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March 1998, Vol. 121,
No. 3
Book reviews
Moving
ahead
Can cutting hours
add jobs
Balancing federal
budgets
Book reviews from past issues
- Moving ahead
-
- Women Entrepreneurs Moving Beyond
the Glass Ceiling. By Dorothy P. Moore and E.
Holly Buttner. Thousands Oaks, CA, Sage Publications,
Inc., 1997, 262 pp. $46, cloth; $19.95, paper.
- In Women Entrepreneurs Moving Beyond
the Glass Ceiling, Dorothy P. Moore and E.Holly
Buttner present findings of a study drawn from focus
interviews with 129 women entrepreneurs, and from
responses to questionnaires that the women provided the
authors.
-
- There has been a dearth of information
about successful women entrepreneurs, given that most
small business research had centered on entrepreneurs who
were men. How are women who start businesses different
from men who start businesses? This research may be
useful on two levels. It meets an academic need for
insight into the characteristics of women who start
businesses. It may also be helpful for women wishing to
start their own businesses because the narrative provides
detailed personal insights into problems and solutions
that struggling start-up firms face.
-
- The profile of the survey entrepreneurs
indicates that most were operating an incorporated
service business-ness with annual sales in the
$250,000499,000 range. Most were white,
college-educated, and married with at least one child.
The profile suggested a rather homogeneous group. The
findings, then, may not be expected to reflect the
characteristics of a wider group of women entrepreneurs.
-
- The authors research strategy is to
present a rich variety of findings from previous studies
which were then used as test hypotheses for this group of
respondents. The technical tools used to analyze the data
seem statistically sophisticated and thorough. Factor
analysis appeared to be successful at getting to the
heart of the reasons for women starting their own
businesses. The content analysis of the focus groups
appeared to ferret out the respondents real
opinions on the research topics. The colorful incidents
surfacing in the focus group conversations provided the
feast of information which added to the readability of
the book.
-
- In introducing the subject, the authors
points out that "Traditional" women
entrepreneurs before the 1980s tended to be proprietors
of small, slow-growing service businesses with low
earnings and equity.
-
- "Second Generation" women
entrepreneurs started to appear in the 1980s; these were
women who met Druckers definition of one who
"drastically upgrades the yield from resources and
creates a new market and a new customer." Many were
women who had left corporations to start their own firms
and were in nontraditional female businesses. Researchers
often linked their leaving a previous organization to
career frustration; the corporate environment was
stifling. However, women who recently became business
owners who have worked in the corporate environment
seemed to have benefited from the variety of their
experiences there.
-
- The study suggests that women who started
their own businesses from a desire for self-determination
and for the challenge, with the concomitant respect,
recognition, and self-esteem that both self-determination
and challenge provide. And, moving from a large
organization to ones own business reflects a strong
desire to be ones own boss. This research failed to
support the assumption that women with families started
businesses to help balance work and family
responsibilities.
-
- Findings outline the differences between
women who always intended to start their own businesses
and those who had originally hoped to move up in a
corporate environment. Women entrepreneurs used their
previous organizations as "incubators" to
acquire skills which were useful in start-up firms. The
survey data suggested that women hoping to move up in the
corporate environment placed a higher value on developing
managerial skills than did those who had always intended
to start their own businesses at some point in their
lives. This latter group placed a higher value on
marketing and technical skills, and each group tended to
underestimate the value of the skills they did not
pursue.
-
- Findings from the research suggest that
rather than a top-down management style, women
entrepreneurs management style could be thought of
as a wheel with the owner at the hub connected to each
subordinate by a spoke and the employees linked around
the rim. Female leaders often used a style which
encouraged participation, shared power and information,
enhanced others self-worth, and excited others
about their work. Women tend to pay less attention to
formal power and rely more on personal power.
-
- Its interesting that the model for
both womens management style and communication
style is described as a wheel with the woman business
owner at the center reaching out to others individually
along the spokes of the wheel. It might be interesting to
speculate whether or not this style, both in
communication and in management, may be closely related
to the size of the enterprise. It is difficult to see how
a relatively large organization could be run in this
fashion. It would seem that a large organization would
have to depend on more hierarchical management and
communication styles while smaller organizations could
function in this way.
-
- The authors suggest that the key to
successfully starting a business is simply moving from
"know-how" to "know-who." Separate
theories of career development may be needed for women
and men because women are often excluded from formal
network structure and even informal networks, the
grapevine. It appeared that because of these constraints,
womens networks differed from mens networks.
Researchers agree that networks are most vibrant when
people value them without expecting benefits.
-
- Success, measured in terms of business
size, sales, and growth, is not the yardstick to measure
success for women owners in this survey. There are
multiple dimensions of success for women business owners;
internally, personal growth, professional development,
and improving ones skills seemed more important
than external measures, such as profits and business
growth.
-
- A statistical factor analysis of nine
measures yields three factors: self-actualization
(composed of self-fulfillment and achievement of goals);
business performance (composed of profits and business
growth); and a web effect (including employee
satisfaction, helping others, balancing family and work,
and social contributions) that were of underlying
importance in measuring success for women.
-
- Women saw starting a business not as a
career, but as a life strategy. This book may shed light
into the corners exposing the reasons for the quickening
pace of womens business ownership.
-
- Arline Easley
Womens Bureau
U.S. Department of Labor
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- Can cutting hours add jobs?
-
- The Microeconomics of the Shorter
Working Week. By Marcus Rubin and Ray Richardson.
Brookfield, VT, Ashgate Publishing Co., 1997, 155 pp.
$55.95.
-
- Cutting hours of work to create jobs is
prominently on the agenda in Europe, and more quietly
discussed in the United States. This monograph is very
timely for economists working in this field. The
books essential concern is the contentious issue of
whether cutting hours of work will lead to additional
employment. The impact that cutting hours has on
productivity is the focus of the research. The answer is
important, obviously, for both sides in labor
negotiations, and, more importantly, is critical to
national policy debates on the question of shortening the
work week. The authors conclude that reduced hours at
individual workplaces do increase employment, while
stressing that such findings cannot be generalized to the
overall economy.
-
- The book is rich with reference to the
United Kingdoms broad literature on working hours,
beyond the productivity question. Major virtues are the
extensive bibliography, including the U.S. literature,
and a discussion of surveys on worker preferences for
hours of work.
-
- The book opens with a description of
competing views of what fuels the drive for shorter
hoursinstitutions such as labor unions or
individual choice for more leisure. What the authors call
the economic approach sees productivity growth raising
living standards, resulting in individuals choosing
shorter working hours. The institutionalists stress two
explanations, fear of unemployment or, alternatively,
joint labor/management anticipation of productivity gains
as a result of cutting hours. Productivity gains are
stressed by both, but are they a cause or a consequence
of cutting hours?
-
- Addressing the theory that individual
choice drives the shortening of hours, the authors report
that a number of surveys asking what hours people want
show a dominant preference for the same hours already
worked, rather than reductions. The authors here point
out that the neoclassical theory of labor supply uses the
same approach as neoclassical consumption theory. Neither
deals with the phenomena of habit persistence, revealing
the limited value of surveys in determining individual
choice.
-
- Chapter twos review of research on
the impact that cutting hours has on productivity focuses
on the United Kingdom but includes U.S. research. This
chapter is stimulating because the need for further work
is apparent. A reader not already acquainted with this
research, however, may be lost in the strong terse
criticism Rubin and Richardson offer. The reader is left
wanting new studies which might control for the business
cycle and other variables, for example, in estimating the
impact of cutting hours. The work by Michael White and
others from the Policy Studies Institute in London comes
in for more detailed criticism. Whites conclusion
that shortening hours leads to significant offsetting
gains in productivity is made to sound implausible.
-
- Rubin and Richardsons own two
studies, done in 1991 and 199294, are reported with
details on both technique and results. Their approach is
"micro" in that they interviewed or surveyed at
the plant level, hence the "microeconomics-" of
the title. The 1991 research found (among other things)
that "Nearly all managers reported that shorter
hours agreements had increased productivity." They
are to be commended for reporting that, based on their
later work, they now reject that result. Their view that
the later study, with repeat interviews with multiple
sources is more reliable, is convincing.
-
- The detailed report of interviews reveals
the unreliability of answers by both management and labor
in response to surveys and interviews. Managers saying
that cutting hours was self-financing because of
productivity gains may do so to satisfy concerns of
higher management, rather than basing the claim on data
or studies. The detailed discussion of the interview
results is instructive. The authors report on corporate
data shortcomings, on the disinterest of some managements
in knowing whether cutting hours has any impact on
productivity, and offer suggestions on how to strengthen
survey and interview research.
-
- They conclude from their latest research
that "Very little of the undoubted growth in labor
productivity can be attributed to the shorter working
week." In light of the frank report of problems,
however, the confidence with which Rubin and Richardson
state their strong conclusions seems misplaced.
-
- Both advocates and opponents of shorter
working hours want to know if job gains will be minimized
because productivity jumps as hours are cut, or if the
cost will be high because productivity does not respond.
The research reported and referenced in this book opens
the search for answers.
-
- Eugene P. Coyle
Economist
Eco-Economics
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- Balancing Federal budgets
-
- Setting National Priorities: Budget
Choices for the Next Century. Edited by Robert D.
Reischauer. Washington, The Brookings Institution Press,
1997, 310 pp. $42.95, cloth; $18.95, paper.
- Setting National Priorities is the
10th in a series of books by the same title published
over various years from 1978 to the present by The
Brookings Institution which focus on spending and
taxation issues of the Federal budget. Edited by Robert
Reischauer, senior fellow at The Brookings Institution,
this edition includes eight essays by highly respected
economists. The subjects explored are current policies
and proposals aimed at reducing the long-term projected
budget deficits. While the subtitle, "Budget Choices
for the Next Century," suggests a broad
consideration of the role and scope of the Federal
Government in our economy, most of the articles relate
more narrowly to the immediate concern of bringing the
Federal budget into balance. Very little consideration is
given to broader philosophical questions about equity,
justice, or stability of the economic system in relation
to the Federal budget. Although these issues are
mentioned in the essays, the main emphasis is on
obtaining efficiency as defined by cutbacks or
restructuring to eliminate long-run estimates of large
deficits. Reischauer, in the opening article, discusses
the political climate and the slow economic growth rate
in relation to the expansion in entitlements since the
mid- 1970s that has made the deficit the center of
attention of this collection of essays.
-
- In the second essay, Shultze discusses
both supply side and demand side options of spurring
economic growth in an economy at full employment. He
concludes that while some of the supply side options may
be desirable as long-run policies, there is very little
that can or should be done by either the Federal Reserve
to manage demand through money supply or by the Federal
Government in terms of deregulation, tax cuts or tax
reform, or increased government spending on education or
infrastructure to alleviate the immediate problem of
deficits. Burtless, Weaver, and Weiner give an overview
of the Personal Responsibility and Work Opportunities Act
signed by President Clinton in 1996 which "does away
with welfare as we know it." They point out that the
two major short-run effects of the act are the loss of
eligibility by some individuals and the increased role of
the State. The fourth article, again by Reischauer,
discusses the history of and difficulty in further
cutting nondefense discretionary spending. Steinbruner
and Kaufmann consider the changing role of international
security and suggest that we need to look more intensely
at cooperative and preventive alternatives to modify and
reduce expenditures on conventional attack strategies.
Cutler does a laudable job of explaining the Medicare
history and current problems to the uninitiated. While
emphasizing the immense popularity of this program, he
discusses possible methods of scaling back expenditures.
Some of the methods may bring about a one-time ratcheting
down of costs, but most options result in a decrease in
use of health care by the elderly. Aaron and Gale discuss
the popular notion of eliminating the Federal income tax
and replacing it with either a flat, consumption, sales,
or value added tax. They determine that such proposals
are more mirage than miracle. In the final essay, Aaron
and Bosworth give a clear and comprehensive accounting of
baby-boomers retirement funding sources including
Social Security, Medicare, and Medicaid, and explore
alternative options for funding. To keep future
generations from bearing an unmanageable burden when the
retirement bulge begins, they suggest switching to a
partially funded program, invested in a mixed
private-public portfolio to replace the current unfunded
Social Security program.
-
- All of the essays are clearly written in
highly accessible language. This collection is a valuable
resource for citizens eager to bypass media soundbites,
journalists who want to understand these issues, and
students of public policy, public health, political
science or economics.
-
- Susan Parks
Professor of Economics
University of WisconsinWhitewater
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