As chairman and chief executive of Longman, she was one of the few role models available to women in publishing, a business with a large proportion of women among junior staff but still very few in top management positions.
"One of the things you quickly notice as you move through the organisation is that you're suddenly dealing almost entirely with men," Ms Kahn says. Throughout her career at Longman, she had worked to put in place the policies and facilities to encourage all employees, especially women, to maximise their potential. "Over time, we'd put in all the structural changes, but we still found women weren't coming through."
At middle management level, the ratio of women to men at Longmans was roughly equal, but very few were moving on to the level from which board members and management directors would be selected. In 1993, she and six other senior managers in publishing formed the Bentinck Group to find out what was happening within the organisational and corporate culture to work against women's promotion to top management. The group commissioned a research study, results of which are published this week.
The researchers exploded the myth that women are not interested in moving up to senior management positions; they had the same aspirations as their male colleagues. The study was carried out in companies where equal opportunities policies were already in place. However, even in such companies, there were numerous covert barriers to women's success, and considerable gaps between policy and reality.
Company policy may state the importance of teamwork and of having employees who are balanced individuals, but this is undermined if different characteristics are rewarded - if those actually promoted are the charismatic, workaholic individuals with high profiles and invisible families, most of whom are men. "The idea of having such a profile terrifies me," one interviewee told the researchers, while another commented: "I feel like the only person here with a small child; it's like work is their lives."
The researchers identified two types of company culture, neither of which were favourable to women's career development. In the paternalistic culture, employees feel cared for and part of a family, but at a cost to the women, who are seen to play a supporting role and to need "looking after" rather than being allowed to develop in their own right.
In the macho culture more typical of the modern multinational corporations, women have to be one of the boys to fit in, using the same kind of aggressive language as their male colleagues. "There's a subtle undermining of women by the male mafia, which is difficult to penetrate. They always close ranks," said one interviewee.
But in the increasingly competitive climate in which publishing finds itself, can companies afford to adopt a less macho, aggressive culture? They can't afford not to, believes Ms Kahn. "You wouldn't dream of having a production line which was working at two-thirds its capacity if you had the business to have it working at 100 per cent.
"It seems to me that in terms of human resources, you want all your staff working at their maximum capacity. If the women - half the workforce - feel nervous of how their pregnancy or childcare needs might affect their prospects, they will not be using their full creative potential.
"If your able women are likely to leave in droves at middle management level because they can't bear your culture any more, that's a tremendous waste of resources."
The use of informal, "old-boy" networks was also common in the companies studied, and women felt excluded from these and uneasy using the same kind of methods themselves.
"As chief executive, I took a tough stance against those informal relationships and practices because I think they work against woman," says Ms Kahn. "If you're dependent on people's favours and recommendations for promotion, it's amazing how often the recommendation tends to be a man. The women get left out."
On the other hand, she would encourage women to use networking more boldly in situations where that is the only way to succeed. "We need to have intermediate ways of going about things until we can get them sorted out in a more equitable way," she says.
"If the only important thing is knowing the job is available and having a contact in the company, it's important the women are as good as the men at using that information."
The long-term aim should be to affect a real change in company cultures, she believes. However, what is needed is more subtle than simply the implementation of policies such as maternity leave and child care, although these are also important: "Before you can do anything, the management has to sit down and sort out whether it is genuinely committed to changing the opportunities for women in the company," says Ms Kahn.
"It can't be done by one group on its own. It has to be done by the whole company, and that means enabling people to say: `I feel anxious about this decision or proposal because I feel it's going to shut down opportunities rather than open them up'."
Such openness can be very difficult to achieve, she agrees, especially for women. "From this report, it's evident they feel they will be penalised if they raise these issues."
Paula Kahn says she doesn't know what she plans to do next. "I'd enjoy working in organisations interested in changing and rethinking their raison d'tre," she says.
"She's very stimulating to work for, and infuriating," says Ms Kahn's former colleague Judy Little, another member of the Bentinck Group. "She's very good at spotting the weakness in someone's argument, and she can tell if you're flannelling."
Whatever her decision, it could be good news for women in the organisation, with some hard thinking to be done among the gray suits at the top.
The report of the Bentinck Group's Women into Management Study, by Dr Susan Walsh and Dr Catherine Cassell, is published this week, price £10. Telephone 0181-874 2718 for copies.