How do men and women approach decision-making differently? An evidence-based answer to this question is important: If we want to make better personal, policy and business decisions, the tools and strategies we use will depend on our strengths and weaknesses, which may be correlated with gender. If we want to help others, we need to understand their gender-related decision-making tendencies as a starting point to understanding them individually.
To be sure, many gender differences in decision-making may well be culturally determined—the result of discrimination and other injustices. Even so, we need to understand typical differences to better address those inequalities. Moreover, none of us makes decisions purely like a stereotypical male or female: as individuals, we are more complicated than that. So, while there’s a risk of perpetuating unconstructive stereotypes, general observations can be helpful so long as we respect individual differences.
Think about the last time you went clothing shopping with the opposite gender (and check out this Psychology Today article). More likely than not, your respective decision styles reflected a well-known dichotomy: Men’s decisions tend to be more goal-oriented, realistic, resulting in good-enough solutions that can be executed quickly. Women tend to decide more slowly, explore stakeholders’ relationships and concerns, and consider all the possibilities to come to the ideal decision.
Or, think about your last business meeting. In my investment banking career, we frequently made “pitches” to win business. There was a big difference in dynamics when presenting to female versus male decision-makers. A recent HBR article, How Women Decide, spelled out these different tendencies well: Women see a big meeting with prospective vendor as a chance to explore options, collaborate on a solution and establish rapport; men see it as the final step to getting hired. I’ve seen this dynamic cause disappointment when the banking team is mostly male and the client is female.
Factors That Affect Decision-making: Gender and Age Difference (2007) explores male versus female and young versus old differences in “naturalistic” settings. That is, in real-life contexts that are uncertain, dynamic, high-stakes complicated by competing players and interests. They found statistically significant differences in the variables that affect decisions by gender:
| Women | Men |
|---|---|
| Uncertainty | Information |
| Time/money constraints | Goals |
| Emotions | Motivation |
| Social pressure | Work Pressure |
| Consequences | Football* |
Among corporate executives, these different decision-making styles can directly affect shareholder value. Gender and Corporate Finance (2012) finds that male executives tend to be over-confident compared to females (and perhaps more risk tolerant) in corporate finance settings. Relative to men in the same role, women:
- Execute fewer acquisitions, and achieve higher returns with the ones they do select
- Provide wider confidence intervals (estimated margins of error) around forecasts
- Tend to keep their jobs longer, especially as CFO
With these findings, I can (hope to) address the weaknesses in my own decision-making that may result from being a man. I can gather a diverse set of advisors, a majority of whom are female, to help me make my most high-stakes decisions. I can also slow down my decision-making to take better account of the uncertainties, consequences and social context. Moreover, I can adjust my communication and presentation styles to better support female decision-makers in ways that are most helpful to them as women and crucially, as unique people.
*I just made this up to see if you’re paying attention.
My thanks to Noreen Whysel (a woman) and Brian Bennett (a man) for their constructive criticism.