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Despite this, MBA graduates are increasingly looking for ethical careers that allow them to not just make money, but also have tangible social impact. Nine in 10 Gen Z and millennials say that a sense of purpose is important to their job satisfaction and well-being.
To meet that demand, many business schools now offer MBA modules related to social entrepreneurship, which seeks to balance profit-making with social impact. But what is social entrepreneurship and what are the benefits of learning about it for MBA students?
What is social entrepreneurship?
Social entrepreneurship is a form of entrepreneurship that seeks to make a social impact through business. A social impact firm still intends to make money—but it wants to do that while making a positive social impact. This definition can differ from country to country, however.
“In Malaysia, we are one of the few countries in the world that have a blueprint or definition of what a social enterprise is,” explains Redza Shahid (pictured), assistant director of the Innovation and Entrepreneurship Center at Asia School of Business. “The idea is that social entrepreneurship is creating a business that balances between profit and impact, where 50% of the business profit goes back to the company to create more impact.”
A social impact startup behaves a little differently than a nonprofit, which mainly relies on external funding such as donations, grants, and government support. In a nonprofit, profits are reinvested back into the business, and founders or shareholders typically won’t take a share. Social entrepreneurship retains that social mission, but can make a profit and redistribute those profits to founders or shareholders.
The importance of social entrepreneurship for MBA students
The skills you learn as a social entrepreneur aren’t just relevant for starting a business but apply to any career in business, says Redza.
“Post-MBA you might still want to go back to a corporate [career] and have a good income, but what I want to teach students is the fundamentals of how to build a business,” he says.
According to Redza, teaching his class these fundamentals makes them “more agile and flexible in their thinking”—two skills that will be valuable in almost any line of work.
At ASB, by experimenting in social entrepreneurship, students are taught the importance of failure and rejection along the way to success. They pull together a business case and model, know who they are targeting, find out who they need to partner with and then they “test, test, test an idea until it works,” says Redza.
He shares the idea of a juice business that uses surplus fruit and vegetables. If the business fails you need to take that learning and look for other ways to succeed if reducing waste is your goal. It's about learning an entrepreneurial mindset and being open to learning, says Redza.
How MBA programs are incorporating social entrepreneurship into their curricula
When the ASB MBA was reduced from two years to one year, it meant an opportunity for teaching entrepreneurship beyond the classroom. “We figured the way to inspire students was to bring a startup ecosystem to ASB,” says Shahid.
This renewed entrepreneurial focus led to the launch of ASBhive, which brings together the school’s entrepreneurial activities under one roof to create a buzzy startup environment. It includes events at the business school such as entrepreneurial workshops and talks. The school also further developed its two-month incubator program, which is part of its MBA Action Learning module. It has proved to be a valuable resource for social impact startups.
“That two-month incubator is a safe space for students,” explains Redza. “Running a business is tough, but running a business with impact is tougher, because now you're balancing your profit while also trying to create impact. So having that safe space to give them a chance to test it out is really important.”
ASB is the only business school that partners with the Earthshot Prize, a foundation that provides £1 million in grants to five startups every year. Redza explains that ASB is a hub for upskilling social entrepreneurs who want to open a company in Southeast Asia, to help them build their business ideas to make submissions to the Prize, and to turn their idea into a reality.
Case study: The MBA graduate transforming the farming industry
ASB’s position as a social impact startup hub is already having a tangible effect on its MBA graduates. One of whom, Chor Chee Hoe (pictured), was invited by Prof. Dr. Suraya Abdul Rashid, chief scientist of environmental startup Qarbotech, to join her as the company's cofounder and CEO as part of the school’s matchmaking initiative. Qarbotech develops affordable technological solutions that smallholder farmers across Southeast Asia can access.
“In Southeast Asia smallholder farmers produce 90% of our food, so we knew that there was a gap in terms of bridging technology to these smallholders,” he explains. “The big plantations or big companies can afford technological intervention, but not smallholders. So in our business model, we price our technology or product really affordably for smallholder farmers to adopt it without changing much of their current SOP (standard operating procedure).”
Although Chor held an interest in social enterprises before his MBA, he “never imagined” he would be running his own one day. He says the ASB MBA not only ignited that social entrepreneurial spark, but also gave him the hard skills he needed to succeed as a business founder.
“In our business we need to look at a lot of data. It could be customer data, market insights, data on our social media interaction, even on how we were able to secure government contracts, our costs of customer acquisition etc. So I would say the MBA taught me how to analyze and capitalize on all these different data points.”
Qarbotech is now into its fifth year as a business, and is making a noticeable impact on the smallholder farming industry across Southeast Asia. Chor says the connections he made while at ASB were “really helpful and meaningful”—and reiterates the importance of social impact for any business.
“Every business needs to have that social impact,” he says. “If not, the business will not be able to thrive. In business you are dealing with people. So no matter what, there is always a social element in any business.”
