Why women entrepreneurs fail in husband-run firms

Women who start new businesses with men are less likely to lead it. And when they co-found a business with their husbands, they have even fewer chances to be in charge, a study finds.

"This study raises awareness of the conditions that limit women's access and also makes us aware of what might be done to increase the likelihood that women will attain positions of authority," explained Tiantian Yang, a graduate student in department of sociology at University of North Carolina (UNC) Chapel Hill.

Yang and Howard Aldrich, chair of the sociology department, wanted to explain gender inequality in new businesses because previous research has mostly examined the issue in established organisations.

The researchers used a nationally representative sample of 362 mixed-sex start-up teams with 880 entrepreneurs on those teams.

Seventy percent of the mixed-sex teams the duo studied were husband-wife teams.

"Our explanation for more pronounced gender inequality in spousal teams is that when husband and wife work together, they carry with them the cultural expectations for the male breadwinner and the female homemaker roles into the business setting," Yang commented.

More children there are at home, the more it amplifies the expectation that the woman would also take on the role of leader of the household, Yang added.

The researchers found that gender inequality in entrepreneurial teams can be reduced when people adopt organisational templates such as signing a formal operating agreement and developing a business plan in the early stages of the company's founding.

They found that men are 85 percent more likely than women to be in charge when team members have not signed a formal ownership agreement.

But men and women have about the same chance to lead a team when that team has adopted such an agreement. "It levels the playing field," Aldrich said.

The study, published in the journal American Sociological Review, is one of the first to explore the emergence of gender roles in new businesses.