E-Magazine
Professor Susan Marlow
Within recent years the extant body of literature upon women’s entrepreneurship has grown in both volume and sophistication (Carter and Shaw, 2006). Despite this expansion however, it has been argued that as a field of study, female entrepreneurship has lacked a theoretical framework with little acknowledgement of conceptual analyses such as those regarding feminism and gender (Marlow, 2002; Ahl, 2004; Ahl, 2006). Indeed, links between existing feminist literatures within the fields of sociology, economics and politics, for example, are rarely utilised to frame explanatory theories to analyse women’s experiences of self employment and business ownership (Mirchandani, 2005). Rather, there has been a propensity to develop atheoretical explorations of women’s experiences of self-employment and business ownership rather than embedding such experiences within pertinent conceptual frameworks (Taylor and Marlow, 2009).
In addition, there is a distinct tendency towards feminist empiricism, i.e., analysing women’s experiences in relation to and in comparison with male entrepreneurs (Keplar and Shane, 2007). In effect, this constructs a normative frame which draws upon the masculine as a natural benchmark for business performance.
One such example of this tendency is articulated through the claim that female owned businesses ‘under perform’. It is certainly undeniable that both as business owners and the self-employed, women command a smaller share of the sector. It is difficult to offer an accurate picture of this share due to the lack of reliable data; however, official statistics for suggest that women comprise only 12%-17% of all business owners and 26% of the self employed within the UK Annual Small Business Survey, 2006).
Despite both the substantial growth of the UK self-employed population over the past fifteen years and the faster increase in rates of women’s self-employment, the female share of self employment has, over the same period, remained almost static (Labour Force Survey, 2005/6). Considered collectively, these figures raise questions regarding the sustainability of female-owned businesses and suggest higher rates of exit.
Whilst acknowledging heterogeneity amongst self employed women, existing literature does indicate that their businesses do display a number of shared characteristics. So, it is noted that women are more likely to locate their ventures in lower order services whilst their businesses remain small in terms of employment, sales, profitability and market share (Carter and Marlow, 2007). Moreover, women owned businesses are more likely to be operated from the home and on a part-time basis; they also command low levels of funding, depend upon informal or more expensive sources of finance and rely on limited business networks (Thompson et al., 2009). In this sense, women’s businesses are probably under capitalised but this does not mean that they under perform.
The combination of such characteristics creates an image of female enterprise that lacks credibility in the realms of modern market economies where the notion of performance is equated with growth and profitability (HM Treasury/dBERR, 2008). Consequently, that women owned businesses may remain small and marginal is frequently transposed into a notion of under performance (Ahl, 2006). Yet, upon a closer and more considered examination of this claim, it is open to some question and criticism. To anchor and measure comparative notions of any activity clearly requires a scale; in the case of business performance, normative indicators arise from criteria such as growth in employment, sales, turnover, employment, profit margins and market share. Businesses which demonstrate achievements regarding such aspects are deemed to be performing ‘well’. And indeed, this is not disputed here.
What is problematic however, is to assume that stereotypical masculinised models of business operation – full time, external premises, formal funding, growth ambitions – some how sets the normative standard of what the typical business should look like. Once this measure is assumed, [women owned] firms which do not reflect such norms become labelled as ‘under performing’.
Such assumptions certainly disadvantages many women who own part time, home based ventures located in crowded, low profit parts of the service sector; these firms are unlikely to meet the normative performance measures which prevail. But the fact that such firms do not meet such criteria does not mean they under perform as they may be doing exceeding well within their particular market segment.
This argument is supported by a body of work under taken by Watson (2002) whose analysis comparing inputs and outputs found no performance differences (outputs) between male and female owned businesses – when the inputs, in terms of starting capital, hours worked etc, were statistically controlled. In other words, when female owned businesses are capitalised in the same way as male owned businesses few performance differences are found. In fact, women owned businesses performed slightly better.
The clear conclusion is that performance differences are not a function of skills shortage or lack of competence in managing the business, but are directly attributable to unequal levels of capitalization and socio-economic positioning. Describing female owned businesses as under performing is thus similar to criticising a person with both legs tied together for not being able to run faster than an unfettered counterpart. There may be performance differences but these should be equated with performance deficits.
Concerns about the apparent inability of female enterprises to reach the levels of achievement seen in male owned businesses, with regard to sales turnover and employment, have sparked some debate regarding the scale, causes - and indeed the very existence of - female under-achievement. This assumption fuels the image of women as deficient. Another interesting aspect of this under performance debate is the assumption of a binary divide which places men and women on opposite sides of a performance measure. This is patently nonsense as firstly, it clearly takes no account of the considerable number of joint and family owned firms (at what point does the ‘feminine’ influence tip the balance here).Secondly, as Ahl (2004) notes, there are many similarities in the operating profiles of small firms, despite the characteristics of the owner, just because of their market position.
In effect, many male firm owners also fail to meet preferred standards of performance even though they are based upon stereotypical masculine norms! As such, there is greater variation within sex difference than between sex difference so in effect, closer examination of marginal firms with low performance profiles will reveal that many are also co-owned or male owned.
This is where the importance of theoretical framing becomes critical. Rather than describe (and probably exaggerate) differences between male and female owned enterprises surely it is of more interest and value to explore what assumptions inform the normative model of performance, why and how these represent women business owners as lacking and the implications of such for both male and female entrepreneurs.
Sue Marlow, Professor of Small Business and Entrepreneurship, De Montfort University and ISBE Vice President