Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. FAMILY BUSINESS OWNERSHIP AND MANAGEMENT: A GENDER COMPARISON Sonfield, Matthew C;Lussier, Robert N Journal of Small Business Strategy; Fall 2004/Winter 2005; 15, 2; ABI/INFORM Complete pg. 59 FAMILY BUSINESS OWNERSHIP AND MANAGEMENT: A GENDER COMPARISON Matthew C. Sonfield Hofstra University Matthew.Sonfield@Hofstra.edu Robert N. Lussier Springfield College rl ussier@sptldco l. edu ABSTRACT Whilefami(v.firms account.for an estimated 80 percent of all American businesses, and about one-third of these .fami(v businesses are owned by women, there has been minimal study of gender issues in family business ownership and management. In contrast to early (pre-1980) gender comparisons in management and entrepreneurship, this study .found general similarities and few significant differences in a variety of management activities and styles between.family businesses with at least half the owner-managers being women and those with less than half These.findings add to the limited and currently inconclusive body of knowledge regarding gender issues in family business, entrepreneurship, and management in general. INTRODUCTION Although there is a body of literature dealing with gender comparisons of management practices and another in the field of family business, there have been few research studies that have focused on gender issues in family business. This study compares family businesses which have a significant proportion (50% or greater) of women family members involved in the ownership and management of the firm (n = 58) and family businesses which do not (n = 91). This comparison focused upon a variety of management activities and styles which have been previously identified in the research literature as being especially relevant in family business management. Such a comparison adds to the currently limited body of literature dealing with gender issues in family business, which in tum can lead to the development of theory and models that can strengthen our understanding of, and assistance to, various categories of family businesses. The research literature upon which this study is based falls into several categories: fami~v business, gender differences in management and entrepreneurship, and women in family business. BACKGROUND This section presents a comprehensive review of the literature from three areas of research: family business, gender differences in management and entrepreneurship, and women in family business. The next section continues the literature review to provide the bases for ten hypotheses tested in this study. 59 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. .Jo11mal of'Small Business Strateg1· I 'of. 15. No. 2 F all/U'illfer 2004 Family Business Business ownership and management in the United States tends to run in families (Dennis, 2002). Within the U.S. economy, family businesses comprise an estimated 80 percent of the total 15 million businesses (Carsrud, 1994; Kets de Vries, 1993). They contribute more than 50 percent of the total Gross National Product (McCann, Leon-Guerrero & Haley, 1997), 50 percent of employment (Morris, Williams. Allen & Avila, 1997), and have higher annual sales than non-family businesses (Chaganti & Schneer, 1994 ). Furthermore, it is estimated that 35 percent of Fortune 500 finns are family owned (Carsrud, 1994), and one-third of S&P 500 companies have founding families involved in management (Weber & Lavelle, 2003). Certainly an understanding of the various issues and aspects of family business should be of interest to scholars in the fields of small business and entrepreneurship. Yet most of the family business literature is conceptual or involves non-quantitative research and, furthermore, relatively few articles in this field have been published in broad-based small business and entrepreneurship journals (Dyer & Sanchez, 1998; Litz, 1997). Family business as a field of study has grown from modest beginnings to a substantial conceptual and theoretical body of knowledge at the start of the twenty-first century. Prior to 1975, a few theorists, such as Christensen (1953), Donnelley (1964), and Levinson (1971), investigated family firms, yet the field was largely neglected (Lansberg, Perrow, & Rogolsky, 1988). These early studies were generally conceptual rather than empirical, with a focus on the more fundamental issues, such as what makes a business a "family business" or a "family firm" (the terms are used interchangeably), the dynamics of succession, intra-family conflict, and consulting to such firms (Handler, 1989; Sharma, Chrisman, & Chua, 1997). In 1988, with the launching of the journal Family Business Review, the first and only scholarly publication devoted specifically to family business, the field reached a level of maturity to foster a significant progression and resulting body of research and findings. Still, as discussed and dealt with in this article's "Methods" section, a variety of definitions continue to serve as the basis for research in this field. Gender Differences in Management and Entrepreneurship Comparisons of management and entrepreneurial styles by gender have been investigated for at least two decades (Carter, Williams, & Reynolds, 1997; Chaganti & Parasuraman, 1996; Powell & Ansic, 1997). This body of research has expanded in response to the growing proportion of women in the managerial, entrepreneurial and small business workforce, their rate of firm creation, and their proportion of small business ownership (Moore & Buttner, 1997). Still, relative to the study of male-owned small businesses and entrepreneurship, this body of existing research is small, with limited investigation and findings of many aspects of women in management (Chaganti & Parasuraman, 1996; Sonfield, Lussier, Corman, & McKinney, 2001 ). Most research conducted prior to 1980 concluded that gender differences clearly exist in managerial and entrepreneurial strategic behavior (Powell & Ansic, 1997; Sonfield, Lussier, Corman, & McKinney, 2001). More specifically, the majority of studies determined that women are more cautious, less confident, less aggressive, easier to persuade, and have inferior leadership and problem solving abilities when making decisions under risk (Johnson & Powell, 1994 ). However, more recent research studies provide mixed conclusions but tend to support gender similarities more than differences (Carsrud, Gaglio, & Olm, 1986; Chaganti & Parasuraman, I 996; Powell & Ansic, I 997; Watson, 2002). Some studies conclude that there are no 60 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. .!011rna/ of"Sma// Business Strategy l'ol. I 5. No. 2 F allllt'intcr 2004 significant gender differences in management decision-making values or styles (Chaganli. 1986; Powell, 1990). Other research has determined Iha! men and women entrepreneurs possess more similarities than differences in decision-related personality traits (Birley, 1989; Sexton & Bowman-Upton, 1990). Still other studies conclude that males and females are equally successful in making decisions under conditions of risk (Hudgens & Fatkin, 1985; Johnson & Powell, 1994 ), are equally effective in roles of leadership (Eagly, Karau, & Makhajani, 1995; Hollander, 1992), and are equally capable of processing and reacting to information (Hyde 1990; Stinerock, Stern, & Solomon, 1991 ). Some of the most current research has moved beyond issues of management behavior and performance and examines women entrepreneurs in light of various theoretical perspectives (Bird & Brush, 2002). Yet the empirical research regarding women in management and entrepreneurship has not yet provided us with totally conclusive findings and many gaps remain (Brush, 1997). Women in Family Business It is estimated that women now own more than 33 percent of all North American family firms (Astrachan, 2002). Yet there have been few research studies specifically focusing on women in family business, and those studies which were conducted were more often conceptual rather than empirical (Bowman-Upton & Heck, 1996; Hisrich & Fulop, 1997). Most of these studies investigated issues of women's roles in family firms, family relationships, the "glass ceiling" and other aspects of gender bias, and succession planning (Barbieri, 1997; Cole, 1997; Harveston, Davis, & Lyden, 1997; Galiano & Vinturella, 1995; Gundry & Welsch, 1994; lannarelli, 1992; Nelton, 1998; Rowe, & Hong, 2000). Other studies have focused on similarities and differences in performance, with mixed conclusions (Fasci & Valdez, 1998; Shim & Eastlick, 1998; Watson, 2002). With regard to differences between men's and women's management activities and styles in family firms, the few conclusions that have been reached tend to be general. For example, women have been found to be more dependent and have a greater concern for others, while men have been characterized as more independent. Thus, women have been described as "peacemakers," "mediators," and "nurturers" in their roles as family business owners and managers (Cole, 1997). With further research studies such as the one reported here, a clearer understanding of the role of gender in family businesses may be reached. Such an understanding would allow consultants and others who assist family firms to differentiate, if and when appropriate, between those clients which do and do not have a significant number of women owner- managers. And at a broader level, such an understanding might contribute to an eventual "model" of women's entrepreneurship beyond more general models (Carter, Williams & Reynolds, 1997; Fisher, Reuber, & Dyke, 1993; Hisrich, Brush, Good, & DeSouza, 1997) and also lead to more effective social policy goals and practices in the fostering and support of women-owned businesses in general. Because women have been starting businesses at a rate more than double that of men in the past decade (Brush, 1992; Center for Women's Business Research, 2003; Dollinger, 1999), this research is especially important. RESEARCH OBJECTIVES AND HYPOTHESES As previously discussed, there have been relatively few prior research studies comparing men and women as owner/managers of family businesses. Gender-related family business research that has been conducted has generally studied the roles and performance of women in family businesses, but there has been little investigation of management activities and styles. The objective of this research study was to make this comparison, focusing specifically on ten 61 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. .Jo11rnal o(S111all Business Strategr I 'of. 15. No. 2 Fall!Wi11ter 2004 management activities and styles which have been previously identified in the research literature as being especially relevant in family business management (and which the ten hypotheses denote). These various issues have been investigated in prior family business studies, but minimally or not al all with regard lo possible gender differences. Based on the limited prior research regarding gender in family businesses, and on the broader literature regarding gender differences in management and entrepreneurship, the following hypotheses were developed. Because this total body of literature is relatively limited and the conclusions reached are mixed and inconclusive, the null hypothesis was used throughout. Group Decision Making A number of researchers have studied leadership style in family businesses (Dyer, 1988; McConoughy & Phillips, 1999; Schein, 1983). With regard to gender, some studies have found no significant gender differences in management values or styles (Chaganti, 1986; Powell, 1990); while others have found men and women family business owner-managers equally effective in roles ofleadership (Eagly, Karau & Makhajani, 1995; Hollander, 1992). Other studies have found that women rely more on social and other networks and less on individual systematic practices in their decision making (Brush, 1992; Cuba, DeCenzo & Anish, 1983; Hisrich & Brush, 1987; Moore & Buttner, 1997); and that women have a lower preference for risk (Hudgens & Fatkin, 1985; Johnson & Powell, 1994; Levin, Snyder & Chapman, 1988; Sexton & Bowman-Upton, 1990). Studies also indicate that women exhibit a "transformational" leadership style, ie. one which is more collaborative, interactive, and utilizes team-work (Bass, 1991; Moore & Buttner, 1997); and that women are more participative and democratic in their leadership style (Eagley & Johnson, 1990; Grant, 1988; Helgeson, 1990; Loden, 1985; Rosener, 1990). Still other research has found that women have more highly developed interpersonal skills (Benner, Tomkiewicz & Schein, 1989; Frank, 1988; Heilman, Block, Martell & Simon, 1989); and that "relational theory" is the best basis for examining women entrepreneurs (Buttner, 2001 ). Thus, HJ: Fami~v businesses which have a sign!ficant proportion of women family members involved in the ownership and management of the firm, and family businesses which do not, are equally likely to engage in group decision making. Family Member Conflict Much has been written about conflict in family businesses (Beckhard & Dyer, 1983; Davis & Harveston, 1999, 2001 ). Many of the findings discussed above with regard to Hypothesis 1 involving women's "relational" preferences might also indicate that there would be less conflict in women-controlled family firms (Bass, 1991; Benner, Tomkiewicz, & Schein, 1989; Brush, 1992; Cuba, DeCenzo, & Anish, 1983; Buttner, 2001; Eagley & Johnson, 1990; Frank, 1988; Grant, 1988; Heilman, Block, Martell, & Simon, 1989; Helgeson, 1990; Hisrich & Brush, 1987; Loden, 1985; Moore & Buttner, 1997; Rosener, 1990). Thus, H2: Family businesses which have a significant proportion of women family members involved in the ownership and management of the firm, andjamily businesses which do not, are equally likely to have conflict and disagreement betweenjamily member managers. 62 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. .Journal o/Sma// Business Stratcgr Vol. I 5. No. 2 Fall/Winter 2004 Succession Plans Another major focus of the literature on family business has been succession. The primary issues here involve the difficulties founders have in "letting go" and passing the reins of control and authority; and thus the need for, and importance of, succession planning (Davis, 1983; Dyer, 1998; Handler, 1994; Stavrou, 1998; Upton & Heck, 1997). Nothing in the literature specifically investigates gender issues with regard to successton (Astrachan, 2002), but perhaps women's preference for collaborative and interactive management might lead to smoother succession planning. Thus, HJ: Family businesses which have a significant proportion of women fami(v members involved in the ownership and management of the firm, and jami(v businesses which do not, are equally like(v to have formulated spec!fic succession plans. Use of Outside Advisors Family business' use of outside advisors (consultants and professional services) has also been a focus of the literature (Aronoff, 1998; Cole, & Wolken, 1995; Coleman & Carsky, 1999; Dyer, 1988; Filbeck & Lee, 2000; McConaughy & Phillips, 1999; Miller, McLeod, & Oh, 2001; Schein, 1983 ). As discussed above, gender-related research has indicated that women prefer to utilize social and other networks rather than individual systematic practices in their decision making (Brush, 1992; Cuba, DeCenzo & Anish, 1983; Hisrich & Brush, 1987; Moore & Buttner, 1997). Also, prior research has indicated that women are less confident in their ability to make decisions (Estes & Hosseini, 1988; Masters, 1989; Stinerock, Stern, & Solomon, 1991; Zinkhan & Karande, 1991 ); and that women tend to build support networks and access resources (Moore & Buttner, 1997). These finding might support a prediction that women family firm managers are more likely to use outside advisors. Thus, H4: Fami(v businesses which have a significant proportion of women family members involved in the ownership and management of the firm, and family husinesses which do not, are equally like(v to use outside consultants, advisors, and professional services. Long-Term Planning The importance of long-term, or "strategic," planning for businesses in general, and specifically for family businesses, has been emphasized frequently in the literature (Aronoff, 1998; Cole & Wolken, 1995; Coleman & Carsky, 1999; Dyer, 1988; Fil beck & Lee, 2000; Mcconaughy & Phillips, 1999; Miller, McLeod, & Oh, 200 I; Schein, 1983 ). With regard to gender, women have been found to be equally successful in making decisions under conditions of risk (Hudgens & Fatkin, 1985; Johnson & Powell, 1994 ); and equally capable of processing and reacting to information (Hyde, 1990; Stinerock, Stern & Solomon, 1991 ). However, other studies have indicated that a "small and stable" business model seems to be more important to women, that they are less interested in business growth, and that they are 63 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Journal o(Smal/ Business Strategy Vol. 15. No. J Fall/Winter J004 happy with being small (Lee-Gosselin & Grise, 1990). If this is true, then long-range planning might be less important to women owner-managers of family firms. Thus, H5: Fami(v husinesses which have a significant proportion of" women fami(v members involved in the ownership and management of" thefirm, andfamiZv husinesses which do not. are eq11alZ1· like(v to engage in long-term or strategic management activities. Financial Management Tools Another component of ''professional" management practices espoused in the literature is the use of sophisticated financial management tools (Aronoff, 1998; Cole & Wolken, 1995; Coleman & Carsky, 1999; Dyer, 1988; Filbeck & Lee, 2000; McConaughy & Phillips, 1999; Miller, McLeod, & Oh, 2001; Schein, 1983). Some studies have indicated that women place greater emphasis on non-financial and personal goals (Hisrich & Brush, 1987; Kaplan, 1988). If this is the case, then women family member owner-managers might be less likely to use sophisticated financial management tools. Yet other studies reject this finding (Fischer, Reuber & Dyke, 1993). Thus, H6: Family businesses which have a significant proportion of women family members involved in the ownership and management of the firm, and family businesses which do not, are equally likely to use sophisticated methods of .financial management. Founder's Influence Another issue of interest in the investigation of family business is "generational shadow" (Davis & Harveston, 1999). In a multi-generation family business a generational shadow, shed by the founder, may be cast over the organization and the critical processes within it. In such a situation, "succession" is considered incomplete, may constrain successors, and may have dysfunctional effects on the performance of the firm. Yet this "shadow" may also have positive impact, by providing a clear set of direction and standards for subsequent firm managers. Kelly, Athanassiou, and Crittenden (2000) similarly proposed that a family firm founder's "legacy centrality" will influence the strategic behavior of succeeding generations' family member managers, with both positive and negative impact. Davis and Harveston ( 1999) also investigated generational shadow, but reached mixed conclusions regarding its impacts. No discussion was found in the literature on this topic relating to gender. Thus, H7: Fami(v businesses which have a significant proportion of' women family members involved in the ownership and management of' the firm, and family businesses which do not, are equal(v likely to be influenced by the original business objectives and methods of' the founder. Going Public Family businesses need not always be privately owned. As these firms grow and/or as they move into subsequent generational involvement, opportunities and needs for "going public" may arise. The family may not be able, or may not choose, to provide sufficient management or financial resources for growth, and outsider ownership can resolve this situation. And even 64 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. .!011mal ofSma11 Business Strateg1· Vol. 15, No. 2 Fa11/Wintcr 2004 publicly owned companies can continue as "family businesses," if management or financial control is maintained by the family. McConaughy (1994) found that 20 percent of the Business Week 1000 firms are family-controlled. Here too, no gender-based discussion in the literature regarding "going public" was found. Thus, H8: Family businesses which have a significant proportion of women famiZr members involved in the ownership and management of the firm. andfamiZv businesses which do not, are equa11y likely to have considered "going public. " Formal versus Informal Management Style In conjunction with the literature's specific investigations of the use of outside advisors and financial management tools, there is a broader discussion of "formal" versus "informal" management styles, with one end of a continuum including formal, objective, and "professional" styles of leadership, and the other end involving informal, subjective, and paternalistic styles (Aronoff, 1998; Cole & Wolken, 1995; Coleman & Carsky, 1999; Dyer, 1988; Filbeck & Lee, 2000; McConaughy & Phillips, 1999; Miller, McLeod, & Oh, 2001; Schein, 1983 ). With regard to gender, some studies have found no significant differences in management values or styles (Chaganti, 1986; Powell, 1990), while other research has indicated that women rely more on social and other networks and less on individual systematic practices in their decision making (Brush, 1992; Cuba et al., 1983; Hisrich & Brush, 1987; Moore & Buttner, 1997). Thus, H9: Family businesses which have a significant proportion of women family members involved in the ownership and management of the firm, and family businesses which do not, are equally likeZv to use more formal rather than informal styles of leadership and management. Debt versus Equity Financing The capital structure decision is important for family business and is a frequent focus of the literature (Cole & Wolken, 1995; Coleman & Carskym 1999; Romano, Tanewski & Smymiosm 2001 ). Some studies have shown that women business owners have less access to debt than do men (Hisrich, Brush, Good & DeSouzam 1997). Yet other research have indicated that while women more frequently borrow from family and friends, in recent years they have gained similar access to institutional loans (Haynes & Haynes, 1999). One Canadian study found that, on the aggregate, women receive credit on less favorable terms than men, but, when all factors are held constant (firm size, age, etc.), the differences were significant only with regard to collateral requirements (Riding & Swift, 1990). If debt financing is more difficult to obtain for women, then perhaps they would engage in more equity financing than men. Thus, HJO: FamiZv businesses which have a significant proportion of women family members involved in the ownership and management of the firm, and family businesses which do not, are equa11y likely to use equity financing rather than debt.financing. 65 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Journal o(Small Business Strategy Vol. 15, No. 2 Fall/Wi11ter 2004 METHODS The research design was self-reported survey research. which is the most commonly used methodology of family business research (Bird. Welsch. Astrachan, & Pistrui 2002) and for all small business and entrepreneurship quantitative research (Dennis. 2003 ). Family Business Definition and Sample A variety of definitions continue to serve as the basis for research in the field of "family business" (Birley, 1997; Chua, Chrisman, & Sharma, 1999; Litz, 1995; Westhead & Cowling, 1998). Some definitions focus on the degree of family ownership, others focus on the degree of family involvement in the management operations of the firm, and still others emphasize owners' perceptions, ie. a "family firm" is one in which owner/managers perceive their company to be a "family business." Most researchers today use a combination of these factors, and "family business" and "family firm" are used interchangeably in the literature. This study combined ownership, involvement in operations, and perception for its definition of "family business," with the latter criterion being the final determinant. Survey instruments were mailed or hand-delivered to a variety of New York and Massachusetts companies that had been identified as being family-owned-and-operated "family businesses." The majority of the companies were randomly selected from a listing of "family businesses" in a Metropolitan New York weekly business newspaper, and the resulting mailing list was supplemented by names of family businesses provided by students at two universities in New York and Massachusetts. Identifying family firms from various listings is consistent with that of other family business researchers, who have been constrained by the lack of national databases of family firms (Chua, et al; Teal, Upton, & Seaman 2003). The survey instrument had been previously and successfully used in an earlier family business study (Sonfield & Lussier, in press). Companies that were family businesses and those that were not were separated by the criterion of perception in the first survey question: Do you consider your company to be a /amity business'? (Yes or No) A total of 822 surveys were mailed or delivered; of these 272 were no longer at the address or responded that they were not family firms. Usable returned surveys numbered 149, providing a return rate of 27.1 percent. This is an acceptable sample size and response rate for family business, as it has been reported that 62 percent of prior family business studies included no sample at all, or a sample with less than I 00 family businesses, and 66 percent of these were convenience samples (Bird, et al, 2002). In the top three small business or entrepreneurship- oriented journals (Entrepreneurship Theory and Practice, Journal of Business Venturing, and Journal a/Small Business Management) around one-third of the articles had a response rate of less than 25 percent (Dennis 2003). Variables Measured and Analysis The independent variable was the percentage of women family members. The respondents were separated into those firms in which 50 percent or more of the family members involved in the ownership and management of the firm were women (n = 58) and those firms in which less than 50 percent were women (n = 9 I). As there are no prior research methodologies comparing percentage of women, it was believed that 50 percent (as a mid-point between totally men and totally women) was a logical methodological dividing point for this research study. Within the sample, there was not a simple majority and minority of women in each group. The > 50 percent group had 77 percent women and the < 50 percent group had 16 percent women. A chi-square test found a significant difference in the percentage of men to 66 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Jounwl of'Small Business Strategr Vol. 15. No. 2 Fa/I/ Winter 2004 women family members in both groups (.000), thus supporting the hypotheses statements that there was a significant difference in the proportion of women in each group. The interval measured dependent variables to test for differences between percentage of women family members were as follows: (I) group decision making. (2) family member conflict. (3) succession plans, ( 4) use of outside advisors, (5) long-term planning, (6) financial management tools , (7) founder's influence, (8) going public, and (9) fonnal versus informal style were all measured through a Liker! scale of "describes our firm" 7 to I "does not describe our firm." H 1-9 were all tested for differences using the I-test. In Hypothesis IO), debt versus equity is a nominal variable and was tested using a chi-square test. Demographic data were also run for descriptive statistics and to test for differences by percentage of women in the business. RESULTS Demographic Descriptive Statistics See Table l for the descriptive statistics of the sample demographic data. Of the sample of 149, the mean number of years the sample family businesses were in business was 42, and the mean number of employees was 205. (For firms with 50 percent or more women owner/managers, the means were 30 years and 62 employees; for firms with less than 50 percent the means were 46 years and 297 employees.) With regard to generation, 29 percent were first-generation family businesses, 38 percent were second-generation and 33 percent were third-generation. The dominant form of ownership (79%) was corporation. More companies in the sample (75%) provided a service rather than produced a product. More firms (62%) had a company founder still active than did not. Table 1 - Descriptive Statistics for Demographic Data (N=l49) (n = 91 <50% & n = 58 =>50%) Variable (ratio level) ~an Std.Dev. Median Years in business 42 33 35 Number of employees 205 682 26 Variable (nominal level) Proportion O/o Generation l SI 43 29% 2"d 57 38% 3rd 49 33% Form of Ownership Corporation 117 79% Partnership 15 10% Sole proprietorship 17 11 % Industry Sales Product 38 25 % Service l I 1 75 % Founder Still Active in Firm Yes 93 62% No 56 37% 67 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. .Journal of'S111all Business Strategr Vol. 15, No. 2 Fall/Wimer 2004 Hypotheses Testing There were no significant gender differences in the means for any of the !-tests for Hypotheses 1-9. See Table 2 for a comparison of means with p-values. Recall that H 1-9 are all measured on a Liker! scale of "describes our firm" 7 to I "does not describe our finn," and H I 0 is either debt or equity. There was a significant chi-square gender difference in the use of debt or equity. Of the total sample, 101 companies or 68 percent use debt financing, and 48 or 32 percent use equity financing. Of the businesses with < 50 percent women, 68 or 75 percent use debt financing, and 23 or 25 percent use equity financing. Of the businesses with => 50 percent women, 33 or 57 percent use debt, and 25 or 43 percent use equity financing. Thus, the businesses with< 50 percent women make significantly greater (p = .023) use of debt financing. Table 2 - Hypotheses Tests (N = l49) (n = 91 <50% & n = 58 =>50%) Means P-value <50% Hypothesis =>50% 1. group decision-making 3.92 .848 4.00 2. family member conflict 2.36 .465 2.59 3. succession plans 3.15 .273 2.72 4. use of outside advi sors 4.3 1 .598 4.10 5. long-term planning 3.23 .981 3.22 6. financial management tools 3.44 .521 3.2 1 7. fo under' s influence 5.07 .706 4.95 8. going public 1.36 .997 1.36 9. forma l vs. informal sty le 3.59 .753 3.50 10. use of debt or eq ui ty 74%/26%* .023 57%/43 % *Due to chi square test, rather than t-test as used in Hl-9, means are not aooropriate, thus percentages are given. DISCUSSION With one exception (the use of debt versus equity financing) no differences were found between family businesses which have a significant proportion of women family members involved in the management of the firm and family businesses which do not. With regard to 68 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. .Journal of'Small Business Stratcgr Vol. 15. No. 2 FafllrVinter 2004 management activities and styles, both groups of family finns were not different with regard to: 1) group decision making 2) family member conflict 3) succession plans 4) use of outside advisors 5) long-term planning 6) financial management tools 7) founder's influence 8) going public 9) formal versus infonnal management style The only significant difference found was that, while both groups used debt financing more than equity financing, family businesses which have a significant proportion of women family members involved in the management of the firm were more likely to use equity financing than were those firms which did not have that proportion of women. As discussed earlier, most research studies in the past two decades found more similarities than differences with regard to management styles and behavior between women and men business managers, entrepreneurs, and family firm owner-managers (Birley, 1989; Carsrud, Gaglio & Olm, 1986; Eagly, Karau & Makhajani, 1995; Hollander, 1992; Hudgens & Fatkin, 1985; Hyde, 1990; Johnson & Powell, 1994; Sexton & Bowman-Upton, 1990; Stinerock, Stern & Solomon, 1991; Watson, 2002). Although these prior studies found some specific gender differences, creating discrepancies in the literature, these disparities were generally with regard to one or a few aspects of management style or behavior, within the larger context of gender similarities. This study's findings thus support most of these more recent studies, but even more strongly support those studies which found virtually no significant gender differences at all (Chaganti, 1986; Powell, 1990). Conversely, this study's findings contrast with the majority ofpre-1980 studies which found major gender differences in entrepreneurial behavior, as discussed by Johnson and Powell ( 1994), Powell and Ansic (1997), and Sonfield, Lussier, Corman, and McKinney (2001). With regard to the single gender difference found in this study, there are several possible explanations as to why the family businesses with significant women involvement were more likely to use equity financing rather than debt financing. The current body of research provides mixed conclusions as to whether debt is equally or less accessible to women business owners (Haynes & Haynes, 1999; Riding & Swift, 1990). If women have less access to debt financing (Hisrich, Brush, Good & DeSouza, 1997), then the alternative would be equity financing, often from their own financial resources and from family and friends. But it should also be noted that the firms in this study with significant women involvement tended to be younger and smaller, and such firms in general may find lending institutions less willing to provide debt financing. Thus this debt/equity difference may be based more on company age and size than on owner/manager gender. The differing demographic characteristics of the two groups also seem logical in light of the broader trends regarding women in business. Since the entry of women into all aspects of the business world has been more recent than for men (Moore & Buttner, 1997), it would follow that family firms with a significant proportion of women family members involved would be younger, smaller, have fewer employees, and have fewer family generations involved. 69 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Journal o{Small Business Strategr Vol. 15. No. 2 Fall/Winter 2004 Limitations A potential limitation of this study, which cannot be controlled for, is spousal influence on both men and women family business owners. More than 85 percent of family business owners are married, and of the married owners 64 percent are likely to talk to or discuss matters with their spouses before addressing a serious problem or make a critical business decision (Dennis, 2002). Thus, spouses who are not involved in the management or operations of the family business do influence the decision maker. However, the spousal influence 1s unknown and is an area for further research in family business. Another limitation of this study is the lack of a strong and conclusive body of research as the foundation for the hypotheses, but at the same time the results of this study add to this limited body of empirical research in the area of gender and family business, and to the broader body of research regarding gender differences in management. Yet the results of both the narrow and the broader bodies of research, while tilting toward the support of gender similarities, continue to lack a strong and conclusive consensus and thus indicate a need for still further research efforts, especially in the context of family business. Such further research efforts have been advocated by other researchers (Nelton, 1998). CONCLUSIONS AND IMPLICATIONS OF THE STUDY The objective of this study was to compare men and women as owner/managers of family businesses. The findings of this study support a general similarity, with minimal differences, between management styles and behavior in family businesses that do and do not have a significant proportion of women family members involved in the management of the firm. If such a general similarity is eventually deemed valid (by this study, in combination with past and future studies), then it is important with regard to future gender-related research, for social policy and efforts to assist family businesses, and for eventual model-building. If it is eventually supported that there are minimal gender differences in management, entrepreneurship, and family business, then future gender-related research can focus on similarities, differences, and other issues within the population of women-owned businesses, rather than between men- and women-owned businesses. Similarly, social policy and small business assistance programs can focus on other more important issues and other ways to categorize firms and their managers, rather than target women owner/managers for various forms of management assistance. 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Family finn research: The need for a methodological rethink. Entrepreneurship Theory and Practice, 23( 1 ), 31-56. Matthew C. Sonfield is the Robert F. Dall Distinguished Professor in Business at the Zarb School of Business at Hofstra University. He earned an A.B, M.B.A. and Ph.D. from Cornell, Harvard and New York Universities. His recent research and publications have focused on entrepreneurship, small business, family business and minority business. Robert N. Lussier is professor of management at Springfield College. He is the author of more than 250 publications including management, leadership, human relations, entrepreneurship, and small business management textbooks. 75