Illinois labor market review

Volume 3, No.1
Spring 1997


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More Women than Ever Before Are Entering Managerial Occupations or Starting their Own Businesses

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More Women than Ever Before Are Entering Managerial Occupations or Starting their Own Businesses
By: Lee Sundholm

Among the trends in business today, we are all familiar with restructuring, reengineering, outsourcing, downsizing, managing change, quality management, and worker training and flexibility. But there's also a very important, and sometimes overlooked, trend: the expanding role of women in business.

The U.S. Department of Commerce reports that in 1970, 38% of the labor force (a total of 82.7 million persons) was made up of women. By 1994 this number had increased to 46 percent (the labor force was 131 million), and by 2005 the Department projects that 48 percent of the labor force (expected to be 150.5 million) will be women. Not only are the numbers of women entering the labor force increasing, but their participation rate (the percentage of the working age population, 16 years of age and older) is also rising dramatically while the participation rate of working age men is declining. In 1970 this rate for women was 43.3 percent, in 1994 it was 58.8, and by 2005, projections put this number at 63.2 percent. Comparable data for men in the same years are 79.7, 75.1, and 74.7 percent, respectively.

Trends: Women in Management

Looking at Table 1 we see that 48.1 percent of the occupations in the Managerial and professional specialty category are filled by women. Women are entering managerial occupations in increasing numbers, from nearly 3 million in 1983 to more than 4.2 million in 1994 (see Table 2). Over this same time period, the percentage of women in these occupations went from 38.9 to 53.8 percent. Total employment in these the occupations between 1983 and 1994 increased at an annual rate of 4.2 percent, while the percentage of women holding these jobs increased at a 7.3 percent annual rate. If the same rates of change were to continue from 1994 to 2005, the percentage of women in these occupations would be over 70 percent.




Table 1
Of the 60.3 million women in the labor force
in 1994, 50.3 million were employed
in these three categories

TOTALS IN MILLIONS
OCCUPATIONAL GROUP TOTAL WOMEN
Technical*, Sales,
Administrative Support
37.3
64.3%
Service Occupations
16.9
59.6%
Managerial and
Professional specialty**
33.8
48.1%
Source: Statistical Abstract of the United States 1995.

* Technical occupations include such occupations as health, engineering, and science technology workers; for example, clinical laboratory technologists and technicians.
** Professional specialty includes such occupations as architects, engineers, mathematical and computer scientists, natural scientists, and teachers.

 





Table 2
The number of women in managerial positions
increased 30.2% from 1983 to 1994


TOTALS IN THOUSANDS
1983
1994
TOTAL % TOTAL %
Officials & Administrators, Public
417
38.5%
598
46.1%
Financial Managers
357
38.6%
608
49.1%
Personnel & Labor Relations Mgrs
106
43.9%
111
61.6%
Purchasing Managers
82
23.6%
130
37.0
Mktg. Advertising, & Pub Relations Mgrs
396
21.8%
564
34.3%
Education & Related Fields Administrators
415
41.4%
701
62.0%
Medicine and Health Managers
91
57.0%
614
79.7%
Properties and Real Estate Managers
305
42.8%
479
50.6%
Management-Related Occupations
2,966
40.3%
4,269
53.7%
Source: Statistical Abstract of the United States 1995

Women as Employers

The National Foundation for Women Business Owners (NFWBO) is the not-for-profit research and leadership development foundation established by the National Association of Women Business Owners. The Foundation has determined that there are 7.95 million women-owned businesses in the U.S., employing 18.5 million persons, and generating nearly $2.3 trillion in annual sales. Women-owned businesses in the U.S. employ 35 percent more people than the Fortune 500 companies employ worldwide.

Research conducted by the NFWBO shows that traditional business ownership by women has been in sales and services. But since 1991, according to Women-Owned Businesses: Breaking the Boundaries (NFWBO and Dun and Bradstreet, April, 1995), the most significant growth in businesses owned by women had been in the services sector "especially in business services, personal services, and ...legal, educational, social and engineering services." Occupations in the services sector in general predominate among those projected to grow the fastest to the year 2005 according to the Bureau of Labor Statistics.

Women at Work Survey Results

In September, 1995 Fortune Marketing Research and Yankelovich Partners sponsored by Deloitte & Touche (hereafter, Fortune/Deloitte Touche) conducted a study to determine the perceptions of selected top and middle female and male managers (who were also Fortunesubscribers) on selected issues relating to the topic Women at Work.
Managers were polled on the following issues:

  • the status and satisfaction of women in business
  • the challenges which women face in the workplace
  • the efforts of companies to recruit, develop, and promote women
  • programs and policies which could help women advance in the business world
Following are the responses of the women who participated in the study.

Status and Satisfaction
When comparing current professional status to expectations,69 percent of the responses were in the range from About Where They Expected to Be to Very Far Ahead. Higher income (above $75,000) and smaller company size (less than 100 employees) tended to enhance current status of the women managers compared to expectations as measured in these categories.

When asked about perceived barriers to women's success in business, here is how women responded:
Perceived Barriers
% in Agreement
A male dominated culture
91%
The existence of a glass ceiling
88%
Women are excluded from the informal communications network
86%
Management believes that women are less career-oriented than men
84%

Companies Can Help Women Move Up

When rating their company's efforts to recruit, develop, and promote women into senior management positions, the Fortune/Deloitte Touche survey found that 54 percent of the women respondents rated these efforts from Good to Excellent. The study also showed that women, on their own, thought that they must develop greater self-confidence, assertiveness, and aggressiveness in order to "move up the corporate ladder." In order for their companies to assist them in professional advancement, women suggested the following initiatives:

  • leadership development programs
  • regular surveys of women about career satisfaction
  • mentoring for women
  • career development focusing on strategy and advice
  • rotation within the company to acquaint women with difficult areas

Women and Men as Entrepreneurs
Whether as employees of employers, women tend to emphasize intuitive thinking to a greater extent than do men. However, the National Foundation of Women Business Owners found that men and women entrepreneurs share some special traits. In their study, Styles of Success, The Thinking and Management Styles of Women and Men Entrepreneurs (NFWBO, 1994), the Foundation found that:

"Entrepreneurs as a group are different from the general working population in that they think more analytically and logically, focusing on reasoning, measurement, procedures, and projected outcomes. Both women and men entrepreneurs share this emphasis in comparison with he working population at large."

Different Styles

But entrepreneurial/management styles of men and women do also differ: As entrepreneurs, women tend to organize their business on the basis of networks. Men emphasize hierarchies. Compared to male entrepreneurs, women tend to be more reflective in running their businesses and will gather more opinions before making decisions. Women go into their own businesses in order to control their destiny. They develop a sense of pride and accomplishment which comes with building relationships and growing a successful business. Women tend to share profits with employees at an earlier stage than do their male counterparts. Women are also more apt to offer flex-time and tuition reimbursement programs to their employees.

The Foundation discovered that the highest rate of growth among women-owned businesses falls into the 100 or more employees category. Recall that the Fortune/Deloitte Touche study found that women employees tend to be more satisfied at companies of less than 100 persons. Hence, if satisfied there is probably less motivation to move on into one's own business.

Although the Foundation identifies" being taken seriously"in a "Male dominated" environment as a barrier for women business owners, business ownership for women appears to be a leveling factor producing greater opportunity and equality for women compared to being an employee. As employers, women have the opportunity to use skills which in the workplace (as employees) may be underutilized or inhibited by the "glass ceiling."

How to Succeed in Business

Success in business comes both from education and from learning by experience. Knowing how to think and how to use knowledge are vital skills for both women and men to possess in order to move up the ladder both as employees and as employers.

In his recent book, Managing In a Time of Great Change (Truman Talley Books/Dutton, 1995), Peter Drucker writes that the industrial worker is being replaced by the knowledge worker. Knowledge work, which requires continuous learning, is learning based, not experienced based, and requires the ability to grasp and apply theoretical and analytical knowledge. There are "priority tasks" which must be accomplished along with the development of "knowledge work." First is education. Drucker writes: "We will have to think through education -- its purpose, its value, its contents. We will have to learn to define the quality of education and the productivity of education, to measure both and to manage both."

By the year 2000, Drucker expects that knowledge workers will comprise about one-third of the labor force in the U.S. He believes that emphasis "has shifted from manual workers doing and moving things...to knowledge and service work...The disappearance of sex roles in knowledge work (will) profoundly affect...how we live."

As indicated earlier, the Bureau of Labor Statistics projects service sector jobs to be among the fastest growing occupations into the next century. The National Foundation for Women Business Owners finds that women business owners are moving in the direction of services. Combined with education and training, "knowledge work" might be the ultimate leveling factor for women as employees as well as for women as employers.

 



This article, which originally appeared in the Spring 1996 issue of the (North Park) MBA Alumni Newsletter, is used with the permission of North Park University

Lee Sundholm is a professor in the Department of Economics at North Park University in Chicago. IN addition to the changing role of women in business and management, his areas of interest include the application of economic analysis to business management and the relationship between labor and capital in national and international markets.



last updated: May 1, 2001