Research reveals how women in business profit from stronger networks

Business owner

Recent research studying grape growers in Champagne, France, has potentially wider implications for women in business, having shed light on the financial power of informal relationships that develop among women who work in the same industry.

The research, outlined in the Harvard Business Review, focused on a market in which women are firmly in the minority, making up only 14% of the researchers’ sample.

Moreover, the research notes these women suffer from discrimination from male growers. As one of the women told researchers: “Among grape growers, you lose a lot of credibility when you’re a woman.”

However, being in the minority had worked in the favour of female sellers, with the results of a detailed quantitative analysis of more than 5700 individual sales transactions over a 17-year period described by the researchers as “surprising”.

“We found that female growers were able to charge systematically higher prices than male growers for grapes of the same quality,” the researchers said.

Qualitative research revealed the underlying reason for these higher prices was “the relationships developed and maintained by the women growers”.

“Often, minorities who are excluded from the majority will seek solidarity with one another, and this was certainly the case for the female growers, who tended to interact for social support,” the researchers found.

“These informal relationships frequently led to the women exchanging useful knowledge and market information that the men tended to keep secret.”

Such conversations could include tips about who does business with whom. With women tending to socialise more with each other, their trust in this information was relatively high, while male growers were, conversely, more sceptical about what they heard from their male counterparts.

On a broader level, the “work highlights an unexpected consequence of discrimination”, and could have implications across other industries, such as technology entrepreneurship and private equity.

As the researchers note, “it’s possible that the dynamics we document in the Champagne grape market might also be at play in these industries”.

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