Emerging Economies: Evening MBA students help small businesses in South Africa

Study abroad experiences are designed to broaden one's mindset, to help develop leadership skills, to push students to think outside the box, to cultivate creativity and to encourage an understanding of the greater world beyond our own. It’s often an experience unlike any other.

More than a dozen Kelley Evening MBA students traveled to South Africa in March to provide unpaid consulting services to small business owners in Johannesburg and the nearby Diepsloot Township.

Our students worked closely with South African businesses to help them improve their business in some way. Sometimes, their recommendations may help companies survive.

Marjorie Lyles, professor of international strategic management

“This was a different business model and business environment for many of our students," explained Marjorie Lyles, professor of international strategic management and instructor for the week-long study abroad course. "Some of the people in these townships don’t have electricity; others don’t have water. Most of their customers are what we call the working poor, making about $3 to $10 a day or sometimes in a week. My students had to think about how you serve this particular kind of market. It is often called 'the Base of the Pyramid.'”

The program is part of an existing collaboration between the Kelley School of Business and the Gordon Institute of Business Science (GIBS). Kelley Evening MBA students, who work full time while pursuing an MBA part time, spend about 10 days with GIBS and the small businesses identified by the institute. The main purpose is to provide an experiential learning opportunity for students, while providing free advice to the businesses.

“They thought outside the box about how to help these businesses. This is a unique opportunity for our Evening MBA students, in terms of thinking about what it takes to really apply what they’re learning in business school."

To help these businesses identify strategies for future sustainability, students thought critically about the conditions and the environment in which these businesses are located.

Lyles said the students worked to address each aspect of the business while on this trip. Take marketing, for example. How do you let people know about your services and your products? Some people don’t have TVs, but most have mobile phones, she explained. What about accounting systems and distribution? Some people may have very little formal education. And how do you get things into the territory and sell them?

“This entire experience helps the Evening MBA students grow by giving them a chance to be creative and innovative,” said Lyles. “Many times at their own jobs, they may do the same thing over and over again, and they may not always have the opportunity to be creative or innovative. This is a chance for them to not only help a company, but to find new ways of helping the company, especially in ways the company hasn’t thought about. It’s also important to listen. This experience will develop their consulting and communication skills by engaging and developing trust with individuals who live a very different environment from our MBAs.”

“This is a wonderful opportunity for them to open their eyes to population segments in almost every country that are often left out of our discussions in the business school.”

At the end of the students’ week in South Africa, they prepared a proposal with recommendations for the businesses. Upon their arrival back in the United States, the student groups also prepared a full report for each business.

One student group worked with a laundromat in Diepsloot Township. Upon their departure from South Africa, they left the business owner with multiple recommendations to help improve her business: both urgent issues to take care of right away and longer-term goals to improve sales.

The owner of the laundromat was able to make enough money to take care of her family and potentially open a second laundromat. At the same time, she needed to overcome some challenges, like employee theft. The student group noted employees were creating fake receipts and skimming profits. Students recommended the owner purchase a rubber stamp to brand her receipts, making it more difficult for employees for create a second set of books. They also designed a way for the owner to keep track of how many clothes customers drop off, so no one can claim to lose garments and demand payment.

“The biggest takeaway for me was the reinforcement of not making assumptions, and to always ask a lot of questions,” explained Dave Smith, MBA’18. Smith is a sales operations manager at Roche Diagnostics. “Going into the township, there are some preconceived notions about the business owners’ aspirations and the environment they operate in. We found the people are very aspirational, even at low income levels. They want to create a better life for themselves.”

“This experience will help in my career here at home. It serves as a reminder: When you’re in management, you will always learn by getting your feet on the ground and speaking with customers and employees, not by sitting in your office. Never make assumptions.”

Another group worked with a hairdresser whose customers live on less than $5 dollars a day, and the business did not have electricity.

“This course in South Africa was eye-opening,” said Iris Wang, MBA’17, MSA’17. “Emerging markets have such a strong growth potential. We learned how to apply the business knowledge and skills we learned in school into the real market in South Africa.”

“For our business owner, we recommended she better document her transactions to have a better understanding of her revenue and profit. We also recommended coupons and rebates to attract new customers and retain old customers. When considering electricity, we suggested she look into options of installing solar panels: It may cost more to begin with, but in the long-term, it will be more profitable.”

Each spring, Professor Lyles leads the Evening MBA Program’s emerging economies course that takes students on business consulting tours throughout the world.

She also takes Evening MBA students on an annual two-week trip to China to consult with companies—which she has done for nearly two decades.

“A few years ago, we did a similar project in Liberia, where we went with several nursing students to consult for the hospital there,” said Lyles.

“My students worked to make the hospital’s business more efficient, to try to save them time and money. When we left, the administrator told me that the students’ plan could save them $30,000 or more.”

Evening MBA graduates who’ve traveled abroad with the program say their experiences were tremendous. Chrissy Vasquez, MBA’07, participated in the China study trip, traveling to Hong Kong, Wuxi, Suzhou, Beijing and Shanghai.

“Traveling abroad with the Kelley Evening MBA Program was an incredible opportunity that I’m so glad I took advantage of,” said Vasquez. “It took fiscal sacrifice and required use of personal vacation time, but with assistance of the Orie Fritz Scholarship, I made the investment in my personal and professional growth."

It was a tremendous experience to witness what we were learning in class come alive in an emerging market.

Chrissy Vasquez, MBA'07