Gender and Decision-Making

From Maria Simpson’s Two-Minute Trainings

The media are focusing a lot on women in the workplace lately, with stories on NPR, articles in a variety of publications, and a whole issue of Fortune magazine devoted to the 50 most powerful women (Oct. 6).

One article explored whether women were better decision-makers than men. Turns out, it depends on the stress level, something important to consider in any negotiation, no matter what the topic being negotiated.

Men and women are pretty much equally good decision-makers when under low stress levels, but “When stressed, men are more prone to taking risky bets with little payoff.” (NYT, 10/19, SR9). A series of experiments showed that:

Men took more risks when stressed, focusing on “big wins, even when they were more costly,” while women took smaller risks, “looking for smaller, surer successes.”

Men were less likely to recognize the risk level of their choices. “Women were more likely to recognize their losing strategy as a losing one.”
Women under stress were likely to be more attuned to others and how they might feel than men.

How does this difference play out in the workplace? What is the implication for management, especially if you are negotiating a contract or settling a dispute? It’s significant.

One study showed that during times of significant stress, such as the financial crisis, boards of directors with at least one woman on the board “out-performed comparable companies with all-male boards by 26 percent.”

Another study showed that the “stock performance of companies with at least one woman on their boards essentially matched performance of companies with all-male board members.”

Maybe the less risky approach used by women during times of stress dampens the tendency toward riskier decisions made by men under stress. In difficult situations, the smaller, more successful steps suggested by women can keep failure at bay. And when there isn’t any significant stress, women’s approach to decision-making doesn’t slow the company down, either.

There are, of course, upsides and downsides to this information. Many women, like Mary Barra of GM, are brought in only after a crisis and hit what has been called the “glass cliff,” the one they fall off because they don’t see the edge amid all the damage caused by the risky decisions that were made. I’m sure Mary Barra thought herself over the cliff when she was hammered at Congressional hearings for decisions that had been made decades before she got to her position.

Although men and women seem to use the same criteria in making decisions when under little stress, women may be seen during that process as less aggressive and more timid, and therefore, less able to lead and make hard decisions during difficult times. This evaluation might hold them back in their careers. It’s only after the damage has been done that woman are called in to make the careful decisions and look for a series of less risky successes that might have kept the danger away in the first place.

In any situation, you want people at the table who have different ideas about how to solve a problem and can communicate the benefit of those ideas persuasively. Styles of communication as well as degrees of risk-taking come into play here, and the lesson is that everyone, no matter the gender, ethnicity, age or other variable all have to be trained in the art of communications, especially when under stress. In addition, if you are facilitating the negotiation, you might want to do a few more reality checks on the riskiness of the alternatives being presented as the stress levels increase.

Have an absolutely wonderful week.

                       

Maria Simpson

Maria Simpson, Ph.D. is an executive coach, consultant, trainer and mediator who has worked extensively with the corporate, non-profit and conflict resolution communities to promote incorporating conflict resolution into organizational systems and training people in the skills and approaches of mediation. MORE >