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Future for Gender Diversity in Sodexo: A Path for Hiring Policy?

3548 words (14 pages) Business Assignment

12th Nov 2020 Business Assignment Reference this

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Introduction

It is said that gender diversity is a powerful tool to bring an organization into success as it assists such an organization to perform and operate in a better way (Kebede, 2017). In other words, this can be considered a suggestion for various companies to include more women in their staff, especially their leading staff for gender balance in the firms. Accordingly, this study intends to evaluate gender diversity in terms of the corporate development in Sodexo corporation through an analysis of effects on the whole company which are brought by gender diversity. This study, in general, utilizes social theories and statistics published by this corporation to analyze the indication constituted by gender diversity in Sodexo group- the one studied through the collected information on the Internet - focusing on its development.

Description of Issues

Sodexo was previously known as Sodexho in 1966 at the time of its establishment by Pierre Bellon with Sodexho being abbreviated name of Société d'Exploitation Hôtelière. It was not until 2000 did the company's name change to “Sodexho Alliance” with three leading acquisitions for expansion and strengthening of the company's international network. However, in 2008, it was formally called “Sodexo” with the exclusion of the word “Alliance.” With 45 years of development, Sodexo has become the big boss in terms of quality of life services, with a wide range of services such as food services and personal & home services. To enhance future development, Sodexo has been making efforts to figure out business strategies as well as improving ones within the organizational structure.

Like other businesses, Sodexo faces many problems that require appropriate solutions for better development in the future. One of the outstanding problems embraced by Sodexo is gender diversity, which seems to be unhealthy over the past years. Though diversified research studies argued that one business's performance could strengthen with the presentation of female managers (Nakagawa, 2015), Sodexo appeared to include a small number of women in managerial roles in comparison with man. According to a report in 2017 by Sodexo, the proportion of female against male stands at one fourth in the management board, implying that only one of every four managers is female (Sodexo's Gender Balance Study 2018, 2018). More seriously, the study also showed that the number of female CEOs among S&P 500 CEOs just accounted for 5.2%, which stated that the gender gap was growing in a negative direction. This is a typical situation of not only Sodexo but also other firms, among which Sodexo appears to embrace the most serious one.

Research focus

Several studies by Sodexo implied that gender diversity has a significant influence on corporate performance and productivity. With the assistance of social theories, this study aims at (1) analyzing the importance of gender diversity in corporation's performance in the long term, as stated by Pletzer et al. (2015), and (2) considering whether a novel hiring strategy should be implemented in the hiring policy of Sodexo. Last but not least, the study gives several recommendations and suggestions about gender diversity, which might be significant to the development of Sodexo corporation in terms of hiring strategy. 

For this study, a large number of research studies have been collected to gather information about Sodexo and its problems. This study is considered as the secondary research study, which makes use of the available data set for both qualitative and quantitative analysis (Johnston, 2014). However, the study acknowledges the drawbacks unavoidable during its implementation of due to time limitations and objective factors. Such troubles will be minimized as many as possible for the enhancement of the accuracy of this study.

Literature Review and Analysis

The theoretical framework for gender diversity

The existing leading theoretical framework focused on supporting gender diversity in the corporation, especially the role of female managers and directors. Among which, four main ones have been widely used to assert the importance of women in one firm which are (1) human capital theory, (2) resource dependency theory, (3) institutional theory, and (4) agency theory (Dang & Vo, n.d., as cited in Boubaker & Nguyen, 2012), which highlight the significance of women in terms of leadership in any firm in comparison with their counterparts.

Human capital theory

According to Dang et al. (2014), this theory was raised by Becker (1964), which emphasized the necessity of women in the firm in general and in the corporate boards in particular. As stated by Becker (1964), elements required for any corporation included education, experience, training, skills, and productive capability, contributing to the development in terms of firms' performance. However, human capital theory emphasized the contribution of women rather than men because they owned skills or met requirements essential to the company/business and such things were not found in their counterparts. As Dang et al. (2014) confirmed, female managers or directors with their critical social status would be likely to have a higher level of education or relevant experience compared with men, asserting the role of female workers in general and in managerial positions in particular to a company.

Resource dependency theory

Two principal authors showed agreement with the resource dependency theory, which stressed the need for employment of the female workforce in the business included Pfeffer and Salancik (1978). In their points of view, the corporation was considered as an open system, dependent on external factors to a large extent. As a result, the corporate boards were of necessity to integrate essential skills and capacity to decrease risks imposed by the external environment. Additionally, Pfeffer and Salancik (1978) pointed out that the presence of female managers assisted in overcoming problems faced by one company as they met the requirements of the organization, such as knowledge, external relationships, and legitimacy. Sharing the same point of view, Dang et al. (2004) appreciated the skills and perspectives brought by women, meaning that women usually came up with practical solutions to complex problems, supporting to resolve and eliminate negative consequences resulting from such problems.

Institutional theory

Institutional theory declared that a corporation should be perceived to be legitimate following social norms, values, and expectations, though such factors might be not deemed to be sufficient for a dominant firm (Dang & Vo, n.d., as cited in Boubaker & Nguyen, 2012). Under Hillman and Cannella (2007), legitimacy could be enhanced by the employment of women in the management boards because of its positive influences on the whole organization. Such an appointment can be seen as an influential factor to bring loyal employees to the company and a driving force for its growth as well (Hillman & Cannella, 2007).

Agency theory

This theory depicted a connection between leading factors, of which was a principal (e.g., chairman), and the other was its agent (e.g., directors) (Dang et al., 2014). As described by Fama and Jensen (1983), corporate boards played an essential function in controlling, monitoring company, and handling problems or obstacles faced by it. However, such functions could be strengthened by the presence of female directors and managers owing to their skills and capabilities. Showing his agreement, Arfken et al. (2004) argued that women appeared to be “ultimate glass ceiling” of the company, highlighting considerably the role of women in the corporate board against men.

Influences of gender diversity in the corporation

Through a number of research studies by numerous authors, it could be said that the role of women in the corporation is undeniable, calling for gender diversity in the workplace. As mentioned above, a group of authors shared the same of point of view that women had necessary skills to the corporation than men, and that women seemed to be critical people to boost the performance of the corporation (Becker, 1964; Pfeffer and Salancik; 1978; Arfken et al., 2004; Hillman & Cannella, 2007). Moreover, with the presence of female managers, other serious problems that could lead to severe effects on the firm could be avoided, such as rash decisions, complicated troubles, and conflicts (Pletzer et al., 2015). Besides, a study conducted by Ben-Amar et al. (2017) also indicated a definite link between the appointment of female directors and the sustainability initiatives, which highly emphasized that the more presence of women in the management board, the more effective initiatives were figured out with the help of women. 

It has been proved that gender diversity contributes much more to the success of one business, and no except for Sodexo. In the past, even though the economic indicators of Sodexo remained positive, it still coped with several problems in terms of social identity, among which gender diversity seemed to be the biggest one. The number of women, especially in the management board, kept small; only one out of four men was women. However, since the study conducted by Sodexo, gender diversity has been put in priority for the realization of positive changes, aiming to balance the number of women against men in the corporate board. Data was gathered from the information provided by over 50,000 managers from 70 companies, which would provide more objective opinions about the importance of gender diversity in the success of one business. The analysis by Sodexo figured out the positive relationship between gender balance and indicators contributing to the success of one firm, including (1) employee engagement, (2) employee retention, (3) client retention, (4) safety, and (5) operating margin (Sodexo's Gender Balance Study 2018, 2018). As pointed out by the study by Sodexo in 2018, in particular, the employee engagement of the entities with gender balance increased by 14 percentage points in comparison with the ones with the gender gap. Employee retention of the gender-balanced management entities was also eight percentage points higher that those with the gender gap. Similarly, client retention, safety, and operating margin of the corporation with the equal quantity of women against men in the management boards raised nine percentage points, 12 percentage points, and eight percentage points respectively against those with no gender balance. These statistics play a function as a consultant for the development of Sodexo, which requires appropriate strategies to enhance the female workforce in the corporate boards for better development.

Recognizing the importance of the presence of women in the corporate boards, Sodexo has implemented several strategies to boost the involvement of women in managerial roles. Over the past few years, since the study was conducted, Sodexo has gained significant strides in terms of increasing female managers and directors in its management board with outstanding statistics. The first evidence was revealed in 2017 as Sodexo proved its commitment in terms of gender balance. Notably, the number of women in the Board of Directors increased by 50%, number of women in the Global Executive Committee raised by 25%, the number of women among senior leaders upsurged by 32%, the number of women among middle management increased by 46%, and employees in the companies with gender-balanced management also raised by 59%. (Sodexo's Gender Balance Study, 2018). These statistics showed that Sodexo has been reaching the working environment of gender-balanced management for its better development and advanced working environment.

Is that the novel hiring policy of Sodexo?

Hiring policy towards gender diversity, as analyzed by Stoilkovska et al. (2015), lies in employment opportunities for both women and men. In other words, HR department, in general, is of necessity to offer equal changes and treatment to women and men, regardless of several objectives and subjective factors which might have impacts on their chances to land a job, such as a gender, nation, and race (Stoilkovska et al., 2015). It could be said that the implementation of a hiring policy aiming at gaining gender diversity in the workplace in general in the corporate board, in particular, is a journey that requires much effort and appropriate practices (Gender diversity journey, 2017).

Through the shown statistics, it could be seen that Sodexo is going to be implementing new strategies to increase the number of women in the corporate boards against men to achieve gender balance within the group. Until now, Sodexo has set up its strategy called global strategy for ensurance of gender balance in the management board, with the leading advisory board to be in charge of this aspect called SoTogether (Pressing for progress on gender equality, n.d.). As mentioned above, this corporation has gained initial successes in the enhancement of gender diversity, which boosting the achievement of the group. Furthermore, Sodexo has committed to strengthening gender-balanced management in 2025, implying that it would make an effort to have at least 40 percent of female directors in its senior leadership staff (Sodexo selected for 2019 Bloomber Gender-equality index, 2019).

It can be a significant shift in comparison with Sodexo’s leadership staff in the past. Heretofore, despite its fame for the leading quality of life services, its corporate board consisted of a tiny proportion of female managers and directors. However, Sodexo has made a big step forward to gender diversity in the corporation, implying a change in policies of the company. Sodexo has been employing more and more women in its leading staff rather than man for gender diversity. Accordingly, it seemed that Sodexo would be likely to deploy an appropriate hiring policy to increase the number of women in the management positions so that it can achieve its goal of gender balance in the corporate board. Such a hiring policy should be implemented in Sodexo but also in other firms for the best corporate performance results.

Conclusion and recommendations

As analyzed in this study, gender diversity plays a vital role in corporate performance and other aspects concerning the development of one business. As stated by a group of authors, gender diversity would show its best effectiveness in case of the presence of women in managerial roles. In other words, gender diversity is vital to the management board of the company because female managers/ directors have skills essential to the growth of the firm.

Sodexo is one of the leading companies facing the issue of gender gap within the corporate board and also among companies to conduct a study to investigate the importance of gender diversity in the corporate board to the power of the company. With the results derived from the study, Sodexo has been implementing suitable strategies for balancing the number of female managers and directors against male ones, which assists Sodexo to become one of the top groups with gender balance SBF 120 French stock market index (Obeime, 2018). In the time coming, Sodexo has an intention to reach gender balance in the management positions for a better development of the corporation in general and the healthy working environment in particular, with at least 40 percent of women would hold the positions in the management board (Sodexo selected for 2019 Bloomberg Gender-equality index, 2019).

From the above pieces of evidence, it can be said that an appropriate hiring policy should be implemented in corporations in general and in Sodexo as a good hiring policy attracts more female candidates to any firm. Such a hiring policy should be comprised of equal opportunities and promotions for both genders to encourage women to apply for vacancies, which depends much on the scale and economic conditions of the company. Again, it should balance between the number of female managers and directors in comparison with male ones to create the gender-balanced management in the firm, which fostering the degree of effectiveness of management for a bright corporate future. 

References

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  • Ben-Amar et al. (2017). Board Gender Diversity and Corporate Response to Sustainability Initiatives: Evidence from the Carbon Disclosure Project. The University of Wollongong. [online] Retrieved from http://ro.uow.edu.au/cgi/viewcontent.cgi?article=2409&context=buspapers. [Accessed 13 Oct. 2019]
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