Christmas reading Joseph Schumpeter

SchumpeterNy christmas reading is as usual one of the classics this time Joseph Schumpeter “Capitalism, Socialsm and Democracy”

Capitalism, Socialism and Democracy remains one of the greatest works of social theory written in the twentieth Century. Schumpeter’s contention that the seeds of capitalism’s decline were internal, and his equal and opposite hostility to centralist socialism have perplexed, engaged and infuriated readers since the book’s first publication in 1943. By refusing to become an advocate for either position, Schumpeter was able both to make his own great and original contribution and to clear the way for a more balanced consideration of the most important social movements of his and our time.

 

The concept of Engendered CSR

The debate between different schools of thought on what gender really is has been fought for several decades (Blau & Ferber, 1986, Rosener, 1990, McCabe, 2006, Yukl, 2010:468f). Within research there are different opinions on how the behaviour of men and women should be interpreted and explained. Are gender traits to be understood to differences in biology e.g. sex or is it something that we as a society have formulated as part of some grand discourse or is it a mixture of many different contributing factors (Giddens, 1989:158, Hearn, 1998). When mapping the terrain of gender research there are several path one can take. Some researchers have shown that behaviour between primates has similarities with how human behave or the behavioural patterns are closely linked to the biological sex. In this understanding we are as humans biological predisposed for certain kinds of behaviour, which unconsciously directs us (Blau & Ferber, 1986:16f). But these arguments do not provide a framework for how to explain the behavioural patterns of homosexuals, who in many ways display behaviour which is opposed to the biological sex or leave room for social interaction that contradicts the norms contributed to the individual sex (Hearn, 1998).

While there is no doubt that there are biological differences between men and women, the reduction of traits to mere biology does not confront some of the more complex issues that organisations are faced with such as male/female adaption to change or their ability to be receptive to the signals coming from the organisations environment. The idea that the social interaction between primates and that between humans should be equivalent could seem like a long stretch, but the ideas is far from foreign in the argumentation for or against equal rights and opportunities today (Yukl, 2010:470). The biological sex perspective becomes apparent and relevant when discussing pregnancy and maternity leave in relation to career advancement or when referring to some jobs being to “though” for women to handle.

Another perspective that research has chosen to deal with gender differences is by ignoring a gender impact all together. This school of thought is especially widespread within economic theory where gender is by most schools believed to have no impact or is just ignored all together (Lorenzen, et al, 2004, Douma & Schreuder, 2004). This so-called rational approach is by far the most widespread in the business community as it reduces the complexity that a gender approach brings to understanding organisational behaviour (Blau & Ferber, 1986:3ff). However, even with this in mind the statement by Gary Powel (1990) that “Success in today’s highly competitive marketplace calls for organizations to make best use of the talent available to them. To do this, they need to identify, develop, encourage, and promote the most effective managers, regardless of sex.” is true for whatever perception one subscribes to. The ability and willingness to organise in ways that utilize the resources that are available to its full potential is nothing new in business. But realising that a gender approach could free up unrealised resources and bring new perspectives is not something which business has worked with.

The concept of Engendered CSR have been used from time to time when it comes to looking at how gender and CSR could potentially be combined in an effort to bring gender to the CSR debate. In my mind gender should play a central role in any organisations work or at least it should be integrated into the corporate strategy at a significant high level.

An engendered CSR approach would imply that business, associates gender with the performance and positive behaviour that feminine and masculine traits bring to the organisation. This means that I believe that gender do play a part in how business perform and that managers and boards can actively influence their organisational results by adopting a strategic gender approach. In essence a business case for engendering the organisation needs to be established which managers can relate to, and perceive as useful to their organisations development. This would mean that instead of adopting a rights and moral argument for working with men and women, organisations would take a strategic approach with business needs at its core. This is at least to me the central theme in the concept when combining gender research and practice with CSR.

Engendered CSR is subsequently understood as a way of thinking about the organisation as made up of men and women that in different ways bring positive and negative behaviour to the organisation and its interaction with its stakeholders, and by working strategically with these different traits organisations can influence their overall performance.

The strategic business areas that according to my own and research done by others and were gender plays a significant part or could play a central role in organisational development are.

  • Governance especially within auditing and assurance work
  • Quality recruitment
  • Positive relations with Civil Society and other stakeholder agents
  • Productivity
  • Staff turnover
  • Fraud reduction
  • Innovation
  • Supply chain management
  • Development of new markets and products
  • Financial performance
  • Stakeholder engagement

This is far from a complete list but is the areas, which are supported by some research. There is still some way to go before we can show causality between gender and these central performance areas but there is reason to think that such a link exists.

If you think that this area should be explored further and/or have ideas on research or business practice which could be used then put a comment.

Does Gender matter in SRI

How does the gender of board and executive management influence the strategic decissions that is takeing in a company? According to my own research there are is a gender impact on some of the key financial parameters such us Operating profit (EBIT) and Earnings per Share (EPS).

Financial indicators are by most companies considered to be the most important  indication of how well or bad the company is doing overall, regardless of any CSR programs it might have.  In relation to EBIT results show that  companies with above average diversification on board and executive management do considerable better than the ones that have not embraced this form of diversity. While the variations when it comes to EPS the results are less salient but there is a impact which investors can consider as a screening indicator. 

These differences in economic performance can be explained using a framework of gender behaviour and traits. When it comes to the traits which influence financial performance, I argue, that women’s tendency to be more adaptable and risk averse influence the organisations that they are part of and helped positively in their financial decision making process. While men’s traits, especially during the financial crisis and subsequent downturn in 2008, are perceived as being rigid in their business approach. Coupled with a willingness to take on more risk without changing their business model have damaged the male dominated companies’ ability to create positive financial results for their organisations in times when a new approach was needed.

However, when it comes to EPS male dominated companies are able to do just as good as their more diversified counterparts. I contribute this to the male trait of entrepreneurialism which favours finding new ways to reduce costs in order for the company to be able to maintain a high level of shareholder returns. While diversified companies are able to maintain their level of EPS without these drastic moves because they were able to anticipate and make the necessary adjustments in time.