Why are so few women promoted into top management positions?

Anna Klaile

Department of Economics

Hanken School of Economics

Helsinki

2013

HANKEN SCHOOL OF ECONOMICS

Department of: Economics Type of work: Masters Thesis

Author: Anna Klaile Date: 6.10.2013

Title of thesis: Why are so few women promoted to top management positions?

Abstract:

In Finland and most countries, female representation in executive positions is scarce.

This study examines whether gender differences in career and family related

preferences and traditional stereotypical beliefs might have an effect on the observed

promotion gap between men and women to into top management positions in Finland.

The theoretical framework builds on a model of statistical discrimination proposed by

Bjerk (2008). The model suggests that gender differences in promotions may be

caused by disparities in skill level, signaling precision and signaling intensity. Special

focus in this study is laid on parameters that affect the signaling intensity, more

specifically societal structure, time consumption, norms and preferences.

The approach for the empirical study is quantitative. A questionnaire was developed

to examine career and family related preferences of Finnish middle managers with

an academic background in either engineering or business. Results suggest that

male managers have more preferences towards pursuing a career than female

managers; they are significantly more willing to consider promotions and aim to

achieve a higher organizational level. Female managers on the other hand show

more preferences towards family. Having children does not permanently alter

managers career goals differently; however women take a significantly larger share

of household and childcare duties and are more likely to face a temporary career

slowdown after having had children. Further, Finnish managers in general, are

rather traditional in their beliefs regarding womens career interests. These beliefs

appear to have an impact on what is considered acceptable and how individuals

act. The differences in preferences, societal structure and social norms seem to

affect each other and help to explain gender differences in promotions.

Keywords: statistical discrimination, promotions, female leadership, career aspirations, family and work balance

1

CONTENTS

1 INTRODUCTION...................................................................................... 7Purpose .................................................................................................................. 81.1.

Problem background and scope ........................................................................... 81.2.

Delimitations....................................................................................................... 101.3.

Structure .............................................................................................................. 101.4.

2 THEORY .................................................................................................. 11Statistical discrimination ..................................................................................... 112.1.

2.1.1. Glass ceiling ............................................................................................ 12

2.1.2. Sticky floor .............................................................................................. 13

Promotion model ................................................................................................ 142.2.

2.2.1. Model .......................................................................................... 14

2.2.2. Group differences ................................................................................... 16

2.2.3. Equilibrium ............................................................................................. 17

2.2.4. Model implications ................................................................................. 21

2.2.5. Extended model with focus on top management ................................. 21

3 PARAMETERS ........................................................................................ 23Average skills ...................................................................................................... 233.1.

3.1.1. Education and work orientation ............................................................ 23

3.1.2. Gender stereotypes ................................................................................. 25

3.1.3. Societal structure .................................................................................... 26

3.1.4. Summary of skills ................................................................................... 26

Signaling precision ............................................................................................. 273.2.

3.2.1. Communication ...................................................................................... 27

3.2.2. Upbringing and activities ....................................................................... 28

3.2.3. Mentoring and role models .................................................................... 28

3.2.4. Summary of signaling precision ............................................................ 29

Signaling intensity .............................................................................................. 293.3.

3.3.1. Networking ............................................................................................. 29

3.3.2. Societal structure .................................................................................... 30

3.3.3. Time allocation ....................................................................................... 32

3.3.4. Norms. ........................................................................................ 33

3.3.5. Preferences ............................................................................................. 33

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3.3.6. Summary of signaling intensity ............................................................. 34

4 HYPOTHESES ........................................................................................ 36Hypothesis 1 Career ambition and preferences .............................................. 364.1.

Hypothesis 2 Family and work ....................................................................... 374.2.

Hypothesis 3 Norms and beliefs ..................................................................... 394.3.

5 METHODOLOGY ................................................................................... 41Choice of research method: Questionnaire ........................................................ 415.1.

5.1.1. Questionnaire design ............................................................................. 42

5.1.2. Target group ........................................................................................... 43

5.1.3. Data collection ........................................................................................ 43

Data processing ................................................................................................... 455.2.

5.2.1. Binary logistic regression ....................................................................... 45

5.2.2. Data processing: Significance tests ........................................................ 46

6 EMPIRICAL FINDINGS ......................................................................... 47H 1 Career ambition and preferences ............................................................. 476.1.

6.1.1. SH 1.1 Willingness to consider promotions ....................................... 47

6.1.2. SH 1.2 Organizational level aspirations ............................................. 50

6.1.3. SH 1.3 Confidence in skills and career prospects .............................. 52

6.1.4. SH 1.4 Career ambition and planning ................................................ 54

6.1.5. SH 1.5 Promotion offers and acceptance ........................................... 56

6.1.6. Summary of Hypothesis 1 ...................................................................... 57

Hypothesis 2 Work and family ........................................................................ 586.2.

6.2.1. SH 2.1 Children and career goals ....................................................... 58

6.2.2. SH 2.2 Career goal compromises ....................................................... 60

6.2.3. SH 2.3 Temporary career slowdowns ................................................ 62

6.2.4. SH 2.4 Time allocation on childcare and housework ........................ 64

6.2.5. Summary Hypothesis 2 .......................................................................... 66

Hypothesis 3 Norms and beliefs ..................................................................... 666.3.

6.3.1. SH 3.1 - Womens career interests ......................................................... 67

6.3.2. SH 3.2 Womens freedom, skills, and male confidence in women ... 68

6.3.3. SH 3.3 Mens role at work and at home .............................................. 71

6.3.4. Summary of hypothesis 3 ....................................................................... 72

7 DISCUSSION AND CONCLUSIONS ..................................................... 73

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Career ambition and perceptions