South Africa has higher entrepreneurial motivation levels than the global average, with a larger percentage of its population perceiving good opportunities in the country for starting a business (Bowmaker-Falconer & Meyer, 2022). This translates into action with a larger than average percentage of South Africans engaged in entrepreneurial activities despite, or possibly because of, the existence of institutional voids (Chipp et al., 2019; Webb, Khoury & Hitt, 2020; Murithi, Vershinina & Rodgers, 2019). While institutional voids can create barriers to economic development and innovation, they also create opportunities for entrepreneurs to develop innovative business models that can fill these gaps and address urgent societal needs (Lashitew, van Tulder & Muche, 2022; Puri, Tavoletti & Cerruti, 2015). Social enterprises play an important role in resolving institutional voids (Colovic & Schruoffeneger, 2022), but there is a lack of empirical support for how early-stage entrepreneurs can develop sustainable, scalable, and innovative business models that directly impact pressing social issues in the Global South. Research into undergraduate students’ entrepreneurial intentions indicates that demographic factors play an important role in determining venture creation, however, this research has not been extended to graduate students (Farrington et al., 2012; Shambare, 2013). This study explored the motivations of graduate business school students in the Global South who created businesses with models focused on collaboration and sustainability.
The University of Pretoria's Gordon Institute of Business Science (GIBS) in Johannesburg, South Africa is a globally recognized business school, having been ranked among the top business schools worldwide for the last 16 years (GIBS, 2023). GIBS’ MBA programme is structured into five streams with Entrepreneurship as one focus area. The basis of the Entrepreneurship-focused MBA is the creation of a business. No suggestions on topics are given nor is there any prior exposure to business models as part of the programme. As such, the types of businesses students choose to start act as an independent measure of what is important to them as both a response to the social issues and institutional voids seen in South Africa along with their entrepreneurial ambitions and motivation.
From 2019 to 2022, 121 students completed the GIBS MBA Entrepreneurship Focus. To better understand the motivations behind students’ chosen business models, case studies of five students were undertaken. Using a case study approach allowed for an in-depth investigation into the complexity of choosing a business model. Case study research is characterised by a small sample size (Yin, 2014) and purposive sampling was used to select cases that were most relevant to the research question. The chosen case studies contributed to a deep understanding of the extent to which new business models that focus on collaboration and sustainability are created in South Africa. Data were collected from documents produced during the programme such as application forms, programme selection interviews, and portfolio submissions. Portfolio submissions were the main deliverables during the programme and consisted of a business proposal, business plan, prototype, investor pitch, consulting report, and a reflective journal. Post-programme interviews were also conducted; these interviews facilitated a deeper exploration of the topic and provided more detailed insights into the students' experiences. Triangulation was achieved using multiple data sources, increasing the validity and reliability of the findings (Yin, 2014). The case studies focused on understanding the personal and business motivation behind the start-up idea, the learning journey that occurred as they established their business model, and the success of their business post-MBA programme.
Data on student business ideas show that in South Africa, students naturally orient their business models toward those that focus on collaboration, sustainability, and their community. They were heavily influenced by the desire to work with others to improve the environment in which they were born or currently live while ensuring the sustainability of those improvements in the future. However, there were very few business models linked to the circular economy, which perhaps speaks to the nature of the South African context where there is little information about the topic and a number of pressing social needs that often obviate the opportunities inherent in the circular economy.
Formal and informal institutional voids play a significant role in shaping entrepreneurial activity (Webb, Khoury & Hitt, 2020) and the types of business models entrepreneurs in Global South emerging markets develop. The findings of this study are useful for educators in the Global South looking for ways to position entrepreneurship education, particularly for graduate-level students. Collaborative business models are intrinsic to the business models in the Global South and businesses in the Global North can use the results of this study to prioritize collaboration at the core of their own models. There is also a need to develop more awareness around the benefits of circular business models in the Global South in the presence of institutional voids; these models can provide economic and environmental benefits while also helping to fill gaps in institutional frameworks.
Collaborative Business Models, Business Students, South Africa, Institutional Voids
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