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Smith Et Al 2008 JEC - Social Eship Grounded Learning
Smith Et Al 2008 JEC - Social Eship Grounded Learning
BRETT R. SMITH
Miami University, Oxford, OH 45056
smithbr2@muohio.edu
J. Enterprising Culture 2008.16:339-362. Downloaded from www.worldscientific.com
Miami University
SAULO D. BARBOSA
EM Lyon Business School
and
JILL R. KICKUL
New York University Stern School of Business
INTRODUCTION
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(2007) published their postscript to the 2004 special issue, outlining the need
to include the study of social entrepreneurship in entrepreneurship programs.
Social Entrepreneurship
U.S. and abroad, and because these enterprises have their own unique set
of challenges to overcome, academic entrepreneurship programs should be
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and measure “their success … by the extent to which they achieve ‘social
transformation”’ (Tracey and Phillips, 2007: 265).
Additionally, students need to know that the resources necessary to
achieve the organization’s social mission can come from many different
places, including philanthropic foundations, government subsidies, private
donations, and earned income (for-profit) activities. To that end, social ven-
tures take a variety of forms (Doherty and Thomson, 2006). Some may be
purely non-profit organizations, dependent totally on donations, grants, and
government funding. Others may be purely for-profit organizations which
serve social missions, funding their programs with sales of products and/or
services. Still others may be non-profits which supplement received grants
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and donations with for-profit earned income streams. All fit the definition of
social entrepreneurial/social enterprises since all place a primary emphasis
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on their social missions. However, they cannot focus on just achieving their
social missions. They often also direct their attention to achieving the eco-
nomic success necessary to meet their social objectives. This dual focus on
both social and economic missions is unique to the social entrepreneurial
venture, and termed “the double bottom line.” Finding the appropriate bal-
ance in working to meet both missions is essential for long-term success
and viability of the social entrepreneurial organization. Therefore, educating
students to the concept of multiple bottom lines is a necessary and essential
success factor for social enterprises.
Closely associated with both the concepts of multiple bottom lines and
the necessity to find sustainable funding are complex issues associated with
how social enterprises manage their dual identities. Particularly relevant to
those non-profits with earned income streams, social enterprises are often
caught between trying to maintain their identity as a non-profit while at the
same time working to increase revenues from their for-profit ventures. Con-
fusion as to what these organizations are, and what their objectives are, has
become muddied as the lines between non-profit and for-profit are interwo-
ven. Consequently, the varied forms of social entrepreneurial ventures lead to
both internal and external identity issues that the organizations must address,
as these factors may affect employee commitment and morale, and donor
funding among other things. Therefore, exposing students to managing these
identity issues is critical to the long-term success of the organization.
Finally, students must learn that social enterprises answer to multiple
stakeholders, as do other institutions. However, because of the social mission
of these social ventures, there is at least one additional group of stakeholders,
those who are impacted by the social mission of the organization. These con-
stituents not only increase the number of stakeholders of the organization, but
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are often very dissimilar to other stakeholder groups to which the social
entrepreneurs must be accountable. As a result, social entrepreneurs must
possess a “distinctive set of competencies in order to create and manage”
the multitude of unique relationships associated with their diverse stakehold-
ers (Tracey and Phillips, 2007: 267). To that end, individuals involved with
social enterprises must demonstrate both an understanding of, and an ability
to communicate effectively with very distinct and disparate constituencies
and their unique needs and demands for the enterprise.
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Over the past two decades, educators and practitioners alike have called for
changes in business education curricula (e.g., Porter and McKibben, 1988;
Pfeffer and Fong, 2002). Many of their criticisms have been directly related
to the lack of experiential activities through which students could both learn
and practice concepts and skills necessary for business success. The Associ-
ation to Advance Collegiate Schools of Business (AACSB), which accred-
its business schools, recognized this deficiency, and ultimately changed its
accreditation standards to reflect a more experiential emphasis in learning.
As a result, there has been a substantial effort made by business schools to
identify ways to increase students’ opportunities to interact with business
concepts in a more significant way. More specifically, curriculum commit-
tees have attempted to identify and develop opportunities which finely tune
students’ skills, and help them develop a hands-on understanding of how
businesses function, ultimately making them more attractive to recruiters
(Barr and McNeilly, 2002). The use of experiential exercises has long been
a feature of many entrepreneurship programs, as this pedagogical approach
is seen as a “key component” of an entrepreneurial curriculum because of its
ability to “reflect a real-world environment” (cf., Greene, Katz, and Johan-
nisson, 2004; Kuratko, 2005). Additionally, these experiential activities have
provided opportunities for students to engage in learning in a significantly
different way from the typical “teacher-centered” classroom, predominated
by lecture, note-taking, and rote learning.
The lack of ‘hands-on’ opportunities was not the only criticism of busi-
ness school curricula, as business schools also faced condemnation for a
lack of consideration of ethics and stakeholders beyond stockholders. Busi-
ness schools were disparaged for educating “critters with lopsided brains,
icy hearts, and shrunken souls” (Leavitt, 1989: 39). Reinforced by the
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Social Entrepreneurship
cal research that suggests that poverty will not be solved by capital intensive
(such as heavy manufacturing) or skill intensive sectors (such as informa-
by UNIVERSITY OF ULSTER on 01/19/15. For personal use only.
tion technology). The argument is that the trickle down effects of economic
growth are too slow. That is, to immediately affect poverty, the focus must be
directed towards providing employment in labor intensive low skill sectors
such as garments (Kochhar et al., 2006).
As a social entrepreneurial venture, Edun is faced with the challenge of
balancing social and economic issues. To assist in making decisions that have
both social and economic ramifications, Edun developed a staged-decision
making process where social considerations preceded economic considera-
tions (Kemp-Griffin, 2007). The social considerations included the following
three questions: (1) Where do people need the business most? (2) Where are
workers paid and treated most fairly? (3) Where does the business help the
development of rural livelihoods? These criteria serve a screening function
in the decision making process and provide Edun with a smaller sub-set of
potential partners from which to make a selection decision (Beach, 1990).
Edun also wanted to develop a sustainable business model that other
companies could replicate, and to build the skill set of the African work-
ers. Clothing sold under the Edun label is high-end, designer-oriented, and
expensive. Made of all organic fibers, the market for the designs is small,
and the principals of the company realized that this product line was unlikely
to generate the necessary funds to fulfill the mission of the organization in
a long-term, sustainable way. Given that reality, the company executives
began to consider other markets, and other clothing options that might be
more suitable and successful for long-term viability. After several consid-
erations, the company decided to produce premium t-shirts under the Edun
LIVE label. By producing and selling premium t-shirts, Edun has been able
to provide fair wages, education, medical services, etc. to the African factory
workers manufacturing their products.
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and Hart, 2001). The students began by using their social networks to reach
out to others whom they knew. They used listservs and FaceBook to commu-
nicate the idea. They also talked to several professors to identify potential
team members. In the early stages, the initial members accepted anyone
willing to help. Over time, the team developed into a total of fifteen students
representing several different majors and colleges across the university. The
majority of students, including the president of the team, were business
school students. As human resources were acquired, the team began identi-
fying roles, responsibilities and accountabilities for the team members.
A second important goal was to develop a business plan to launch the
business. Two sub-groups of students were formed to build the business
plan. The business plan was not only for the launch of the pilot program
at this school, but would also be used by the Edun executives to assess the
feasibility of the college market business model. While the development of
business plans is common in entrepreneurship curriculum, the experience in
the development of this plan was less common given its social focus, and
the fact that its development coincided with the launch of the business itself.
As such, the development of the plan and the development of the business
were intertwined allowing for testing of assumptions and feedback on various
strategies. In addition, this plan was different than commercial business plans
because it was primarily focused on the delivery of social value rather than
economic value. The plan needed to be economically viable for the purpose
of sustainability but it also had to focus on the primary mission of social
value. In this way, the students gained first hand experience in managing a
double-bottom line.
Another important goal of the experience was the actual launch of the
social entrepreneurial business of Edun LIVE on Campus. To launch the
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shirt, it read, “I Know Who Made My Shirt, Do You?” The purpose of this
message was to initiate a conversation about the social issues of extreme
poverty in sub-Saharan Africa and of some of the unethical practices in
the garment industry such as child labor. The back of the shirt told of the
socially entrepreneurial solution of Edun LIVE, arranged in the shape of
the continent of Africa, to address these problems. The project and t-shirt
were also featured in the student newspaper and resulted in the theme of the
program “Changing the world, one t-shirt at a time.”
Edun LIVE on Campus as Grounded Learning. As identified earlier in this
paper, grounded learning is made up of four basic elements: (1) offering real
world experience, (2) increasing learning transfer, (3) integrating theory and
practice, and (4) shifting learning responsibility more directly to students.
The following highlights how the Edun LIVE on Campus case addresses each
of these factors. (It should be noted that while this discussion highlights the
start-up of this business venture, a subsequent team of students is continuing
to run this business venture, and therefore, the opportunities for learning
among multiple teams of students into the future are possible.)
Offering real world experience. While cases are useful for simulating real
world experience, Edun LIVE on Campus was and continues to be a real
world experience. Every aspect of the program – from the development of the
team to conference calls and the board meeting with the Edun executives –
has been a real world experience. This element of the project got students out
of the hypothetical world and into the real world where their decisions had
and will continue to have significant impact and consequences. The success
or failure of Edun LIVE on Campus has relied upon the efforts of the student
launch team. If a successful pilot program could develop an effective business
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Increasing learning transfer. In the Edun LIVE on Campus project, the trans-
fer of learning was increased by the real time, real world development of
the business and by interaction with the different forms of resources needed
to support a social entrepreneurial venture. Over the course of the project,
students found themselves in many situations that they would face in the real
world (Mosca and Howard, 1997). For example, in an effort to sell premium
priced t-shirts, students were confronted with the issue of selling a product
based upon social rather than financial issues. This process required the stu-
dents to become more knowledgeable of the social issues being addressed
and resulted in greater social awareness being communicated to potential
customers.
Beyond feedback from customers, the students received ongoing feedback
from the faculty advisor and interacted with different stakeholders, including
Edun executives and the seed investor who provided the initial seed capi-
tal to the launch the project. In this way, the students gained not only an
understanding of the motivations of additional stakeholders who supported
the launch of the venture for social reasons but also a keen understanding
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Through Edun LIVE on Campus, the students had the opportunity to begin
to experiment with these theories and see first hand issues of management
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first hand trips to Africa where the students will begin to engage in the
challenging process of measuring social returns.
Shifting learning responsibility more directly to the students. The final ele-
ment of grounded learning addresses a shift in the relationship between
the faculty and student. This shift often results in positive interdependence
between the faculty and the student and increased personal accountability
by the student. In the current example, the faculty advisor and the students
engaged directly in an interdependent relationship. The students relied on
the faculty member to interact with Edun and to provide guidance especially
on strategic issues as they developed the business and the business plan. This
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responsibility for the development of both the plan and the business rested
with the students. In many cases, this required the students to engage in a
process of discovery in the pursuit of knowledge when they lacked informa-
tion. In other cases, this resulted in peer-to-peer learning as students with
knowledge in one area shared it with students lacking such knowledge.
The shifting of responsibilities also provided the chance for students to
learn first hand the management of the dual identities of social ventures. To
illustrate, the students were placed in charge of pricing of orders. In this
way, the students were forced to make decisions on a case by case basis of
how much to charge each customer. In the process, the students had to begin
making trade-offs between economic and social considerations. Was it more
important to provide the lowest possible price to try to secure the order or
was it more important to be profitable to keep the project sustainable? The
students not only took responsibility for the financial aspects of the business
but also wrestled with the tensions created by the integration of the economic
and social dimensions of a social venture.
We have identified the ways that learning should occur within the context
of the Edun LIVE on Campus case, however, it is more difficult to measure
whether or not learning actually occurred. To determine whether or not the
fundamental elements of grounded learning theory were achieved, we asked
the student participants in the project to provide feedback to us in written
form through the use of a questionnaire of open-ended questions relating to
their perceptions of what they learned about social entrepreneurship from
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Table 1. Selected questions asked and representative student comments received upon com-
pletion of the Edun LIVE on Campus (ELOC) project.
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1. What did you know about social entrepreneurship before you became involved with
ELOC?
• Honestly, before I became a part of the ELOC team, I didn’t even know that a thing
called social entrepreneurship existed. I had never heard of Edun or any other
similar initiatives whose goals were directed toward delivering social value. I came
onto the Edun team with a blank slate.
• I knew what social entrepreneurship was but had never seen an example of it. I have
intuitively understood it for many years and its basic premise is the reason I got into
fundraising 9 years ago. Until last year, however, I never had a label for it.
2. Why did you become involved in ELOC?
• I chose to become a part of the ELOC team because I wanted to direct my time and
energy toward a cause that really mattered - that really made a difference. Being a
single person often times seems like you cannot make a serious impact on the world,
but I felt with being a part of ELOC I could finally make a difference through the
way in which I chose to spend my time and efforts.
• I joined ELOC because of the potential it has to make a big difference. Other
projects I have been involved in similar to this have lacked serious financial backing
and/or vision. This seemed to have both. Since I’m not a full-time student, I didn’t
seek out any other student organizations.
• I studied abroad in India two summers ago and witnessed the extreme poverty
firsthand. I was extremely overwhelmed. As soon as I got back to Miami I heard
about ELOC and was amazed by the business concept. I knew it was the perfect way
for me to help.
3. What skills, if any, did you develop or enhance as a result of participating in ELOC?
What are some examples?
• I enjoy the benefits of not only helping out a great cause, but also being involved in
a real world company as a college student. It is awesome to be able to get real world
experience as a college student and put the practices we are taught in class to action.
Being taught about entrepreneurship just does not compare to actually being
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Table 1. (Continued)
involved in an entrepreneurial start up. They tell you that being an entrepreneur has
its up days and its down days, but you honestly can’t even imagine what that could
feel like until you actually experience it.
• I struggled to be part of the sales team but it stretched my gifts and talents to help
me improve my sales skills.
• I enhanced my skill of working with different people (i.e. — students, faculty,
celebrities, international citizens) and of thinking through all details of a project. I
also sharpened my ability to be self-motivated.
• Before ELOC, I had very limited knowledge of business ideas and practices;
however, now, I have a very broad understanding of almost all business concepts. In
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what the best way to work with each other is. Getting used to managing people on a
one-on-one basis is a very important skill that I continue to develop every day. The
last skills I have enhanced as a result of ELOC are my creative vision and flexibility.
Before, I was very focused on minute details and things very in the moment. Now, I
have visions for where I want to be and can be more flexible in getting to where that
vision is. I don’t have such a hard time with trying to cover every detail to the point
that I miss the big picture. I am always looking for ways to improve and strengthen
the organization instead of being so focused in on minute details.
4. How would you compare learning through ELOC to learning in a typical classroom
setting?
• Learning through ELOC compared to a typical classroom is a completely different
world. Ideas and concepts taught in a classroom can only be communicated to a
certain extent compared to getting actual hands on experience through a real world
company. Business practices such as marketing is so much different when you are
actually trying to responses as opposed to reading out of a text book or through
simulations. Also, I remember in one of my first entrepreneurship classes, my
professor said that in entrepreneurial start ups the lows can be very low and the
highs can be extraordinarily high; however, it wasn’t until I was actually placed in
the setting that I understood that. Things are constantly changing and you really just
have to learn to roll with the punches and feel thankful when you do get those great
high days.
• I learned more about starting one’s own business through ELOC than I have through
all of my entrepreneurship classes combined. The hands on experience is worth so
much more than reading about cases in a classroom setting.
• There’s nothing like having direct responsibility for something to realize how "real"
the need for knowing what you’re doing is. ELOC sort of forces people to learn
because if you don’t, the organization tanks.
5. What do you know about social entrepreneurship after your involvement in ELOC?
• The most important thing I know about social entrepreneurship as a result of my
involvement with ELOC is that these social ventures really do make a difference in
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Table 1. (Continued)
the areas that we are trying to help improve. It is amazing to see these locally owned
factories in Africa get the business and have the employment opportunities they
deserve. It is amazing to know that there are people who care enough about social
change over the bottom line. It is incredible to know that this idea of social
entrepreneurship can work and make an actual long term change.
• I learned that there are many models of social entrepreneurship out there and that
the challenge is to remember that it does not always have to be a for-profit business
model. I also learned that start-up organizations may do well to have an objective
source to guide its development because many times the people doing the actual
work get so embroiled in the specifics of running the business that some of the more
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Social Entrepreneurship
activity.
As suggested by student participants, the experiential learning in this case
complemented their learning in the classroom. These complementary ben-
efits may be due, in part, to a pedagogical approach to social entrepreneur-
ship education that draws on experiential learning theory (Kolb, 1984). In
Kolb’s model, the process of experiential learning occurs through the learn-
ing modes of concrete experience, reflective observation, abstract concep-
tualization and active experimentation. By providing opportunities for both
concrete experiences and active experimentation, the ‘live case’ approach
allowed students to gain knowledge about social entrepreneurship through
their transformation of experience. Recognizing that students each have a
dominant learning style (Kolb, 1984), future research could begin to under-
stand how live cases may be more or less useful to the experiential learning of
a student depending on their learning style. Future research could also extend
the boundaries of explanatory theories as developed through grounded learn-
ing to more operational theories as suggested by grounded action (Simmons
and Gregory, 2003).
Research in the domain of entrepreneurship has found evidence that edu-
cational programs increase the intentions of students by increasing their per-
ceived desirability and feasibility (Peterman and Kennedy, 2003). In the case
of social entrepreneurship education, it may well be that an increase in inten-
tions may be constrained more by feasibility than be desirability. Some ini-
tial research on the attractiveness of entrepreneurial opportunities found that
social impact was one of the most desirable attributes of an entrepreneurial
opportunity among undergraduate entrepreneurship students (Smith, Kickul
and Wilson, forthcoming). Despite the perceived desirability of these types
of opportunities that focus on the creation of social value, many students who
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launch ventures generally focus more on economic rather than social value
creation. One possible way to reduce the potential gap between perceived
desirability and action may be through the use of experiential learning simi-
lar to the presented case. Through participation in real-world social ventures,
students may recognize that social ventures are possible and may increase
their perceived feasibility of launching such ventures. Given the exploratory
nature of this discussion, one important direction for future research on social
entrepreneurship education is to begin to disentangle the issues of perceived
desirability and feasibility.
The experiential approach to social entrepreneurship education may well
serve a number of important functions both now and in the future. First, the
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grounded learning generated by the live case we presented may allow stu-
dents to understand that social entrepreneurship “often creates social value
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through both the end product and the processes” (Dees, 1994). In the case
of Edun LIVE on Campus, the creation of social value occurred not only
through the economic development in sub-Saharan Africa but also as social
value created in the education of the students who launched the venture. As
such, the creation and development of the project provided a hands-on expe-
rience that is consistent with AACSB suggestions and represents a promising
direction for understanding the nuances of social entrepreneurship. The pro-
gram has also provided a promising new market of college students for Edun
LIVE products. The ongoing partnership between Edun and the university
has continued to develop. Beyond the visit to campus, Edun executives have
participated in dozens of phone calls and hundreds of e-mails with members
of the university. This past summer, the lead student from Edun LIVE on
Camus was selected for an internship in Dublin, Ireland at Edun LIVE’s
headquarters. Edun has also sought out the participation of university per-
sonnel for key strategic alliance meetings with retailers, distributors and
consulting firms.
Looking forward, social ventures, like the one described, provide a poten-
tial opportunity for students to understand the “scaling up” of social impact.
Social entrepreneurship is about finding ways to address ongoing social
issues and about affecting systematic change of both attitudes and behaviors
on a much wider scale (Bornstein, 2004). Scaling up is the process of expand-
ing social innovations to maximize the social value to better address the social
problem or need (Dees, Anderson and Wei-Skillern, 2002). An activity like
the Edun LIVE on Campus has the ability to have long-term social impact
through expansion to other college campuses.2 This may constitute a very
unique characteristic of social entrepreneurship, which, as opposed to tra-
ditional entrepreneurship, is not so much concerned with competition and
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markets for social ventures are still emerging. While some work on the types
of funding sources for social ventures exists (e.g., Dees, 1996), the chang-
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ing landscape requires increased attention to this important issue for both
prospective funders and prospective social entrepreneurs. For example, the
advent of venture philanthropy whereby venture capital-like approaches are
used in the initial and continued funding of social ventures raises some inter-
esting questions about the desirability and effectiveness of these approaches
to funding social ventures (Sievers, 2001). One way for students to gain a
better understanding of these issues is through engaging them in the pro-
cess of raising capital, setting milestones and reporting on progress. At a
minimum, the integration of social venture financial markets represents an
important educational and research opportunity, one that may be increas-
ingly understood through hands-on engagement with participants in these
markets.
A final direction for future research raised by this case is the issue of mea-
surement of impact. For our purposes, we will highlight two issues associ-
ated with the measurement of impact – the impact of student learning and the
impact to a wider range of stakeholders. Given the pedagogical focus of this
paper, the measurement of impact was primarily focused on student learning.
As presented in Table 1, the experiential learning approach of Edun LIVE
on Campus provided a useful means of learning about social entrepreneur-
ship. These results are consistent with findings from McMullan and Boberg
(1991) who found experiential approaches were considered more effective
than classroom based approaches to teaching entrepreneurship. While this
is a promising first step, the results of this study must be considered in light
of the limitations of the small sample size of students and the subjective
nature of the qualitative data gathered from the students. Future research
on the measurement of student learning could draw from increasingly more
sophisticated methodologies and data analysis. For example, Storey (2000)
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ment of impact on such entities as the individuals and the factories of sub-
Saharan Africa, the executives from Edun, the students who purchase the
t-shirts as consumers to name a few. Such an approach begins to drill down
into the complexities of measuring the social impact of the organization
(Kramer, 2005). This approach offers an additional opportunity for both stu-
dent learning and a broader understanding of the role of context in the social
entrepreneurial process (Austin et al., 2006).
In addition, a stakeholder view may also raise some of the ethical issues
associated with social entrepreneurship.3 While research about the ethical
issues associated with commercial entrepreneurship continues to emerge
(e.g., Hannafey, 2003; Fisscher, Frenkel, Lurie and Nijhof, 2005), much less
attention has been focused on ethical issues and the potential ‘dark side’
of social entrepreneurship (Zahra, et al., forthcoming). Using an ethical
stakeholder lens, numerous questions emerge about the both the benefits and
costs of social entrepreneurship to the full range of people and organizations
affected by the venture. Rather than starting do novo, research agendas in
areas such as fair trade (Moore, 2004) may be instructive and fruitful avenues
to inform this line of inquiry.
As Edun LIVE on Campus has continued to evolve, important issues
such as the compensation of students involved in running the social venture
have been raised.4 In the case of Edun LIVE on Campus, the management
of these ethical issues will be addressed in collaboration with the exec-
utive student team of Edun LIVE on Campus, faculty administrators and
donors. As such, involvement in ethical issues about social entrepreneurship
represents another opportunity for both additional examples of experiential
learning and increased scholarly research. In sum, the use of an experiential
learning approach to social entrepreneurship provides several benefits as a
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pedagogical approach and provides many avenues for future research includ-
ing the scaling, the measurement of impact and the ethical issues related to
social entrepreneurship.
CONCLUSION
lems. The Edun LIVE on Campus student-run social venture is one example
of how the tools of social entrepreneurship can be used to contribute to help
alleviate extreme poverty in sub-Saharan Africa. This innovative approach to
management education offers a real-life educational experience to students in
the practice of social entrepreneurship, through the use of grounded learning
theory, and provides a template of a social entrepreneurship model that can
be used in entrepreneurship education to address other pressing social prob-
lems. Such an approach may also allow for the mutually enriching process
of closer integration of theory and the practice of social entrepreneurship.
Opportunities to develop social ventures in educational settings are endless,
as are the learning capacities of highly motivated and engaged students.
Social entrepreneurship may constitute a particularly favorable environment
to raise motivation, commitment, and learning through action.
ENDNOTES
1 Both commercial and social entrepreneurs are engaged in the discovery and exploita-
tion of opportunities, the marshalling of resources and the development of founding
teams and networks to develop the venture.
2 The program has recently been expanded to two other universities in the United States.
There are ongoing conversations with more than 20 colleges and universities about
adoption of Edun LIVE on Campus.
3 We thank an anonymous reviewer for raising this important issue.
4 At the founding of Edun LIVE on Campus, students joined the project as a co-curricular
activity and received no course credit or compensation. As specific academic deliver-
ables have been identified, students have earned academic credit for specific aspects
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of the project. Graphic designers have been ‘compensated’ for their work with a per
design donation made to an identified charity. Direct financial compensation to team
members has recently been approved based on discussions with the executive team of
Edun LIVE on Campus, academic personnel and donors of the start-up capital.
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