Identifying Female Leadership and Performance in Small and Medium-Sized Enterprises in a Transition Economy: The Case Study of Vietnam

Abstract

A review of the literature shows that there is no consistently positive impact on enterprise performance of female participation in business leadership (gender diversity in leadership). This study conducts direct surveys of more than 500 Small and Medium-sized Enterprises (SMEs) in Hanoi, Vietnam, to assess the relationship between women in top management positions and enterprise performance. Unlike previous studies, which used financial indicators to measure enterprise performance, this study adopts the Balance Scorecard theory (BSC) developed by Kaplan and Norton (1996) that assesses enterprise performance based on four groups of criteria: Financial, customer, internal operating process, and training and development. In addition to the control variables used commonly in previous studies, this study adds two factors: (1) awareness of equal opportunities for men and women to become business leaders (2) appropriateness of men and women in leadership positions. The results of the study have shown no clear relationship between the percentage of female participation in leadership, and the financial results and customer development of the enterprise. However, internal operating process and training and development results are negatively affected by the participation of women on the board of directors. The inconsistency of these research results suggests the need to continue to study this topic in SMEs with larger sample size and geographic scope.