How a CEO's Gender Affects an Organization

How a CEO's Gender Affects an Organization

Introduction

Gender is a concept that identifies roles and responsibilities that have been prearranged for both men and women to follow. It is socially accepted that men have a more dominating role to play compared to women. Throughout history, men have played a superior role compared to women. This role has been maintained throughout history. Therefore, women have a lower status compared to men in every society in the world. The reason for this disparity is that women tend to have a caring and nurturing character while men have a dominating and aggressive character. In recent times, the role of women in the society has started to gain importance because they have started to occupy some important roles in businesses (Lipman, 2011).

Discussion

A change in the CEO of the company can lead to major changes in the company's policies. Greater changes occur if the change also includes a change in gender. The greatest change relates to risk. Males are considered more aggressive and hence they take risky decisions. The higher the risk, the greater will be the chances of success. 0n the other hand, females are more risk averse and take conservative approaches while leading their company. This leads to reduced earnings and hence lower stock prices.

Change from Female to Male

When a female CEO is replaced by a Male CEO, the chances that the company's profits will increase are higher. The employees, on the other hand often tend to dislike such decisions since male CEO's are likely to be more aggressive and hence the employees have to perform better in order to please him. However, the case is not the same with most female CEO's since they are more lenient and hence employee satisfaction increases (Martin, 2009).

Change from Male to Female

When a male CEO is replaced by a female CEO, the results are usually positive when it comes to management of the organization but negative when it comes to the company's growth. Female CEO's are notable for their transformation attitude. Female leaders tend to change the way people work by influencing then to cooperate with each other. On the other hand, the company's performance can be affected because females are considered people who avoid taking risks and therefore they make conservative decisions. These decisions being less risky lead to lower profits and hence lower share prices.

Since the objective of every organization is to maximize the profit of shareholders, the role of women as CEO's is usually debated because of the fact that on an average, female CEO's has an adverse effect on the profitability of the company.

Companies led by Women

There are only 18 female CEO's among the fortune 500 companies. This shows that most companies are against the idea that females should lead the company. The performance of female CEO's was much better than that of males when combined together. However, individually, males performed better since they were risk takers and managed their role better compared to ...