How Gender Balance in the Corporate Suite Contributes to Financial Success

A new study led by Chandra Srivastava, an assistant professor of marketing at St. Edwards University in Austin, Texas, and a lecturer in marketing at the McCombs School of Business at the University of Texas at Austin, finds that women in executive-level management are more likely than men to focus on customer relationships, leading some companies to greater long-term financial performance.

The study of 389 Fortune 500 organizations over six years found female leaders are especially valuable to customer strategy in companies that operate in relatively stable environments. These companies are where women and marketers are well represented on boards of directors.

“In less regulated industries, where there is more strategic and tactical freedom, the inclusion of female executives may provide a ‘turnaround’ strategy for these companies, helping them instill and benefit from a greater customer orientation,” Dr. Srivastava said.

However, the researchers note that hiring more female executives will not always lead to superior financial returns. An entirely female top management team suffers from the same issues of gender imbalance – more homogenous perspectives and groupthink – as an entirely male top management team. CEOs must find the gender balance in their top management teams that facilitates an appropriate strategic orientation for their companies, according to the authors.

Dr. Srivastava holds a bachelor’s degree in economics and history and a Ph.D. in marketing from the University of Texas at Austin.

The full study, “Customer Orientation and Financial Performance: Women in Top Management Teams Matter!” was published on the website of the Journal of Marketing. It is available here.