The Distinctive Challenge of Educating Social Entrepreneurs: A Postscript and Rejoinder to

the Special Issue on Entrepreneurship Education

Author(s): Paul Tracey and Nelson Phillips
Source: Academy of Management Learning & Education, Vol. 6, No. 2 (Jun., 2007), pp. 264-
271
Published by: Academy of Management
Stable URL: https://www.jstor.org/stable/40214446
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c Academy of Management Learning & Education, 2007, Vol. 6, No. 2 264-271.

The Distinctive Challenge of

Educating Social Entrepreneurs:
A Postscript and Rejoinder to
the Special Issue on
Entrepreneurship Education
PAUL TRACEY
University of Warwick

NELSON PHILLIPS
Imperial College London

In September 2004, Academy of Management Learning and Education published a special

issue on the role of management education in the training and development of
entrepreneurs. Despite making a significant contribution to current thinking about
entrepreneurship education, we consider that the special issue contains an important
omission - there is no discussion of social entrepreneurs, individuals who develop
economically sustainable solutions to social problems. In this essay we seek to address
this omission and to outline the distinctive challenges and issues involved in teaching
and developing entrepreneurs that combine social and commercial objectives.

Reflecting the growing stature and prominencement of of a business plan forms a central component
entrepreneurship and business venturing within in most entrepreneurship curricula, there is little ev-
business schools, in September 2004 Academy of idence that it leads to the creation of successful new
Management Learning and Education published a
ventures, and it may even inhibit new venture cre-
special issue on the role of management education ation in some circumstances. Shepherd (2004) also
in the training and development of entrepreneurs. develops a provocative line of argument, suggesting
It sought to "inform AMLE's readers about the the- that learning from business failure requires that ed-
ories, methods and best practices in entrepreneur- ucators move beyond the cognitive dimension of en-
ship education" (Greene, Katz, & Johannisson, 2004:trepreneurship (i.e., how or what entrepreneurs
238). In so doing, it incorporated perspectives from
"think"), and explore the emotional relationship that
leading scholars in the field, experienced educa- exists between entrepreneurs and their businesses.
tors, and successful entrepreneurs. In another insightful paper, DeTienne and Chandler
The special issue represents a timely contribu- (2004) show empirically that it is possible to teach
tion: Through the constituent papers, many of the students to identify business opportunities, and more
specific challenges that the subject poses are ar- generally, to exhibit higher levels of innovation, sug-
ticulated, and some of the most established ideas gesting both that entrepreneurship education can
in the field are critiqued and questioned. For ex- have tangible outcomes and that "entrepreneurship
ample, Honig (2004) argues that while the develop- is not about who the entrepreneur is, but what the
entrepreneur does" (p. 254).
Taken together, the articles published in the spe-
We wish to thank the Monument Trust, the Esmee Fairbairn
cial issue show that there is no single "best" ap-
Foundation and the Isaac Newton Trust for the support they
have given to the Community Enterprise initiative at the Judge
proach to entrepreneurship education - the key
Business School, University of Cambridge. The opinions ex- point is that content should be based on solid con-
pressed in this paper are solely those of the authors. ceptual building blocks, allowing students to un-

Copy
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 2007

derstand the kinds of social enterprise that form the

the focus of
multifaceted our analysis. Following on from this, we outline the
Moreover, distinctive nature of social entrepreneurship.
th We
ucation argue that in addition torequthe challenges faced by
reflecting all entrepreneurs, social entrepreneurs encounter
th
edge is tacit
another set of issues pertaining to their social ob-
which means that it is difficult to transfer within the jectives that add an extra layer of complexity to
boundaries of the classroom or lecture theater (see their activities. This leads into a discussion of the
especially Aronsson, 2004; Wolfe, 2004). ways in which business schools can address the
Despite the significance of its contribution, we growing interest in social entrepreneurship within
consider that the special issue contains an impor- their entrepreneurship and MBA programs, based
tant omission - there is no discussion of social en- on our own experiences. While the topics covered
trepreneurship, a form of enterprise that is becom- in existing entrepreneurship curricula remain rel-
ing increasingly prominent in the U.S., the U.K., evant to social entrepreneurs, we suggest there is
and elsewhere (see, e.g., Borgaza & Defourny, also 2001;a need to incorporate new topics that reflect
Dees 1998a; Paton, 2003). In this essay we address the distinguishing characteristics of social enter-
this omission and outline the distinctive chal- prise as an organizational form.
lenges and issues involved in teaching and devel-
oping entrepreneurs who build businessesDEFINING in order SOCIAL ENTREPRENEURSHIP
to achieve social as well as commercial objectives.
Our aim is to begin what we hope will beBefore a broad discussing social entrepreneurship educa-
discussion to theorize social entrepreneurship tion, itand
is important to explain what we mean by
to develop a preliminary framework thatsociai can entrepreneurship,
be particularly given the rel-
used for pedagogical purposes. ative novelty of the term and the lack of clarity
We think that this is an important rejoinder regarding
to the its relationship to more traditional en-
special issue, particularly in the light of the trepreneurship.
increas- Moreover, an important first step
ing number of social entrepreneurs entering toward the inclusion of social entrepreneurship
busi-
within business schools is to raise awareness
ness schools in order leam the skills and competen-
cies required to build sustainable businesses, as among faculty, and this requires a clear sense of
well as the growing proportion of mainstream busi- its key characteristics.
nesses incorporating a social dimension in their ac- Broadly speaking, two overlapping conceptions
tivities. The interest in social entrepreneurship of social entrepreneurship can be identified in the
among students is further evidenced both by the literature. For some scholars, social entrepreneur-
growing number of social enterprise clubs, and by ship refers to the creation of positive social
the fact that social entrepreneurship business plan change, regardless of the structures or processes
competitions are now commonplace, particularly in through which it is achieved. Indeed, this under-
U.S. business schools (Olszak & Sidorick, 2003). More- pins the influential work of Dees (1998b), whose
over, the 2005 Net Impact conference hosted by Stan- definition is perhaps the most commonly cited and
ford University - an event for graduate students in used. From this perspective, social entrepreneurs
business and management studies interested in so- are concerned with reconfiguring resources in or-
cial entrepreneurship and corporate social responsi- der to achieve specific social objectives, and their
bility - attracted a record 1300 participants (www. success is measured by the extent to which they
netimpact.org). achieve "social transformation" (Pearce, 2003; Al-
It is our view that business schools need to re- vord, Brown, & Letts, 2004; Bornstein, 2004). While
spond to this trend and to cater to these students they may develop business ventures in order to
within their entrepreneurship and MBA programs. fund their activities, they are as likely to rely on
Indeed, some have already taken important steps philanthropy or government subsidy to achieve
their social missions.
in this direction: For example, the Social Enterprise
Initiative at Harvard Business School, the Center A second strand in the literature focuses on gen-
for Social Innovation at Stanford University, anderating "earned income" in the pursuit of social
the Center for the Advancement of Social Entrepre-outcomes (Boschee, 2001; Oster, Massarsky, & Bein-
neurship at Duke University. hacker, 2004). From this perspective, social entre-
We consider the issue of social entrepreneurshippreneurship is concerned with enterprise for a so-
education in three steps. In the next section, we cial purpose and involves building organizations
position our conception of social entrepreneurshipthat have the capacity to be both commercially
within the existing literature and give examples of viable and socially constructive. It therefore re-

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266 Academy of Management Learning & Education June

quires social entrepreneurs THEto

DISTINCTIVE CHALLENGE
identify andOF SOCIAL
exploit
ENTREPRENEURSHIP
market opportunities in order to develop products
and services that achieve social ends, or to gener-
Social entrepreneurs are "like other entrepreneurs,
ate surpluses that can be reinvested in a social
only they are in it for social improvement, not the
project (Leadbeater, 1998; Amin, Hudson, & Cam-
money" (James, 2001: 58). This does not imply that
eron, 2002). This is the form of social entrepreneur-
profits are unimportant; the enterprise needs to
ship with which we are concerned here.
generate surpluses if it is to be viable in the long
Some brief examples will help to illustrate the
term. Social entrepreneurs therefore encounter the
kinds of social enterprise that form the focus of our
same challenges as more traditional entrepre-
analysis. Our arguments relate in the first instance
neurs - opportunity recognition, the marshalling
to social entrepreneurs who build and manage of resources, and the creation of the new venture
nonprofit organizations that rely upon earned in-
(Kourilsky, 1995) - with the added complexity of de-
come rather than contributed income from govern-
fining, building support for, and achieving social
ments, foundations, and other awarding bodies. A
outcomes. As a result, it is a particularly demand-
well-known venture of this kind is Greyston Bak-
ing form of entrepreneurial activity. In our experi-
ery, an organization based in NewYork, which pro-
ence, there are three key challenges inherent in
vides employment for people who have been mar-
social entrepreneurship, which grow out of the hy-
ginalized from mainstream labor markets, many of
brid nature of social enterprises and their dual
whom have been unemployed for long periods. The
objectives, and which need to be addressed in the
profits from the bakery are used to subsidize a
education of social entrepreneurs: managing ac-
range of community-focused services including
countability, managing a double bottom line, and
housing, childcare and healthcare in the Yonkers
managing identity. In this section, we consider
district of New York (www.greystonbakery.com). each in turn.
Another nonprofit social enterprise that is suc-
cessful in both commercial and social terms is
Greenworks, which earns income by recycling un-
Managing Accountability
wanted furniture from corporations and public sec-
In private
tor organizations. Donors "benefit from a one stop, enterprises the lines of accountability
hassle-free service enabling them to fulfil are their
reasonably clear. Put simply, firms operate in
environmental and social responsibilities," and the interests of their owners, and the actions and
Greenworks sells the furniture to schools, chari- decisions of organizational members are taken
ties, community groups, and start-up businesses at broadly with a view to their interests (Charkham,
discounted prices (www.green-works.co.uk). 1994). By contrast, accountability is often a complex
But social entrepreneurs can also lead for-profit issue for social enterprises. Specifically, by taking
businesses. For example, Cafedirect is a limited on a social mission on behalf of a particular con-
company selling "fair trade" tea and coffee to pro- stituency, social entrepreneurs create an addi-
vide above-market prices and good employment tional key stakeholder, which they must take into
conditions for disadvantaged tea and coffee farm- account and communicate with when building the
ers in developing countries. In addition to divi- venture and developing its strategy (Emerson,
dends to shareholders, around 8% of annual profits 1999).
are invested in the training and support of farmers For example, Cafedirect has developed strong
in Africa, Asia, the Caribbean, and Central and relationships across the developing world with the
South America (www.cafedirect.co.uk). coffee and tea growers that it supports, and has
Moreover, for-profit businesses can play a key sought to make their views and experiences cen-
role in supporting and facilitating social entrepre-
tral to the company's strategy rather than impos-
neurship by building links and engaging in part- ing its own set of "solutions" on their behalf. Of
course, this is a difficult balance to strike, because
nerships with nonprofit organizations. This is illus-
trated, for example, by Ben & Jerry's "PartnerShop" social entrepreneurs also need to build profitable
initiative, where community-based organizations businesses based upon competitive products and
have the opportunity to operate a Ben & Jerry's services, and the process of stakeholder consulta-
tion may impede competitiveness and slow down
franchise. Ben & Jerry's "waives the standard fran-
chise fees and provides additional support to helpdecision making (Franks & Mayer, 1995).
nonprofits operate strong businesses." This allowsWe suggest that this is a crucial issue that needs
nonprofits to generate surpluses that can be used to be addressed in social entrepreneurship educa-
to pay for other social initiatives (www.benjerry.tion, as social entrepreneurs require a distinctive
com/scoop_shops/partnershops). set of competencies in order to create and manage

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 2007

these relatio
Managing Identity
be skilled at building mechanisms to act as a
The hybrid nature of social enterprise leads to
bridge connecting the social enterprise to key
complex and difficult identity issues. Social entre-
stakeholders, and provide the organization with
preneurs who have worked mainly in the nonprofit
much needed legitimacy (Zander, 1993; Cornforth,
2003). sector may find it difficult to identify closely with
the commercial side of the business; for entrepre-
neurs with a for-profit background, the problem
may be a difficulty identifying with the goals and
Managing the Double Bottom Line approach of the social side of the venture, espe-
At the heart of social entrepreneurship is the chal- cially when they undermine the stability of the
lenge of balancing social and commercial objec- business (Pharoah et al., 2004). In other words, the
tives (i.e., managing a double bottom line), which tension between the for-profit and nonprofit di-
can create a series of tensions across the business mensions of the enterprise has the potential to
create dissonance and interfere with the critical
(Pharaoh, Scott, & Fisher, 2004). The kinds of ten-
sion experienced depend on the nature of theprocesses en- of organizational identification on
terprise and the "costs" imposed by the social which mis- much positive behavior depends (Albert &
sion (Boschee, 2001), but the apparent conflict Whetton, 1985). Of course, these issues are not con-
between social and commercial priorities is a cen- fined to the entrepreneur - employees and volun-
tral characteristic of social entrepreneurship. teers may also be affected.
Most obviously, difficult decisions need to be For example, staff at Aspire, a U.K. social enter-
made with respect to organizational priorities and prise established to employ and support the home-
investment strategies. For example, in social en- less, became disillusioned as the social impera-
terprises that engage in unrelated business activ- tives of the enterprise were watered down in
ities (i.e., where the enterprise operates in markets response to poor business performance. Specifi-
that are not connected to its social mission and
cally, the source of cohesion that bound organiza-
uses the surpluses to subsidize the component ofmembers together - a common dedication to
tional
the enterprise that is responsible for socialtackling out- homelessness and poverty - began to dis-
comes), social entrepreneurs must consider the ap- As a result, many organizational members
sipate.
propriate balance between investment in thefound rev-it increasingly difficult to relate to the ven-
enue-generating part of the enterprise with a view
ture, with obvious consequences for morale and
to building competitive advantage and investment
organizational commitment (Tracey & Jarvis, 2006).
in the part of the enterprise responsible for achiev-
Complex identity issues such as these need to be
ing social outcomes (Hansmann, 1987).
made explicit in the context of social entrepreneur-
For mission-driven social enterprises (i.e., enter-
ship education, which should also convey the com-
prises that provide products or services with a
mercial realities of managing a social venture;
social objective, such as public transport, banking
facilities in rural areas, and the development of regardless of their commitment to their social vi-
renewable sources of energy), social entrepreneurs sion, only by operating profitably can social entre-
often use income they generate from providing the preneurs engender sustainable social change.
same service in profitable markets to cross-subsi- Clearly, this raises particular leadership dilem-
dize the less profitable ones (Weisbrod, 1998). Thus mas for social enterprise (Martin, 2003).
tensions arise about the appropriate balance be-
tween serving locations and markets with varying
prospects for generating earned income. Complex identity issues such as these
need to be made explicit in the context
Regardless of the type of social enterprise being
studied, the challenge for entrepreneurship educa-
of social entrepreneurship education,
tors is to ensure that potential social entrepreneurs
whichshould also convey the
understand the nature of the tensions and that they
commercial realities of managing a
are equipped with tools and frameworks to deal
strategically with them (See, e.g., the "organized venture; regardless of their
social
abandonment grid" developed by the Institute commitment
for to their social vision, only
by operating profitably can social
Social Entrepreneurs in the U.S., which encourages
social enterprises to "score" products and services
entrepreneurs engender sustainable
according to their social purpose and financial
social change.
impact, www.socialent.org).

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 268

IMPLICATIONS FOR ENTREPRENEURSHIP Given the current focus on CSR issues in entre-
EDUCATION preneurship and small business management
(Vyakarnam, Bailey, Myers, & Burnett, 1997), this
The distinctive nature of social entrepreneurship,
provides a welcome addition to more standard ap-
outlined in the previous section, and the presence
proaches to the topic.
of budding social entrepreneurs in entrepreneur-
A second strategy is to ensure that successful
ship and management programs, means that a
new set of issues and concerns needs to be inte-
social entrepreneurs are included in speaker se-
ries and as in-class presenters. Again, this change
grated into existing material in order to ensure
is principally one of awareness on the part of fac-
that students are adequately prepared for the
ulty in organizing speakers. We have found that
complex challenges of social enterprise. This does
many social entrepreneurs are very enthusiastic
not imply that mainstream entrepreneurship topics
about speaking to entrepreneurship classes, and
are no longer relevant (as noted, social entrepre-
the inclusion of even a few of them provides valu-
neurs need all the same skills and expertise as
able exposure for students interested in entre-
more traditional entrepreneurs when they build
preneurship of all kinds. In this respect, it is crucial
their businesses), but it does require new topics
to be included in the curriculum. Based on our
to emphasise to students the links between tradi-
tional entrepreneurship and social entrepreneur-
experiences of teaching social entrepreneurs, we
ship, and what traditional entrepreneurs can learn
believe that there are a number of ways to incor-
from the experiences of successful social entrepre-
porate a social enterprise dimension withinneurs. tradi-
tional entrepreneurship programs. We suggest
Also important in planning speakers is
several here with the understanding that our list is
illustrative rather than exhaustive.
a variety of types of social enterprise a
sented. For example, speakers such as Mu
The first, and perhaps the most important, tech-
Yunus, the founder of the Grameen Bank, which
nique is simply to raise the topic of social entre-
provides credit without collateral to the very poor
preneurship at appropriate junctures in order to
in rural Bangladesh so that they can start micro-
highlight specific issues and to draw on the expe-
businesses (www.grameen-info.org), could be bal-
riences and interests of the class. Social entrepre-
anced by Mimi Silbert, the founder of the Delancey
neurship is too often thought of as a stand-alone
Foundation, a social enterprise based in San Fran-
topic best taught in a specialized elective or even a
cisco, which aims to "turn around the lives of sub-
separate program. Our experience is that thestanceop- abusers, former felons, and others who
posite is true: Social entrepreneurship should be
have hit bottom" by providing meaningful employ-
woven through traditional courses and included in
lectures and discussions where relevant. Addi-
ment and educational opportunities, and which
has become one of the world's most well-known
tional readings (e.g., Dees, Anderson, & Wei-skill-
social enterprises (www.eisenhowerfoundation.
ern, 2004; Foster & Bradach, 2005) and social entre-
org/grassroots/delancey). Another excellent source
preneurship cases (e.g., The Big Issue1 and the
of speakers are the professional associations and
Latino Community Credit Union2, both of which we
government departments involved in supporting
have found to work well in class) can also be
social enterprise. For example, Terr Boschee, the
added to the curriculum in order to provide a basis
founder and executive director of the Institute for
for discussion in seminars.
Social Entrepreneurs, which provides education
Integrating social entrepreneurship throughout
and training for social entrepreneurs around the
entrepreneurship programs in this way has two
world, was very well received by our students
very positive consequences. Most important, it en-
(www.socialent.org). While these are obviously
sures that social enterprise is seen as a central
high-profile speakers, there are many other suc-
part of entrepreneurship and not as something that
cessful social entrepreneurs operating on a
is distinct or less legitimate. But it is also a useful
smaller scale who can be asked to talk to entre-
introduction to discussions regarding the social
preneurship students, and whose experiences can
implications of entrepreneurship more generally.
provide valuable insights.
Third, we have found it very effective to ask the
students themselves to develop teaching cases
1 Case study prepared by Julian Lloyd under the supervision of
based on real social enterprises. In particular, it
Stephanie Robertson, London Business School. Case number:
LBS-CS-03-019. can be useful to have groups of students pick a
2 Case study prepared by Victor Abad and Adam Elboim undersocial venture and write a teaching case based on
the supervision of Beth Anderson, Duke University. Case num-the issues encountered by the social entrepreneur.
ber: CASE SE-02. The best ones can then be used for a case discus-

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 2007

sion led by the students. If this assignment is cepted within the management learning literature
broadened to allow students to choose either a more broadly (see, e.g., Kolb & Kolb, 2005). One way
traditional venture or a social enterprise,toitincorporate pro- an experiential component into so-
vides an opportunity for those students interested cial entrepreneurship education is to organize so-
in social entrepreneurship to explore the reality of
cial enterprise consulting projects for groups of
social enterprise, while at the same time interested exposingstudents, where students are required to
social entrepreneurship to the other students. act as consultants to a new social venture. This
While this is obviously a much more time-consum- kind of activity has a number of benefits, including
ing and demanding activity than using existing giving the students "hands-on" experience with a
case studies, the insights that this process gener-
social enterprise and providing them with experi-
ates for the students are considerable.
ence of managing consulting relationships. More-
A very instructive case for this kind of exercise is
over, consulting projects provide an integrative
Emmaus, a multinational social enterprise with
"communities" in about 50 countries worldwide.
learning experience because they invite students
to draw upon what they have learned from across
Each community operates as a social enterprise
the different courses they have taken.
and is organized as part of a loosely coupled
franchise system. Although there is variation be- Sixth, many entrepreneurship programs have an
tween countries, all communities aim to help so- internship component that gives students an op-
cially excluded people through recycling busi- portunity to spend time working with an entrepre-
nesses of various kinds. This case is especially neur in a start-up firm. This type of activity can be
effective as a learning tool because it reveals the extended to include social enterprises, allowing
issues surrounding the internationalisation of so- students to experience the reality of managing a
cial ventures and the way that social enterprise social venture, while also providing much needed
takes quite different forms in different places, par- resources for the participating organizations. As
ticularly in developing countries (www.emmaus- with consulting projects, internships expose stu-
international.org). dents to the tacit elements of social entrepreneur-
Through researching the organization and writ- ship, and in particular the tensions inherent in
ing the case, students learn some key issues and social enterprise as an organizational form, which
challenges inherent in social enterprise. One im- cannot be easily captured through more formal
portant consideration, however, is that the stu- educational experiences such as lectures and case
dents need to be able to collect sufficient informa- studies.
tion to write up an accurate and convincing case A summary of approaches for integrating social
study. The social enterprises they choose mustentrepreneurship into entrepreneurship education
therefore be either prominent enough for sufficient
is shown in Table 1. This list of possible ap-
publicly available data to exist or local enough proaches
to is intended only as a starting point. As
give the students direct access. The advantage of noted, our main argument is that business schools
using local social enterprises is that students have
should respond to the growing interest in social
the opportunity to interview the managers and
enterprise with effective curriculum changes to
other key actors and to invite their feedback.
their entrepreneurship programs in order to ensure
Fourth, many entrepreneurship programs re-
that the learning requirements of social entrepre-
quire the development of a business plan as an
neurs are included.
integral part of the course. A simple change that
can provide additional opportunities for students
interested in social entrepreneurship is to encour-
age them to develop a business plan for a social TABLE 1
enterprise. This gives a platform for the discussion Summary of Techniques for Educating Social
of the issues involved in founding and building a Entrepreneurs
social venture. In addition, it provides an opportu-
Approaches to Social Entrepreneurship Education
nity for "peer consulting" whereby groups of stu- 1. Weave social entrepreneurship topics, cases, and reading
dents are assigned to provide feedback and ideasinto traditional courses
to each other as they develop their projects. This 2. Develop social entrepreneurship speaker series
generates insights significantly beyond what can 3. Have students develop teaching cases based on real social
be provided by faculty alone. enterprises
4. Introduce social enterprise business plan assignment
Fifth, as the special issue made clear, experien-
5. Introduce social enterprise consulting projects
tial learning is a crucial component of entrepre- 6. Provide opportunities for social enterprise internships
neurship education. Indeed, this is widely ac-

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270

CONCLUSION Alvord, S. H.f Brown, D. L, & Letts, C. W. 2004. Social entrepre-

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this kind of commercial logic. Ultimately, the role ship education. Academy of Management Learning & Edu-
of educators must be to draw on the growing body cation, 3: 238-241.

of literature on social entrepreneurship and on the
experiences of successful social entrepreneurs to
create educational experiences that prepare social
entrepreneurs for the demanding and often ambig-
uous world of social enterprise. We hope that this
essay will form part of an on-going discussion of
how this goal can best be achieved.
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Paul Tracey was awarded his Nelson Phillips was awarded

PhD from the University of his PhD from the University of
Stirling, and is currently assis- Alberta, and is currently profes-
tant professor of enterprise at sor of strategy and organiza-
Warwick Business School, Uni- tional behavior at Tanaka Busi-
versity of Warwick. His re- ness School, Imperial College
search interests include social London. His research interests
entrepreneurship, regional in- include technology strategy, in-
novation, and institutional the- stitutional theory, and entrepre-
ory. neurship.

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