Djcnor’s Weblog

Gender Diversity and Decisions

Posted on: February 10, 2009

I have to thank my husband for pointing out this story to me:

http://www.nytimes.com/2009/02/08/opinion/08kristof.html?emc=eta1

The gist of the story is that homogeneous groups, such as the groups of old white upper-class men we’ve had making decisions (they point out Wall Street in particular) make bad decisions. In fact, in groups, women and men have very distinct styles of decision making.

I knew this was true for children and young people. If you ever want to read a book that will contribute to your observations of human behavior for  the rest of your life, read Carol Gilligan’s book In a Different Voice .

http://en.wikipedia.org/wiki/Carol_Gilligan

about the progression in considerations of moral decision making as boys and girls grow up.  The differences are very interesting. For example, girls, in order to include everyone in the group, will adjust the rules to accomodate a person who might not otherwise participate. Boys will “sacrifice” that person (and the relationship) to preserve rules. Girls start by putting their own well-being last and move toward  an understanding that they can’t do their best for others without taking care of themselves. Boys start by putting their personal interests above those of others and progress to an understanding that they will need to accomodate others in order to further their own interests.

Well, it seems there’s more to the story. The World Economic Forum came to the conclusion that the world would not be in the economic mess it is in if more women had been involved in the decision making of banks and other financial institutions.

It seems that a trader’s level of testosterone in the morning correlates highly with two things, generally their profitability for the day, but also their tendency to take risks. This might seem all good on first impressions, but it also means that when the risks don’t pay off, they crash big. What’s worse is, when males find themselves under financial pressure and around other men of similar status, they are particularly likely to take high-risk chances. (So it’s true that they never really grow up!)

On the other hand, women’s risk taking was unaffected by whether they were around other women of equal status and whether they were under financial stress.

Interestingly, after noting that having more women around might have saved us from this crisis, the article says as an aside: “After all, we also saw some unexpected gains from the balance resulting from women’s suffrage.” I’m going to have to do some research on that one, since the article only cites that having women voting changed the behavior of politicians, particularly regarding public health programs.

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