Women business owners in traditional and non-traditional industries

Abstract

Small businesses continue to grow in importance to the national economy. According to the Small Business Administration, America's 22 million small businesses generate more than half of the nation's Gross Domestic Product and are the principal source of new jobs. The National Foundation for Women Business Owners reported that between 1987 and 1994, the number of women-owned businesses grew by 78% and women-owned firms accounted for 36% of all firms. Although the growth in the number of women-owned businesses is encouraging, the size of such businesses remains small in terms of both revenues and number of employees, especially in comparison to male-owned businesses. One explanation for this disparity is that female business ownership is concentrated primarily in the retail and service industries where businesses are relatively smaller in terms of employment and revenue as opposed to high technology, construction, and manufacturing. One of the most fruitful streams of research in women's occupational choice has been based on social learning theory. Specifically, self-efficacy has been found to relate to both type and number of occupations considered by college men and women, and with regard to traditional and non-traditional occupations. Entrepreneurship researchers have also used social learning theory to study entrepreneurial intentions. This study builds on that background of women's career development and entrepreneurial intentions to examine differences between traditional and non-traditional women business owners. We examine 170 women business owners in various traditional and non-traditional businesses in Utah and Illinois. Questionnaires were the primary method of collecting data, in addition to 11 in-depth interviews from a sample of the survey respondents. Using a careers perspective, based on social learning theory, we hypothesized that women in these two different categories of industries would differ on levels of self-efficacy toward entrepreneurship or venture efficacy, their career expectations and their perceived social support. A second analysis was also done that explored the relationship between the same independent variables and success or performance of the business. The results offer support for using this integrative model to understand differences between women in traditional and non-traditional industries. The first analysis revealed that significant differences exist between the two groups on several of the independent variables. Traditional business owners had higher venture efficacy for opportunity recognition, higher career expectations of life balance and security and they reported that the financial support received from others was more important to them than those in non-traditional businesses. On the other hand, the non-traditional owners had higher venture efficacy for planning and higher career expectations for money or wealth than the traditional group. The second analysis explored whether success, as measured by sales, was affected by differences in venture efficacies, career expectations, or perceived support received by women in traditional businesses as compared to those in non-traditional ones. This analysis revealed that traditional women business owners might have different factors that contribute to their success than non-traditional owners. Specifically, for the traditional owners, venture efficacies for opportunity recognition and economic management as well as the career expectation of autonomy and money (or wealth) were positively related to sales. For the same group efficacy toward planning and the need for security were negatively related to sales. For the non-traditional women, venture efficacy toward planning and the career expectation of autonomy were positively related to sales while the expectation of money or wealth was negatively related. Also for the same group, the perceived importance of the emotional and financial support was negatively related to sales. In the past, most of the entrepreneurial research has used predominantly male samples of entrepreneurs. Those that include women entrepreneurs generally are comparative, between men and women. This study's comparison of two groups of women entrepreneurs offers a unique contribution to the field. Future research is recommended to further understand how venture efficacy and career expectations affect the decision to start a new business in a particular industry. It would be particularly beneficial to study venture efficacy and career expectations of prospective women entrepreneurs prior to the start of the business. Similarly, greater attention should be given to understanding how venture efficacy develops in different individuals.