HENRICH R. GREVE
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Organizational musings

Trailblazers or Tokens? Women in Top Management and Boards

6/1/2017

 
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​A famous career effect on women is the glass ceiling – at some point in the career, women find that it is hard to get promoted, harder than it is than for comparable men. Because this has been known for a while and is known to be an unfair and poor use of human capital, there is increasing pressure from institutional investors for firms to promote women’s advancement. This has created a paradox where many, but not all, firms are still set in their usual ways of treating men and women differently, but their owners are seeking change. What are the effects?

A new paper in Administrative Science Quarterlyby Eunmi Mun and Jiwook Jun has now discovered what happens as a result of these pressures for fairness. It turns out that they come from two places. One is institutional investors, who are concerned with fairness and best use of human capital. The other is corporate social responsibility (CSR) associations and employees, who see fair treatment of employees as an important corporate responsibility.  Both of these help women gain higher-level positions in firms that they would otherwise not have received. But there is a catch, or more accurately, two catches.

The first catch is that at least now, the benefit of having institutional investors and CSR representation in a firm mainly leads to a few women entering the very top positions. So, it can give a board membership that otherwise would not be possible, or top executive level position which would be difficult otherwise, but at any lower level they simply don’t have any effect. That’s why women in the top levels could be tokens to show outsiders that the firm is fair, but without really changing the inside of the firm.

The second catch is that the emphasis on breaking the glass ceiling is not an international trend. Much of it is driven by Europe and North America, and has effects worldwide because so much of the world’s capital, and hence institutional investors, comes from these nations. In fact, I did not mention that this research is on Japanese firms, and the effect of institutional investors is from foreign institutional investors, not domestic ones. The domestic ones don’t help women’s careers. That does not mean that the token effect is only outside Europe and North America – this research is pioneering in showing that it exists precisely because Japanese firms are more open about their internal hiring at lower levels than firms in most other nations are.

So where does that leave women’s careers? A few token hires do not really break the glass ceiling, they just hide it. In many of these boards, one out of 12 members was a woman. But the research suggests that they could be trailblazers too. Another finding in the paper is that women in the board also helped women in non-managerial positions, so maybe they are the start of more equal careers. Although we should be careful about drawing too optimistic conclusions – women in the board had no effect on women in managerial positions. We need to wait and see before we know how this unfolds.

​Mun, Eunmi, and Jiwook Jung. 2017."Change above the Glass Ceiling: Corporate Social Responsibility and Gender Diversity in Japanese Firms." Administrative Science Quarterly, forthcoming.


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    This blog is devoted to discussions of how events in the news illustrate organizational research and can be explained by organizational theory. It is only updated when I have time to spare.

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