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Research on women business owners: past trends, a new perspective and future directions.

noted internationally. Each approach has different structural considerations, obstacles, and outcomes. Further consideration of these should provide insights into possible changes in public policy and assistance programs.

The number of women business owners is expected to increase rapidly in the next decade and they are expected to make a great impact on the workplace (The State of Small Business, 1990; Nelton, 1990b). For researchers, it is time to use a new lens to guide our research on the activities of women business owners and recognize a view that considers the integrated nature of relationships important to women business owners. The increase in women business owners(1) is apparent in the U.S. economy. Since 1970, the percentage of businesses owned by women has increased from 5% to 30%, (New Economic Realities, 1988), representing nearly three million of the nation's 12 million small businesses (Report to the President, 1985). According to the Internal Revenue Service, from 1977-1985, the number of women-owned sole proprietorships nearly doubled from 1.9 million to 3.3 million, an increase of about 9.4% per year versus 4.3% for men during the same period (New Economic Realities, 1988). Estimates are that women are starting businesses at a rate more than twice that of men (New Economic Realities, 1988). Similarly, a recent survey released by the Census Bureau notes that the number of women-owned firms has increased from 2.6 million in 1982 to 4.1 million in 1987; a 57% increase (Nation's Business, April, 1991).

Even though a smaller percentage of women are self-employed overall, about 8.6% versus 14.6% for men (Haber, Lamas, & Lichtenstein, 1987), women-owned businesses are contributing revenues, services, and jobs to the economy. It was estimated in 1988 that women-owned businesses had contributed more than $250 billion to the national economy by 1983 (New Economic Realities, 1988). Gross receipts of women-owned businesses are on the increase as well, rising from a .3% ($23 billion) contribution to national gross receipts in 1972, to more than 10% ($98 billion) in 1986 (Thierren, Carson, Hamilton, & Hurlock, 1986). Similarly, the SBA reports that receipts from women-owned sole proprietorships grew by $31 billion between 1977 and 1987 compared to a decline of over $8 billion for men (The State of Small Business, 1990).

Despite the tremendous growth in the number of women-owned enterprises and their increasing aggregate impact on society and the economy, there are few studies researching women business owners in general, comparing them to other groups of employed or non-working women, or comparing them to men. Most of the research to date on business ownership has focused on males (Collins & Moore, 1964; Roberts, 1968; Hornaday & Aboud, 1971; Kent, Sexton, & Vesper, 1982). This is not surprising since a higher percentage of men have started and operated their own businesses. Even though women have owned their own enterprises throughout history (Anderson & Zinsser, 1988), public policy and popular press interest in the phenomenon of women as business owners is relatively recent.

Investigation of women business owners as academic research subjects developed during the past decade. The earliest studies emerged in the late 1970s, and sought to distinguish the psychological and sociological characteristics of women business owners from male business owners, assuming there were few differences between males and females (Schrier, 1975; Schwartz, 1976). Other studies focused on women in male-dominated industries (Hisrich & O'Brien, 1981).

The largest study in the U.S. was produced by the President's Interagency Task Force (The Bottom Line, 1979) and identified instances of discrimination and barriers encountered by women business owners in their attempts to start new businesses. Since the completion of this report, the topic of women business owners has emerged as an area of more popular interest and research effort.

Research over the past ten years has shown there are similarities between male and female business owners across demographic characteristics, business skills, and some psychological traits (Hagan, Rivchun, & Sexton, 1989). However, differences between male and female business owners have been found in educational and occupational background, motivations for business ownership, business goals, business growth, and approaches to business creation. To date, these differences have been recognized but not fully explained.

This paper proposes a new perspective that offers a basis for interpreting unexplained gender-based differences between male and female business owners. This perspective, referred to as the "Integrated Perspective," is rooted in psychological and sociological theories that submit women's social orientations are more focused on relationships. This new perspective suggests that women view their businesses as an interconnected system of relationships instead of a separate economic unit in a social world (Kent, Sexton, & Vesper, 1982). This system of relationships composing the business is "integrated" into the woman business owner's life. The woman business owner is at the center of a network of various relationships that include family, community, and business. In other words, when a woman starts or acquires her own business, in her view she is not creating/acquiring a separate economic entity, rather she is "integrating" a new system of business-related relationships into her life.

In order to show the need for this new perspective and to substantiate its roots, this paper first reviews academic research on women business owners and their ventures, and TABULAR DATA OMITTED summarizes trends emerging from the findings of previous studies. Second, the Integrated Perspective is described, and questions and implications for future research on women business owners are discussed. This review is representative but not comprehensive and is limited to academic research in the field of entrepreneurship.


Articles published since 1975 were identified by reviewing past issues of entrepreneurship journals such as the American Journal of Small Business,(2) Journal of Business Venturing, and the Journal of Small Business Management.(3) In addition, book chapters, other relevant journals such as the Academy of Management Journal, the conference proceedings including the Babson College Proceedings, Frontiers of Entrepreneurship Research, and United States Association for Small Business and Entrepreneurship (USASBE) Conference Proceedings were identified from bibliographies. A total of 57 empirical articles were reviewed and evaluated for this discussion.

Generally, only a small percentage of studies in the field of entrepreneurship have focused on women and their businesses. For instance, the 1987 issue of Frontiers of Entrepreneurship Research, which categorized the 227 studies published between 1980 and 1987 by topic, showed that only 13 published studies investigated women and minorities (Churchill & Hornaday, 1987). While this appears to be a relatively small percentage, in fact this publication has included a very high number of studies of women business owners compared to the other popular journals. Table 1 reflects the number of articles researching women business owners in entrepreneurship journals and conference proceedings in recent years.

In order to examine the major trends emerging from previous studies, the 57 articles were classified according to Gartner's (1985) framework for new venture creation. This framework was selected because it clearly identifies the four key components of venture creation and ownership--individual, environment, organization, and process(4)--which are common to most entrepreneurship frameworks (Vesper, 1980; Kent, Sexton, & Vesper, 1982; Timmons, 1985; Stevenson & Gumpert, 1985). Classification of articles was based on title, purpose, and major research theme as stated in the papers. Table 2 contains a listing of authors who have conducted studies on women business owners and is organized by topic according to Gartner's (1985) framework.

Consistent with most research in entrepreneurship, the greatest number of studies of women business owners have focused on the "individual": demographic background, psychological characteristics, motivations, and educational and occupational experiences (Churchill & Hornaday, 1987).

Recent studies have investigated aspects of the organization such as strategy, problems, and management style. Start-up activities, such as acquisition of capital and networking behaviors, are other new areas of research. Only three studies have examined environmental factors (economic) as they related to women-owned businesses.


The most popular research design was survey, with the majority of these being descriptive studies. As indicated in Table 3, 36 studies employed a cross-sectional research design, nine of which were national in scope, while the remaining studies were limited to a particular state or region. Twelve studies employed in-depth personal interview techniques, two were longitudinal, and three utilized archival or secondary data bases. The prevalence of descriptive cross-sectional research is not surprising, given that the objectives of early efforts investigating women business owners were to describe their characteristics and activities, similar to early research on males (Kent, Sexton, & Vesper, 1982).

A minority of the studies reported the use of random sampling techniques, with the majority choosing convenience samples of women business owners who were personally known to the researcher, such as SBDC clients, students, women's networking, or business associations (see Table 3). This is to be expected in that there are no comprehensive national listings of women business owners, and more inclusive state lists have only been collected within the past five years. Further, nearly 50% of the studies sampled only women business owners and did not use a comparison group, whereas nearly 26% did use men as a comparison group. The more recent studies have contrasted women business owners to other groups, men or women executives, while earlier studies compared women business owners to what was known about male business owners (see for example, Schrier, 1975; Humphreys & McClung, 1981; Hisrich & Brush, 1982).

Consistent with research on male entrepreneurs, the bulk of the research to date has centered on individual characteristics (Kent, Sexton, & Vesper, 1982). As a result, the primary theory bases used have come from psychology (see for example, Waddell, TABULAR DATA OMITTED 1983; Sexton & Bowman, 1986), and trait and psychoanalytic theories are most often employed. For measures, Rotter's Locus of Control Scales, Edwards Personality Schedule, and Jackson Personality Inventory are commonly used (see Table 4). More recently, social interaction and network theories from sociology have been the basis for investigation of start-up processes (see for example, Carsrud, Gaglio, & Olm, 1987; Aldrich, Reece, & Dubini, 1989; Nelson, 1989).
Table 3
Design and Sample Selection in Research on Women Business
   Research Design                    Number   Percent
Mail Survey, Cross sectional            36      63%
  Local/State Region   27
  National              8
  Multi-Country         1
Personal Interview                      12      21%
Archival, Database                       3      5%
Longitudinal (national)                  2      4%
Case Studies                             2      4%
Phone Interview                          1      1.5%
Experimental Design                      1      1.5%
                          Total         57    100%
             Samples                   Number   Percent
U.S. Women Business Owners               26      46%
Men & Women Business Owners              14      25%
Women Business Owners from U.S.
  and/or Foreign Countries                7      12%
Women Business Owners & Other Groups      7      12%
  Women Managers   3
  Minorities       2
  Students         1
  Part-time WBOs   1
Other Samples (Loan Officers, Students)   3      5%
                          Total          57    100%

It is notable that one-third of the studies in this review neither explicitly stated that the research was connected to a theory base nor did they indicate if they were exploratory or designed to generate theory (see Table 4). Further, many of the studies using scales and measures from the field of psychology did not explicitly note the linkage between the theory and the research.

Statistical analysis techniques employed have been consistent with the descriptive focus of the research with nearly one-half of the studies reporting only frequency distributions. Again, it is the more recent works that have employed regression analysis, factor, cluster, or discriminant techniques. Qualitative studies employing qualitative analysis are similarly more recent and also few in number.

In sum, the methodologies employed most often for research on women business owners have been cross-sectional surveys that used convenience samples, analyzed data with descriptive statistics, and frequently did not link the research to a theory base. In short, rigor is lacking in much of this work. Other methodological problems noted were similar to those described by Stevenson (1986) and included infrequent instrument validation, reliance on a single convenience sample, and one source and method of data collection. Many studies tended to generalize behaviors and characteristics of women TABULAR DATA OMITTED business owners across different types of women, such as new business creators and family business successors, and business characteristics such as age, industry, and size.

Despite these problems, there are several instances of careful and rigorous work in more recent studies. For example, work matching samples of males and females to examine psychological traits (Welch & Young, 1982; Carsrud & Olm, 1985; Sexton & Bowman, 1986; Masters & Meier, 1988) has proved fruitful in distinguishing particular areas where men and women business owners do differ. Particular issues affecting women business owners have been highlighted in careful qualitative work by Cromie & Hayes (1988); whereas cross-cultural sampling (Aldrich, Reece, & Dubini, 1989), development of a logit model (Kalleberg & Leicht, 1990), and testing of social interaction theory (Nelson, 1989) are representative of high quality methodological work. While the bulk of the research to date has not been rigorously performed, it appears there is a trend toward more careful methodology based on these more recent studies.


Individual Characteristics of Women Business Owners

It is generally agreed that women business owners are more similar to than different from men across psychological and demographic dimensions such as motivations (independence, achievement, job satisfaction) for starting a business (Schrier, 1975; Schwartz, 1976; Welsch & Young, 1982; Geoffee & Scase, 1985; Hisrich & Brush, 1983; Chaganti, 1986; Longstreth, Stafford, & Mauldin, 1987). The majority of studies examining personality and psychological characteristics have employed reliable and valid instruments to compare samples of males and females. These studies conclude that women business owners are more similar than different from males across personality factors (Sexton & Bowman, 1986), risk-taking propensity (Masters & Meier, 1988), and psychological characteristics (Welsch & Young, 1982; Dugan, Feeser, & Plaschka, 1990). Sexton and Bowman (1986, 1990) have found in the course of several years' research that the only significant gender-based trait differences are that women business owners reflect a lower risk-taking propensity and energy level.

In spite of these conclusions, it is notable that many of the standard psychological instruments employed by researchers to measure entrepreneurial traits of women business owners are derived from research on samples of male entrepreneurs (Hurley, 1991). For example, McClelland's (1961) work on need for achievement as a motivation for entrepreneurship emerged from research on men. Similarly, Collins and Moore's (1969) work on motivations investigated male founders of manufacturing firms and concluded that these individuals had unresolved fears of their fathers which motivated them to pursue autonomy through business creation. Measuring instruments flowing from this work were similarly developed using samples of males (Kent, Sexton, & Vesper, 1982). The fact that these instruments were developed on male populations suggests that they may not fully explain the personality traits of female business owners.

Some demographic characteristics of women business owners also are similar to those of men. For example, marital status (married), age (30-45), birth order (first born) (Charbonneau, 1981; Watkins & Watkins, 1983; Hisrich & Brush, 1983; Sexton & Kent, 1983; Mescon, Stevens, & Vozikis, 1983/4; Honig-Haftel & Martin, 1986; Neider, 1987), and having a self-employed father (Hisrich & Brush, 1983; Watkins & Watkins, 1983; Birley, Moss, & Sanders, 1987) are not significantly different between women and men business owners. However, it is notable that a higher proportion of males tend to be married than females (Stevenson, 1986), and a higher percentage of spouses of male business owners did not work compared to spouses of female business owners (Honig-Haftel & Martin, 1986).

Differences between male and female business owners in individual characteristics have been noted especially in background factors such as work experience and education. Several studies found that women business owners had previous work experience in teaching, retail sales, office administration, or secretarial areas (Hisrich & Brush, 1983; Welsch & Young, 1983; Scott, 1986; Neider, 1987) rather than executive management, scientific, or technical positions more typical of men (Watkins & Watkins, 1982; Stevenson, 1986). Likewise, research on career paths has found that for women, careers are more frequently interrupted (Kaplan, 1988; Cromie & Hayes, 1988), and that men more often had previous work experience in self-employment (Kalleberg & Leicht, 1990).

The educational level of women business owners is comparable to men (Birley, Moss, & Sanders, 1987), but the fields of study differ widely. Most often women have pursued undergraduate studies in liberal arts rather than business, engineering, or technical subjects (Hisrich & Brush, 1983; Watkins & Watkins, 1983; Scott, 1986; Honig-Haftel & Martin, 1986; Neider, 1987).

While the general business management skills of men and women business owners have been reported not to vary significantly (Birley, Moss, & Sanders, 1987), women business owners feel that social adroitness and interpersonal skills are their strongest assets (Smith, McCain, & Warren, 1982; Hisrich & Brush, 1984). Likewise, self-assessed competence in financial skills has been frequently rated lower by females than males (Hisrich & Brush, 1984; Chaganti, 1986).

Early research found the personal timing and circumstances for business start-up/acquisition is similar for males and females in that economic necessity was a frequent condition (Schrier, 1975; Schwartz, 1976). However, more recent studies have found men more often become business owners out of a desire to be an entrepreneur (Scherer, Brodzinski, & Wiebe, 1990) or not work for someone else (Swayne & Tucker, 1973), while for women the dominant impetus is a desire to create employment that allows flexibility to balance work and family (Geoffee & Scase, 1983; Scott, 1986; Chaganti, 1986; Kaplan, 1988; Holmquist & Sundin, 1988; Brush, 1990). One recent study proposes that interest in helping others is a key motivator for women to become business owners (Thompson & Hood, 1991).

Few studies have investigated differences in individual characteristics across groups of women. Research in this area has found that women do face different issues and problems depending on a woman's stage of personal life cycle (Kaplan, 1988), region or industry of location (Holmquist & Sundin, 1988), and role perceptions in business ownership (Geoffee & Scase, 1985).

It can be concluded that women business owners are more different from than similar to men in terms of individual level factors such as education, occupational experience, motivations, and circumstances of business start-up/acquisition. The next section will consider the organizational level factors in women-owned businesses.

Organization Characteristics of Women-Owned Businesses

Several studies have reported on the characteristics of businesses owned by women, but few have explored the strategy, problems, and structure of their enterprises. Descriptive methodologies comparing women-owned businesses to what is known about male-owned businesses are the most common types of studies. Investigation of the characteristics of the businesses owned by women shows these to be predominantly service-oriented (Schrier, 1975; Smith, McCain, & Warren, 1982; Hisrich & Brush, 1983; Cuba, Decenzo, & Anish, 1983; Scott, 1986; Neider, 1987); small in terms of revenues and employees (Cuba, Decenzo, & Anish, 1983; Hisrich & Brush, 1983; Welsch & Young, 1984; Scott, 1986); and young--less than five years old (Hisrich & Brush, 1983; Cuba, Decenzo, & Anish, 1983; Scott, 1986). Comparable to male-owned businesses, women most often choose sole proprietorships as the preferred form of business structure (Hisrich & Brush, 1983; Cuba, Decenzo, & Anish, 1983; Mescon, Stevens, & Vozikis, 1983/4).

Strategic management aspects of women-owned businesses have been rarely investigated, but differences from male-owned enterprises have been noted with regard to management style, which has been described as more "feminine" (Chaganti, 1986), informal (Cuba, Decenzo, & Anish, 1983), and participative (Neider, 1987). This parallels in-depth case research of high-level women executives that found women emphasized openness in communications, participative decision making, and less hierarchical organizational structures (Helgesen, 1990). On the other hand, one study did find women-owned businesses to be structured, formal, and well-planned (Mescon, Stevens, & Vozikis, 1983/4), but this may have been a function of the sample which consisted of women-owned real estate firms averaging 15 years old.

Business goals is another area where women-owned businesses differ from those that are male owned. Women business owners frequently note that they pursue social goals, such as customer satisfaction (Holmquist & Sundin, 1989; Moriya, Judd, & File, 1988; Hisrich & Brush, 1987; Chaganti, 1986), together with economic goals, such as profit and growth, emphasized by male-owned firms (Kent, Sexton, & Vesper, 1982; Stevenson & Gumpert, 1985).

The great disparity in financial performance between male- and female-owned businesses also suggests profit and growth may not be the main goal of these enterprises. Several studies note sales of women-owned businesses tend to be less than $500,000 annually (Hisrich & Brush, 1983, 1987; Cuba, Decenzo, & Anish, 1983; Welsch & Young, 1983; Longstreth, Stafford, & Mauldin, 1987).(5) Longitudinal research shows the average gross revenues of women-owned businesses to be about $100,000 a year, with sales growth averaging 7 percent a year, whereas the average for male-owned small businesses is closer to $500,000 annually (Hisrich & Brush, 1987). These statistics may reflect a desire by women-owned businesses to focus on goals other than growth and performance.

Problems of women-owned businesses have been investigated and described in several studies, most finding women not to experience any serious formative problems unique to their gender (Pellegrino & Reece, 1982). While problems hiring and maintaining employees, managing time, and delegating are typical of both male- and female-owned enterprises (Pellegrino & Reece, 1982; Cuba, DeCenzo, & Anish, 1983; Hisrich & Brush, 1987), problems in managing conflict between personal and work responsibilities are more frequently mentioned by women business owners (Geoffee & Scase, 1983; Honig-Haftel & Martin, 1986; Scott, 1986; Neider, 1987).

Financial aspects of venture start-up and management are without a doubt the biggest obstacles for women. Obtaining start-up financing and credit (Schwartz, 1976; Charbonneau, 1981; Pellegrino & Reece, 1982; Hisrich & Brush, 1984; Neider, 1987; Olm, Carsrud, & Eddy, 1988), cash flow management in early operations (Hisrich & Brush, 1984; Scott, 1986), and financial planning (Hisrich & Brush, 1984) have been noted in several studies.

While financial problems are also common to male-owned businesses, they may not always be the biggest obstacle (Chrisman & Leslie, 1984). One recent study comparing start-up problems of male and female business owners found no significant differences in types or amount of pre-venture assistance required (Chrisman, Carsrud, DeCastro, & Herron, 1990). Nevertheless, it has been suggested that financial difficulties are exacerbated for women who have not had experience in finance, or rate themselves weak on financial skills (Hisrich & Brush, 1984). Further, it is proposed that women have difficulty penetrating informal financial networks (Olm, Carsrud, & Alvey, 1988) due to their lack of experience and skills (Aldrich, 1989; Hurley, 1991). Several studies have reported that women used only personal assets at start-up and have employed no or minimal external funding (Honig-Haftel & Martin, 1986; Neider, 1987; Hisrich & Brush, 1987; Olm, Carsrud, & Alvey, 1988). Moreover, women frequently start their businesses with half the amount employed by male business owners (an average of $11,000 versus $22,000) (Hisrich & Brush, 1987; Brush, 1990).

Consistent with male-owned enterprises, financial problems of women-owned businesses do seem to vary by stage of development. A longitudinal study by Hisrich and Brush (1987) found early problems in obtaining outside financing were diminished after the business had developed a track record. The same study found that as women's businesses got older, the priorities of problems shifted from purely financial to general business management issues, such as personnel and marketing, which is consistent with findings for male-owned businesses. Delegating responsibility was another general management problem reported frequently by established women-owned businesses (Cuba, Decenzo, & Anish, 1983; Neider, 1987). Similarly, a longitudinal study investigating survival rates of male- and female-owned businesses found women-owned businesses are not more likely to fail (Kalleberg & Leicht, 1991).

In sum, organizational characteristics of women-owned businesses are more different than similar to male-owned businesses. While form of business and general business problems over the life cycle of the enterprise do not vary widely by gender of the owner, there are wide differences in sales levels, management styles, goals and severity of financial obstacles at start-up.

Process of Creating or Acquiring a Business

Activities involved in identifying an opportunity, acquiring resources, and building a business have been investigated in only a few studies (see Table 2). The area of most research is networking, a means of obtaining information and resources important to business development (Carsrud, Gaglio, & Olm, 1986).

The existence or non-existence of networks at start-up is not a distinguishing characteristic of women-owned businesses (Carsrud, Olm, & Gaglio, 1989). Similarly, the process of building networks of contacts does not appear to differ across gender (Aldrich, Reece, & Dubini, 1989). The information needs of women business owners (Nelson, 1987) and the degree of planning and importance of personal versus impersonal information are also very similar between male- and female-owned businesses (Smeltzer & Fann, 1989).

On the other hand, differences in network compositions and size have been identified in research. One rigorous study of Italian and U.S. male and female business owners found notable differences in the composition of networks--those of women business owners were made up of a greater proportion of females (Aldrich, Reece, & Dubini, 1989). Researchers note that women are seeking to build their own "female" networks where they gain both social and instrumental support (Smeltzer & Fann, 1989). Likewise, women tend to have smaller networks, which may limit their access to low-cost facilities or transportation (Aldrich, 1989).

In the area of support systems, there is evidence that women business owners tend to have many strong supporters (Hisrich & Brush, 1983; Olm, Carsrud, & Alvey, 1988; Smeltzer & Fann, 1989) and in particular, a spouse or significant other seems to be an important factor for successful women business owners (Sexton & Kent, 1981; Hisrich & O'Brien, 1981; Hisrich & Brush, 1983; Nelson, 1987). It is difficult to say if the support systems of women differ from those of males because there have been few studies of men exploring this issue.

The limited number of studies investigating the steps in the process of business acquisition or creation make it difficult to identify well-defined trends. However, it has been proposed in a comprehensive examination of women-owned businesses in 24 countries (including the U.S.) that because of different occupational, social, and educational experiences, women may follow various approaches to venture creation that may result in different steps, different problems, and different business outcomes (Brush, 1990).

Environmental Factors Affecting Women-Owned Businesses

The relationship of environmental factors to women and their enterprises is the area where the fewest studies have been completed. The issue of possible credit discrimination against women business owners has been examined in three recent studies (Buttner & Rosen, 1988; Buttner & Rosen, 1989; Riding & Swift, 1990). While lending institutions still perceive women business owners to be less successful than men (Buttner & Rosen, 1989), loan officers did not note any differences by gender in the objective quality of business plans prepared by males and females (Buttner & Rosen, 1989). Furthermore, a large Canadian national study found that terms of loans granted to male and female business owners did not vary significantly (Riding & Swift, 1990), and concluded it was the banking relationship that differed by gender.

Given the scarcity of studies of environmental factors and their relationship to women-owned businesses, it is difficult to draw substantive conclusions. The focus on financial institutions as possible sources of differences between male- and female-owned enterprises is logical given the previously mentioned financial problems experienced by women. However, the impacts of political, cultural, technological, and social factors do remain to be studied (Hurley, 1991).


We can conclude from the above discussion that there are more differences than similarities between male- and female-owned businesses. As noted by Sexton (1989), this review found that most studies agree that there are few gender-based differences in certain psychologically based entrepreneurial traits. Furthermore, some motivations, demographic characteristics, basic business skills, problems, planning, and terms of outside financing do not vary significantly by gender.

On the other hand, women business owners differ greatly from males in several areas. Significant differences have been found in reasons for business start-up/acquisition, timing and circumstances of start-up, educational background, work experience, and business skills. More differences are apparent in business goals, management styles, business characteristics, and growth rates. These variations suggest that women perceive and approach business ownership differently than men. To unify these differences, a new perspective for thinking about women-owned businesses is proposed, one that looks at the business through the eyes of women.

The basis of this perspective is similar to a cooperative systems view (Barnard, 1938), which assumes the organization to be a consciously coordinated system of activities conditioned by communication, cooperation, and common purpose. Organizational theorists have discussed this view of organizations as it relates to business strategy (Chaffee, 1985), but this idea has not been frequently employed in entrepreneurship.

This paper suggests that women perceive their businesses as "cooperative networks of relationships" rather than separate economic units. In this conception, business relationships are integrated rather than separated from family, societal, and personal relationships. The business is "integrated" into the woman business owner's life. This "integrated" perspective offers explanations for many of the differences between male-and female-owned businesses as well as suggests future directions for research.

Foundations of the Integrated Perspective

The world consisting of multiple socially constructed realities created through social interactions, language, knowledge and experience has been espoused by sociologists (Berger & Luckman, 1967). Similarly, the theory that women perceive a different reality due to their situation and experiences has been empirically investigated in psychological studies (Miller, 1976; Gilligan, 1982), and written about in studies of female managers (Hennig & Jardim, 1977). A popular book by Helgesen (1990) borrowed from Mintzberg's (1973) methodology to investigate perceived roles of women managers. This work found that women emphasized interpersonal connections, were guided by intuition and opportunity, and dealt with work and family matters simultaneously.

The main theme of this psychological research is that women's "reality" is characterized by connectedness and relationships (Gilligan, 1982) rather than the autonomy and logic more typical of men's reality. This stream of literature further argues that women's social orientations are directed towards cultivating strong relationships rather than achieving independence (separateness) and position (Gilligan, 1982). A woman's identity is defined in the context of a relationship with decisions situationally determined. Women's personal reality is "web-like," connecting family, work, and community relationships. Men's reality is seen as separate and autonomous, with decision making being logical and rule-based (Gilligan, 1982).

Recent work in sociology by Aldrich (1989) supports the idea that women business owners may view their social relations differently than men by placing more emphasis on building interpersonal relationships. Aldrich (1989) goes on to suggest that the causes for this "different view of reality" emanate from social structures: the workplace, marriage, family, and organized social life. He suggests that not only do women still face a limited range of job opportunities, primarily in the service sector, but also have limited access to upper-level management experience, which similarly limits opportunities in entrepreneurship (Nieva, 1985; Cromie & Hayes, 1988; Aldrich, 1989; Gould & Parzen, 1990). In addition, women are more likely to have primary responsibility for domestic responsibilities, work part-time, and have interrupted careers (Larwood, Stromberg, & Gutek, 1985; Aldrich, 1989; Gould & Parzen, 1990). In social life, women's social networks are frequently a function of their children (i.e. parent-teacher associations, school committees) and they are often excluded from informal business networks and professional business clubs (Gould & Parzen, 1990). Thompson & Hood (1991) argue that women's view of their business's corporate social performance is different from men's because of their psychological make-up and sociological experiences. Research by Hurley (1991) suggests not only that women's perspectives on entrepreneurship are different, but also that new female-based theories need to be employed in sociology to investigate business ownership by women.

Despite sociological and psychological evidence that women's internalized systems of thinking and social and work experiences vary from men's leading to a different view of reality, the bulk of the research on women business owners assumes a view of business ownership rooted in men's view of reality, which is characterized by autonomy, logic, and rule-based decision making. Studies on women business owners have been based on male-derived psychological traits (Stevenson, 1986) and focus on structural factors (political, economic, cultural) as they affect male populations (Hurley, 1991). Furthermore, this research has explored business creation and performance based on the assumption that the venture is viewed as a separate economic entity designed primarily to achieve profit through competitive advantage and the creator of the business is assumed to follow a logical sequence of steps (see for example, Hagan, Rivchun, & Sexton, 1989).

If we acknowledge this evidence on women's view of reality from sociology and psychology, it is logical to assume women would view their businesses differently from men. A closer look at the empirical studies of women business owners reviewed herein supports this idea (Holmquist & Sundin, 1988). The "Integrated Perspective" is proposed as a new basis for investigating women-owned businesses (see Table 5). The main premise of this perspective is that many women business owners conceive of their businesses as a cooperative network of relationships rather than primarily as a separate profit-making entity. As such, these cooperative relationships become integrated into a TABULAR DATA OMITTED woman's life along with her family and community relationships. The women business owner is at the center of these various mutual relational interactions and her role is to bring these connections together. This perspective suggests different interpretations of the variables across the four main dimensions involved in venture creation or acquisition, and begs different questions for future research.


Individual Dimensions

View of business. The main assumption of the integrated perspective, that women business owners view their businesses as a cooperative network of relationships, is suggested by current studies. Research has found there is considerable crossover between business and personal dimensions of life in the case of women business owners, which suggests these are connected (Stoner, Hartman, & Arora, 1990). While this also has been alluded to in some studies (Chaganti, 1986; Aldrich, 1989; Brush, 1990; Holmquist & Sundin, 1990), further investigation through field research or case studies would be the first step in refining this proposed viewpoint. Questions of interest include:

1. How do women business owners view their businesses? Is there variation in perspective of the business across types of women business owners based on dimensions such as age, location, work experience, life cycle stage, or cultural background?

2. Is the perspective that women business owners have of their business similar or different from that of male business owners? If so, how do perspectives of businesses vary between male and female business owners?

3. What are the implications for the differences in perspectives (if any) between males and females across business strategy, goals, and performance of their enterprises?

Role. The commonly accepted role for business creators is to be the initiator, innovator, or creator (Vesper, 1990). While women business owners may in fact initiate or create their own businesses, they may conceive of their role as a coordinator of relationships (Aldrich, 1989). Their role is to facilitate and enable others to make contributions (Shaef, 1985). Research questions of interest are:

1. How do women business owners view their primary role in business operations? How is this role related to other roles that women business owners assume?

2. What are the implications of the perceived roles of women business owners for business operations and performance? For family, community and the woman business owner?

The nature of these questions could be explored in field research similar to Helgesen's methodology (1990). Further, the use of "role set theory" (Bird, 1989) may be an appropriate theoretical framework to employ.

Motive. Even though it is a popular notion to "be an entrepreneur," there are several empirical studies suggesting that women business owners are motivated to create or own their own businesses out of a desire to have flexibility in their work and family (Geoffee & Scase, 1983; Chaganti, 1986; Birley, 1989; Holmquist & Sundin, 1990). Women are motivated by job frustration (Kaplan, 1988) rather than a desire to express themselves by becoming an entrepreneur (Geoffee & Scase, 1983). For example, Lynn Wilson, who heads a large public relations firm, notes in a recent issue of Nation's Business, "I never considered being an entrepreneur." She started her $250 million firm because she wanted to have flexibility in her family and work (Nelton, 1990a, p. 17).

There is also some evidence that social issues or problems are the impetus for women to begin businesses. Cathy Leibow started Baby Minder Finders, a private child-care referral service, when she encountered problems locating a day-care provider for her own infant (Leibow, 1991). Research questions of interest include:

1. What factors lead to the decision of women business owners to become business owners? Are these factors similar or different from males? What is the effect of these factors on the start-up process? Are there differences for male and female business owners?

2. Do women business owners differ from men in motivations for business creation/ownership across age, family life cycle, or background?

Although testing of motivations has been done using existing psychological theories and instruments, more study of motivations of women business owners is needed. As noted earlier, many of the instruments previously used have been based on psychological motivations of males (Hurley, 1991; Stevenson, 1986). Instead, motives such as "flexibility," "necessity," "social contribution," "affiliation" (Gilligan, 1982) might be tested on carefully selected samples of male and female business owners and matched samples of different groups of women business owners, such as venture creators and acquirers.

Decision making. Normative literature in entrepreneurship suggests that a logical stepwise decision-making process is best for women business owners (see, for example, Hagan, Rivchun, & Sexton, 1989), yet there is no evidence that women follow this model. Rather, many women business owners seem to have an "intuitive" (Hisrich & Brush, 1987; Dugan, Feeser, & Plaschka, 1990) or team approach (Chaganti, 1986) to decision making. Similarly, Helgesen (1990) comments that women managers typically seek lots of information, trade ideas with people and let it "jell" before making a choice. Further, women business owners quoted in the popular press have noted "women are more willing to allow people to be involved in decision-making" (Nelton, 1990a, p. 20). Research questions of interest are:

1. How do women business owners make critical decisions? How do they frame decisions and make choices?

2. Is the decision-making process of women business owners similar or different from that of male business owners?

Decision theories from strategic management such as decision framing (Tyversky & Khaneman, 1981), incremental decision making (Lindblom, 1959), or rational decision making (March & Simon, 1958) would offer useful approaches to test and investigate these issues. Comparative case studies or longitudinal analysis of a single business owner in a company also might be appropriate methodologies.

Success. Personal success in business is frequently synonymous with high income and wealth. However, for many women business owners there is evidence to suggest that they view personal success as achieving a balance between family and work (Schwartz, 1976; Humphreys & McClung, 1981; Neider, 1987; Holmquist & Sundin, 1990). This interpretation of success is consistent with the earlier proposed motive for acquiring or starting a business as well. In the integrated view, family, social, and business relationships are connected, thus suggesting that measures of success should not be achievement of personal wealth. Thompson & Hood (1991) note that women business owners frequently measure success by helping others and self-fulfillment rather than just profits. Questions of interest might include:

1. How do women business owners measure personal success? Do women business owners view personal success in the same way that male business owners view it?

2. Is there variation in the view of success across different types of women business owners based on location, education, experience, or life cycle stage?

The first step in exploring these questions might be field research to examine the dimensions of personal success as perceived by women business owners. Second, these dimensions might be tested on other groups, such as women managers, non-working women, and male business owners.


Business goals. Business goals for small businesses are assumed to be primarily economic (Kent, Sexton, & Vesper, 1982). However, research suggests that a balance between economic and non-economic goals may be a more accurate description for women-owned businesses (Chaganti, 1986; Hisrich & Brush, 1987; Kaplan, 1988). Such goals as customer satisfaction (Kaplan, 1988), to make the firm the best (Chaganti, 1986), or to help others (Thompson & Hood, 1991) have been frequently mentioned. Kalleberg and Leicht (1991) found women business owners placed more emphasis on quality than males. Relatedly, one woman business owner was quoted as saying "my progress is not generated by a quest for money or a quest for being bigger--but a quest for being better" (Nelton, 1990a, p. 19). Questions of interest are:

1. What are the primary business goals of women-owned businesses? To what degree are these economic or non-economic goals?

2. How do these goals arise and do these goals vary over the life cycle of the business or by type of business?

3. To what degree do women- and men-owned businesses have similar or different goals? What are the implications of these goals for business operations and performance?

Structure. While many small businesses are conceived of as hierarchical structures, many women-owned businesses have been characterized as networks or teams, loosely and informally structured (Schwartz, 1976; Neider, 1987). Watkins and Watkins (1983) suggested that males replicated the business in which they had experience. Because many women business owners have not had previous venture-creation experience (Hisrich & Brush, 1983), lack high-level executive experience, and have interrupted careers, they frequently structure their organizations differently from men, in a flexible, personal manner where a team philosophy predominates (Chaganti, 1986). Questions of interest include:

1. How do women business owners organize their businesses and allocate responsibilities among employees?

2. Do women business owners employ different structure and design dimensions from male business owners?

3. What are the implications of any differences in structure and design dimensions on business operations of male- and female-owned businesses?

Business performance. Typically business performance is measured in economic or financial terms (Brush & VanderWerf, 1991). However, there is empirical evidence that suggests women-owned businesses earn less money (Hisrich & Brush, 1987; Brush, 1990) and often do not grow as rapidly as male-owned businesses (Kalleberg & Leicht, 1991). Sexton (1989) notes that growth is a choice; it is likely that many women business owners choose not to grow their businesses, instead pursuing other goals. As one woman business owner recently noted, "growing is more than growing in size; it's growing in knowledge and ability to do what you do better--it's growing in a lot of ways" (Nelton, 1990a, p. 19). Hence, the assessment of business performance for women-owned businesses should include not only financial measures, but should incorporate other measures such as employee satisfaction, social contributions, goal achievement, and effectiveness. Questions of interest include:

1. How is business performance measured by women business owners? How is this similar or different from male business owners?

2. Does interpretation of business performance vary across groups of women business owners?

3. What are the perceptions of business performance of women-owned businesses from the viewpoint of employees? customers? community?

Planning. Relatively little research has been done on planning in women-owned businesses. Normative literature suggests that the process should be a linear and stepwise progression (Hagan, Rivchun, & Sexton, 1989). Some research has found that many women business owners do not plan (Cuba et al., 1983), while other research has found that many do plan, and the process is often participative (Hisrich & Brush, 1987). In terms of distinct competence and competitive advantage, customer service and quality are most often mentioned (Kalleberg & Leicht, 1991). Research questions of interest are:

1. How do women business owners conceive of planning? What is the content and process of their planning activities?

2. Does planning vary for male- and female-owned businesses? If so, what are the implications for business operations and performance?


Activities involved in business start-up acquisition. Although the business-creation process is generally prescribed as a sequential series of steps (Kent, Sexton, & Vesper, 1982), some studies of women business owners have found that the process by which women business owners create or acquire their own business is simultaneous rather than sequential (Geoffee & Scase, 1983; Kaplan, 1988). Because women business owners frequently have interrupted careers (Kaplan, 1988) and have primary responsibility for the children (Aldrich, 1989), the business creation process is often intertwined or simultaneous with managing a family (Brush, 1990). This in turn requires a strong support system of relationships (Hisrich & Brush, 1987; Nelson, 1989; Smeltzer & Fann, 1989). In fact, recent articles in Nation's Business noted that most women business owners refuse to sacrifice their personal life to business (Nelton, 1990a, p. 22; 1990b, p. 32), pointing out the interconnection between work and family. Moreover, a large proportion of women business owners are homebased (Honig-Haftel & Martin, 1986; Kemp, 1988), making it possible for business and household management to occur simultaneously. Research questions of interest are:

1. How do women business owners create or acquire their own businesses? What is the role of family and business relationships in this process?

2. What are the effects of various background factors such as family life cycle stage, cultural background, or education and occupational experience on the process of venture creation or acquisition?

3. What are the similarities and differences in the process between male and female business owners?

Theories that might be applied include the life path model of Shapero & Sokol (1982) and the network approach (Aldrich et al., 1989).

Management style. Investigations have found that women business owners have a personalized and people-oriented management style (Chaganti, 1986), white dealing with people is considered a prime strength (Hisrich & Brush, 1983; 1987). Similarly, the popular press describes women business owners as offering flexibility: flex-time and multiple career ladders are practices typical in many women-owned businesses (Nelton, 1990b). Research questions of interest include:

1. What are the management approaches of women business owners? How are they similar or different from male business owners?

2. What is the relationship of management style to perceptions of job satisfaction by employees? to overall business performance?

Obstacles. Financial obstacles as well as other problems in business creation/ownership have been investigated and it is commonly agreed that women do not face different financial obstacles from men (Buttner & Rosen, 1990; Chrisman et al., 1990). However, one obstacle frequently mentioned by women business owners is the conflict between work and family (see, for example, Pellegrino & Reece, 1982; Hisrich & Brush, 1983, 1987; Honig-Haftel & Martin, 1986; Neider, 1987; Brush, 1990). Research questions of interest are:

1. How do work/family conflicts arise and how do women business owners manage these?

2. What is the role of expectations of employees, family, and other stakeholders in operations and performance of women-owned businesses?

3. How do women business owners view relationships with work and family and is this similar or different from the perspective of males? for other groups of women?


Integrated perspective. While very little research has been done investigating environmental factors, the integrated perspective suggests that women business owners do not view the environment as a separate element; rather, they see themselves as embedded in the environment which is conceived of as a network of relationships in work, family, and society (Aldrich, 1989). Questions of interest include:

1. To what degree do women business owners view the environment as connected to their business, work, and family? Do male and female business owners view the environment in the same manner?

2. What is the effect of different work, family, social, and cultural experiences on the environmental perspective of women business owners?

3. What is the role of women's associations and groups in establishing relationships and networks for women business owners? Do these associations perform the same functions as organizations that are not gender-based?

4. What are the political, governmental, technological, and economic factors that encourage or discourage women's business ownership?

5. What are the structural barriers (noted by Aldrich, 1989) faced by women business owners and are these similar or different for male business owners? How do women manage these and how do these impact business performance?

The transactional relationship of women business owners and the environment might be investigated using a resource dependence theory (Pfeffer & Salancik, 1978) to examine the impact of environmental factors on resource acquisition (capital, information). Further, the effect of environmental and societal changes such as women's rights, legal decisions for equal and minority rights, advances in home and office communications, and the greater acceptance of women in the workforce, need to be investigated for their impact on women's business ownership (Hurley, 1991).


This paper has reviewed 57 articles presenting empirical research on women business owners. The discussion concluded that women business owners are similar to males across some basic demographic factors, problems, and business characteristics, but they differ widely from male business owners across individual dimensions related to education, work experience, skills, approach to venture creation/acquisition, business goals, problems, and performance. It is suggested that the major reason for these differences is that women conceive of their businesses differently than men which in turn leads to different approaches and outcomes for performance. This is consistent with previous work from the fields of psychology and sociology that theorizes that women have a different reality from men rooted in their situation and experiences. This paper proposes that women view their businesses as a cooperative network of relationships rather than a separate economic entity. When a woman starts or acquires a business, the set of business relationships are "integrated" into her life. This new view, the "integrated perspective," has implications across the four main components of business creation--individual, organization, process, and environment dimensions--and redirects the focus of our research on this topic.

While this new perspective challenges the assumptions about conceptions of a business underlying previous research, this view is similar to theories of organizations as cooperative systems. Not only does the integrated perspective capture the perception most women business owners have of their ventures, but it also offers explanations for the differences in the motivations, activities at start-up, business goals, and performance between male and female business owners.

The implications for viewing women-owned businesses as a system of cooperative relationships should encourage new measures of motivations for women who become business owners, and in turn these will suggest different dimensions of the start-up acquisition process to be explored. Similarly, the linkages between work and family, where personal and business goals are intertwined and both economic and non-economic goals are pursued, suggests different performance measures will need to be considered. For example, the performance of women-owned businesses as a group may need to be measured in terms of social contributions, innovative management practices, customer satisfaction, quality of customer services, job security, social responsiveness, business goal achievement, and employee satisfaction as well as growth in sales, and increase in employees and profits.

The idea that business problems are a combination of balancing family and work issues implies that different training approaches also may be important. For example, attention to cultivation and maintenance of personal relationships, development of negotiation skills, and formulation of cooperative strategies may need to be included in business management courses along with a discussion of identification of critical economic, technical, and facilities resources, industry analysis, and competitive strategies.

In addition, investigation of the simultaneous, often interrupted and participative process by which women business owners create/acquire and manage their businesses may yield new information about start-up and management techniques. In other words, what can be learned from the experiences of women business owners? One scholar recently noted that women's attitudes about team-building and consensus are much more geared to leading a business through the growth stages than men's (Nelton, 1990a, p. 19). If this is true, women business owners can suggest prescriptions for success in moving a business through the life cycle that might be useful for smaller businesses in general. Similarly, the fact that women frequently handle many varied life roles simultaneously implies that they may be better equipped to manage the conflicting demands of business ownership, or may be able to educate male business owners on the topic of successful "coping" strategies.

Finally, a study of the conditions leading to the integrated perspective should allow for a better understanding of the various structural antecedents encouraging business ownership as well as the barriers faced by women business owners and how these are similar or different from those faced by males. As suggested in Brush (1990), at least two different approaches (deliberate and evolutionary) to business ownership have been
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Author:Brush, Candida G.
Publication:Entrepreneurship: Theory and Practice
Date:Jun 22, 1992
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