Gender as a Factor that may Influence the Performance of Small Scale Businesses

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Gender as a Factor that may influence the performance of Small Scale Businesses

Among the factor that may influence the performance of small scale businesses is gender. This post is on gender as a factor that may influence the performance of small scale businesses.

Gender is a key characteristic of business owners that influences the performance of a business enterprise.

Previous studies have reported the impacts of gender on different type of business enterprise.

See also: Definition and Importance of Small Scale Businesses

Over the past decade, researchers in entrepreneurship and small business have investigated the direct links between leader gender, as a key demographic variable, and performance outcomes.

Comparisons of female-led versus male-led businesses on a variety of firm performance measures such as revenue, profit, growth and discontinuance rates have yielded mixed results.

Studies and Researchers

While some studies supported differences in performance across female led and male led businesses (Du Rietz and Henrekson 2000;Fasci and Valdez 1998; Rosa, Carter, and Hamilton 1996; Cooper, Gemino-Gascon, and Woo 1994), other researchers reported finding no difference in performance (Johnson and McMahon 2005; Watson and Robinson 2003; Watson 2002; Anna et al. 2000; Fischer, Reuber, and Dyke 1993; Kalleberg and Leicht 1991).

Notwithstanding previous efforts, the evidence regarding the effect of gender on performance remains scant and inconsistent.

Much of the research investigating gender effects sought to explain variations in performance stemming from demographic differences such as age, education, and business background (Brush 1992).

See also: Gender: Meaning and Definition of Gender-related Terms

More recently it has been suggested that observed performance differences, if any, may not be due to gender directly, but rather may be indirect, perhaps via gender influence on other variables that affect performance (Watson 2002; Anna et al. 2000).

The literature argues that the relationship between gender and small business performance is a complex phenomenon (Rosa, Carter, and Hamilton 1996).

And research has provided ambiguous results as to whether the effects of gender on performance are direct or mediated by other variables.

Over the years, many studies reported finding a direct effect of gender on performance among small businesses.

More on Gender as a factor that may influence the performance of small scale businesses

Literature suggest four main categories of factors that affect the performance of business enterprises with gender being one of the factors namely; human capital, personal characteristics, family characteristics and business characteristics (Loscocco et al…, 1991; Daniels and Mead, 1998; Mcpherson 1996).

In term of human capital, literature suggests that the skill and experience an entrepreneur brings into the enterprise the more successful the business enterprise.

Others contend that personal characteristics embody entrepreneurial traits including the degree of risk taking behavior and the motivation to achieve the highest levels.

Loscocco (1991) argue that small business owner may also benefit from intangible success from family members, although heavy family responsibility may also have negative effect of detracting the entrepreneur from business activity.

Business characteristics also play an important role in determining business performance. Others have argued that women are likely to operate in low risk and low technology industries such as petty trading.

The gender division of labour and gender stereotypes tends to push women into low status and low income business activities (Von Masson, 1999).

The other business characteristics that play an important role in determining performance are size, age and location of the business. Size is associated with economies of scale.

Mcpherson (1996) argues that location of business has strong influence on survival chances and growth of small businesses. The various factors that influence performance of enterprise may influence female -owned and male -owned enterprise due to gender biases.


Contributor: Temiloluwa OLAPOSI

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