Gender Dilemma in Entrepreneurship - Term Paper Example

To what extent could it be argued that entrepreneurship is gendered? Introduction Women’s entrepreneurship refers to the ownership and management of firms by women including women who found, inherited, or obtained a business, individually, with a spouse, or with a business partner. Women’s entrepreneurship has gained significant attention from both policymakers and academics based on the fact that, in spite of empirical data highlighting an increase in the number of female entrepreneurs, women entrepreneurs remain underrepresented relative to their male counterparts on a number of dimensions (Wickham 2001, p.4). Entrepreneurship is at the heart of job creation, innovation, and economic growth and time of the high rate on unemployment, women-owned enterprises make a critical contribution to household incomes and economic growth. Promoting entrepreneurship is an essential policy goal for governments in all countries in line with shared expectations detailing those high rates of entrepreneurial activity will herald sustained employment creation (Gherardi1996, p.187). Women have risen to become nest-builders rather than serial entrepreneurs. Indeed, not many women warm up to the idea of starting new business enterprises (Howarth and Whitehead 2007, p.16). Conversely, men are open to selling up and launching new businesses and becoming serial entrepreneurs. Even in cases where women are successful in new ventures, women still prefer to keep the business and solely focus on it. One of the prominent questions in this debate centres on whether male and female entrepreneurs are diverse species. The manner in which popular culture presents entrepreneurship can be considered as largely a masculine activity embodying the possibility to create the conditions that it names, shaping social reality, informing power relations and impacting on policy. Entrepreneurship represents dominant discourse that highlights institutionalized and taken-for-granted ways of thinking that are socially accepted and influence other discourses via uncritical reproduction and replication. Helene Ahl has indicated that dominant discourses of entrepreneurship emanate from masculine foundations, which symbolically connect essentialist ideas of masculinity with entrepreneurship (Ahl 2006, p.595). Although, women entrepreneurs bear the same motivations and responses to business ownership, they may be positioned differently from “true” entrepreneurs, who are exclusively male and serial entrepreneurs. Since female serial entrepreneurs are not many, one of the assumptions detail that they not to exist which subsequently makes policy makers, the media, and researchers not to seek them as they are deemed non-existent. In most cases, highly visible entrepreneurs, who are mostly male are depicted as experts within the field, which makes their pronouncements to derive interest and reproduced as “fact,” when in reality they derived from taken-for-granted notions regarding essential differences between men and women as homogenous and stable groups flowing from a masculine discursive space (Zhang, Zyphur, Narayanan, Arvey, Chaturvedi, Avolio, Lichtenstein and Larsson 2009, p.93). Women are usually positioned as business owners rather than entrepreneurs probably because of the need to position entrepreneurship as a high-status profession, and subsequently linked to masculinity. Research indicates that once professions are perceived as feminized they become less attractive to men and thus, lose their status (Verheul, Stel and Thurik 2006, p.151). In most cases, women who own businesses prefer to call themselves business owners rather than entrepreneurs, as if they remain prohibited from using this term since they do not fit in the socially sanctioned model of a true entrepreneur. Theoretically, the possible connection between entrepreneurial gender and entrepreneurial performance is deceptive partially because of the varying perspectives. First, there is the “constrain-driven-gap” perception, which stipulates that there are considerable gender-specific impediments to entrepreneurship, which limit the performance of women entrepreneurs. Most of these barriers stem from existing cultural norms that limit the mobility of women within the entrepreneurial field. The second impediment features the “human capital-driven-gap” perspective whereby in the existing gender-based gaps within human capital attainment female entrepreneurs can be inadequately equipped compared to men in managing a business. The other impediment features “preference-driven-gap” perspective, which stipulates that, there are elementary differences within the motivations, and approaches that male and female entrepreneurs possess towards their businesses (Ogbor 2000, p.605). The manifest gaps could translate to female under-performance in entrepreneurship due to the limitations or owing to their preferences. Women entrepreneurs are relatively a heterogeneous group propelled by varying motivations to start a business. The motives for starting a business entail both “push” and “pull” factors and the mix of women entrepreneurs appears to be relatively diverse from that of men. Overall, a considerable section of women entrepreneurs start a business “out of necessity” compared to men plainly because they do not see other rewarding options. Family obligations may also play a critical role whereby launching a business may be an easier, re-entry point into the labour market, especially for women wishing to reconcile work and care commitments (OECD 2012, P.137). One of the reasons explaining the lower earnings of female business owners might detail that women are less willing to take risks. Increased risk aversion naturally yields to lower polarization of earnings translating to less probability to incur losses and minimized opportunity to reap high returns. The distribution of earnings of men can be regarded as more skewed compared to that of women as women tend to gain low levels of profits (Gatewood, Brush, Carter, Greene and Hart 2009, p.129). Women may adopt a different approach to business as there are relatively more cautious with regard to the resources committed to their ventures, and selecting a slow and steady expansion for their businesses. Entrepreneurship: A Gendered Profession? Gender and entrepreneurship can be regarded as intertwined and women can be perceived as facing significant challenges in manoeuvring economic space. Despite the increased participation of women within the labour market over the past half century, women remain considerably underrepresented as entrepreneurs. When enquired, fewer women compared to men indicate that would prefer to be self-employed. Despite the vastness manifest in the entrepreneurship literature, there is always a gap between women’s experiences of the phenomenon and the explanations provided by the traditional research generated within the academic setting. As such, the explanations of entrepreneurial experiences remain significantly based on orthodox perspective centred on comparisons of male and female entrepreneurs (Kim 2010, p.36). However, such an approach fails to enlighten on the manner in which and the reason why entrepreneurship came to be defined and understood as per the behaviour of only men. The inadequacies in understanding the phenomenon of entrepreneurship by the orthodox approaches have heralded criticisms that the concept of entrepreneurship is itself discriminatory, gender-biased, and ethnocentrically structured, and in some cases ideologically controlled. As a result, some people argue that the discourse of entrepreneurship cannot possibly sustain the overriding societal biases that serve as the embodiment of unexamined and paradoxical assumptions and knowledge regarding entrepreneurs. Moreover, feminist critics have highlighted the weaknesses in the capability of the orthodox frameworks within entrepreneurship research to propel theories relevant to women’s experiences (Kim 2010, p.37). This suggests that, while research on female entrepreneurship has availed significant insight into the behaviour of women business owners, the bulk of the focus still remains on strategies through which female entrepreneurs can successfully ape the male norm. Gender and Entrepreneurship Gender is culturally determined and refers to set of assumptions regarding the nature and character of the biological differences between men and women and assumptions that are inherent within a number of ideas and practices that bear a determinant influence on identity, life experiences, and social opportunities. In recent times, there have been calls for entrepreneurship to be a more intricate phenomenon than is presently allowed by its narrow formulation as an economic activity (Hundley 2001, p.817). There are three core reasons that demonstrate why gender matters: first, women remain key players within the private sector and it is estimated that women owned firms account for close to one-third of all business establishments. Second, the capability of women to formalize and build their business, to create jobs, and to enhance productivity is impeded by legal and institutional barriers that affect men’s and women’s enterprises differently. Third, evidence that exists at the micro level suggests that gender disparities not only disadvantage women, but also minimize the growth potential of the contribution of women within the business world. Characteristics of Women Entrepreneurs In most cases, women possess varying reasons for starting a business, which may differ with those of men. Relatively, more women than men own businesses out of necessity and award more significance to the working time-flexibility afforded by self-employment. On average, women business owners possess enhanced levels of educational attainment, but manifest less experience managing an enterprise. The gender gap manifested in earnings for self-employment is relatively higher compared to wage employment mainly emanating from the fact that, they work considerably fewer hours on their businesses (Bessant and Tidd 2007, p.4). The labour market participation of women has risen in recent years; nevertheless, available evidence indicates that the number of women entrepreneurs has not risen at the same pace. The absence of dependable and updated information is the core reason that has made the monitoring of trends in women entrepreneurship a daunting task. The evident data gap can be cited as one of the core obstacles to comprehending the challenges specific to female entrepreneurs and their impact on economic growth (Armstrong 2001, p.524). In most cases, men tend to express stronger preferences for self-employment compare to women. In 2009, a Eurobarometer survey indicated that close to 51% of men and 39% of European women would opt for self-employment if they had the choice (EC 2009, p.4). The survey also indicated that women possess lower preferences for self-employment based on the fact that they continue to perceive such a career as being too risky. 7% of European women and 5.4% of men affirmed their unwillingness to take up self-employment for fear of legal and social consequences in the event of failure (EC 2009, p.3). Data on self-employment avail one perspective on the entrepreneurial activity of women, whereby characteristics and growth dynamics of women-owned enterprises exists only for a limited number of countries, and manifest limited cross-national comparability given that they remain grounded in different definitions and different methodologies. However, enterprises owned by women considerably contribute to job creation and economic growth. Women-owned enterprises with employees are considerably small compared to those owned by men. The most noteworthy differences recorded between women-owned and men-owned enterprises centres on the size of their business operations as detailed in the level of sales and value-added. This elevates an issue of policy detailing whether the comparatively low levels of turnover of women-owned enterprises arises from the preferences of women for certain sectors (and, potentially, for small-sized businesses) or due to consequence of the distinct constraints that women encounter when launching and growing their companies (OECD 2012, p.133). There is no clear-cut answer to this question within literature. Although, majority of studies unearth that female-controlled enterprises frequently perform worse in terms of profits; nevertheless, some analysts stipulate that the recorded differences disappear once the sectors of activities and critical characteristics of the business owners other than gender are evaluated (Gatewood et al., 2009, p.129). On average, the productivity, employment growth, and profits derived from women-owned enterprises are considerably low compared to those owned by men. The lower-capital intensity of the women-owned enterprises can be highlighted as the most relevant factor in determining their depressed productivity. The comparatively small size of women-owned enterprises is the core factor linked to their lower profits and their slightly depressed likelihood to enhance the number of employees. Other pertinent factors entail differentials in experience, approach undertaken to management, and access to relevant resources and networks, which all play a critical role in shaping this precedent (Birley, Muzyka and Stutely 2000, p.8). This demonstrates that the policy debate should spotlight ways of enhancing the number of women enterprises and tackling potential market or institutional failures hindering the women enterprises that are already operating within the market from growing into “large” firms.” The reality on the ground details that, when women are pursuing to start businesses, they frequently start on a smaller scale compared to men and within a limited range of sectors that often require low capital intensity. In emerging and developing economies, women frequently represent the majority of business owners devoid of paid employees within the informal sector. On average, women earn far less compared to men with gender gaps in median earnings among the self-employed ranging around 30-40% compared to an average of about 16% across OECD countries with regard to salaried jobs (OECD 2012, P.5). Even in cases where enterprises operating in analogous size, class, and industry are contrasted, women-owned businesses possess other features that are linked to depressed sales, labour productivity, and profits (Doherty, Foster, Mason, Meehan, Meehan, Rotheroe and Royce 2009, p.33). There are two central variations between male and female entrepreneurs aid to explain these trends: women launch their enterprises with minimal management experience and tend to devote considerably less time to their business compared to men. In OECD countries, about 22% of self-employed women usually work less than 40 hours a week representing less than 10% for self-employed men. The fraction of women-owned businesses presently “plateau” at around 30% of the total within OECD countries, which also applies to the majority of the developing countries (OECD 2012, P.6). Women are also less probable compared to men to borrow money for financing their business. This emanates, partly, from the fact that women are likely to be charged higher interest rates and may be required more guarantees given that women frequently have shorter credit histories, fewer collaterals, and less operating capacity (Read, Sarasvathy, Dew, Whiltbank, Ohlsson 2011, p.52). Although, there is minimal evidence, some lenders demand higher charges from women owing to biased expectations regarding women’s capacity to satisfy debt obligations. Furthermore, women may less enthusiastic about asking for money because they are less optimistic on the growth potential of their business establishments. Women are a significant part of untapped entrepreneurial resource. The evidence explored in this paper indicates that women entrepreneurs lag behind men in aspects such as numbers, average turnover, profits, and productivity of their businesses (Martin and Thompson 2010, p.3). In acknowledgement of the stated differences in preferences, policies should be grounded in systematic analysis of the factors that safeguard or limit entry of women entrepreneurs into the market and constrain the growth of female-owned enterprises (Scase 2007, pp.58). The main dedication should centre on aiding female businesses attain their potential for growth through the employment of growth-focused initiatives such as favourable lending ceilings and public credit guarantees that ensure that small, women-owned firms possess access to public procurement and tax credit schemes for capital investments in SMEs (Burns 2011, p.6). The issues that limit the entry of women are complex and tackling them demands to alter the manner in which the society and the economy functions. Both genders must highlight a work-life balance that suits them irrespective of family status or the household income. There is an urgent need to avail more and better information regarding entrepreneurship as a rewarding career option for women at school and those outside the labour force, and considering starting their own business (Rae 2007, p.11). Hence, it is essential to improve the quality and quantity of data by gender that should inform the evaluation of the public policy. Governments should employ the gender-responsive approach throughout the public financial management cycle and enhance gender-impact assessments (Stokes and Wilson 2010, p.68). This necessitates reforming of legal frameworks and guaranteeing their enforcement to eliminate obstacles that constrain gender equality; ban discrimination, sustain all forms of pay discrimination, preserve the notion of equal pay for work of equal value, and avail economic support and incentives to alter discriminatory attitudes. Conclusion Indeed, entrepreneurship is not a gendered profession. Women entrepreneurs are highly likely compared to their male counterparts to be engaged in running family enterprises. This implies that family dynamics play a critical in entrepreneurship. Statistics indicate that women are less probable to possess large businesses as small ones, and there is no gender-distinct segmentation of women entrepreneurs with regard to the sector of operation or the size and age of the business. Similarly, women’s businesses are generally as productive as those owned by their male counterparts given that, the constraints and obstacles that women encounter once they start operating their businesses is largely the same as those of men. However, the absence of considerable gender-based barriers within the operating of a business does not translate to the notion that gender-based impediments to entrepreneurship are non-existent. There in insufficient understanding of gender and women activities as women’s own perspectives are lost in these strategies, not because of their underrepresentation in research, but they are represented in the terms dictated by the dominant groups instead of their own terms and their own voice. Although, progressively, women have been incorporated in several studies on entrepreneurship, there has been minimal focus on challenging conventional definitions of entrepreneurship or in establishing fresh methods to collect information on entrepreneurship. While there has been some considerable reflection on the diversity, this manifestation has not been contextualized within the theoretical understandings of the manner in which entrepreneurial work is socially constructed. This embodies the way in which entrepreneurial work is located within gendered processes, which shape, via relationships between work, gender, and the organizational structure. References List Ahl, H. (2006). 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The genetic basis of entrepreneurship: Effects of gender and personality, Organizational Behaviour and Human Decisions Processes 110 (1), pp.93-107. Read More