Issued Quarterly

December 2003

OVERVIEW

The reasons why entrepreneurs go into business may not always be the same but they tend to fall into one of five major categories: be my own boss; use my creativity; money; lifestyle; or time with family.  Much of the research has not evaluated whether men and women have the same reasons.  What research that has been done on gender differences has yielded varied explanations as to why female entrepreneurs differ from male entrepreneurs.  

Although often pictured in the popular literature that women are more likely to want to start their own business, often home-based, in order to better balance work and family, some research suggests that instead women choose to own their business as it allows them choice and career opportunities not otherwise available if they were a corporate employee.  Feminist research focuses on the influence of this discrimination and several years ago even offered one hypothesis for a woman’s struggle, the “glass ceiling.”  In this work, researchers argued that this discrimination deprived women of equal opportunities and experiences within the corporate world.  In that research it was also suggested that women choosing to start their own businesses are more motivated by money than are men. 

Other research into why entrepreneurs start businesses though have found other reasons, often that women are motivated by dissatisfaction with their current employment and view business ownerships as a job alternative that is more compatible with other aspects of their life.  Quite often that other aspect is the flexibility to balance work and family. One issue that has confounded the research though has been that of education levels.  In several of the research studies, the level of education among the women and men has not been considered or controlled.  It is not clear that, if men and women have the same educational background, would the analysis have produced the same findings. The purpose of this research was to examine the primary motivation of men and women, controlling for education, that each group had for starting his or her own business.

METHODS

The survey examined 2840 MBA’s from 10 universities.  Twenty-nine percent of the group was female.  Four hundred ninety seven of them owned their own business.  Questions were asked about their employment history, career transition history and expectations, career preferences, and personal/demographic information.  This study was concerned with the responses to four employment motivation questions that measured family- and lifestyle-related factors: career flexibility, family friendly policies, family obligations and spouse/partner co-careers. 

RESULTS

Overall men were more likely to have started their own business (16.2% vs. 11.5%). Overall the business owners, both men and women were similar in the number of years since graduation, work experience before starting a business, age of the current business owned by the respondent, and they were most often married and had dependents. 

The survey found that women were significantly more likely to state a family/lifestyle motivator as the reason for starting a business.  For those women

still employed, this interest in family was also noted as women ranked family friendly policies, family obligations, and spouse/co-career employment issues as very important at double the rate of men.  On the other hand, men had a much higher likelihood of listing advancement and wealth creation as their primary motive.

When the issue of whether or not there were children in the family, the results however began to change.  If there were no children in the family, the motivators of both men and women did not differ.  The primary motivator for both of these groups was wealth creation.  When children were present, then there was even a greater split with women choosing a career path that offered the opportunity to respond to family obligations while men remained motivated by career opportunities and wealth creation.  When men with dependents were compared to all other men, a difference was noted with men with dependents were more likely to be motivated by family policies and family obligations.

SUMMARY

The results of this study support the idea that men and women entrepreneurs start a business for different reasons.  Although the men and women in this study had similar backgrounds, demographics and had started their businesses at about the same time, women entrepreneurs were motivated by a career that gave them flexibility and allowed them to balance their career with family obligations.  These concerns were among the least important for male entrepreneurs who were motivated by wealth.  It provides an understanding on why men and women entrepreneurs may take different views on such issues as business growth, where the market is located, business hours, and planning.