Why are positions of power in organizations disproportionately held by men?

In old school sociology and economics, there are two explanations for this – one unconvincing and one very convincing.

The unconvincing one is that women are not sufficiently committed to their careers to be able to attain and keep managerial positions. They want to leave the labor force to have babies. They quit jobs to follow their husbands or boyfriends to new locations. This position is sometimes called the human capital theory. Human capital refers to skills – which are obtained by gaining years of experience. The argument ran that women’s fickle attachment to their careers kept them from attaining the years of experience they needed to really master their occupational skills. Therefore, all the top jobs go to men.

This is a pretty easy argument to refute. In any given job, women’s quit rates are nearly identical to those of men. If women don’t quit more, they are not going to have less experience than men.

The convincing argument is that women are discriminated against by managers. This is a highly credible position. Managers determine who is promoted and who is not. There is very little evidence that women perform worse at their jobs than do men. So, if women are doing just as well as men and they are not being promoted, that strongly suggests the presence of discrimination. There is substantial evidence that the contributions of women are undervalued relative to men both in terms of subjective assessment of their performance and for the actual pay they receive relative to comparably performing men.

There is now a third explanation for women’s exclusion from managerial positions: discrimination by clients and customers. A striking case has been made for this by Laura Doering from the McGill Business School and Sarah Thébaud at the UC Santa Barbara Department of Sociology. They argue that clients and customers systematically disrespect women managers and disobey them. This makes women managers seemingly less effective at doing their job because they face greater obstacles than do male managers.

The evidence for this comes from a fascinating dataset – the effectiveness of male and female managers in a microfinance organization in Central America (Due to a confidentiality agreement, neither the name of the bank nor the nation in which it is located are identified.)

Microfinance programs make very small-scale loans to poor people. A stereotypical loan might be one hundred and twenty dollars to a poor woman to get a beauticians’ chair and an over-the-head dryer to allow her to have a beauty business in her home. In microfinance programs, a critical concern is making sure the borrowers pay the credit organization back. Because the customers are poor and face substantial levels of objective risk, a good microfinance organization follows its borrowers closely. Managers work with customers to overcome whatever obstacles they face that might interfere with their ability to make their payments.

The key finding here is that customers were more likely to miss their loan payments payments if a woman manager was supervising them than if their bank manager was a male. This was true for both male and female borrowers. It was true for rich and poor borrowers. It was true for borrowers with larger loans and smaller loans.

Worse. If a customer had once had a male manager and then was transferred to a female manager, that customer became more likely to miss their payments.

Even worse. If a customer had a female manager and then was transferred to a male manager, that customer became even more likely to miss payments. The customers with female managers had already been missing payments. Once they got a man, they disrespected the man just as badly as they disrespected the original women. In some cases, they disrespected the man even worse. It was as if once a customer had experience with a female bank manager, he or she made up their mind that bank managers don’t have to be taken seriously. Bringing in a male manager was not enough to overcome this original perception that “microloan managing is a woman’s job’ and therefore, microloan managers are no big deal.

The only patterns that generated low rates of missed loan payments were starting customers with male microfinance managers and keeping them with their original male supervisor, or passing customers from one male microfinance manager to another.

As long as the customers perceived that microfinance managers were male, they took them seriously. Otherwise, they blew them off.

Is what Doeringer and Thébaud describe a human universal? This is hard to say. The study took place in Latin America. Machismo can be a significant component of Latin American culture. People in other regions might have been more receptive to working with women supervisors. In West Africa, there are many many women traders and businesswomen. They do business with men and women alike. The men may disrespect women – but there would be more of a culture of mutual commercial respect among women.

Likewise, the recipients of microfinance loans tend to be lower class and relatively poorly educated. Wealthier and more educated bank customers might have gender attitudes that are latently more feminist.

Note that these regional and social class specifications are speculative. The data may show that West African women and wealthy clients treat women managers just as bad as did the poor Central Americans in the Doering and Thébaud study.

What Doering and Thébaud tell us is that customers and clients can really deep six female managers. If they disrespect female representatives of the company and do things which cost money (like not repaying loans), this lowers the objective quality of female managerial performance. It does not matter if women managers themselves are not responsible for their customers’ bad behavior. The behavior of customers and clients puts women at a disadvantage – and gives management an incentive to fill its ranks with men.

We used to think that the only problem we had to deal with was eliminating the sexism of upper management. It now looks like we have to eliminate the sexism of the world as well.

A woman’s work is never done. Quintuple that if you want to eliminate the obstacles that keep hard-working competent women from getting the economic rewards that they deserve.