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2:07 pm
Thu July 25, 2013

USU professors research the glass cliff phenomenon

Allison Cook
Credit HUNTSMAN SCHOOL OF BUSINESS

New research from Utah State University shows that inequality amongst top leadership positions goes well beyond appointment.

Two USU professors are currently in the middle of publishing four research articles that look at women and minorities in high ranking positions in the workplace. Christy Glass is an associate professor of sociology at USU, and Allison Cook is an associate professor in the management department in the Huntsman School of Business at Utah State.

The two may come from very different backgrounds, but their research interests converged on the study of women and minorities in the workplace. Many previous studies have asked why this group of people gets stuck near the bottoms of their companies—instead, cook and glass asked the opposite question—
Why do some women and minorities exceed—and what happens to them once they reach the top?

Christy Glass
Credit CHaSS

“I think that people know about the glass ceilings, which are the invisible barriers to women and minorities attaining top leadership positions across a number of fields. But we wanted to look at the conditions under which those folks are appointed. Under what conditions are women and minorities appointed to very top leadership positions, and then what happens after they are appointed,” Glass said.

Cook and Glass describe two phenomena in their research: the glass cliff, which is a near relative of the glass ceiling, and the savior effect.

The glass cliff refers to the idea that when women are appointed to high-ranking positions, they are much more likely to be appointed to firms that are struggling or at risk to fail. Though other scholars had proposed the idea in regard to women before, Glass and Cook wanted to see if the cliff was seen in promotions of minorities in the workplace as well. 

“First,  we wanted to see whether this theory is relevant to racial minorities as well. We wanted to see across different contexts; NCAA and Fortune 500 CEOs,” Glass said. “We wanted to see what happens afterward, because if it’s true that women and minorities are more likely to be appointed to struggling organizations, then it seems probable that their leadership experience will be plagued as well. So we wanted to look not just at their promotion, but their post promotion trajectory. And that’s where Allie and I developed the theory of the ‘savior effect’.”

The savior effect is seen when, after only a short period of time as an organization's leader, women and minority leaders are replaced by a corporate "savior." They’re replaced by a traditional white, male leader who is brought in to save the organization. Even though often that leader was originally appointed during a period of struggle or crisis.

In their research, Glass and Cook compared top non-traditional leaders with white-male leaders. They looked at how well a company was doing at the time of transition and what happened to the CEO and the company after the transition occurred.

“We were able to conclude that women and minorities are more likely to be appointed when there has been weak prior performance either in terms of win/loss records or in terms of the performance of the organization,” Glass said.

Then, the duo tested the savior effect process. They looked at what happens after the non-traditional leader is appointed in terms of performance.

“What we found is that even performance declines in the short term can put non-traditional leaders at significant risk of being replaced by traditional leaders. Replaced by a white man. Even if those non-traditional leaders were appointed to struggling firms in the first place. This suggests to us that women and racial ethnic minorities aren’t given much of a chance even when they are appointed to these top leadership positions. They are not given very many degrees of freedom to prove their leadership capability, and then they are blamed for the struggle or the crisis and then replaced by a corporate savior,” Glass said.

“This is risky. This is risky for their career but it’s also risky for our perception of non-traditional leaders. Because if in these high profile cases, we have women and minorities blamed for firm struggle and replaced, that risks confirming our biases that these probably weren’t good leaders in the first place and probably shouldn’t have been appointed," she said.

The researchers say because of the rarity of women and minorities in these high-powered positions, the media may spotlight their work—making it seem to the general public that this group of people should not be leaders because they are generally depicted as leading a failing company.

“Within our 15-year study of Fortune 500 companies, we had 57 occupational minorities only transition, where we had 551 transitions of white males.  It is an extremely rare occurrence,” Cook said. “There’s one that just sort of stands out as both the glass cliff and the savior effect happening within one company. Toys “R”  Us is I think a terrific example."

Cook said during the late 90s Toys “R” Us started faltering as it had to compete more with retail giants like Walmart. The founding CEO stepped down and was replaced by Michael Goldstein. Goldstein was given 4 years to turn the company around—but when the value of the company kept falling he was replaced by an Asian man, Robert Nakasone. Unlike Goldstein, Nakasone was given only a year and a half save the company. In 1999 Nakasone abruptly resigned. Cook said no one really knows if he was forced out or whether he stepped down, but after his resignation Goldstein shows up again as the CEO to act as the savior of the company. Cook said  some people working under Nakasone say Goldstein actually kept a lot of the strategies that Nakasone had created during his short time as CEO.

There are things the public can do in light of this research. Glass said she believes there are ways to move forward.

“I think that most organizations are committed to diversity and have done a great deal to increase diversity at lower levels. The way that they have done that is by formalizing the recruitment and hiring process, making the requirements transparent, and drawing on a large pool of possible candidates,” Glass said. “Those same processes haven’t moved to the very top. Recruitment and hiring of those top positions remains informal and hidden. Applying some of those same human resource practices at the very top I think could do a lot to increase the good opportunities for women and minorities at the top—not just these precarious opportunities.”

Glass also said some of their research has shown that companies with diverse boards are more likely to appoint non-traditional leaders regardless of firm performance, and that they seem to be given more time to prove themselves.

The researchers said that the women and minorities who do make it to the top are truly exceptional leaders.

"When they are getting to the ranks of this position as females or minorities not only are they exceptional next to other females or minorities, they are exceptional next to all leaders,” Cook said.
Cook and Glass said they will continue to combine their backgrounds in sociology and management to better understand these trends and how to fix them.