World Class Faculty & Research / October 14, 2015

A Hidden Quota on Female Leaders

When a company promotes a woman to its top management team for the first time, you might expect the following to happen: The company grows comfortable with women in positions of power, women perceive new career paths and the movement toward gender equity snowballs.

In fact, “exactly the opposite happens,” says Smith School professor Cristian Dezső. With two coauthors, Dezső examined hiring patterns at 1,500 firms from 1991 to 2011. Once one woman was hired into one of the top-five-paying positions at a company, they found, the odds of a second woman being hired at that level dropped by 50 percent. Companies were eager to hire one woman, but only one.

For the study, forthcoming in Strategic Management Journal, Dezső and his coauthors used mathematical models to study the distribution of top female managers across companies.

If hiring one woman eased the path for others, you’d see clusters of C-suite women in the data. If hiring a woman had no effect, you'd see random distribution. In fact, the data showed that elite female managers were distinctly isolated, evidence of an “implicit quota.”

There could be several potentially overlapping reasons for this effect, Dezső says. Hiring committees could grow complacent after they promote one woman into a top position. Or they might decide, possibly unconsciously, that one woman would be enough to convince the public of the company’s commitment to diversity.

Examining the data, the authors rejected one hypothesis: That top female managers, protective of turf, oppose the promotion of other women. The upshot is that after one woman is hired at a company, advocates for female leadership “need to keep up the pressure,” Dezső says.

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About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and flex MBA, executive MBA, online MBA, business master’s, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.

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