Women own differently: How women's decision‐making authority shapes owner teams' strategic choices in private firms

Abstract Research Summary The literature on the strategic role of ownership in creating firm value suggests that owners' ultimate decision‐making authority allows them to align their firms' strategic orientations with their idiosyncratic judgment. By integrating the strategic ownership literature with social role theory, we theorize how women owners' gender‐based judgment influences owner teams' strategic choices depending on the level of ownership (i.e., decision‐making authority) collectively held by women owners. Our empirical evidence, based on 42,667 European firms, suggests that greater ownership among women is associated with less risky strategic choices and a stronger social value‐creation orientation among owner teams. These relationships are partly contingent on whether or not women hold a block majority. Our findings contribute to the strategic ownership literature and advance research on women's entrepreneurship. Managerial Summary In this study, based on 42,667 European private firms led by owner teams, we investigate how women's ownership affects owner teams' strategic choices. Consistent with established behavioral differences between men and women, we find that greater decision‐making authority held by women owners is associated with less risky strategic choices and a stronger social value‐creation orientation among owner teams. These associations, to varying extents, are contingent on whether or not women on the team collectively hold a block majority. Our findings help owner teams reflect on how the gender composition of their teams and the distribution of decision‐making authority among owners jointly shape strategic choices. We also provide investors with new insights into how different ownership structures ultimately influence firms' broader strategic orientations.