EnTrends

German women, no longer content to
play second fiddle to male bosses, are
making huge strides in the business
world. The number of self-employed
individuals in Germany has increased by
almost 20% since1991. A significant
share of these new entrepreneurs are
women. In the last ten years, the number
of women entrepreneurs in Germany has
increased by 27% to almost one million.
Women founders of new businesses in
Germany tend to succeed at a higher
rate than their male counterparts
according to experts. The reason given
is that they involve themselves to a
greater extent in laying the fundament of
their businesses before opening their
doors. Ingo Sandstedt, the President of
the German Association of Women
Entrepreneurs, (Verband deutscher
Unternehmerinnen) believes that the
success of women entrepreneurs in
Germany today is due in part to their
outstanding professional qualifications.

The percentage of women entrepreneurs
in Germany today has risen to
approximately 30%. This is a substantial
increase from the 1970's when the
percentage hovered around 10%. It was
in the 1970's that the term "glass
ceiling" was first coined to describe the
invisible, artificial barriers created by
attitudinal and institutional prejudices
that prevent qualified individuals from
advancing within their organization and
reaching full potential. Although these
statistics are evidence of the strides that
women have made, it is still evident
today that ceilings and walls exist
throughout most workplaces for women.
Research shows that when all else is
equal, women are still heavily under-
represented in senior positions and still
feel as if they are coming up against that
invisible and seemingly impenetrable
glass ceiling.

Starting one's own business has been
seen by many women as a way to
circumvent this problem. New
technology, instantaneous
communication and the globalization of
world markets have profoundly
transformed the way business is done.
In many respects, the increase in
women-owned and run businesses have
been fuelled by these changes. Women
have seized upon the break down of the
traditional methods of doing business
and replaced them with their own
models rather than copying comparable
male business models. Women tend to
start small, often in their own homes,
and grow to meet demand, rather than
start with a flashy business plan,
expensive marketing campaign and a list
of venture capital investors, who insist
on being repaid fairly quickly.

There is a trend toward female
entrepreneurship in the United States as
well. Between 1992 and 1997, the
number of women-owned firms
increased two-and-a-half times faster
than all U.S. businesses (16% compared
to 6%). Employment in women-owned
firms grew more than three times the rate
for all firms (28% compared to 8%).
During this same time period, the
number of women-owned firms with
employees grew six times faster than the
national average (37% compared to 6%).
Payroll in women-owned firms grew at
almost twice the rate for all firms (46%
compared to 25%).

What is particularly interesting is that
there is a greater degree of stability and
staying power among women–owned
businesses. This again has to do in part
with women's different approach to
business than their male counterparts.
Instead of starting out on a mountain of
credit, many women businesses start
out with minimal financial resources and
a more customized service for a smaller
client base. According to a the Small
Business Administration study, nearly
three-fourths of women-owned firms
which were founded in 1991, were still
going three years later, as compared
with two-thirds of all U.S. companies.

A bi-product of juggling career, family
and households, is the fine honing of
women's skills at multi-tasking and this
translates into successfully being able

to run a new business, be it alone or with
a staff. In some cases, much of the
valuable experience that women bring
with them when starting their businesses
comes from unpaid work of home
management and motherhood.

Although all individuals building up their
own company are concerned with turning
a profit, studies show that the profit
motive is not the primary reason for many
women in creating their own companies.
There are other factors influencing
women when they give up their employee
status to make it on their own. For
example, lack of child care facilities,
unacceptable working conditions, rigid
hours, the wage gap between men and
women, occupational segregation, job
frustration resulting from the glass
ceiling, or disillusionment with traditional
employer/employee relationships. On the
positive side, the factors include market
opportunity, an interest in a particular
area of activity, social objectives, greater
income and financial independence, a
need simply to get out of the house, and
a desire for autonomy, personal growth,
and increased job satisfaction.

Before the fall of the Berlin Wall, 94% of
women in the former German Democratic
Republic worked. However, since re-
unification there has been a dramatic rise
in the unemployment rate in the former
GDR. This has touched off a surge in
female entrepreneurship: Women have
been responsible for the creation of one-
third of the new firms, representing one
million jobs and $15 billion turnover per
year.

Researchers who study new-business
growth in Germany say that companies
run by women develop more slowly than
those managed by men. One reason is
that the profit motive isn't as strong
among women entrepreneurs. According
to government surveys, women cite
earning profits as a fourth or firth reason
for setting up their own companies, after
their desire to become self-sufficient and
develop their own ideas. Unlike male
entrepreneurs for whom the profit motive
is the primary reason for creating their
own companies, women in Germany put
profits in fourth or fifth place.

Women business owners have styles of
thinking and management that differ in
several important ways from men. A 1994
Study commissioned by the National
Foundation for Women Business Owners
(USA) showed that men strongly
emphasize logical, left-brain thinking.
They tend to be more action oriented and
competitive. Contrastingly, women are
somewhat more likely to emphasize right-
brain thinking –that is, feeling, intuition,
relationships, sensitivity, and values and
tend to be more evenly balanced between
the two styles than men. One can
conclude from this study that men tend
to take a more authoritative and
competitive approach to management.
Further, assuming the adage that women
have the distinguishing traits of
interdependence and cooperation, one
could also conclude they women tend to
take a "win-win" approach; they seek to
understand the needs of the other party
when coming to the negotiating table and
seek to achieve a mutually agreeable
result. This of course is not to imply that
the restrictions of our biology are solely
responsible for the differences in men
and women's styles of doing business.
External forces such as culture, habit, and
expectations play a large role.

In general, women-run companies tend to
consider the process and atmosphere in
which the goals and objectives are
achieved as opposed to just the goals
and objectives. Additionally, creating an
atmosphere of camaraderie is often made
a priority. The typical structure of
women-run enterprises is that of a web,
in which everyone internally networks
with one another. This form of co-
dependence ensures that tasks are not
overseen and creates a higher degree of
camaraderie.

The employees see themselves as
working together as opposed to merely
working in an isolated manner in the
same office with others.

Trust in Business, an all-woman office
services company located in Munich,
Germany exemplifies this type of structure.
The company which was founded by two
women has increased its profits 5200%
since its founding in 1999. The methods
used by the company have much in
common with other woman owned
businesses; i.e. it started without venture
capital in the home of one of the women
and most of the advertising has come from
articles written about the company which
were of no cost to the company. Trust in
Business presently employs 15 women and
rents office space. The women work in a
web structure. According to Anne Koark,
one of the partners, "Each person's
functions are interdependent with the
functions of at least one other woman in
the office."

Another strong trend in addition to
entrepreneurship is women working on a
contract basis. This type of arrangement
generally allows for more overall flexibility
and evidences that many women are now
seeking employment outside of the
structure of a traditional office
environment. A study by Computer Jobs,
an employment Web site, and Contract
Professional, a national magazine for
information technology contractors,
underscored this point. It reported that
while salaried male information technology
workers earn 12% more than salaried
women, female contract workers in the
same field earn 8% more than their male
counterparts. This supports the findings
of another recent survey that showed that
given a flexible work environment, women
will put in more hours. The survey found
that women in technology love the
creative freedom, opportunities for growth
and relative lack of barriers to
advancement in the field. Equally strong,
however, are their feelings that the hours
and level of commitment required in many
information technology jobs are not
sustainable long-term.

Although men as well as women face
difficulties in finding a balance between
work and the responsibilities of personal
life, women still carry much of the
traditional burden of the organization of
childcare and household. It is often
reported that women no longer bear this
burden alone and that men do help out
with the household chores. However,
"helping out" still implies that the share of
responsibilities are far from equal. A novel
approach to this problem has been
presented by the German air carrier,
Deutsche Lufthansa AG. According to
Monika Rühl of Lufthansa, a quantum leap
is only possible if more equal
opportunities are available for men. Men
so far have no 'biological options'. Only
when the responsibility for reproductive
work is divided between both partners will
the professional opportunities for women
increase. The new topic must therefore
be: men must also be allowed to take
parental leave and reduce their working
hours without losing anything in terms of
respect or career opportunities. Lufthansa
is clearly on the right path. The challenge
will be of course, to translate such a policy
into a market trend.

The emerging trends discussed herein
clearly indicate that requiring women to
work in an "overload" mode is no longer
economically efficient. Male-led
organizations will benefit from adopting
structures and strategies similar to those
now being created by women
entrepreneurs which are sensitive to their
employees ever-developing sense of how
to make their careers and personal lives
more compatible. Additionally, all
companies that practice combining family
and career and equal opportunities for
men and women in the corporate culture
will improve their chances of remaining
competitive and becoming market leaders.

Stacey van Hooven is an American
attorney living and working in Munich
and the mother of three children. She is a
consultant on American- related legal and
business issues. She works in cooperation
with Trust in Business, www.trustib.com,
a full service company for the start-up
phase of international subsidiaries in
Germany. For further information, please
contact Stacey van Hooven at
Stacey@Trustib.com

1. Study conducted by the "Verband Deutsche Unternehmerin e.V. (VdU)

2. "Frauen haben mehr Erfolg", Metro Clubpost, November 2000

3. "Women's E-Businesses Are Alive and Thriving" by Priscilla Y. Huff December 26, 2000. Online.
[www.womensenews.org]

4."Key Facts", 2001 National Foundation for Women Business Owners. Online [www.nfwbo.org/key.htm]

5. Woodruff, Business Week, p.25.

6. Issue Paper from OECD Conference on Women Entrepreneurs in Small and Medium Enterprises: A
Major Force in Innovation and Job Creation; Paris, April 16-17, 1997

7. Described in the research report Styles of Success: The Thinking and Management Styles of Women and
Men Entrepreneurs. (Washington, DC: The National Foundation for Women Business Owner's 1994).

8. Survey of 265 women technology professionals, coauthored by Mindy L. Gewirtz and Ann Lindsey of
GLS Consulting, Inc., Boston. 2000.