Gender diversity and firm performance in seeking for sustainable development

• Author: Sumedrea S.
• Pages: 369-384

Bulletin of the Transilvania University of Braşov

Series V: Economic Sciences • Vol. 9 (58) No. 2 - 2016

Gender diversity and firm performance in seeking

for sustainable development

Silvia SUMEDREA1

Abstract: This paper is focused on identifying possible relations between companies’

performance and their board structure and managerial team after the recent world financial

crisis, in an attempt to identify possible ways to support corporate sustainable development.

Companies with board and management team gender diversity tend to score higher in terms

of ROA and ROS than companies where men are in charge. Women in managerial positions

in large companies tend to relate better with customers and help sales improvement, but in

companies that are old and big the women participation in the process of strategic decision

making is not particularly encouraged.

Key-words: gender diversity, management, financial performance, sustainable development

1. Introduction

There is a very actual debate about companies’ performances and their ability to

maintain their operation in a sustainable manner after the tough crisis that hit the

world in 2008-2011. The present post-crisis world is a more polarized one, with

many gaps and disparities between various economies and with many companies

around the globe struggling hard to survive and develop. Various performance

drivers were studied, new econometric models were tested and alternative

development strategies were implemented, both in the developed and in the less

developed economies, at national and companies level, in an attempt to diminish the

negative effects of the financial crisis.

Following the crisis, even the EU economic space is perceived as an

unbalanced one, and is more and more confronted with the concept of two-speed

development (Piris, 2012), as it seeks for possible solutions for its future sustainable

development.

Cross-countries studies developed by Eurostat examined all the 28 EU

countries for a better understanding of their common points and biggest disparities

in their common sustainable development. Themes such as population dynamics,

education and labour market, combined with issues related to economy and finance,

1 Transilvania University of Braşov, silvia.sumedrea@unitbv.ro

Bulletin of the Transilvania University of Braşov • Series V • Vol. 9 (58) No.2 - 2016

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and innovation and information society must now be assembled in new ways for

building more coherent future EU sustainable development policies.

The development of new communication technologies combined with the

easy access to a huge amount of knowledge already began to bring a series of

changes on both the labour and the education markets in the EU. Different cultural

patterns, combined with new expectations based on a different education and work

motivation will influence the EU economies in their future growth, too.

This paper will examine the possible connection between firm performance

and gender diversity in an attempt to discover how the board of directors and the

managerial teams are doing their jobs and are using their skills and knowledge when

confronted with gender diversity and, furthermore, if there is a link between gender

diversity and the financial performance of companies that could be used to promote

their sustainable development, in one of the less performing European country,

namely Romania. Based on the results, some suggestions will be formulated for a

future development of the subject, some recommendations to policy makers will be

presented along with some possible solutions for companies’ future development.

2. Literature review

Comprehensive studies on the companies’ management structure in various cultural

contexts have been the subject of many interesting books and scientific papers,

starting with years ‘80-‘90 of the past century, among the most famous being those

published by Gert Hofstede and his collaborators (Hofstede, 1983, 1990, 1993).

Hofstede developed the well-known cultural dimension theory where an important

explanatory factor of each national culture was the one called “masculinity versus

femininity (MAS)”. Hofstede said that culture is a collective learned programming of

the mind that derives from the social environment and allows us to differentiate

between the members of various groups and understand their behaviour. In some

cultures, he said, there is a preference for “masculinity” (e.g. for competition,

achievement, material rewards for success and assertiveness), while in others

“femininity” prevails (e.g. a preference for cooperation, modesty, quality of life and

environment and, also, attention for the weak). His cultural dimension theory served

as a base for further studies related to how various cultural drivers could influence

companies’ performance. In their study, Watson, Kumar & Michaelsen (1993)

suggest that group diversity leads to a competitive advantage due to improved

knowledge base and increased creativity and innovation.

Other studies focused on how (and if) the managerial team structure, the

organisational performance, and company’s size are correlated in an attempt to

explain certain financial or non-financial performances (Chaganti et al. 1985;

Baysinger, 1985; Barney, 1986, Shrader et al., 1997, Carter et al., 2003, Erhardt et

al., 2003, Deszo et al., 2013). The link between company performance and the board