Why Do Women Struggle to Climb the Corporate Ladder? Evidence from Retail Frontline Managers

34 Pages Posted: 17 Feb 2021

See all articles by Ruoran Chen

Ruoran Chen

Tsinghua University

Susan F. Lu

Purdue University - Krannert School of Management

Lauren Xiaoyuan Lu

Dartmouth College - Tuck School of Business

Simin Huang

Tsinghua University

Date Written: December 30, 2020

Abstract

Today women are still struggling to climb the corporate ladder. While existing gender studies have focused on individual workers or C-suite executives, why men climb the corporate ladder faster than women remains a mystery. To fill this void in the literature, we explore gender differences and disparities in low-level management by empirically investigating the performance of frontline managers in a large sportswear retail chain. We observe a substantial performance gap between male and female managers—stores with male mangers generate 34.4% higher sales than stores with female managers. Meanwhile, we find male managers are more likely assigned to stores with high sales potential than female managers. After matching stores based on sales-potential characteristics, the performance gap becomes quantitatively and statistically insignificant. These results suggest that the seemingly large gender gap in managerial performance reflects the fact that store assignment is inequitable across genders. This interpretation is supported by a triple differences (DDD) estimation—we find no evidence that manager gender changes associated with manager changes affect store sales. We rule out an alternative hypothesis that differential manager ability across genders contributes to the gender gap. We conduct a maximum likelihood estimation of a discrete-time Markov chain that models the processes of store assignment and manager turnover, and we rule out the possibility that inequitable store assignment can be explained by a gender preference hypothesis. We develop a resource inequity index to measure gender inequity in store assignment and link it to the gender pay gap based on manager compensation data.

Keywords: gender inequity, resource allocation, frontline management, retail operations, people-centric operations

Suggested Citation

Chen, Ruoran and Lu, Susan Feng and Lu, Lauren Xiaoyuan and Huang, Simin, Why Do Women Struggle to Climb the Corporate Ladder? Evidence from Retail Frontline Managers (December 30, 2020). Tuck School of Business Working Paper No. 3758149, Available at SSRN: https://ssrn.com/abstract=3758149 or http://dx.doi.org/10.2139/ssrn.3758149

Ruoran Chen

Tsinghua University ( email )

Beijing, 100084
China

Susan Feng Lu

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States

HOME PAGE: http://https://sites.google.com/site/susanluhome/home

Lauren Xiaoyuan Lu (Contact Author)

Dartmouth College - Tuck School of Business ( email )

Hanover, NH 03755
United States

Simin Huang

Tsinghua University ( email )

Beijing, 100084
China

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