The effect of TMT feminization on the firm's risk management
Abstract: Abstract Background: To have a deeper and better understanding, about results of having women on the top management team and its effects on risk-taking process, and the outcomes of a diverse team, it is crucial to study the contrasting, characteristics and qualities of different genders (men and women), which imitate the dynamics of TMT. Extant literature shows these differences can be a result of work environment, social beliefs, or rooted in the gender itself. These differences can affect the decision-making process and subsequently, risk management in a firm. Purpose: The purpose of this study is to investigate the effects of feminization on company risk management considering the differences in decision making between male and female managers. We believe by shedding light on effects of female on company’s performance, specifically risk management, we can provide top decision makers with better understanding of female capabilities. Subsequently, we believe our findings can help to recruiting more females on managerial positions and improvement of gender equality. Method: This is a case study conducted in a company that experienced a considerable change in its TMT gender combination. Qualitative data are gathered through interviews and secondary data are used to back up empirical findings. For the overall visualization of the study Coleman’s boat diagram is used. Conclusion: Finally, our findings support that companies with more females have more cash holding policy, higher sophistication in project selection, and more efficient R&D investments. Micro-level qualities in female managers regarding risk-taking, has resulted in better risk management in the company. Although there is a decrease in R&D investment during past few years, the company is still innovative.
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