06.07 A historical lens on family firms and gender equality in the Netherlands, 1900-2020

Aim of the Project

The purpose of the project is twofold. First, it tests whether family businesses are more conducive to gender equality in the workplace than companies without a family background, using a historical perspective. To do so, it identifies the distinctive features of family businesses that differentiate them from other business types and tests how this translates into different outcomes in terms of gender equality in the workplace. Second, the insights gained on the family businesses will be used to develop new intervention tools that can be used in promoting gender equality in non-family businesses. These tools will help developing sustainable cooperation between female employees and (non-family) firm where the firm structure supports women to grow in their career to top-decision positions. Thus, the project engages closely with Challenge 7: Dealing with Diversity (threat feedback cycles) and targets to come up with new solutions for work (Scoop proposal p. 13). In particular, the project will address sustainability cooperation threats within societal domains (Scoop proposal p.4) and help making a transition from a vicious cycle where women remain underrepresented in the top positions in the business, work in less profitable economic sectors and are paid less for the same jobs to a virtuous cycle where gender equality is achieved in the work context.

Theoretical background

This project will focus on gender inequalities in the work context which concerns the gender differences in resources, namely human capital (formal and informal training opportunities), financial capital (access to financial resources, succession practices), and social capital (networks) (Cach and Blair-Loy 2010). The project will develop novel strategies in addressing these challenges by focusing on the diversity among firms, and in particular test whether and how family businesses influence gender equality (in terms of having more female managers, closing the wage gap and occupational segregation) differently compared to non-family businesses. The formalized structure of non-family firms can impose impersonal rules such as rigid promotion criteria making it more difficult for women to develop further in their career during a life cycle which requires more flexibility between home and work. By looking at family firms, characterized with more informal practices, this project will test whether family firms favor women more in their career growth.

The literature on family firms from the finance and economics fields highlights that family firms have features in terms of succession strategies, investment decisions and diversification strategies, which distinguishes them from non-family firms. These features have shown to influence outcomes such as economic performance (Kachaner et al. 2012; Bennedsen et al. 2017). Some studies (e.g., Haberman and Danes 2007; Dumas 1992) considered the position of women in the family firm too. Based on this literature, some features of family firms can be distinguished that can benefit gender equality outcomes compared to non-family firms. For instance, the practice of management authority transfer to a family member in family firms may encourage inclusion of women in managerial positions. Family firms potentially also provide more informal training opportunities as well as easier access to relevant business networks to women from an early age, due to informal mechanisms operating in the family firms (Treas, 1993). This may reduce the gender gap in human and social capital. Thus, the solutions provided within the firm can result in sustainable cooperation between the firm and women in the business, where businesses become a context that address the gender gap in resources and support women reaching to higher positions.

Interestingly, the scattered evidence in sociological and historical literature hints to contradictory conclusions on whether family firms support gender equality or not. For instance, evidence from the Netherlands in the 17^th and 18^th centuries show that family businesses provided flexibility and opportunity to women to engage in the labour market such as in family-owned small shops, as traders and as investors (e.g., van den Heuvel 2007). For 19^th-century France, Khan (2019) has shown that family businesses by providing informal training opportunities and access to family networks were key in supporting female innovators. Similarly, in early 20^th-century Italy, Picciai (2017) argues that family business structure enabled Luisa Spagnoli, (founder of Perugina) to translate her local businesses to one of the most prominent chocolate factories and clothing companies in the world. Contrarily, other scholars argue that in family businesses a patriarchal value system continues to dominate and that women are often discriminated and not considered as managers, despite the strength of their credentials, until crisis creates a critical need (e.g., Dumas, 1992, Bessière, 2014). Another disadvantage of family businesses can be the difficulty of leaving the family company due to the tighter informal network and expectations in the succession process which may limit the options for women to pursue a career in the larger labour market.

To develop a better understanding of the role of family firms in gender equality, this project will use a historical perspective covering the twentieth century to answer the main research question: How and why do family businesses influence gender equality differently than non-family businesses? It will demonstrate (the change in) to what extent family businesses provided opportunities to women to participate in diverse economic sectors and close the gender gap in resources, namely human capital (via informal training), social capital (access to networks) and physical capital (inheritance) especially in a period when the formal education and wage labour market opportunities were more limited to women.

Research Design

The analysis will cover the entire twentieth-century Netherlands, quantitative data will be collected in ten-year intervals between 1900-2020, using various sources. First, archival sources include the annual report archives of family business (https://neha.nl/collecties.php and National Archives), business register (ABR) of Statistics Netherlands, and trade registries (archives of Chamber of Commerce/KVK), which will be used to gather information on the number of family firms (co-)owned by women broken down to economic sectors and when available, whether it is an employer or own account worker. Following the strategy of CBS, which provides data on family businesses from 2016 onwards, this project will identify family businesses and women in the board of family businesses prior to 2016 using three data sources. 1) The new trade register (NHR) of the Dutch Chamber of Commerce (KvK) provide information on the partners and directors and shareholders of enterprises. This information is then combined with 2) Household registers of Statistics Netherlands, containing information about persons in a household and 3) Payroll tax registers of the Dutch Tax and Customs Administration, containing information about board members and their decision-making rights (CBS 2017). This register includes information about the income category such as ‘board member with social security insurance for employees’ and ‘board member without social security insurance for employees’. CBS uses this indicator on income code (with income code 17)  on board members to identify family businesses. In the case of one board member, it implies that this board member (either alone or with family) is in the possession of the majority of the decision-making rights and implies that this family has a member involved in the governance of the enterprise (CBS 2017, p.27). Household registers can also be used to collect information on demographic characteristics (e.g., age, number of household members) as well as in human capital resource (education).

Next to the quantitative analysis, the project will pursue a qualitative analysis involving interviews with the family-owned businesses (https://www.fbned.nl/nl), biographies (http://www.iisg.nl/ondernemers/bladeren/a.php) and newspaper archives to provide information on the background characteristics of women in larger and more well-known family businesses. These written sources will shed light on the conditions behind the gender gap in financial, human and social capital. They provide qualitative information on female business owners who often are directors of large companies, which will complement the quantitative analysis on women’s participation in different types of family businesses. In addition, interviews with 200 family-owned businesses which will be collected via the Dutch Association of Family Firms (FBNed) (https://www.fbned.nl/nl). Topics which will be addressed in the interview include succession practices, informal training opportunities for family members and family networks. Using an oral history approach, it will be evaluated whether and how these factors within the family firm have changed, and to what extent this has influenced women’s position in the firm.

Literature

Bessière, C. (2014). Female and Male Domestic Partners in Wine-Grape Farms (Cognac, France): Conjugal Asymmetry and Gender Discrimination in Family Businesses. The History of the Family (19)3: 341–57.

Bennedsen, M. et al (2007). Inside the Family Firm: The Role of Families in Succession Decisions and Performance. The Quarterly Journal of Economics (122)2: 647–91.

Cech, E.A., & Blair-Loy, M. (2010). Perceiving Glass Ceilings? Meritocratic versus Structural Explanations of Gender Inequality among Women in Science and Technology. Social Problems (57)3: 371–97.

Dumas, C. (1992). Integrating the daughter into family business management. Entrepreneurship, Theory, and Practice 16(4): 41–56.

Haberman, H. & Danes, S.M. (2007). Father-Daughter and Father-Son Family Business Management Transfer Comparison: Family FIRO Model Application. Family Business Review 20(2): 163–84.

Heuvel, D. van den (2007). Women and Entrepreneurship. Female traders in the Northern Netherlands c. 1580-1815. Amsterdam: Aksant. 

Khan, B.Z. (2016). Invisible Women: Entrepreneurship, Innovation, and Family Firms in Nineteenth-Century France. The Journal of Economic History (76)1: 163–95.

Picciaia, F. (2017). ‘In Spite of Everything?’ Female Entrepreneurship from a Historical Perspective: The Italian Businesswoman Luisa Spagnoli (1877-1935). Journal of Management History 23(4): 436–51.

Treas, J.K. (1993). Money in the bank: Transaction costs and the economic organization or marriage. American Sociological Review 58: 723-734.