Social entrepreneurship is an increasingly popular focus for MBA students, but what exactly does the term mean? We spoke to Pamela Hartigan, director of the Skoll Centre for Social Entrepreneurship at the University of Oxford’s Saïd Business School.

Can you briefly define social entrepreneurship?

Social entrepreneurship is entrepreneurship that fuses innovation, resourcefulness, and opportunity to create new systems or practices – or improve on those that exist – that instead of being focused on just making a profit are focused on transforming society in a positive way.

How does that differ from the work of charities?
Social entrepreneurship defines an approach; it’s not a legal structure. You can be a social entrepreneur who is focused on creating change through a non-profit, or through a for-profit structure.

People get caught up in this idea whether it’s a charity or not; it is independent of charity. And in fact, to make it sustainable, it should not be a charity. But it really is not about the legal structure, and that’s the main message here: it’s about an approach to how to create innovation in a way that changes systems and practices.

In terms of MBA programs, is social entrepreneurship still quite a separate field from mainstream business education?
No, in fact, what we are doing at Oxford Saïd is integrating it into the entire business school curriculum, so that there is not this little niche area called social entrepreneurship, and in fact, probably over half of our students are passionately interested in this area.

Most students coming out of any business school will be working for companies. They will not be going and setting up their own enterprises because there are only a few nuts who have the perseverance to do that. We have MBA graduates who have gone to work in mainstream business, and created massive change within the companies. We have one graduate who went and started the whole microfinance arm of Morgan Stanley.

So, this is relevant for all businesses?
Yes, for all businesses. Business in the twenty-first century is all about the responsibility revolution. It’s about, how do I integrate a commitment to sustainability? And I’m not just talking about the environment; I mean for society even. The next generation of businesses – those that win – are going to have to respond to that mandate, or else their workers are not going to tolerate it, and consumers are not going to tolerate it.

How does corporate social responsibility fit into this picture?
CSR is a precursor, a first step of companies trying to prove that they are good citizens, but usually going about business as usual expect that they have this little department that was stuck off somewhere – usually in marketing or something – that writes checks for charity. That is not social entrepreneurship, and in fact many companies are moving away from that now and saying, ‘this isn’t about something with do in the charitable sector, this is actually about how we run our business.’

Is an MBA with a focus on social entrepreneurship something that is really valued by employers?
I think that the vast majority of companies are still in the CSR mode. They separate out how they make their money from how they do their philanthropy. But I think that’s rapidly changing. Many of the big fortune 500 companies are completely moving away from that because they are competing in a very, very tight market.

For example – why should I buy a Dell computer as opposed to a cheap HP computer as opposed to Sony or whatever? They all look alike and they all function the same. There has to be something that’s going to draw the consumer to your product, and they’re finding that a lot of that has to do with public perception of the behavior of that company.

And so the consumer today is king. It’s no longer the company that can dominate the client; it’s much more the other way around, and clients – especially through the use of information technology and social media – in two seconds can get together to completely ruin a company if it’s not perceived as fit for purpose in terms of doing the right thing by society.

Your students coming from an NGO or charity background seem to have realized that they need to understand the business world to make their organization more effective.
Exactly. They’re saying, “I need to understand how I’m going to make this sustainable, and that’s not going to happen if I just rely on charity.” Most of those students are going to go and form businesses that have at their core social transformation.

What about students coming at it form the other direction – those with experience in mainstream business who are looking for a better way of doing things?
Oh, we have tons of them! I must be seeing three or four students like that every single day, who are saying – I worked at X multinational and all of a sudden I’m realizing that I actually want a meaning to my life, I want to combine my business talents with doing the right thing by society, so how do I go about this?

Frankly, the business school environment that is used to dealing with students who want to go into investment banking or consultancy doesn’t know how to deal with that because they are not in a position to know the possibilities that are out there. So, much of the work I have been doing at the Skoll Centre is providing students with the means to hook into that world, and to see it not as a separate world, but one towards which the general trend is moving.

How important is this mix of students to the learning experience at Saïd?
Oh, it’s fascinating! They really influence each other: the students who have never thought of themselves as going into mainstream business end up thinking much more hard-nosed about business, and the ones who came in thinking, I want to go Goldman Sachs and make a fortune start to think, maybe I don’t want to do that. So, it goes both ways.

Photo Courtesy Pamela Hartigan