Why don’t more women go into business?

By Chloé Freslon
August 19, 2019
Why don't women go into business

As part of URelles, I meet a lot of women. They are inspiring, fascinating, all interesting. They all share common traits. When it comes to taking the plunge, they have doubts, they do a lot of research, they go through long periods of reflection and questioning. They always seem to consider their environment – spouse, children, friendships, etc. – before making a decision that could radically change everything and everyone around them. Conversely, I’ve observed that men act first and deal with the consequences later.

So I wanted to know why and how to explain these differences.

I met Marie-Thérèse Chicha, Ph.D., winner of the Governor General’s Award in Commemoration of the Persons Case, full professor at the School of Industrial Relations and holder of the Chair in Ethnic Relations at the Université de Montréal.

What motivates women to go into business?

Marie-Thérèse Chicha: The crowding-out effect. They face obstacles and difficulties in the job market. They have skills, but they can’t put them to good use because employers are reluctant to hire them. There are also difficult working conditions, such as lower wages than their male colleagues. These factors push them out of the job market as salaried employees, so they decide to set up on their own.

So women are “forced” into business?

Marie-Thérèse Chicha: The crowding-out effect is more prevalent among women than men. It’s harder for women to climb the career ladder and find work that matches their ambitions. It has been found that women entrepreneurs create their own businesses in response to the obstacles they encounter. These are generally small businesses.

Why is that?

Marie-Thérèse Chicha: They are often involved in economic sectors that are extensions of their socialization or the skills they have acquired through their family obligations: cooking, sewing, etc. They are more sensitive to the needs of other women, hence the creation of a catering service, for example. They are more sensitive to the needs of other women, hence the creation of a catering service, for example. This kind of business can’t expand enormously; it will stay small. They’re niches.

Is it voluntary to stay small, or do women prevent themselves from working “too much” because they have to look after the family?

Marie-Thérèse Chicha: Yes, taking care of the family can be a factor. But there’s also the fact that women find it difficult to raise the capital they need for major expansion.

Did Hillary Clinton’s defeat in the US elections have an impact on women’s decision to go into business?

Marie-Thérèse Chicha: Yes, in the workplace and in access to senior positions. I’ve already heard comments on this. Her journey has been so difficult, she’s had to endure so many insults, so many low blows, I think other women will think before embarking on this kind of adventure. It’s my hypothesis that they might be chilled. I’ve already heard women in senior management positions ask themselves whether it’s really worth going through all this only to be ousted by someone so incompetent. It’s very painful, because to have gone through so many pitfalls, to have put in so much effort, only to be dismissed… I’m not sure it won’t have an immediate negative effect, as long as it’s still very fresh in women’s minds.

What are the strengths of women in business?

Marie-Thérèse Chicha: They have a lot of determination. Once they’ve decided to do something, they’ll see it through. They’re good at relationships and cooperation. They’ve often been through difficult times, which has given them a strong sense of resilience. 

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