CEO Gender and Firm Performance

CEO Gender and Firm Performance

Deliverable 1: Critical Analysis of Scholarly Article

This article was written by João Paulo Vieito, and Walayet A. Khan and published in 2013 by the University of Evansville in the USA. It discusses the impacts of female CEO on the performance of companies in comparison to male CEOs. Its authors are well-established and qualified elites working at reputable institutions. João Paulo Vieito is the Chairman of the World Finance Conference, and the Dean School of Business Studies Polytechnic Institute of Viana do Castelo Portugal. He has a Ph.D. in Management Sciences and has specialized in Finance. Walayet A. Khan possesses a Ph.D. in Finance, works as the Finance professor at the University of Evansville. The article presents the results of research on the performance of companies that are led by female CEOs, and how this performance compares to that of firms managed by male CEOs. It is an Economics and Business article that skillfully and in a detailed manner, explains the topic while providing facts to support the evidence given. There are three main goals and purposes of this source. One of the goals is to establish whether companies managed by female CEOs show the same performance as those that are managed by male CEOs. The other goal is to examine the impact of the CEO’s gender on the level of the firm’s risk. The third goal is to establish whether the compensation packages that CEOs get from the board differ in terms of risky components between male CEOs and female CEO’s. The articles are written in continuous prose, to give a detailed research analysis of the company’s performance under the female CEO in comparison to male CEOs. The authors also make use of hypothesis which are confirmed through the research. The target audience for the source is the public, and mainly due to the rise in the issue of gender equality and women in leadership positions. The authors aimed at making readers understand that women are capable of undertaking leadership roles effectively. They also aim at bringing the perception that men are more risk-takers as compared to women.

In their article, Khan and Paulo acknowledge that the research on the connection between the genders of the individual heading a firm to its performance is a reasonably new analysis. They conducted an in-depth literature review on the topic and concluded that the CEO’s gender is significant to the overall performance of an organization. The organization’s risk level is relatively smaller when a female CEO is involved compared to when the leader is male. The proportion of stock options provided by the board is similar regardless of the gender of the CEO; hence female CEOs have an incentive to take risks.

The theoretical questions and hypothesis clearly show that the authors understand the topic of research. Further, the evidence used to support the argument being made by the authors. The article cites authors such as King and Cornwall (2007), who support the findings of the research by stating that employing women to top positions in firms that sell feminine products boosts the performance as they better understand the behavior and needs of female consumers (Khan and João 57). The findings inform the article’s conclusion of the research and the extensive review of the literature.

Women’s rights is a significant subject that is brought out in this article. With the rise in the concerns for women empowerment and gender equality, women are increasingly taking up roles in corporate leadership. Through the analysis of the impacts of female CEOs on the performance of organizations, the article points out that women have a significant impact on the performance within an organization. This concurs with the concern that women have a right to take leadership roles in organizations. Besides, the authors found out that the organizations that are headed by female CEOs have a smaller risk level as compared to male CEOs. The authors found out that boards do not attend to the differences in risk aversion between females and males when designing the compensation package. This issue touches on women’s rights since it seems that women are not being given the same treatment as men.

Overall, the quality of the article is excellent, specifically based on the detailed and comprehensive research conducted. The article explores research that supports and those that go against the hypothesis, and then makes an informed conclusion based on the findings. In a world that is increasingly advocating for gender equality and equity at the workplace, this article is significant in many ways as it helps position women CEOs and leaders favorably. It shows that women CEO also has an exemplary performance and shows that there are firms where a female CEO would be more favorable compared to the male counterpart. The article also touches on women’s rights. It explains how women are denied chances in leadership, paid lower than men in the same capacity and discriminated against in the allocation of the compensation package. The author finds out that boards usually fail to consider the differences in the risk aversion between male and female CEOs. The information in this article is useful and should be considered when comparing the performance of firms based on its leadership, as well as the products it offers.

Deliverable 2: Summary of the Article for a Lay Audience

The article explains the gender impact on the performance of an organization. In America, organizations are head by both men and women. The article attempts to analyze the difference between organizations headed by men and ones that are headed by women. The analysis is based on the performance of male-headed organizations and female-headed organizations. The main focus of the research is to analyze whether gender has an impact on the organization’s performance or not. The relationship between gender and firm performance has not been explored extensively. However, multiple researchers indicate that there is a difference between the management styles of women and men. One such difference is the fact that women tend to focus on ethics compared to their men counterparts. Studies also indicate that mixing men and women in the top management yields better results.

Women in top management tend to be paid less than men in similar levels of management. Women and men have different attitudes to risk. In any business, the risk is an essential factor of consideration. Risk is defined as the factors that may expose a business to losses (Khan and João 56). Previous research also indicates that gender has an impact on the financial decisions made by management. Walayet and Paulo’s research indicates that the gender of the leader of an organization affects firm performance. According to the authors, male leaders tend to expose firms to higher risk levels in comparison to female leaders. The research also indicated that the salary of the management is not based on the exposure of an organization to risk—many firms design compensation packages without taking into consideration whether a firm is exposed to risk or not.

Deliverable 2: Describing Decision of Writing Summary

Writing the summary has been guided by various approaches. First, numerous rhetorical questions are presented in summary, which makes the writing use a rhetorical approach. The major question that is presented in summary is whether female CEOs have an impact on the productivity in an organization. It also triggers several questions in the mind of the reader. One of the questions the reader can ask is whether females deserve to be allowed to take up leadership roles. Another question that can trigger the readers to think about is the question of whether an organization headed by a female CEO has a lower or higher risk level as compared to the organization headed by male CEOs. There is also a question of consideration in the differences in the risk aversion between males and female CEO. A reader is triggered to ask himself/herself whether there is any push for the boards to consider differences in the risk aversion when they are designing compensation package for the CEOs. Usually, the boards award male CEOs the same stock options as female CEOs. However, there are differences in the risk levels in the organizations headed by female CEOs and those led by make CEOs. The use of suspense, which can be categorized as stylistic, has been used in writing the summary to reflect in the minds of the readers.

The decision to write the summary is aimed at making the target audience understand that women have an impact on the organizations’ performance. The summary makes the audience realize that gender matters in the performance of firms. The audience is meant to understand that women leaders can make the firms they lead to perform much better than their male counterparts. Therefore, the summary was written in such a way that it identified the ley terms such as risk-averse and compensation package. These terms were clearly explained to make the audience understand them so that they can make appropriate decisions. Therefore, the decision to write the summary affects the audience by making them understand and appreciate the contribution of women leaders so that they can make an informed decision in regards to giving space for women leaders to exhibit their leadership capabilities.

The decision to write the summary can also affect the lay audience since it is given the opportunity to understand the technical information in a more clarified and simplified manner. The summary writing decision for the lay audience should consider that the audience might have little information about the concept of women’s leadership. Therefore, the summary needs to be clear, simple, and straightforward. Besides, all the essential terms should be easy to be identified. Accordingly, writing the summary was guided by these considerations. However, the summary avoided technical terms such as risk-averse. Instead, simple English was used to ensure that the lay audience understands the contents of the article. Complex sentences were broken down to ensure that a lay audience could synthesize the contents. For example, the literature review section of the article was broken down into several themes. The findings of previous studies were broken down to ensure that it could be understood. The term business risk was explained in detail. A lay audience may not have the privilege of understanding business risk. It is, therefore, essential to define essential terms that define the study. However, the summary included all the necessary concepts so that the lay audience will clearly understand what the summary is about and its purpose.

Deliverable 3: Decision Report

Writing a summary for a lay audience requires one to make many decisions. One of the decisions made is to keep it simple and clear. The summary avoided technical terms such as risk-averse. Instead, simple English was used to ensure that the lay audience understands the contents of the article. Complex sentences were broken down to ensure that a lay audience could synthesize the contents. For example, the literature review section of the article was broken down into several themes. The findings of previous studies were broken down to ensure that it could be understood.

Another critical step is to make complex terms more understandable. The term business risk was explained in detail. A lay audience may not have the privilege of understanding business risk. It is, therefore, essential to define essential terms that describe the study. The summary was also inclusive. The breaking down of concepts, as well as the simplicity of terms, make the summary to be all-inclusive.