Does she belong here? Women in leadership positions and organizational performance in gendered institutions

Gender diversity in leadership positions may not always bring desirable outcomes for an organization as diversity researchers have argued. Female leaders are less likely to contribute to effectiveness of their organization when it is male‐dominated and has strong masculine culture. We tested a nonlinear relationship between gender diversity at the top and organizational performance and the moderating effect of a female critical mass in an organization. Time‐series data were collected from state‐owned enterprises and quasi‐governmental organizations affiliated with the Korean government and were analyzed through fixed‐effects panel regressions. The results show that gender diversity on executive boards has an inverted U‐shaped relationship with organizational performance. The positive effect of gender diversity on executive boards on organizational performance increases up to a certain level, beyond which the diversity effect turns negative. Curvilinear relationships were found to be flatter in more gender‐balanced organizational settings, suggesting that the negative effect of gender diversity at the top is likely to increase to a lesser extent than in male‐skewed settings.