The paradox of the contented female business owner

https://doi.org/10.1016/j.jvb.2007.12.005Get rights and content

Abstract

According to survey responses from 201 business owners, although the firms of male business owners were more successful than those of female business owners on frequently used measures of business success (business performance compared to competitors and sales), business owner sex did not predict satisfaction with business success, supporting the existence of a “paradox of the contented female business owner”. A differential values explanation for this paradox was strongly supported, whereas a differential inputs explanation was unsupported. Female business owners placed less value on achieving business success than their male counterparts. Also, female business owners’ satisfaction with business success was less related to fluctuations in business performance and sales than that of male business owners. However, results for male business owners displayed a different kind of paradox, as their satisfaction with business success was positively related to business performance and negatively related to sales.

Introduction

Business ownership as a career offers a degree of autonomy, self-fulfillment and independence that few other careers can provide. Business owners are able to create organizations that uniquely meet their needs, allowing them to pursue personally defined goals and strategies (Bird & Brush, 2002). This flexibility and control may explain the significant increase in women-owned businesses (Morris, Miyasaki, Watters, & Coombes, 2006). Around the globe, women own 25% of all businesses in advanced market economies and the number of women-owned businesses in Eastern Europe, Africa, Asia, and Latin America is growing (Jalbert, 2000). Women-owned businesses now make up approximately 40% of all businesses in the U.S. (DeMartino & Barbato, 2003). As a result, female business owners are increasingly important contributors to their country’s level of entrepreneurial activity and economic growth (Brush, Carter, Gatewood, Greene, & Hart, 2006).

Despite the increasing number of women-owned businesses, such businesses are less successful than those owned by men by objective measures of business success (Loscocco et al., 1991, Welter et al., 2006). Women-owned businesses tend to have lower sales, slower growth, and lower profits than men-owned businesses (Brush et al., 2006). However, limited research evidence suggests that female business owners are no less satisfied with their careers as business owners than their male counterparts (Cooper and Artz, 1995, Parasuraman et al., 1996). Why would business owners with lower sales and performance not be less satisfied with their businesses? This question lies at the heart of what may be called “the paradox of the contented female business owner”.

Crosby (1982, p. 7) coined the term “the paradox of the contented female worker” to refer to the phenomenon that women express no more dissatisfaction with their jobs than men despite the fact that they hold jobs with less pay and authority. This set of relationships represents a paradox if job characteristics such as pay and authority are assumed to be normally related to job satisfaction (Phelan, 1994). Crosby (1982) concluded that working men and women experience similarly high levels of job satisfaction because they perceive little discrepancy between what they obtain from their jobs and what they feel entitled to obtain. Since her groundbreaking study, further evidence has supported the applicability of the paradox to diverse occupational groups such as lawyers (Hull, 1999), human service workers (Buchanan, 2005), hospitality managers (Iverson, 2000), and Protestant clergy (McDuff, 2001) and to part-time MBA students (Keaveny & Inderrieden, 2000) and mid-career workers (Hodson, 1989) employed in full-time jobs across occupations. There has been a call for research to investigate the paradox in settings where relatively less objective inequality should exist (Buchanan, 2005). Our study responds to this call by investigating whether such a paradox exists for business owners and, if so, the merits of alternative explanations for it.

The position of female business owners in the workplace is very different from the more traditional position of the female worker. Compared with female employees of firms owned by others, female business owners have greater freedom to create work environments that are consistent with their goals and values and greater opportunity for financial independence, autonomy, flexibility, achievement, and the challenge of making it on their own (Bird and Brush, 2002, Buttner and Moore, 1997, DeMartino and Barbato, 2003, Mattis, 2005). Moreover, the values and expectations that women bring to their careers as business owners tend to differ from those of male business owners (Bird and Brush, 2002, Moore, 1999). Female business owners have stronger self-imposed barriers to growth (Cliff, 1998, de Bruin et al., 2007, Morris et al., 2006), lower expectations for success (Wilson, Kickul, & Marlino, 2007), greater interest in pursuing entrepreneurship as a means of balancing work and family rather than as a means of achieving financial success (Brush, 1992, DeMartino and Barbato, 2003, Kepler and Shane, 2007), and higher aversion towards risk (Morris et al., 2006) than male business owners. Also, female business owners are commonly portrayed as possessing less human capital than their male counterparts, e.g., by having less industry experience and devoting less time to their businesses (Brush, 1992, Kepler and Shane, 2007). Such differences between female and male business owners could contribute to the existence of the paradox of the contented female business owner.

This study contributes to the literature on business ownership as a career in several ways. First, it contributes to our understanding of the paradox of the contented female worker by examining its existence and alternative explanations for it in a population in which gender inequalities and experiences with gender discrimination may be limited. Specifically, our sample of business owners was drawn from a university alumni database, resulting in a highly educated sample and therefore fostering more stringent conditions for testing the paradox. Second, this study increases our understanding of the factors that influence the extent to which business success fosters satisfaction for male as well as female business owners. Third, from a training perspective, knowledge of the conditions under which the paradox applies to business owners may be incorporated into gender-sensitive training programs for prospective and existing business owners (Wilson et al., 2007). Further, the satisfaction of female business owners in particular has broad societal implications. Female business owners’ satisfaction with the success of their businesses may influence their decisions about whether to continue along this career path as well as their investment decisions if they carry on (Cooper & Artz, 1995); such decisions influence the extent to which female business owners as a group act as a driver of economic growth (Brush et al., 2006).

In this article, we first examine whether the paradox of the contented female business owner exists and then evaluate the merits of alternative explanations for it. Drawing from research on the paradox of the contented female worker as well as studies of female business owners, we focus on two possible explanations, the differential inputs perspective and the differential values perspective. These explanations seem most applicable to the entrepreneurial context given that researchers have argued that female business owners may be less successful than male business owners because they possess less business-relevant inputs (Cliff, 1998, Menzies et al., 2004) and their personal values are quite different (Bird and Brush, 2002, Brush, 1992).

Section snippets

Existence of paradox

Economic criteria are often considered the most appropriate measures of business success (Walker & Brown, 2004), with size and growth typically used as indicators (Venkatraman & Ramanujam, 1986). As Cooper and Artz (1995, p. 441) argued, “We would, of course, expect that the satisfaction of individual entrepreneurs would be highly correlated with the economic performance of their ventures. Thus, those who do better should feel better”. This argument does not appear to apply to female business

Sample

A survey was sent to entrepreneurial alumni of a large U.S. private university. All alumni who reported that they held CEO or top management positions (N = about 7200) were identified by the university’s alumni association. About 1900 of these alumni provided a job title that included the term “owner” or “founder” (e.g., accountant/owner, founder/CEO). Alumni who provided such job titles, about 30% of whom were women, were considered to be business owners and represented the population of the

Results

Table 1 reports means, standard deviations, and correlations for the unstandardized variables (except for satisfaction with business success, which was already standardized); all other variables were standardized prior to further analyses. Hierarchical ordinary least squares (OLS) regression analyses were performed to test all hypotheses.

Discussion

Responses to a survey from 201 business owners provided support for the existence of the paradox of the contented female business owner. Despite their businesses’ experiencing lower levels of business performance and sales, female business owners were found to be as satisfied with the success of their businesses as their male counterparts. Two explanations for this paradox were proposed and tested. A differential inputs explanation for the paradox received no support. In contrast, a

References (41)

  • B. Bird et al.

    A gendered perspective on organizational creation

    Entrepreneurship Theory and Practice

    (2002)
  • C.G. Brush

    Research on women business owners: Past trends, a new perspective and future directions

    Entrepreneurship Theory and Practice

    (1992)
  • C.G. Brush

    Women-owned businesses: Obstacles and opportunities

    Journal of Developmental Entrepreneurship

    (1997)
  • T. Buchanan

    The paradox of the contented female worker in a traditionally female industry

    Sociological Spectrum

    (2005)
  • E.H. Buttner et al.

    Women’s organizational exodus to entrepreneurship: Self-reported motivations and correlates with success

    Journal of Small Business Management

    (1997)
  • F.J. Crosby

    Relative deprivation and working women

    (1982)
  • A. de Bruin et al.

    Advancing a framework for coherent research on women’s entrepreneurship

    Entrepreneurship Theory and Practice

    (2007)
  • T.J. Devine

    Characteristics of self-employed women in the United States

    Monthly Labor Review

    (1994)
  • J.V. Gallos

    Exploring women’s development: Implications for career theory, practice, and research

  • Cited by (63)

    • Women's entrepreneurship and well-being at the base of the pyramid

      2022, Journal of Business Venturing
      Citation Excerpt :

      However, women entrepreneurs tend to place greater value on subjective performance measures that are not at the firm level of analysis (vis-à-vis their male counterparts) (DeMartino and Barbato, 2003; Phelan, 1994). For example, women are drawn to business ownership as a career because it offers them a high degree of autonomy, self-fulfillment, and independence (Powell and Eddleston, 2008). Yet, many women continue to face discrimination even after venture creation resulting in varying levels of well-being (Ahl and Marlow, 2012; Akobo, 2018).

    • Am I an entrepreneur? How imposter fears hinder women entrepreneurs’ business growth

      2019, Business Horizons
      Citation Excerpt :

      This performance disparity was expected to decline with time as more women-owned businesses overcame liabilities of newness and smallness (Loscocco, Robinson, Hall, & Allen, 1991; Powell & Eddleston, 2008), but that has not happened. Two potential reasons have been identified in the literature for this gender-performance gap: the differential inputs perspective and the differential values perspective (Jennings & Brush, 2013; Powell & Eddleston, 2008). The differential inputs perspective argues that women entrepreneurs underperform relative to men because they possess less valuable inputs related to business experience (Cliff, 1998; Menzies, Diochon, & Gasse, 2004) and have less access to resources essential to entrepreneurial success, such as financial and social capital (Fischer, Reuber, & Dyke, 1993; Jones & Tullous, 2002).

    View all citing articles on Scopus

    We are grateful for helpful suggestions from the faculty and doctoral students of the Department of Management at Drexel University’s LeBow College of Business, where the first author presented an earlier version of this article.

    View full text