Strengthening Organizational Climate

Researchers have discovered a host of organizational climate benefits associated with the number of women serving in management and leadership. First, a number of studies have found that an organizational climate that is open to diversity is linked to employees’ lower intentions to leave.

Second, one study of government agencies in the U.S. found that employees were more satisfied when they perceived that diversity was effectively managed and that managers were fair to all employees. Third, other studies confirm that women leaders typically help ensure that more women are hired and in the pipeline for future leadership. Fourth, having more women in senior leadership roles is also linked to a smaller gender pay gap and wage increases, particularly for women at higher levels of companies.  Fifth, the Corporate Leadership Council discovered a link connecting commitment to diversity and inclusion with the level of employee engagement. Finally, one report stated that “mirroring the community can lead to a boost in productivity, customer satisfaction, and earnings.” For example, one retail company discovered that when their store employees matched the demographic profile of the community, it had increased sales. Since women constitute the majority of consumers today, companies are finding that it makes sense to have more female employees who better understand the needs of female consumers.

Women leaders also tend to look more carefully at issues of fairness in policies and practices for all employees.  A Chinese study found that boards with higher numbers of women were less likely to violate security regulations and to commit fraud. This study concluded that female board members appeared to contribute to reduced groupthink, better board independence, and improved monitoring. Additional studies have confirmed these findings in other countries and contexts.

Women also bring beneficial competencies and skills to teams. One field study experiment in Amsterdam found that mixed-gender teams had a higher team performance. Performance peaked when student teams were composed of about 55% women. Other scholars found that participants of more diverse teams felt that their teams were more considerate and that team leaders were better able to see each member as unique and as a valued contributor.  In addition, inclusive leadership styles, most commonly found in women, are also linked to reduced turnover and improved performance of diverse teams.  Finally, researchers continue to confirm that more diverse groups and teams result in more effective and ethical choices and decisions.

SOURCE:  Utah Women in Leadership Project, Research Brief No. 5, January 2015

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