In the recent decades, there has been made significant global progress towards gender equality in the workforce. The decreasing gap in gender workforce ratio has led to countless of studies focusing on the different aspects of gender equality in labour market participation. In particular, the increase in women’s workforce participation has opened up a new field of research regarding its effect on organisational competitiveness. Researchers argue that achieving gender equality has not only been important for workplaces because it is ‘fair’, but also because it is linked to an organisation’s overall economic performance and competitive advantage. This literature review seeks to clarify the effect of gender inequality on organisational competitiveness. It will focus on two main parts of gender equality that have been widely researched over the past few decades. Firstly, it looks at the different aspects of gender utilisation and its outcomes for an organisation. Secondly, as outlined by literature, the contributing factors to gender inequality will be presented.
Within the human resources research, the resource-based view (RBV) argues that human capital is key to achieving competitive advantage (Harel, Tzafrir & Baruch 2003). Therefore, optimisation of its human assets is an important strategy for an organisation’s success. As women in Australia comprise of approximately half of the labour force, the RBV would define their under-utilisation as a poor management of human assets. Similarly, does Appold, Siengthai and Kasarda (1998) argue, that a proper utilisation of all human resources assets is necessary for the enhancement of organisational effectiveness and that an under-utilisation of women in the workforce will produce poor results. Moreover, organisations that are concerned with managing their human assets in terms of benefitting from a broad range of resources, including women, achieve more sustainable results.
Dezsö and Ross (2012) take the RBV method a step further as they look at the key aspects of what makes women an asset for an organisation. They argue that organisations can benefit from gender diversity through the unique expertise and strategic input. Their study found that female representation in top management positions leads to better firm performance, but only to the extent a firm is focused on innovation as a part of its strategy. A year later, Torchia, Calabrò and Huse (2011) showed the positive impact of women on board strategic task and its positive influence on the firms’ innovation. Particularly, it argued that women who are involved in the proposals of decision-making in a firm can lead to implementation of a successful long-term strategy.
Both findings suggest that heterogenous teams will have stronger knowledge foundations, leading to a more comprehensive set of solutions and higher levels of competitive advantage. A heterogenous team will gather information from a variety of sources, such as males and females leading to diverse perspectives. These teams have in particular shown to be effective where higher levels of creativity are needed. Whereas, a homogenous team can expect higher levels of conformity and a lack of openness to differing solution or idea from one’s own. Researchers believe that functional gender diversity in organisations is a “double-edged sword”.
Despite studies done on the positive effect of heterogenous teams on organisational competitiveness, literature has also been concerned with its negative effect. As gender equality is increasing globally, teams are assembled from individuals with varying skills, knowledge, experience and personality. On one hand, heterogeneity within work teams is argued to be a challenge because of the potential conflicts. Cronin and Weingart (2007) argued that diversity is associated with differences of opinion and perspective, diverse teams can therefore lead to increased conflict and decreased overall team performance. On the other hand, gender diversity has shown to increase team performance because too much comfort and familiarity which is often seen in homogenous teams reduces productivity.
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