When a firm is acquired, roughly 90 percent of managers are commonly laid off, propelling many of them—men and women—into the job market. What happens to female senior managers when firms are acquired? Do they land comparable positions to their male counterparts?
Often, unfortunately, no, according to a recently published paper authored by experts in The University of Alabama’s Culverhouse College of Business.
The researchers — Drs. Vishal K. Gupta and Sandra Mortal, and doctoral student Xiaohu Guo, along with collaborator Vikram Nanda (University of Texas at Dallas) — studied job mobility and outcomes for men and women in senior management positions. Women managers, they found, fare significantly worse than their male counterparts when reentering the labor market after their firm is acquired.
But it also depends on the gender makeup of the hiring company. Companies that employ more women in top management positions (called female friendly companies) reduce gender bias significantly. Additionally, women who have a great deal of professional experience and have served on corporate boards do not suffer a gender penalty in the labor market. “These findings are consistent with the idea that women may have to explicitly demonstrate ability and skills to be considered as competent as men,” the authors wrote.
The study also investigated promotion rates in the firms that hired from target firms, and found that women were typically hired at lower ranks, but female managers were more likely to be promoted than their male colleagues. This suggests that they were underplaced initially, and did not take lower-ranking jobs voluntarily, for job flexibility, but would likely choose a higher-ranking job if it were available. Overall, the authors found that women are at a significant disadvantage in the managerial labor market compared to men.
“The positive news,” the authors concluded, “is that the presence of women in senior positions and the adoption of female friendly policies by firms appear to blunt the effects of implicit gender bias in the managerial labor market. As more women reach the upper echelons in corporations, we may observe the gradual [lessening] of gender bias in the labor market.”
The paper, titled “Gender and Managerial Job Mobility: Career Prospects for Executives Displaced by Acquisitions” was published in Journal of Financial and Quantitative Analysis and is available here.