Monday, 22 October 2007

WISER - Leadership Rules

"A woman is like a tea bag- you never know how strong she is until she gets in hot water." Eleanor Roosevelt.

The professional advancement of women (and minorities) in an organization often reaches a certain level, after which there appears to be a barrier that limits women from being promoted to higher positions. It is not through lack of experience or education that this occurs, but rather some other impediment that holds women back, a situation that is often referred to as the ‘glass ceiling’. Many people believe that women restrict themselves from taking on high level positions; however, there is also the perception that women who do hold such positions often do so to the detriment of the company. Dr. Michelle Ryan, a psychologist at the University of Exeter, has questioned the validity of such a statement, suggesting that women are often promoted to management roles only when a company is already struggling. In studying the performance of FTSE 100 companies in Britain in 2003 in the months preceding and following the appointment of both men and women to board positions, she found some interesting trends in the data. When the stock market was down, the companies that were performing relatively consistently appointed men to the board member positions while the companies that were struggling promoted women. After each appointment, the performance of these companies typically increased, although those with the women on board showed a much more dramatic turn around. When the stock market was up, the company performance after appointing a man was relatively stable. For the companies that promoted women under such conditions, their performance was more variable prior to the appointment, after which it was again relatively stable. From these results, Dr. Ryan concluded that it appears that women are more likely to be promoted to higher level positions when a company is performing badly. She says, “In this way, such women can be seen to be placed on top of a ‘glass cliff’, in the sense that their leadership appointments are made in problematic organizational circumstances and hence are more precarious.” What is not clear from this outcome is why such trends occur. Is it because women are perceived to perform better under crisis situations? Do women see such roles as an opportunity to prove themselves? Or are they simply being promoted to ‘scapegoat’ positions? The implications of such precarious promotions form the basis of Dr. Ryan’s ongoing research. From this study, however, it is apparent that the promotion of women to higher positions is often an effect rather than a cause of poor company performance.

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