INSEAD study finds how women entrepreneurs can overcome gender bias

Society sees a fit between female entrepreneurship and caring for the world

Middle East, Asia, Europe
27 March 2018

While many start-ups claim to have a social impact dimension, many women entrepreneurs hold back from sharing the social goals of their ventures because they fear that they will not be taken as seriously as men. Instead, female professionals attempt to avert this “gender penalty” by asserting typically male characteristics associated with business success. Yet in the male-dominated world of venture capital, such strategies can backfire on women as they conflict with feminine stereotypes.

New research from INSEAD, the business school for the world, and Wharton, however, finds that women can overcome this “double-bind”. It turns out that playing up their social mission can help them mitigate gender biases they are up against.

All entrepreneurs spend a significant amount of time seeking resources, including financial backing. However, external evaluators, such as venture capitalists, often perceive female-led ventures to be less viable than male-led ventures. That’s because women don’t fit the stereotype of entrepreneurs as aggressive and ambitious risk-takers, traits that society tends to associate with the male gender.

Social expectations of what it means to be an entrepreneur are at odds with the traditional image of women as caring and warm individuals. However, women entrepreneurs who emphasise the social impact of their venture may be better evaluated precisely as they meet gendered expectations of warmth and care,” says Matthew Lee, Assistant Professor of Strategy at INSEAD.

Mitigating the gender penalty

In a forthcoming paper to be published in Organization Science, Gender Bias, Social Impact Framing, and Evaluation of Entrepreneurial Ventures, Lee and Laura Huang, Assistant Professor of Management and Entrepreneurship at Wharton, discuss the results of two studies they carried out on the link between gender bias, social impact framing and the evaluation of entrepreneurial ventures.

The first study, based on real-life venture evaluations, showed that on average, female-led ventures were perceived as less viable than male-led ones. However, women entrepreneurs who mentioned the social mission of their venture managed to avoid this gender penalty.

Interestingly, business plan evaluators did not penalise male-led ventures that were framed in terms of their proposed social impact. “It made no difference in their case,” says Lee.

In their second study, the authors controlled all variables of a business plan that was presented to evaluators. A fictional venture was pitched, via an audio-recording, using one of two scripts. Both scripts discussed the commercial objectives of the business, but only one also emphasised the social mission. Each version was recorded by either a man or a woman.

The “commercial only” pitch was viewed more positively when narrated by the man. However, when the script also included a social mission, evaluations were equally likely to be positive, regardless of whether it was pitched by a man or a woman. The authors were able to show that the “warmer” persona associated with the social mission was the key reason why evaluators had no reservations about the female pitch.

Not a panacea

Women entrepreneurs are often advised to project an aggressive, non-feminine persona when pitching their venture. While they may initially be viewed as more “competent”, women who violate social expectations of warmth and care typically suffer some form of backlash. Using a social impact frame might allow social entrepreneurs to make society’s expectations work to their advantage.

This is also somewhat disappointing in that it confirms other recent research showing that women have to conform to gender stereotypes to be considered influential or competent. The fact that this is happening is a consequence of persistent gender biases that continue to play an outsized role in venture capitalism. While this research shows that women are judged differently to men, the silver lining is that those in the field of entrepreneurship, especially social impact can use this to their advantage.

However, if it is not authentic or if it is over-used, this same social impact frame may be viewed with scepticism and backfire. It is also unlikely to change the stereotypes that underlie discrimination, and may even reinforce them,” warns Lee. For this reason, such a framing strategy should probably only be used by women entrepreneurs with a genuine social mission. 

About INSEAD, The Business School for the World

As one of the world's leading and largest graduate business schools, INSEAD brings together people, cultures and ideas to change lives and to transform organisations. A global perspective and cultural diversity are reflected in all aspects of its research and teaching.

With campuses in Europe (France), Asia (Singapore) and the Middle East (Abu Dhabi), INSEAD's business education and research spans three continents. The school’s 145 renowned Faculty members from 40 countries inspire more than 1,400 degree participants annually in its MBAExecutive MBAExecutive Master in FinanceExecutive Master in Consulting and Coaching for Change and PhD programmes. In addition, more than 10,000 executives participate in INSEAD's executive education programmes each year.

In addition to INSEAD's programmes on its three campuses, INSEAD participates in academic partnerships with the Wharton School of the University of Pennsylvania (Philadelphia & San Francisco); the Kellogg School of Management at Northwestern University near Chicago; the Johns Hopkins University/SAIS in Washington DC and the Teachers College at Columbia University in New York; and MIT Sloan School of Management in Cambridge, Massachusetts. In Asia, INSEAD partners with School of Economics and Management at Tsinghua University in Beijing, and China Europe International Business School (CEIBS) in Shanghai. INSEAD is a founding member in the multidisciplinary Sorbonne University created in 2012, and also partners with Fundação Dom Cabral in Brazil.

INSEAD became a pioneer of international business education with the graduation of the first MBA class on the Fontainebleau campus in Europe in 1960. In 2000, INSEAD opened its Asia campus in Singapore. And in 2007 the school began an association in the Middle East, officially opening the Abu Dhabi campus in 2010.

Around the world and over the decades, INSEAD continues to conduct cutting edge research and to innovate across all its programmes to provide business leaders with the knowledge and sensitivity to operate anywhere. These core values have enabled us to become truly "The Business School for the World”.

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