Calling the Shots: Senior Manager Gender, Risk, and Organizational Performance in Different Strategic Decision-Making Contexts

Abstract

We develop new theory on when and why the greater risk aversion often observed in female managers enhances or hinders organizational performance. Our framework centers on the alignment between cognitive propensities and the duration of the decision-making task cycle. We argue that female managers' risk aversion enhances performance in contexts with ample time for deliberation, but dampens performance in contexts requiring rapid decisions. Consistent with this theory, analysis of archival data from 135 NCAA Division I women's basketball teams reveals that female head coaches outperform their male counterparts on long-cycle decision tasks (e.g., recruiting), where time for decision-making is ample. Conversely, male head coaches outperform on short-cycle decision tasks (e.g., in-game decisions), where time is limited, even after adjusting for the quality of human capital available.