TUM Management Insights
- Prof. Hana Milanov, PhD
- E-Mail email@example.com
- Chair Entrepreneurship Research Institute
Milanov, H., Justo, R., Bradley, S. Making the most of group relationships: The role of gender and boundary effects in microcredit groups. Journal of Business Venturing. Accepted for Publication, April 2015.
Where do women entrepreneurs stand when it comes to using networks for performance?
Looking at entrepreneurial networks, some studies find differences in women’s and men’s network composition, structure and usage, while others fail to find any differences. Yet most sources seem to suggest that performance-wise, women entrepreneurs are still ‘behind’. For women entrepreneurs aspiring to get ahead, trying to mimic men’s network characteristics would seem to get them only so far. Even with the same network characteristics, it is not clear that performance effects for women would be the same as for men.
Tackling this issue, Professors Hana Milanov (TUM School of Management), Rachida Justo (IE Business School) and Steve Bradley (Baylor University) suggest that asking how women’s networks can become more like men’s is not the right question. Indeed, they suggest that looking beyond network characteristics to the context in which networks are used might provide novel insights. A context might be as broad as a profession (it has been established that females have a different status in the legal profession than in stereotypically female professions such as nursing), or as narrow as a characteristic of a particular group or a team (their study suggests a proportion of women in a group and the gender of the group’s leader play a role in the perception of women’s status).
The authors examine this issue among entrepreneurs in microfinance groups in Kenya. As entrepreneurship is considered to be a male-dominated activity, women entrepreneurs often face status-related obstacles (e.g. when raising funds). In making the most of networks, it is important to understand that a value of a relationship is at the other group members’ discretion. For women entrepreneurs, status deficit might limit the group member’s willingness to engage in or commit to a relationship. Indeed, this is what the authors find. Given the same network characteristics, women entrepreneurs seem to get less out of every contact compared to men. Importantly, their study also confirms that the group context matters in explaining nuances. For example, the presence of a female loan officer seems to offset the importance of gender status in network dynamics and help women in such groups better leverage their networks compared with women in groups with a male loan officer. The results of this study show a similar effect in groups in which women constitute more than 80% of group membership.
With this in mind, microcredit agencies interested in supporting women entrepreneurs should carefully consider factors such as loan officer profile and group gender composition given their potential to shape gender network dynamics. More broadly, these results are informative for managers concerned about gender diversity. Relationships and networks emerge within a context (e.g. a work group), and their dynamics are shaped by the characteristics of the same context. To the extent that managers are able to influence characteristics of their context – e.g. the group composition or leader election – they may contribute to women’s ability to make the most of their intra-group networks.
In conclusion – “who you know” still matters, but it does not explain the whole value spectrum of relationships. Network benefits are fundamentally context-dependent as long as the context shapes members’ willingness to imbue relationships with value.
Technical University of Munich
TUM School of Management