Are American Female Executives a Risk Factor in the Global Economy?

In order for an organization to effectively manage risk, executive management must examine all potential factors that may have an impact on its ability to achieve goals, satisfy shareholders, and – among other aspects – maintain a positive perceived image among its supply chain. One of the pivotal areas of interest and risk is the manner with which American global organizations perceive their female executives in global roles. In an increasingly-interlinked world, organizational/employee constituencies will be made up of female executives, especially within management cadres (given the numerical growth of women in the domestic workforce). The purpose of this paper is to address the possible issues inherent in this shift. More specifically, the risk of assigning female staff persons to pivotal roles in an organization’s global effort and where exactly the female executive fits in the global endeavor, considering that sometimes perceptions found in the global environment may pose risk to the potential success of an organization, will be discussed. First, the issue of risk management is presented and areas of risk management are discussed, followed by a presentation of potential risks associated with female executives in the global business world. In addition, the person(s) who might be in the organization’s charge becomes extraordinarily important and redolent with risk will be identified. Finally, an assessment on the risks of placing female executives in global companies and the issue of organizational fit, as described above, will be presented.

A risk management assessment from a global approach should be taken from more angles than a U.S. organization that operates solely on a domestic level. First, a company that conducts its business on a domestic level can obtain its information easier than one that wishes to expand its operations into new soil. For example, should a local firm decide to expand its operations into different areas of the Commonwealth of Pennsylvania the management of the company would already be familiar with the laws and regulations of the Commonwealth, so the task is less daunting. Much more research is needed prior to entry into the global market. A company wishing to expand its operations into a different domestic region may not need to be as concerned with establishing relationships with the region’s existing business leaders, members of local communities, and government officials as a firm would if it were to expand globally to alleviate concerns of the region (Gupta & Govindarajan, 2004). Companies wanting to enter the global market must launch a public relations campaign to help gain the foreign public’s trust and respect while maintaining relations with the local communities and government. Opting-in to create a global posture is not always the best strategy. The culture of the foreign region, people, and business and political leaders whom management will form a relationship with may advise otherwise. The inclusion of female executives into the mix of management may also yield a potential risk.

One of the pivotal areas of interest and risk is the manner with which American global organizations perceive their female executives in global roles. American, as well as British, firms find women executives to be an asset in the global economy, especially in terms of preaching diversity (Streel & White, 2003). Cultural differences between the two nations may indicate potential risk factors, though. American women executives and those trying to climb the corporate ladder tend to have more ambition than those from the U.K. and can be perceived as overbearing – or manly – in some cultures (Emling, 2004). In some countries, the inability for a woman – regardless of beaurocratic level – to act feminine may indeed be a risk factor one not considered by American women. The perception of sending a woman to do a man’s job may seem offensive to foreign executives, although female managers and executives are commonly accepted in the U.S. In short, foreign executives may not feel comfortable dealing with women while conducting business (Fingar, 2001). “Europe is not… ready to embrace the unconflicted businesswoman. A survey of European directors shows that stereotypes of women's abilities and a lack of female role models are among the top barriers to advancement.” (Foroohar & Radcliffe, 2003, par. 11).

Domestic companies have taken strides in breaking the glass ceiling in the United States, but the global business world is still perceived to be a man’s world (Fingar, 2001). U.S. companies are giving women opportunities they may not have otherwise had 50 years ago, as indicated by a study conducted by “Catalyst, a New York-based research firm that studies workplace issues that affect women” (Fingar, 2001, par. 2), noting that “women now represent nearly half of the U.S. managerial labor pool” (Fingar, 2001, par. 3). U.S. companies are still cautious about sending women overseas due to the global perception that the international business world is still a man’s world. Women are willing to take on global assignments, but the apparent risks associated with sending women and lack of acceptance in the global business community need to be addressed. Currently, the risk containment strategy used by domestic organizations is to keep women moving up the corporate ladder in the U.S. and limiting their exposure abroad. This tactic, however, has a major drawback: more large companies are requiring that executive and high level management positions be filled with people who have some global experience (Fingar, 2001). Failure to provide women the opportunity to participate in the global environment can lead to backlash, leaving existing corporate directors and executives in a quandary.

Acceptance and American attitude in the foreign board room, particularly with women executives, are the result of perception and cultural differences. In parts of the world, where women are not accepted in leadership, such as the Middle East, sending a female executive to conduct business may give the domestic company the perception that it is weak or not serious about doing business. The culture and government of the United States have taken great strides in giving women the opportunity to be placed in leadership roles and break into the global economy. The rest of the world, however, may not be as ready. Even though companies in the U.K., New Zealand, Germany, and other countries are bringing women into the boardroom, they are still far behind the times when compared to U.S. companies (Jellnek & Adler, 1988; Fingar, 2001; & Emiling, 2004).

Risk containment by allowing only a small percentage of women in foreign board rooms is not a permanent solution. The problem lies in how the global business environment can be changed to accept women as equals. Organizations in developed countries have either implemented or are in the process of implementing programs to train women to become global executives (Fingar, 2001), but these training programs do not solve the issue of fostering an environment where women can succeed in every corner of the world: cultural barriers will remain. Breaking down these glass walls is a daunting task and leads to additional questions:

Should existing executives take a more proactive role in changing the attitudes and/or perceptions of individuals in lesser developed countries to accept women executives in the board room?

Would government intervention via international relations tools, tariffs, and incentives create a more level playing field?

Should domestic companies soften women executives to become more accepted in foreign board rooms?

Is the only solution to be patient and allow ample time for other countries’ cultures to become more tolerant and acceptable of women leaders?

The answers to these questions on how the environment should be changed and who should be responsible for making changes are outside the scope of this report and may become considered as the bases for additional studies. This report aimed to examine the possible issues inherent in bringing female executives to the forefront of international business. The risk of assigning female staff persons to pivotal roles in an organization’s global effort and where exactly the female executive fits in the global endeavor, considering that sometimes perceptions found in the global environment may pose risk to the potential success of an organization, were discussed. First, the issue of risk management was presented and areas of risk management were discussed, followed by a presentation of potential risks associated with female executives in the global business world. It was noted that acceptance and American attitude in the foreign board room, particularly with women executives, are the result of perception and cultural differences and that the only solution provided by American companies for risk containment is to limit the number of women executives overseas. The global environment needs to change before more women executives can be brought onto the international scene.

References

De Streel, M. & White, E. (2003, May 7). Burberry CEO delivers an encore to top list of women executives. The Wall Street Journal. Retrieved May 13, 2008 from http://www.marcusventures.com/press/wsjwomen.htm.

Fingar, C. (2001, January). Stay-at-home careers? Export Today''s Global Business, 17(1), 62.

Foroohar, R. & Radcliffe, L. (2003, November 17). Unless you're queen. Newsweek, 142(20), E28.

Gupta, A. K., & Govindarajan, V. (2004). Global Strategy and Organization. New York: John Wiley & Sons.

Jellnek, M. & Adler, N. J. (1988, February). Women: World-class managers for global competition. Academy of Management Executive, 2(1), 11.