Human Resource Management Review

13 (2003) 347 – 364

www.socscinet.com/bam/humres

Entrepreneurship as a solution: the allure of

self-employment for women and minorities
Madeline E. Heilman*, Julie J. Chen
Department of Psychology, New York University, Room 576, 6 Washington Place, New York, NY 10003, USA

Abstract

In this paper, we discuss the experiences that women and minorities encounter in organizational
settings that result in frustration and discontent with corporate life and their opportunities for
advancement. We suggest that such experiences push many of these individuals out of organizations,
attracting them to entrepreneurship as an alternate route to both personal and professional success. Our
discussion includes an examination of the issues that give rise to these experiences and a consideration
of how entrepreneurship appears to provide a solution to them. It also identifies some of the potential
pitfalls of entrepreneurship for women and minorities. In our concluding comments, we urge
organizations to recognize the unique problems women and minorities face and the necessity of
addressing these problems if they are to retain these potentially valuable members of the workforce.
D 2003 Elsevier Science Inc. All rights reserved.

Keywords: Women; Minorities; Entrepreneurship

1. Introduction

Recent years have witnessed a dramatic increase in the popularity of entrepreneurship. The
exploding interest in owning or starting a small business has resulted in record-breaking
numbers of new business formation. In 1998 alone, an estimated 898,000 new firms with
employees opened their doors for business—the highest number ever, and a 1.5% increase
from 1997 (U.S. Small Business Administration [SBA], 1999). In fact, from 1982 to 1998,
the number of business tax returns filed in the United States increased 73%, totaling 24.8
million in 1998.

* Corresponding author. Tel.: +1-212-998-7813; fax: +1-212-995-4826.

E-mail address: [email protected] (M.E. Heilman).

1053-4822/03/$ – see front matter D 2003 Elsevier Science Inc. All rights reserved.
doi:10.1016/S1053-4822(03)00021-4
348 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364

One impetus for the increased popularity of entrepreneurship is the spate of corporate
downsizing and restructuring efforts that have forced employees to exit organizations. But it
is clear that this is not the only impetus. In increasing numbers, people are choosing to
become entrepreneurs even when there are other options open to them. Acknowledging this
trend, business schools, of which one of the most recent has been Harvard Business School,
have made adjustments in their curricula that now requires a course on entrepreneurship in the
first year of study (Leonhardt, 2000). Becoming an entrepreneur, it is believed, is not only
potentially very lucrative, but also provides individuals with challenge and the opportunity to
maximize their power, autonomy, and impact.
Amidst the general thrust towards entrepreneurship, there appears to be a disproportion-
ately large number of women starting their own businesses. Although 3.9 million women as
compared to 6.6 million men declared self-employment to be their primary source of income
in 1997, this represented an increase of 48% for women as compared to an increase of 1.5%
for men over a 15-year period (U.S. SBA, 1998) generating $1.15 trillion in sales and
employing 9.2 million people, but their businesses also were growing at a faster pace than
other businesses and the economy as a whole (Center for Women’s Business Research
[CWBR], originally founded as the National Foundation for Women’s Business Ownership
[NFWBO], 2001b). In fact, the CWBR estimates that between 1997 and 2002, the number of
women-owned firms grew at twice the nationwide rate (14% for women-owned firms
compared to 7% nationwide).
There has also been a disproportionately sharp rise in the number of businesses owned by
minorities. Between 1982 and 1997, the number of businesses owned by minorities more than
doubled, for an estimated total of 3 million businesses, generating $591 billion in revenues
and employing 4.5 million workers (U.S. SBA, 2001b). Although 90% of small business
owners were White in 1997, the pecentage increase from five years earlier was only 4% for
Whites, compared to 84% for Native Americans, 30% for Asians, 30% for Hispanics, and
26% for African Americans (U.S. SBA, 2001a, 2002). Furthermore, from 1997 to 2002, the
number of minority women-owned businesses grew at a rate four times faster than all U.S.
firms and over twice the rate of all women-owned firms; in fact, it was estimated that in 2002,
one out of every five women-owned companies would be owned by a minority (CWBR,
2001a).
The aim of this paper is to identify the special issues faced by women and minorities that
may help to explain their disproportionate interest in self-employment. We propose that
although there is a tremendous general appeal of entrepreneurship, there is a special appeal to
women and minorities who are likely to encounter experiences in corporate life that ‘‘push’’
them toward self-employment. In addition, we propose that whereas there are no doubt
unique issues for members of some of these groups, the experiences of women and minorities
are often quite parallel, leading them to seek self-employment as a career alternative for
similar reasons. Specifically, we believe that women and minorities view entrepreneurship as
a solution to problems that they encounter in the traditional workplace-problems that appear
to them to be fixed and unlikely to change.
What follows is an examination of some of the issues that are of concern to women and
minorities in corporate contexts and a discussion of why self-employment is seen as a way of
 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364 349

alleviating them. First, we will make some distinctions among types of entrepreneurs that will
help to structure our discussion.

2. Types of entrepreneurs

There are numerous definitions of entrepreneur. In this paper, a slightly modified version
of Moore and Buttner’s (1997) definition will be used: An entrepreneur is someone who has
initiated a business, is actively involved in managing it, and owns at least 50% of the firm.

2.1. Traditional and modern entrepreneurs

Among entrepreneurs there is great diversity in the level and amount of education and
training individuals have received. These differences affect the career choices that have been
available to them and the reasons for their self-employment, as well as the types of businesses
they start.
Those with little education or training most often have turned to self-employment because
it is their best chance for achieving career and social mobility. Women of this type have been
termed ‘‘traditionals’’ by those who study women entrepreneurs (Gregg, 1985; Moore, 1990;
Moore, Buttner, & Rosen, 1992), and their businesses tend to focus on providing domestic
services and skills. One can easily see analogous groups among minorities: immigrants who
not only are untrained, but also are hindered by language barriers and the devaluation of
credentials they have earned in their homelands, as well as racial and ethnic minorities who
have lived in the United States for several generations but have been hindered by social
barriers and socioeconomic stratification (Hosler, 1998; Waldinger, Aldrich, Ward &
Associates 1990). For these individuals, self-employment often means sole proprietorships
and low-income, low-equity, small and slow-growing enterprises.
In contrast, individuals who are highly educated and professionally trained turn to self-
employment for very different reasons. They have had multiple options open to them,
including entry into the corporate mainstream, and they have opted for entrepreneurship. It is
this group, the women and minorities with the business and technical training that makes
them desirable in a variety of industries and corporate settings, that is our focus. They are
sometimes referred to as the ‘‘new modern’’ entrepreneurs by those who study women’s
career development (Moore, 1990). For these modern entrepreneurs, self-employment often
comes after a stint as an employee in a corporation where they attain skills and experience and
build key contacts that help them launch their entrepreneurial ventures. Their corporations fail
to hold onto them despite the investments that have been made in their training and
development.

2.2. Career track differences

A further distinction can be made among these modern entrepreneurs who ‘‘do their time’’
in the corporate world, only to leave to start their own businesses. Some, it appears, have
350 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364

always intended to launch their own enterprises and are more or less using the organization as
an incubator for development, whereas others actually had intended to have a corporate career
but, after having a taste of the corporate life, decide to move on. These two career tracks have
been described by Moore and Buttner (1997), the first being labeled as ‘‘intentional
entrepreneurs’’ and the second as ‘‘corporate climbers.’’
Although this distinction in intended career track is no doubt important in considering the
development of entrepreneurs, we do not think that it is critical to our purposes in this paper.
Whatever the reason women and minorities enter organizations, they confront the same issues
and problems on the job. In addition, whatever the goals these individuals have, once they are
employees of the organization there is both the potential to capture their loyalty and
commitment, and the potential to turn them off and push them away. Our interest is in the
factors that tip the scale toward turning them off and pushing them away.

3. Pushes toward entrepreneurship

Women and minorities encounter experiences within traditional organizational settings that
can result in feelings of disenchantment with corporate life and their opportunities for career
advancement. These experiences may ‘‘push’’ these individuals out of organizations, and
attract them to entrepreneurship as an alternate route to both personal and professional
success. What follows is a consideration of some of the issues confronting women and/or
minorities in organizations that produce the discontent that ultimately may be the impetus to
move on to self-employment.

3.1. Lifestyle issues

Achieving a good balance between work and family life is a major concern. It is not an
easy task, and working women, in particular, are feeling the challenges of trying to maintain
such a balance (Phillips & Imhoff, 1997). Although both men and women experience work–
family conflict, the constant tension between work and family seems to be a more acute issue
for women. A review by Stroh and Reilly (1999) is consistent with this view. Not only did
they find that more women than men take advantage of parental leave and flextime options,
but they also found that women who have utilized the Family and Medical Leave Act (which
allows employees up to 12 weeks of unpaid leave to care for family members) worry that
having done so may have sidetracked their careers. Their worry appears to be well founded.
Although disadvantages exist for both men and women who are perceived to be more
committed to their families than to work (Stroh & Reilly, 1999), because women are more
likely to be perceived this way, they are likely to bear the brunt of these disadvantages.
Organizations in general are only now beginning to accommodate the work–family issue.
Although a few have been quite forward-thinking in this regard, offering everything from on-
site day care to telecommuting and flexible in-house hours, many others have been reluctant
to come to grips with this problem (Stroh & Reilly, 1999). Moreover, even when
organizations are responsive to women’s concerns, women who take advantage of the
 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364 351

potentially alleviating measures are in jeopardy of being perceived by bosses and coworkers
as sidelined or ‘‘mommy-tracked,’’ and these perceptions can limit their career progress
(Schwartz, 1989).
Key to this issue is the widespread belief that women put their families first, and that work
for them is only a secondary activity. This old-fashioned notion that flies in the face of data
from so many different sources seems to have a life of its own, persisting despite blatant
evidence otherwise. Regardless of its veracity, however, it has profound consequences for the
experience of working women. Knowing that negative perceptions of work commitment
result when they spend time at or away from work resolving family issues, women often feel
that life in the corporation forces them to choose between their careers and their families. No
doubt, this provides an impetus to look outside of the traditional corporate environment to
one that has built-in flexibility.
Indeed, the desire for a flexible work schedule is one of the main reasons women say they
leave their companies and are attracted to entrepreneurship (Catalyst, NFWBO, & the
Committee of 200 Foundation, 1998). This is not limited only to White women. According
to a recent study by the NFWBO, women business owners of all ethnicities (Asian, Black,
Caucasian, Hispanic, and Native American) report the need for flexibility as their top
motivation for leaving jobs to start their own businesses (NFWBO, 1998a). Moreover, family
considerations have been found to be frequently tied to women’s employment decisions (Carr,
1996), and having young children has been found to have more of an impact on the self-
employment tendencies of women than men (Boden, 1996, 1999; Carr, 1996; Loscocco,
1997). Thus, becoming an entrepreneur appears to provide a solution to the problem of
maintaining a balance between work and family responsibilities. It not only allows women to
have careers that are vital and challenging, but it also gives them the power to decide when,
how, and where their work gets done. Note that it is not a decrease in hours worked that
women seek, but rather the flexibility to accomplish goals on their own terms.

3.2. Getting placed in the right job

Despite the increased number of women and minority group members entering work
organizations, and the explicit efforts of corporations to provide access to those in these
groups through recruitment and affirmative action programs and policies, there remains an
insidious barrier to their advancement. They often are not placed in the visible and demanding
jobs that provide a conduit up the organizational ladder. The reasoning underlying these
placement decisions is based on stereotypical beliefs about what women and members of
various minority groups are like and the inconsistency of these conceptions with what is
thought to be necessary to succeed in a corporate position of responsibility. Much of the work
in this area has been done concerning women, but the principle concerning other groups is the
same. If individuals are considered ill equipped to handle a particular job, they are unlikely to
be chosen to do it.
There has been a good deal of research in organizational psychology documenting the fact
that the way in which women are characterized is antithetical to the way in which successful
managers are characterized (Heilman, Block, Martell, & Simon, 1989; Powell, 1993; Schein,
352 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364

1973, 1975). Repeatedly, women, but not men, have been viewed as deficient in objective and
rational thought style, in forcefulness and tough-mindedness, in leadership ability and in the
skill in business matters believed necessary to succeed in managerial roles. Similar findings
have prevailed in studies of characteristics of successful executives, in which being
inspirational, decisive, action-oriented, proactive, and thinking strategically have emerged
as critical attributes, all of which are typically associated with men but not women (Martell,
Parker, Emrich, & Crawford, 1998). Quite simply, the demands of traditionally male-
dominated jobs, the positions that tend to be the most desirable and career relevant in
organizations, do not coincide with the attributes believed to characterize women as a group,
and consequently women are not expected to succeed in these positions (Heilman, 1983,
1995).
The problem of perceived ‘‘lack of fit’’ of the attributes that are required to perform a job
well and the attributes that are ascribed to individuals because of their group membership is
relevant to those in minority groups as well. The stereotype of Asians, for example, depicts
them as passive, reserved, conflict aversive, and soft-spoken (Niemann, Jennings, Rozelle,
Baxter, & Sullivan, 1994; Oyserman & Sakamoto, 1997). These qualities are inconsistent
with managerial jobs, which are thought to require more active and assertive qualities.
Likewise, certain aspects of the stereotypes of African Americans, such as being hostile, lazy,
and unintelligent (Devine & Baker, 1991), and of Hispanics, such as being aggressive,
present oriented, unambitious, and family oriented (Dovidio, Gaertner, Anastasio, &
Santioso, 1992; Marin, 1984), do not fit well with the widely shared conception of the
attributes required to succeed as a manager. In each case, bias is likely to result—bias that
fosters the expectation that the individual who is a member of one of these groups will not be
competent at fulfilling the responsibilities of an upper-level, corporate position.
The expectations of incompetence that arise from perception of lack of fit have profound
consequences. They contribute to the ‘‘lost opportunities’’ effect described by Ilgen and
Youtz (1986). That is, they may deprive women and minorities of the opportunity to be in
central and visible positions that put them in the spotlight, building their reputations and
positioning them for future advancement. They also may deprive women and minorities from
developmental experiences such as foreign assignments that are deemed essential to upward
mobility. Finally, these expectations and the placements that they spawn are likely to deprive
women and minority employees of the on-the-job training that builds new skills and
competencies that will enable them to handle increasing responsibility. Instead, they are
likely to be placed in jobs that are believed to ‘‘fit’’ their perceived skills and attributes and
therefore are peripheral to the enterprise, so undemanding that success is meaningless or so
low profile that failure does not matter. Given that the placement of individuals in the
organizational structure is critical to their subsequent career success, this issue is far from
trivial for competent women and minority group members who feel that they are never going
to be given a chance to prove themselves.
There is no question that starting one’s own business has an appeal to women and
minorities who feel that they have been stymied by where they have been placed. In fact,
according to the Catalyst et al. (1998) study of women entrepreneurs, women business
owners identified ‘‘not being taken seriously’’ as one of the major dissatisfactions prompting
 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364 353

their exit from corporate life. Once self-employed, they feel that they will be able to use their
capabilities to the fullest, and not wait around to be given an opportunity that seems unlikely
to come.

3.3. Being evaluated fairly

To advance up the corporate hierarchy, it is essential that women and minorities be given
credit for what they accomplish. Yet, there is a persistent sense that this does not happen in
organizations—instead, there is the belief that there is a lack of recognition for these
individuals’ contributions to successful projects. And the belief appears to be borne out by
fact. In comparison to Whites, Blacks receive lower ratings on both relationship and task
components of performance and less favorable assessments of promotability from supervisors
(Greenhaus, Parasuraman, & Wormley, 1990). Women experience similar forms of negatively
skewed performance evaluations when compared to men. Consequently, women and
minorities often believe that others are promoted ahead of them and provided with training
opportunities not available to them that are crucial to future success. The idea of stereotyped
perceptions dominating views of women and minorities in work settings, producing negative
competence expectations, also helps explain why women and minorities may not be treated
fairly when their performance is being evaluated.
Although it is clear why stereotype-based expectations would have direct implications for
job placement, it is less clear why they hold so much weight in the evaluation of performance.
To understand this, it is necessary to examine the nature of stereotypes and the extraordinary
hold that they exert on how members of particular groups are regarded.
Stereotypes are generalizations about groups of people, and result from the ordinary
cognitive process of categorization. They help simplify our social environment and efficiently
organize the multitude of complex information that we routinely encounter (Fiske & Taylor,
1991). Once categorized, we tend to view all of those within a social category as the same—
their perceived similarities are exaggerated and their differences are downplayed or ignored
(Park & Rothbart, 1982). This overgeneralization can thus become the basis of faulty
reasoning, leading to the mistreatment of individuals not because of who they are or what
they have done, but because of the group they belong to.
But how about when actual performance information is available? Does this not override
the stereotype? The answer very often is ‘‘no.’’ There is a powerful tendency for stereotypes
to perpetuate themselves, throwing up a protective shield from disconfirming information.
Moreover, it is this tendency for self-perpetuation that produces some of the most nefarious
consequences of stereotypes. A brief list of these follows.
1. Performance information is ignored. There is a good deal of evidence that indicates that
even when she produces the identical product as a man, a woman’s work is regarded as
inferior. This is particularly likely when there is no concrete work product or when work
performance is not easy to measure (see Heilman, 1983, 1995; Nieva & Gutek, 1980 for
reviews). In these cases, the performance outcome is easily distorted and stereotype-based
expectations act to create a self-fulfilling prophecy. Evaluators, in essence, see what they
expect to see. In the process, they leave untouched the stereotypes they hold.
354 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364

Evaluators may also end up disregarding performance information by inadvertently

adopting a different set of criteria to judge employee performance. For example, social
behaviors have been found to be more influential than task-related behaviors when raters
evaluate the performance of Black employees (Beatty, 1973; Cox & Nkomo, 1986). Also,
citizenship behavior, which is consistent with behavior expected from women, is all but
ignored when women’s performance is evaluated, but is weighted heavily when men’s
performance is evaluated (Chen & Heilman, 2001). The adoption of different criteria for
performance evaluations can make the actual accomplishments of women and minorities
invisible and, again, leave stereotypes unchallenged.
2. Performance information is interpreted to be consistent with the stereotype. We all have
had the experience of interpreting the same behavior differently depending upon who the
actor is (e.g., Duncan, 1976). This tendency, which stems from the different expectations that
we hold for various others, has strong implications for how women and minorities are
evaluated in work settings (Bento, 1997; Feldman, 1981, 1994). Given our expectations,
being seen on the phone a lot may be interpreted as indicative of being productive for a man
but of time wasting for a woman, or making a decision to wait rather than act may seem
passive and nonconfrontational coming from an Asian, but prudent coming from others.
Thus, rather than potentially disconfirming information prompting a revision of the
stereotype, it is assimilated in a way that maintains and even reinforces it.
3. Memory is distorted. What we expect from people influences what we remember about
them (e.g., Bodenhausen & Wyer, 1985). Short of actions on the part of another that are very
public and dramatic, people are likely to remember behavior that is consistent with what they
expect, and forget behavior that is inconsistent with what they expect. Sometimes people even
‘‘remember’’ events that did not even occur that are consistent with their expectations. This
bias in recall can be devastating to women and minorities in work settings (Bento, 1997).
When employees are reviewed and their progress assessed, their superiors are likely to have at
their fingertip examples of actions and behaviors that are consistent with stereotyped
expectations. What they remember may not be representative or even accurate, but it is
likely that it will not challenge stereotypic thinking.
Thus, there are barriers preventing women and minority employees from being evaluated
in an unbiased manner. These barriers are not necessarily purposely erected or a product of
active prejudice. Rather, they arise from ordinary cognitive processes that regulate and guide
evaluation activities. How difficult it is to confront such barriers when they block one’s
progress! No wonder women and minorities who have left corporate life to become self-
employed point to lack of recognition for their contributions as a serious impetus for their
exits (Catalyst et al., 1998; NFWBO, 1998a, 1998b). When self-employed, an entrepreneur’s
accomplishments (or lack of them) speak for themselves.

3.4. Being credited with competence

Despite all the obstacles blocking the acknowledgment of successful performance by

women and minorities, there are times when it is undeniable. This often occurs when there is
objective verification of outstanding performance or widespread consensus about its
 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364 355

excellence. However, even under these circumstances, the woman or minority member does
not always benefit from the fruits of his or her labor.
Again we can point to the tenacity of stereotypes as the culprit. We have already discussed
how information inconsistent with stereotype-derived expectations often is ignored, distorted,
or interpreted in a way that is consistent with the expectations, thereby bringing about unfair
evaluations of work performance. These stereotype-derived expectations also can affect the
attributions made for performance that is acknowledged as successful. It is, after all, only
when the success is attributed to the individual’s skill and ability that he or she is likely to be
rewarded for it (Heilman & Guzzo, 1978).
Outstanding performance from a woman or minority group member may be attributed to
others in the work setting or to peculiarities of the particular work situation, not to the
individual’s competence. This has been demonstrated in recent research (Haynes & Heilman,
2002). A woman who was depicted as having succeeded in work on a difficult task was
viewed as being less competent if she had worked on the task in a group (presumably her
success was due to the work of others in the group). This did not occur for identically
described men. Similarly, in a second study, women but not men who were successful were
rated as less competent if they were said to have had access to coaching. In each case, by
attributing her success to others, the woman was denied credit for it and the view of her as
incompetent could be maintained.
The opportunities to attribute success to others are many in modern organizations. With the
emphasis on teams and the ambiguity surrounding performance in many industries, individual
contributions can be easily disregarded. So, hard work and hard-won accomplishments can be
discounted, not having the impact on the career progress of women and minority group
members that they have on the career progress of others in organizations. The result, no
doubt, can be very costly and very frustrating. Certainly, the lure of being credited for what
one has achieved, something that is almost definitional in entrepreneurial ventures, must be a
potent one.

3.5. Being rewarded for success

Yet, some women and minorities do ‘‘make it.’’ Somehow, they pierce the glass ceiling and
rise through the organization’s ranks. Even then, there potentially are problems. Women and
minorities still may be disadvantaged relative to others who are at their level. In fact, a recent
three-year study conducted by Lyness and Judiesch (1999) that tracked the advancement of
30,000 managers indicated that as women ascended the corporate hierarchy, their chances of
being promoted were much poorer than their male counterparts. It appears that those who are
unexpectedly successful, who violate the expectations derived from societal stereotypes, still
can be blocked from attaining the very highest level jobs in corporate life.
Why might this be? One reason is that these newcomers to organizations pay a price for
their success—they are penalized for their success by being disliked and interpersonally
derogated. Consider the case of Ann Hopkins against Price Waterhouse, which ultimately
came before the U.S. Supreme Court (Price Waterhouse v. Hopkins, 1990). Ann Hopkins had
been working for 5 years in the Office of Government Services at Price Waterhouse in
356 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364

Washington, DC, when, in 1982, she had been considered for a partnership. She had every
right to expect to be given a partnership—none of the others up for consideration had brought
in more business or billed more hours. But she did not make partner. Instead, the decision was
first postponed and subsequently she was turned down. What was the reason? In notes
disclosed to the court, Hopkins was described as annoying, irritating, and lacking in social
grace. Evidently, her failure to be promoted was based on perceptions of her interpersonal
style.
The Ann Hopkins case highlights the dilemmas for upwardly mobile women and minority
group members in today’s organizations. It makes more understandable, for example, the
findings of Lyness and Thompson (1997), who, in comparing matched samples of women
and men in senior positions, found women to be significantly less satisfied with their future
career opportunities. This finding persisted when hierarchical level, base and bonus
compensation, and company ratings of advancement potential were controlled for, suggesting
that women who have achieved success within organizations feel threatened about their
continued upward mobility. Perhaps they anticipate the same treatment as Ann Hopkins.
Perhaps they anticipate that how they will be evaluated will involve more than just the quality
of their work.
There is a growing body of research documenting a backlash against successful women
(Heilman, Block, & Martell, 1995; Heilman, Wallen, Fuchs, & Tamkins, 2003; Rudman,
1998). It seems that when successful, women are seen as particularly harsh and unpleasant,
described in terms such as abrasive, selfish, untrustworthy, and manipulative. These
descriptors are opposites of the traditional stereotype of women, which includes such
attributes as gentle, understanding, selfless, and sympathetic. Evidently, successful women
are treated as an exception and put in a separate category—called a subtype in the psychology
literature. In the process of designating these women as ‘‘different,’’ the general stereotype of
women remains untouched.
We do not have information about whether minority group members suffer similar
interpersonal penalties when they violate stereotype-derived expectations and are successful
in organizations. But it would not be surprising if they too were imbued with character-
izations that rendered their chances less than optimal for the jobs at the top. In general,
however, the violation of expectations provokes a reaction, and in the case of stereotyped-
based expectations, that reaction often seems to be hostile.
There is another possible reason for the failure of women and minorities to reach the top
level of organizational life despite their success in moving up the organizational ladder. There
is evidence that people who occupy jobs that have typically been closed to those in their
racial, ethnic, or gender group are sometimes suspect. These individuals are at risk of being
seen by others in the organization as having attained their positions not because of their merit
but because of affirmative action or diversity initiatives that are assumed to entail preferential
selection based on group membership (Heilman & Blader, 2001). If they are indeed believed
to have benefited from preferential selection and treatment, then their competence will be
questioned regardless of their level in the organization (Heilman, Block, & Lucas, 1992;
Heilman, Block, & Stathatos, 1997), and there will be limits on just how far they will be able
to progress. Moreover, there is indication that there are debilitating effects that arise from the
 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364 357

belief that others regard oneself as having benefited from preferential processes (Heilman &
Alcott, 2001). Thus, to the extent that women and minorities are aware or even suspect that
they are regarded as beneficiaries of preferential processes, they may feel unhappy and
hampered in their ability to move up the corporate ladder.
Affirmative action is not the only basis of preferential treatment. Women, in particular, are
often plagued by the assumption on the part of others that they have gotten to where they are
in the organizational hierarchy because of special relationships with those in power. This is
particularly problematic for attractive women (Heilman & Stopeck, 1985). This too can have
debilitating effects on assessments of the likelihood of being taken seriously when the
difficult jobs need to be filled. Knowledge or suspicion that others think that you have been
given special treatment for reasons having nothing to do with expertise or skill can have
debilitating effects on confidence and most certainly will influence estimates of likely
advancement. Moreover, it will influence those who are just beginning their corporate ascent
who, looking upward for role models, come to recognize that the road ahead is strewn with
obstacles that continually dog women and minorities—even when they already have been
reasonably successful.

3.6. Making friends and building networks

It is no secret that if one is to succeed in organizational life, having mentors and building
networks is essential. But, more often than not, the opportunities for both are limited for
women and minority employees.
Mentors are believed to be instrumental in helping buffer women and minorities from overt
and covert discrimination, and in aiding them in charting their course up the corporate ladder
by coaching them and helping them develop management skills (see review by Ilgen &
Youtz, 1986; Ragins, 1999). They also are helpful in educating the individual about the
informal power structure of the organization and in identifying who and what is most critical
to success. However, opportunities for mentorship within organizations are typically more
available to White men than to women or minority group members.
One reason is the scarcity of other women and minority employees who can serve as
mentors, but even when they do exist, there seems a reluctance to take on this role (Powell,
1993, 1999; Ragins, 1999). Protege failure may reflect poorly on the mentor’s competence, a
risk that seems particularly onerous given the many other problems these individuals have in
establishing themselves as competent members of the organization. Moreover, women and
minority employees may already be expending extra time and effort compared to others
trying to advance their careers, and therefore are not enthusiastic about taking on the
additional chores that the role of mentor entails.
There also is reluctance on the part of male mentors to mentor women (Powell, 1993;
Ragins, 1999). Moreover, the fabled ‘‘old boy’’ networks produce environments that
intentionally or unintentionally exclude women from professional development activities
(Moore, 1999; Moore & Buttner, 1997). Not being invited to play squash or golf or not
joining the guys in the locker room or the sauna evidently shuts women out of the informal
relationships that are so important to them as they progress in the organization. Therefore,
358 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364

organizational environments that are not set up to help women with their professional
development may inadvertently thwart their advancement. In light of this, there have been
suggestions that corporations provide more opportunities for women in terms of socialization
and mentoring (Brodsky, 1993; Powell, 1993, 1999).
The opportunities for mentoring are even scarcer for minorities, especially minority
women (Betters-Reid & Moore, 1992; Ilgen & Youtz, 1986), and when they do exist, they
can be problematic because they most often involve cross-race relationships. Some argue that
these cross-race relationships offer less psychosocial support to individuals than do same-race
relationships (Thomas, 1990), and that it is only when both parties prefer the same strategy
for dealing with race differences (e.g., either suppressing and denying or openly discussing
differences) that they are effective (Thomas, 1993). It is not surprising, then, that mentoring
opportunities for minorities are unlikely to exist unless there are procedures and processes in
place to ensure their occurrence.
The fact that mentoring and the networking that it encourages are far less available to
women and minorities than to others in the organization is likely to be very apparent. The
relationships that result are evident in the elevators, in the cafeteria and at the water cooler, as
well as at meetings and company events. That many of these relationships are the result of
casual contacts that arise naturally, not by design, is no solace to those shut out of them.
Regardless of the intent, women and minorities are likely to feel ‘‘on the outside’’ and
irrevocably handicapped in their ability to become central contributors to the core activities of
the organization.
The lure of entrepreneurship is therefore many faceted. When self-employed, lifestyle
issues can be tailored to the needs of the entrepreneur. Biases in placement processes and
performance evaluation are irrelevant and because success seems to be a direct function of the
entrepreneur’s competence, attributional biases appear to have little impact. Moreover, there
is no corporate ladder to climb—the founder is at the top no matter how big or small the
firm—so perceptions of and internal relationships with others are not considered to be critical
to success. In short, it is not difficult to see why so many women and minority group
members see entrepreneurship as a route to success that bypasses the many obstacles that
exist for them in corporate America. In the next section, we will consider whether this view of
entrepreneurship may not be overly optimistic.

4. Issues faced by women and minorities as entrepreneurs

Is entrepreneurship really the answer? Does it really create a level playing field for women
and minorities in the business world? There is no question that many of the problems blocking
these individuals from achieving success in corporations are alleviated when they become
entrepreneurs. In fact, Baron, Markman, and Hirsa (2001) found evidence to support this
claim when it comes to women. Women entrepreneurs, when compared to women managers,
were described as more decisive and serious about their careers, and their successes were
more strongly credited to their skills rather than to luck. In contrast, men were viewed
favorably on these dimensions regardless of whether they were managers or entrepreneurs.
 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364 359

Nevertheless, there still are problems that are apt to threaten the success of women and
minority entrepreneurs that do not affect the likely success of others. The autonomy and
control of being an entrepreneur, although it effectively precludes many concerns that are
likely to preoccupy these individuals when they are employees of an organization, does not
provide immunity from stereotyping and the bias it produces. This can be particularly
apparent when first starting up a business.
Individuals starting businesses typically dominated by white males may potentially face
difficulties in obtaining a client base. This is likely to be a very real problem because,
according to the NFWBO (1999), the most rapid growth in women-owned firms lies in
nontraditional industries such as construction, wholesale trade, transportation/communica-
tions, agriculture, and manufacturing. Customers may choose not to turn to women and
minorities for their products and services due to a perceived lack of fit between business
owner and industry characteristics. Customers who have the option of employing a male-
owned versus a female-owned construction firm may, for example, select the male owned
firm simply because men are more commonly associated with and are believed to be more
knowledgeable about the construction business. If this is the case, then women and minorities
have an uphill battle in combating the skepticism of potential clients, and may wind up with
less than they deserve in terms of market share.
Stereotypes about what women and minorities are like can produce other problems as well.
There may, for instance, be issues in attracting outstanding personnel. There is evidence that
people do not always like working for female bosses. The Gallup Poll indicated that in 1995
almost half of the people surveyed indicated a preference for a male boss, but only 20% for a
female boss (Gallup Poll, 1996). There is likely to be a similar reluctance to work for members
of minority groups. Working for someone who is not expected to be very competent is not an
appealing prospect, nor does it provide much of a sense of security. However, as long as
stereotypes predominate in characterizations of women and minorities, such expectations of
incompetence are likely to prevail. Inability to attract the best and the brightest may result.
Stereotype-derived expectations that the woman or minority entrepreneur is not very
competent also are apt to create problems in obtaining financial backing. Providing money
and resources to such an individual is very likely to be viewed as more risky than providing
money and resources to others. Moreover, stereotypes can affect financial backing decisions
by influencing the interpretation of business strategy. Research by the NFWBO (1999)
suggests that women entrepreneurs are more likely than men entrepreneurs to place value on
business relationships, to seek out others’ opinions and inputs, and to be more reflective when
making decisions. Given stereotypes about women, customers, suppliers, and bank loan
officers are likely to see these behaviors as uncertain, dependent, unassertive, and over-
cautious—all indicative of a lack of business acumen. They therefore may be hesitant to
provide these women business owners with capital or with necessary resources, viewing them
as a bad risk. Similar nontraditional orientations can be found among members of many
minority groups and so their businesses too are apt to be seen as risky ventures. This is likely
to have consequences for the type of support and backing that can be obtained early in the life
of a new business. Data lend support to this speculation. Women entrepreneurs have less bank
credit than men entrepreneurs, and minority women business owners are less likely than
360 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364

White women business owners to have bank credit (NFWBO, 1996, 1998b). Furthermore, in
the equity capital arena, women-owned firms represent only 9% of all institutional investment
deals and receive only 2.3% of all institutional investment dollars (NFWBO, 2000).
In sum, although entrepreneurship can provide individuals with a way to gain career
autonomy and control, it does not necessarily provide an escape from all of the problems that
women and minorities face in the business world. The same stereotyped conceptions that
plague women and minorities within the walls of corporate America exist outside of those
walls as well. We have discussed only a few examples of ways in which they can act to affect
the success of these individuals and their businesses, and there doubtlessly are many others.
But there is no question that when on one’s own these problems seem more manageable, and
the solutions to them seem more under one’s control, than when ‘‘stuck’’ at the mercy of
others in the corporate setting.

5. Conclusion

Over the past decade there has been an explosion of interest in entrepreneurship,
particularly by women and minorities. In this paper, we have considered some of the issues
that discourage women and minorities from pursuing careers in organizations, issues that they
see as obstructing their advancement and stopping them from achieving the type of success to
which they aspire. There are numerous parallels in the experiences of those in these two
groups and the concerns that push them away from work in traditional corporate settings and
toward self-employment as a solution for achieving personal and professional success.
Although the allure of entrepreneurship is great, it is not a cure-all for the ills that beset
women and minorities in organizations; in fact, we take the point of view that many of the
same problems are likely to surface, but in a different form. Nevertheless, entrepreneurship
holds the promise that individuals’ career success will rise or fall on their own merits—not on
the preconceptions and prejudices of others in the work setting. This is very appealing.
In these dynamic times it is inevitable that many talented and highly skilled individuals
will choose self-employment over being an employee of a corporation. What is critical is that
this not happen for the wrong reasons. If women and minorities are leaving organizations
because they are frustrated and unhappy, not because they sincerely want to be entrepreneurs,
then this is a sad and potentially costly loss both for these individuals and for the
organizations in which they work.
Organizations do not have to sit back helplessly and watch this happen. Rather than
allowing frustration and discontent to persist without addressing it, they can act on the issues
that provide the impetus for women and minority employees to leave organizations.
Admittedly, many of these issues have a long history and originate in social norms not in
the organization itself, but change efforts focusing on outcomes, not causes, can be highly
successful. By targeting these unwanted outcomes, initiatives that can improve the lives of
women and minorities within the organization are very feasible. One thing seems painfully
clear. Without positive action aimed at creating organizational settings that facilitate the
personal and professional goals of women and minorities, organizations may be discouraging
 M.E. Heilman, J.J. Chen / Human Resource Management Review 13 (2003) 347–364 361

the very people whom they most want to retain from moving on to what they see as greater
opportunity at less personal cost.

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