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Special Professional Studies: Senior Phase

Economic Literacy and Entrepreneurship
Only Study guide for PSTS 1 1 -L Study guide 2 for PFC l O3-S
Compiled by
Dr EldriQ Gouws
Edited and Translamd
Celia Mendelsohn

2003 University of South Africa
All rights reserved
Printed and published by the University of South Africa Muckleneuk, Pretoria
PST311-L/1/20042006 PFC103-S/2/20042006
PRS Style

(iii) PST311-L/1/20042006 PFC103-S/2/20042006
Study unit Page
outcomes 2 1.1 The economic reality 2 1.1.1 Defining economics 3 1.1.2 Economic literacy 4
1.1.3 Participants in the economy 4 1.1.4 The economic process 5 1.2 The South African
economic system 7 1.2.1 A market-oriented mixed economic system 8 1.3 Economic growth,
inflation and unemployment 10 1.3.1 Economic growth 10 1.3.2 Inflation 11 1.3.3
Unemployment and the world of work 12 1.4 The government sector 16 1.4.1 Tax 17 1.4.2
Fiscal policy and the budget 18 1.4.3 The Reconstruction and Development Programme (RDP)
18 1.4.4 The government and politics 19 1.4.5 The government and the employee 20 1.5 The
monetary sector and other important financial institutions which play a
role in the economy 22 1.5.1 Monetary policy 22 1.5.2 Important financial
institutions/mediators 22 1.6 The foreign sector 23 1.6.1 International economic organisations
23 1.6.2 Foreign exchange and the exchange rate 24
2 THE INDIVIDUAL AND THE ECONOMY 26 Learning outcomes 26 2.1 People and the
economy 26 2.2 Human needs 27 2.3 Man as consumer 29 2.3.1 The rights of the consumer 29
2.3.2 Buying and selling 29 2.3.3 The quality of goods 30 2.3.4 Production of goods and
services 31 2.3.5 The consumer and the retailer 33 2.4 Productivity 36 2.4.1 The importance of
productivity 37 2.4.2 Personal productivity 37 2.5 Personal financial management and planning
38 2.5.1 Money 38 2.5.2 Instruments associated with money 40 2.5.3 A budget 41 2.5.4
Savings 43

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2.5.5 Bank overdrafts 44 2.5.6 Credit 45 2.5.7 Investment 46
Section B 49 ENTREPRENEURSHIP 3 ENTREPRENEURSHIP 50 Learning outcomes 50 3.1
What is entrepreneurship? 50 3.2 Entrepreneurship and the economy 52 3.2.1 Reasons why
entrepreneurs are important to the economy 53 3.3 Establishing a culture of entrepreneurship in
South Africa 54 3.4 Promotion of entrepreneurship 54 3.4.1 The national Department of
Education 54 3.4.2 Community involvement in entrepreneurship education 56 3.4.3
Entrepreneurship at school level 57 3.5 Factors which hamper the promotion of an
entrepreneural culture 58
4 THE ENTREPRENEUR AS A PERSON 61 Learning outcomes 61 4.1 The characteristics of
an entrepreneur 62 4.1.1 Qualities and personality 63 4.1.2 Aptitudes, abilities and skills 65
4.1.3 Interest 70 4.1.4 Attitudes and values 72 4.1.5 Conclusion 75 4.2 Self-knowledge and
entrepreneurship 76 4.2.1 Johari's window and self-knowledge 77 4.3 Motivation and
entrepreneurship 79 4.3.1 Intrinsic motivation 80 4.3.2 Extrinsic motivation 81 4.3.3 The
connection between intrinsic and extrinsic motivation 81 4.3.4 Motivational theories 82 4.3.5
Performance motivation 83 4.3.6 Motivation in the classroom 85 4.4 Creativity and
entrepreneurship 86 4.4.1 Creativity and intelligence 87 4.4.2 Identifying creativity 87 4.4.3
Factors which hamper creativity in primary schools 88 4.4.4 Stimulating creativity 89
5 STARTING A BUSINESS 92 Learning outcomes 92 5.1 Introduction 92 5.2 Step 1: Assessing
your own abilities and knowledge of business 93 5.2.1 Formal and informal sector 93 5.2.2
Forms of business 95 5.3 Step 2: Consider the feasibility of your business idea 108 5.3.1
Generating business ideas 109 5.3.2 Is your business idea feasible? 110 5.3.3 Is your business
idea viable? 110 5.3.4 Protecting your business idea 112 5.4 Step 3: The business plan 112
5.4.1 The cash flow plan 113 5.4.2 The cash budget 115

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Study unit Page
5.4.3 The human resources (personnel) plan 117 5.4.4 Additional information 117 5.5 Step 4:
Starting a business 117 5.5.1 Who to turn to for help 118 5.5.2 Establishing a new business 118
5.5.3 Marketing 122 5.5.4 Personnel 125 5.5.5 Finances and record keeping 126 5.5.6 Financial
statements 135 5.5.7 Conclusion 138
6 ENTREPRENEURSHIP IN THE CLASSROOM 139 Learning outcomes 139 6.1 A strategy for
developing entrepreneurship 139 6.2 The teacher's role in entrepreneurship activities and their
facilitation 141 6.3 Teaching methods 144 6.3.1 Story-telling technique 144 6.3.2 Games
technique 145 6.3.3 Role-play technique 146 6.3.4 Mentoring programme as a technique 146
6.3.5 Brainstorming as a technique 147 6.3.6 Group work and discussion as a technique 148
6.3.7 Case study as a technique 149 6.3.8 Active participation and experience as a technique
149 6.4 Flea markets/market day 150 6.4.1 A flea market at school 150 6.4.2 The teacher's role
in organising a flea market 151 6.5 A plan of action for four terms: helping learners to start real
enterprises 151 6.6 Reasons why businesses fail 157 6.6.1 Incompetent management
157 6.6.2 Lack of experience 157 6.6.3 Poor financial planning 157 6.6.4 Poor financial control
157 6.6.5 Inflexibility 157 6.6.6 Unrealistic time frames 158 6.6.7 Keeping things to themselves
158 6.6.8 Too many interruptions 158 6.6.9 Working without a plan 158 6.6.10 Not doing
enough research 158 6.7 Overview of reasons for teaching entrepreneurship 159 6.8
Conclusion 159
7 ADDITIONAL INFORMATION 161 7.1 Applying for credit 161 7.1.1 Total honesty 161 7.2
Magazines and institutions involved in entrepreneurship 162 7.3 Holland's model: Personalities
and career possibilities 165 7.4 Nelson's test for interest field or pattern 166 7.5 Entrepreneurial
potential: Test designed by the Small Business Development
Corporation 168 7.6 Johari's window 170 7.7 Characteristics of intrinsic and extrinsic
motivation 172 7.7.1 Intrinsic motivation 172 7.7.2 Extrinsic motivation 172 7.8 Brain-teasers

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7.8.1 Brain-teaser 1 173 7.8.2 Brain-teaser 2 173 7.8.3 Brain-teaser 3 174 7.8.4 Brain-teaser 4
174 7.8.5 Brain-teaser 5 174 7.8.6 Brain-teaser 6 175 7.9 Who to turn to for help 175 7.10 What
banks want 175

The aim of this course is to equip you with the knowledge, skills and attitudes you need to teach
Economic Literacy and Entrepreneurship at school level, specifically in the intermediate and
senior phases of the general education and training (GET) band. The value of the course cannot
be overemphasised, as Grade 9 marks the end of the GET phase and constitutes an exit level.
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When you have completed this module you should be able to:
impart knowledge of and insight into the South African economy and the role of the individual
in the economy to learners
prepare learners for the economic world
examine possible ways of promoting entrepreneurship in the intermediate and senior phase of
the GET band
teach economic literacy and entrepreneurship with a positive attitude
prepare learners for the world of work
In this module we introduce primary school teachers to our economic reality: our daily
involvement as consumers and participants in the economic world can be seen in our economic
activities. We also give teachers a glimpse of the world that school leavers enter. (The first exit
level is at the end of Grade 9. According to the Education Laws Amendment Act 57 of 2001, the
first nine years of schooling are compulsory and free.) Then we go on to discuss the necessity
of promoting a culture of entrepreneurship in South Africa.
All learners require economic knowledge, skills and attitudes because they will all be required to
participate in economic and consumer activities. The primary aim of this module is to teach you
how to impart the required knowledge, attitudes and skills to primary school learners. Our aim is
to help learners to participate in these activities in a responsible way and to develop an
entrepreneurial approach to life, both while they are still at school and when they leave school.
We hope that you will find this module interesting and stimulating, and that the knowledge you
gain here will help you to prepare your learners for the economic world.
How to use the study guide
This is the only study guide for Economic Literacy and Entrepreneurship; there is no textbook.
All the subject matter is contained in the study package.

The study guide is divided into two sections:
Section A: Economic literacy Section B: Entrepreneurship
The subject matter is divided into different study units. Every study unit covers a specific theme.
Please note that it is impossible to deal comprehensively with the whole economic reality as well
as entrepreneurship in one module. There are many good sources you could consult to extend
your knowledge of the economic reality and entrepreneurship.
Study unit 7 of the study guide is not to be studied for examination purposes. It has been
included to provide you with additional information to facilitate your task in the classroom. In the
rest of the module we often refer to sections in study unit 7 which provide you with additional
A number of learning outcomes are listed at the beginning of each study unit. It is your
responsibility to ensure that you comply with these requirements.
Please complete the activities that appear in the text before you move on to the content that
The study units are divided as follows:
Please refer to the contents page before you study a particular theme. This will help you to
understand how the section fits into the course.
Look at the following symbols that are used throughout the study guide to highlight different
We use this symbol whenever we refer to learning outcomes. Learning out- comes are the
outcomes you need to achieve during this course.
This symbol means that you should think about the topic in the light of what you have already
learned. We do this to place new content into context and to enable you to progress from work
you know to new content and ideas, opinions and texts. You should read these boxes carefully
before you begin to study any new content, since the text serves as a link between your existing
knowledge and the task that follows.

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This symbol indicates a written activity. You may not have to submit your written answer, but the
activity will help you to understand and interpret the work. Written activities often serve as
practice for the assignments that you have to submit.
We use this symbol for self-assessment questions. These questions may re- quire you to think,
reflect and evaluate. Our aim is to enable you to apply theoretical content in practical situations.
This icon denotes references to additional information in study unit 7.
We suggest that you keep a journal and record your responses. Write down the plans of action
you could follow when dealing with the case studies; which ap- proach works best for a
particular situation; and any information gleaned (learned) from additional reading or from your
practical experience. This is not compulsory, but you will find that a journal is an asset and an
invaluable source of reference when you are involved in real-life teaching.
Programme for the year
You will not be able to work through this course if you do not start as soon as possible. Please
do not attempt to start studying days before the examination. We recommend that you work
throughout the year and hand in all your assignments. Study the relevant sections carefully
before you tackle the assignments. If this is your first year of studying at a distance education
institution such at Unisa, you will have to adapt your approach to your studies. You will have to
work through the study material at your own pace, in your own time and at a place of your
choice. You need to draw up a work schedule and then stick to it. Tackle the work unit by unit.
I hope that this module will help you gain more knowledge and a better under- standing of the
challenging, exciting disciplines of economic literacy and entre- preneurship. I also hope that
you will acquire the theoretical and practical knowledge you need in your specific situation.
Dr Eldrie Gouws