Issues In Entrepreneurship and Business Education in South Africa

As published in Education Africa Forum
Used with permission of the author:
Author: Andrew Hofmeyr  andrew@bused.co.za  
Business Education Design (Pty.) Ltd.  www.bused.co.za
30 April 2007

It would be nice if understanding the world of work and business came naturally to us all. It doesn't - as responses to an informal survey amongst schoolchildren in the UK show:

What is work?
Playing makes mess, working doesn't make mess

Why do people work?
For money to get rich, and when they're rich they show off.

Payment for work:
Dustmen aren't paid until Christmas, but some people don't pay them at all.
At my school, I think people used to say that teachers don't get paid.

Why are some people poor?
Because they don't go to the bank as much as rich people do.
Ain't got the brain.
They just can't get up in the morning - they're too tired.

How do people get rich?
Because the king gives it to them.
They go to the bank.
They steal the money.

Why do we give money when we buy things?
lf we don't they will call the police.
So they can give it to teachers to buy things.

What do shopkeepers do with the money?
Send it to poor countries.
Spends it on himself - shoes, clothes and aftershave.

Why do some things cost more than others?
Banana you eat and its gone; a bath tub you buy and it lasts - that's why it costs more.
An apple costs more because it takes longer to eat than a peach.

How are goods produced?
Bananas grow on trees - then they go to the factory to have skins put on them.

Developing an understanding of how the world works, and particularly the world of business, is something that has been neglected by our schooling system and industry training programmes. Suddenly, this is changing. As South Africa grapples with the challenges of trying to compete in a competitive global economy, entrepreneurship, enterprise and business education programmes are increasingly finding their way into schools and companies. This article will examine some of the reasons for these changes and address some of the anomalies and problems being encountered.

Historically, education policy, driven by ideological dictate rather than pragmatic considerations, chose to ignore the provision of business and socio-economic education. Where schools did offer subjects like bookkeeping or business economics, the focus was primarily on technical skills, rather than conceptual understanding, and the subjects were often marketed as choices for the academically less able.

At one level, this neglect represented an understandable, if somewhat perverse, logic. Apartheid social engineering predetermined life chances, so providing school-leavers with the conceptual capacity to identify, and take advantage of, employment opportunities in the marketplace (and in particular self-employment opportunities), seemed unnecessary. Education policy and practice prepared whites for employment in the professions, the corporate sector (for which tertiary education would prepare them) and (as a fall-back option?) the civil service. For blacks, every aspect of education, from curriculum to methodology to resource provision, prepared pupils for workplace subordination - both in terms of abilities developed and expectations engendered.

The current reality is different. Prodded into action by a belated recognition that school-leavers should, ideally, have at least some understanding of how the world works, and by that popular (and surely ridiculous) statistic that only 7% of school-leavers will find employment, many schools now provide some form of business education. Formal employment opportunities are indeed in decreasing supply and recognition of this by schools is welcome. Sadly, however, in many cases good intentions are foundering on the rocks of inadequate understanding. Perhaps this is inevitable: there is something of a paradox in the notion of teachers teaching children how the world works, when most teachers have never really been there. What is happening, then, is that many programmes are being offered by teachers with very limited understanding of the subject themselves.

A PANACEA FOR OUR ECONOMIC WOES?

Firstly, it appears that business education in schools is widely seen and presented as synonymous with entrepreneurship education and where such programmes are being offered they are typically being touted as a panacea for our economic woes. Moreover, entrepreneurial qualities are being positioned as something we would all do well to acquire. Our economy undoubtedly needs more entrepreneurs and more entrepreneur-friendly legislation and financial support. However, to suggest that we must all become entrepreneurial is at best silly at worst dangerous. While the literature on the subject is full of unresolved debates about its specific meaning, the most widely accepted view is that an entrepreneur is one who sees things as obsolete and desires to reinvent them. New ways of doing things are the entrepreneur's stock-in-trade, and a propensity for risk, an internal locus of control and motivation based on personal gain, are necessary preconditions for his/her behaviour.

Secondly, the way in which some entrepreneurship programmes are being handled is worrying. A favourite introduction to such programmes is a checklist. "Are you an entrepreneur?" the checklist typically asks. Pupils are required to compare their personality characteristics with those of an entrepreneur. Given that research on the distribution of these characteristics suggests that only a small percentage of respondents are going to be "lucky” enough to discover that they are indeed entrepreneurs, the value of such an activity escapes me. I fear that it's inclusion in such programmes is more a reflection of methodological "cuteness" than educational value. (I also fear that the choice of "entrepreneurship" programmes, as opposed to enterprise or business development programmes, is often based on the cuteness of the word entrepreneur, rather than any real understanding of it.)

Thirdly, another worrying inclusion in entrepreneurship curricula is the holding of "entrepreneurship days" at schools, which are usually little more than reconstituted "cake and candy" sales with scant, if any, attention to the business logic that should drive them. These days typically see pupils making fudge at home using “available” ingredients) for sale to a captive market the next day. “Profit” is made and rejoicing is widespread. Seldom will such a programme (as it should, if it is to be at all educationally honest) include a costing of the ingredients and energy used to make the fudge, or an analysis of the market to see whether there was not perhaps a more profitable opportunity than fudge-selling, or whether the fudge business would be sustainable over time. In short, such experiences are, if anything, anti-educational. Put simply, if pupils were to start businesses on the basis of what was learned on entrepreneurship days, they would more than likely end up in hopelessly overtraded markets and blithely take in less revenue than the costs of producing that revenue. In short, they would soon be bankrupt.

So, while the current focus on promoting business as an employment option is welcome, a clearer understanding of the subject is necessary - including the distinction between business practice and entrepreneurship. For example, with hard work, some understanding of business, a good franchise and an appropriate location, business success can be achieved by the most un-entrepreneurial. However, if everyone were to behave entrepreneurially, we would be in bigger trouble than we currently are, since a business sector in which everyone behaved like that would collapse. Schumpeter, one of the doyens of entrepreneurship theory, calls entrepreneurship an act of "creative destruction"¹. A small amount of creative destruction may be good for developing new ideas and enterprises, but too much would render an economy highly unstable. What a healthy business sector needs is a good balance between entrepreneurs who create new opportunities and enterprises, and effective business practitioners who manage them. Also, there are many areas of work where entrepreneurial behaviour would be not only inappropriate, but possibly fatal. Brain surgery and air traffic control spring readily to mind. So, the promotion of entrepreneurial behaviour should be approached with considerable qualification, rather than with what lvancevich refers to as "cultish enthusiasm"². The problem thus lies not in the current focus on the world of work and business, which is positive, but in the educationally unsound basis of some of the programmes and activities on offer. 

EVERYONE IS IN BUSINESS

What, then, is needed? From a content perspective, certainly business education is vital - not business in the narrow sense, nor business only as entrepreneurship, but business as an understanding of and orientation to markets. In the final analysis, everyone is in business - we all do something for the benefit of others (a market) and for this we charge, either by way of invoice or salary receipt. School-leavers need to understand how societies and economies work and by extension, how markets behave - markets for professional and other services and for products. Such an orientation in education would also imply a re-casting of vocational guidance, from its current foundation on psychology and input-based logic, to a focus on opportunities available in the marketplace of work, the potential profitability of such opportunities, their supply/demand dynamics, and an understanding of the resources required to access them. With such career guidance, students would be less likely to pursue tertiary qualifications that often leave them disillusioned when they discover, too late, that there is no market for the skills and knowledge they have acquired. Students have a right to make choices based on an informed understanding of the value they have to add to markets that will pay for that value. It is the absolute responsibility of education to enable school-leavers to make such informed decisions. Another current locus of business education is within organisations in all sectors of the economy. Again, this was something neglected in the past, as hierarchical and autocratic organisations saw staff purely as cost inputs to predetermined and management-directed processes. The need for an understanding of business at lower levels of the organisation was simply not acknowledged, or even considered. Again, there was a perverse logic to this. Where vast corporations rule and traditional production processes apply, staff with an understanding of the lousiness causality at play, or an orientation towards being enterprising, would probably be, at best, a nuisance. 

BUSINESS EDUCATION IS MANDATORY

However, modern organisations differ fundamentally from those of the past. The trend is towards flatter structures, greater participation in decision-making, devolution of responsibility, multi-tasking and the increased need for flexible responses to market demands. In this situation, business understanding throughout the organisation is mandatory. Given this and the historical neglect of business education, corporations in all sectors - private, public, development and parastatal - are beginning to take the need for business education for all levels of staff, as opposed to task-specific training, seriously. The need to deliver on the part of government, and the need to become internationally competitive on the part of the other sectors, are driving this realisation, and union support, in my experience, has been strong. Interestingly, the outcome of such education goes beyond the expected application of business principles to decision-making, to fundamental shifts in employee attitudes and management/labour relations. Research on one of these programmes by Dr Gillian Godsell established:³

• Improved understanding of business principles and a desire amongst staff to apply these principles to the participant's own job. 
• Improved teamwork and willingness to share tasks, as well as increased productivity. 
• Improved understanding and appreciation of the role of management. 
• A reduction in conflict in the work situation. 
• Innovative ideas and efforts to implement cost savings. 
• A greater sense of ownership of and responsibility for employees' own work. 
• Demonstration of an active, "owning", understanding of work. 
• A greater sense of responsibility, increased enthusiasm, and improved co-operation. 
• Greater satisfaction from and a growing sense of competence in their work. 

However, as with the schooling system, there are problems in the provision of business education in corporations. The quality of programmes available varies considerably and some are seen as patronising by recipients. Where the programmes are serious and methodologically sound, participant response is highly supportive. A more critical determinant of the impact to these programmes, though, lies in the motivation behind management's offering them. Where the programmes are simply offered as something "nice to do" and the outcomes ignored in the workplace, more damage than good is probably done. In my experience, employees are extremely keen to understand business and the business of their organisations - and to then apply the understanding developed to the improvement of their work. However, when the workplace itself denies them the opportunity to implement such improvement, or when management fails to take their recommendations or questions seriously, frustration and disillusionment are inevitable. Dr Godsell's research confirmed this view - that the extent and quality to impact was influenced by the receptiveness of the work context to participants' inputs into decision-making after the programme. The more seriously this was taken by management, the greater the beneficial impact on the organisation.

That business education has at last found a place on the education agenda of both schools and corporations, seems clear. Its management, however, has some way to go. In schools, an improved understanding of the subject and its application in the real world are necessary. In corporations, business education needs to be offered, not because it is a "nice to have", after which its outcomes are ignored, but because it will have a fundamental impact on organisational transformation and effectiveness and, by extension, on our public service's efficiency and our private sector's international competitiveness.

References

1. Schumpeter, JA 1950. Capitalism, Socialism and Democracy, 3rd ed. New York. Harper and Brothers.
2. lvancevich, J.  A traditional faculty member's perspective on entrepreneurship. Journal of Business Venturing, 6, I, January 1991.
3. Evaluation of the impact of Team Business on the workplace, conducted by Dr Gillian Godsell, in conjunction with students of the Faculty of Management, University of the Witwatersrand. 

Andrew Hofmeyr (BA, HDE (PG), BEd. Med, MBA) lectured in educational theory at the Johannesburg College of Education and the University of the Witwatersrand from 1977 to 1992. During that time he studied research methodology and educational technology on an international fellowship at the University of Surrey, UK. He is a founder member of Business Education Design, whose training programmes are used by leading corporations and business schools in South Africa and the USA. He can be contacted at andrew@bused.co.za and at the Business Education Design website www.bused.co.za.

Short summary
Business education greatly enhances personal understanding of business principles as well as function and output within an organisation or business.

Keywords and relevant phrases
Accountability, attitude, business education, career guidance, communication, conflict, corporate culture, decision-making, education, entrepreneurship, global economy, innovation, labour relations, learning, management, motivation, ownership, responsibility, skills, talent management, teamwork, trade union, training, vocation.