Invited to the party but not allowed to dance? Examining strategic decision-making inclusion of top female executives

• DOI: https://doi.org/10.1108/EDI-07-2021-0184
• Published date: 10 May 2022
• Date: 10 May 2022
• Pages: 1137-1153
• Subject Matter: HR & organizational behaviour,Employment law,Diversity,equality,inclusion
• Author: Ann Mooney

Invited to the party but not allowed

to dance? Examining strategic

decision-making inclusion of top

female executives

Ann Mooney

Stevens Institute of Technology, Hoboken, New Jersey, USA

Abstract

Purpose –The gender diversity of top management teams (TMTs) is slowly increasing. Research shows that

top executives influence firms through their role in strategic decision-making but that executives are not

equally engaged in it. The purpose of this paper is to understand whether gender affects the likelihood of

inclusion in strategic decision-making.

Design/methodology/approach –Drawing on surveys completed by chief executive officers (CEOs) and

using expectation states and gender roles theories, the author examines the relationship between gender and

inclusion in strategic decision-making for 266 top executives of global public firms.

Findings –After controlling for a myriad of factors, results indicate that female executives are less likely than

male executives to be included in strategic decision-making. Firm tenure moderatesthis effect such that it leads

to a greater likelihood of inclusion for female executives but not male executives.

Originality/value –This study provides a unique consideration of strategic decision-making in TMTs. The

findings suggest that diversity and inclusion do not always go hand in hand and that female executives may

need to prove themselves more than male executives to be given an equal voice in the strategic direction of

the firm.

Keywords Diversity, Strategic choice, Top management

Paper type Research paper

Over recent years, there has been increased attention to the gender diversity in firms,

especially at top leadership ranks. While few females serve as chief executive officers (CEOs),

the proportion of females serving in non-CEO top management team (TMT) positions –the

next rung down from the CEO in the corporate hierarchy –has grown steadily. As evidence,

in Fortune 500 firms, females represented 26.5% of top executives in 2020, which was up from

17.7% a decade earlier and 12.5% the decade before that (Catalyst, 2000,2010,2020). Scholars

underscore that gender diversity in TMTs is advantageous because it enriches decision-

making through an expansion of perspectives considered, which can have positive effects on

firm innovation and financial performance (Adler, 2001;Carter et al., 2003;Cordeiro and

Stites-Doe, 1997;Reutzel et al., 2018;Welbourne et al., 2007).

Given the growing research on the potential benefits of gender diversity in top leadership,

including studies reporting more equivocal findings (see metaanalyses by Hoobler et al., 2018

and Jeong and Harrison, 2017), it is surprising that more attention has not been paid to a key

mechanism considered to drive those benefits –the inclusion of female top leaders in the

decision-making process. As described by the well-known diversity and inclusion advocate

Verna Myers, “Diversity is being invited to the party. Inclusion is being asked to dance”

(Myers, 2015). Not all TMT members are engaged equally in strategic decision-making

(Hambrick, 1994;Simsek et al., 2005), and it is typically a smaller subset of the TMT members

handpicked by the CEO who are most responsible (Mooney and Amason, 2011;Roberto,

2003). This “inner circle”(Thompson, 2017) selection is often opaque and behind the scenes,

involving the CEO’s perception of the value TMT members can bring to decisions and the

Gender and

strategic

decision-making

inclusion

1137

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Received 26 July 2021

Revised 10 January 2022

23 March 2022

Accepted 14 April 2022

Equality, Diversity and Inclusion:

An International Journal

Vol. 41 No. 8, 2022

pp. 1137-1153

© Emerald Publishing Limited

2040-7149

DOI 10.1108/EDI-07-2021-0184

comfort CEOs have in working with them (Roberto, 2003). Since top executives influence firm

outcomes primarily through the strategic decisions they make (Hambrick and Mason, 1984;

Finkelstein et al., 2009), it follows that female executives excluded from strategic decision-

making will likely be constrained in the extent to which they can contribute to and make a

difference in firms.

In this paper, I tackle this issue and consider the inclusion of female executives in strategic

decision-making. Applying expectation states theory (Correll and Ridgeway, 2003;

Ridgeway, 2001) and gender role theory (Eagly and Carli, 2018;Eagly and Diekman, 2005;

Eagly and Karau, 1991,2002;Ritter and Yoder, 2004), I hypothesize that ceteris paribus,

female executives will be less likely than male executives to be included in strategic decision-

making. Moreover, I hypothesize that due to a “double standard”females face in evaluations

(Correll and Ridgeway, 2003;Correll et al., 2007;Foschi, 2000), female executives will need to

prove themselves more than male executives in the form of greater experience in the firm to be

included in strategic decision-making. Using primary data gathered directly from CEOs of

global public firms along with other data, I find strong support for the hypotheses. Finally, I

discuss implications and offer a number of suggestions for practice.

Theory and hypotheses

While diversity and inclusion have often been considered together, important differences

exist in their meanings and implications (Roberson, 2006). Diversity refers to the extent to

which different groups are represented in populations and contexts (Cox, 1994). Inclusion

refers to whether individuals represented in those populations and contexts are provided

equal opportunity and treatment (Shore et al., 2018), feel a sense of belonging (Randel et al.,

2018) and feel able to express their authentic selves (Deci and Ryan, 2000;Jansen et al., 2014).

Inclusion has been considered in a range of contexts, such as schools, clubs and sports

teams. One major research stream focuses on the workplace, where inclusion is commonly

examined in terms of how employees, especially those from marginalized groups, are treated

(Nembhard and Edmonson, 2006). Among the various aspects of workplace inclusion

considered, a central one is whether supervisors and other leaders foster a culture whereby

organizational members are able to share their perspectives and collaborate with others

during decision-making (Mor Barak, 2015;Nishii, 2013).

In this study, I focus on inclusion in decision-making and consider the highest leadership

level of the firm, where decisions are more strategic, require a significant investment of

resources and are likely to have a long-term impact on the firm (Child, 1972). Strategic

decisions are primarily the responsibility of the CEO and other TMT members (Hambrick

and Mason, 1984). However, there are often differences between the TMT as a whole and the

TMT members who are regularly engaged in strategic decision-making, and it is the latter

group that is influential over firm outcomes (Finkelstein et al., 2009). The selection of which

team members are included in decision-making often happens behind the scenes and is

primarily the CEO’s call (Busenbark et al., 2016;Mooney and Amason, 2011;Roberto, 2003;

Thompson, 2017). Rather than involving the entire TMT, a CEO may simply consult with a

few key people, quickly get the pulse of the wider TMT and listen intently to a limited set of

TMT members. Moreover, the CEO’s selection of a given team member to provide input will

tend to recur as CEO-TMT interactions strengthen the CEO-TMT relationship, resulting in

what is referred to as an “inner circle”(Thompson, 2017)ora“stable core”(Roberto, 2003)of

TMT members who are most often included in, and therefore have influence over, strategic

decision-making.

Expectation states and gender role theories provide important insights for how gender

might influence whether a CEO includes a TMT member in the inner circle of strategic

decision-makers. According to the expectation states theory, a metatheory representing a set

EDI

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