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Professional Service Ventures, Performance, and the Gender Effect

November 27, 2006 

"The largest single identifiable group starting new professional service ventures in the United States (U.S.) is women; they initiated new businesses at twice the rate of men (National Women's Foundation, 2004).  A wide variety of research has compared various dimensions of female and male small business professional service providers.  Initially research explored demographic differences, including age, education, and business background (Bush, 1992). 

 An appropriate theoretical foundation for explaining differences between male and female service providers originates in the sociology literature and is referred to as feminist theory.  This theory proffers two perspectives regarding gender-related differences in performance.  One argues that there are a wide variety of issues that are impacted by society's attitudes towards women (Hooks, 2000).  Another stream of literature argues that there are innate differences between male and female approaches to issues.  Both streams of feminist theory based research have been used to support the finding the women receive only 76 cents in earning for every dollar a man earns.

 There is an alternative theoretical perspective that would not accept the arguments for feminist theory.  The foundation for most of this research is the rational economic model (Ferber & Nelson, 1993).  This theory argues that individuals make rational economic choices and seek to maximize economic benefit to themselves or the firm.  Prior research on whether gender has an impact on the financial performance of professional service providers has not provided clear insights on whether feminist theory or the rational economic model is more valid.  A second observation regarding this research stream is that most studies draw their results from a variety of industries.  A third observation is that a variety of measures have been used to represent business performance.  This study seeks to address these issues using feminist theory to guide our investigation. 

Hypothesis 1:  Women professional service providers have lower levels of industry experience than males in similar businesses.

Hypothesis 2:  Women professional service providers place a lower priority on financial success than do males.

Hypothesis 3: Women professional service providers work fewer hours in their businesses than do males in similar businesses.

 Hypothesis 4: The gender effects on income will be mediated by:

(a): Industry experience, which will be positively related to financial performance.

(b): Financial motivation for starting a business, which will be positively related to financial performance.

(c): Hours worked will be positively related to financial performance.

 Women are rapidly becoming a majority in the veterinary profession where they now make up nearly 76% of veterinary students and 36% of practicing veterinarians, which is nearly twice the percentage of veterinarians practicing in 1990 (Volk, 2005).  One benefit of studying such professionals is that they are a clearly definable group.  The sample for this study was drawn from a larger study by the American Veterinary Medical Association (AVMA).  The AVMA mailed 15,000 survey questionnaires to a random sample of member veterinarians.  Responses were received from 4,392 veterinarians for a 29.3 percent response rate.  The businesses sampled focused exclusively on small/companion animals, as opposed to food animals (e.g., cows, pigs, etc.) and equestrian, veterinarians.  These qualifications resulted in a sample of 572 owners, including 178 women (31%) and 394 men (69%). 

 The measures studied included: performance, industry experience, hours worked, and financial motivation.  A set of control variables was also included in the analyses to account for additional determinants of income.  One factor expected to be positively related to performance is the population of the community in which the practice is located.  A second factor that may influence owner income is the average income in the area in which the practice is located, as this should allow for greater pricing flexibility.  Finally, size of business (e.g., number of employees) has been generally found to have an important influence on business performance.

 Female professionals compared to male professionals are less experienced and indicated that income potential was less important as a reason for starting their own business than their male peers.  In hours worked per week, there were no differences between male and females.  Female ownership is negatively related to income, even when controlling for environmental and business factors. 

 The evidence presented here is that there is a gender effect among professional veterinarian service providers; females earn significantly less than their male counterparts.  There are several research implications from the findings presented here.  First, the findings demonstrate the usefulness of feminist theory for guiding research on the effect of gender performance.  Second, the results reported here suggest that future research on gender effects should include relevant industry experience and hours worked.  Third, our results concerning the importance of money in motivating the service provider to enter a profession suggest that greater attention should be focused on the motivations of the profession (Cron, W.L., Bruton, G.D., & Slocum, J.W.  2006, p. 53-67)."

 Reference: Cron, W.L., Bruton, G.D., & Slocum, J.W.(2006).  Professional Service Ventures, Performance, and the Gender Effect.  Journal of Leadership and Organizational Studies, Vol. 121, No. 3. 

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Created: 2007-08-27, Updated: 2009-02-17