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THE ENTREPRENUERIAL MIND-SET IN

THE 21ST CENTURY


Vision
Vision is a fundamental element in becoming
an entrepreneur.

Wickham characterizes vision as a destination, a


light at the end of the tunnel. This illuminates
the entrepreneur in the process of translating his
dream into reality.
Vision Provides to the Entrepreneur:

A sense of direction by being the light at the end


of the tunnel
Helps the entrepreneur identify and define his
goal or mission
Guides in formulating action plans
Serves as a communication tool
Provides a sense of warmth and encouragement
Serves as a medium for attracting people for
support and for motivating them
Provides moral content to the endeavor
Mission
Mission flows from the entrepreneurs process
of visioning.
Entrepreneur hopes and wishes to achieve
Scope and parameter of his visions
Formal and specific point of reference
Mission and Vision

Mission and Vision always go together and


both are indispensable to a starting
entrepreneur who wishes to engage in a
particular business endeavor.
Relationship between Opportunity and
Innovation

Opportunity provides the entrepreneur the


chance to do something differently and better.
Innovation is the means of doing something
differently and better.
Thus, Innovation is means of exploiting a
business opportunity.
Recognizing opportunities
1. New Product
2. New Service
3. New Means of Production
4. New distribution route
5. Improved Service
6. New networks and Relationship
Gaps that provides opportunity
conducive to innovation.

1. Unexpected Success and Failures


2. Deviation from Conventional Wisdom
3. The need for process creation or Process
Revision
4. Change in Society Structure and Perceptions
5. Location
6. New Concepts
The Schools of Entrepreneurial
Thought
Figure
1.1 Entrepreneurial Schools-of-Thought Approach
Macro View: External Locus of Control
1. The Environmental School of Thought
Considers the external factors that affect a
potential entrepreneurs lifestyle.

2. The Financial/Capital School of Thought


Based on the capital-seeking processthe search
for seed and growth capital.
114

Table
1.1 Financial Analysis Emphasis

Venture Stage Financial Consideration Decision


Start-up or Seed capital Proceed or abandon
acquisition Venture capital sources
Ongoing Cash management Maintain, increase, or
Investments reduce size
Financial analysis and
evaluation
Decline or Profit question Sell, retire, or dissolve
succession Corporate buyout operations
Succession question
3. The Displacement School of Thought
Alienation drives entrepreneurial pursuits
Political displacement (laws, policies, and
regulations)
Cultural displacement (preclusion of social groups)
Economic displacement (economic variations)
Micro View: Internal Locus of Control

1. The Entrepreneurial Trait School of Thought


Focuses on identifying traits common to successful
entrepreneurs.
Achievement, creativity, determination, and technical
knowledge
2. The Venture Opportunity School of Thought
Focuses on the opportunity aspect of venture
developmentthe search for idea sources, the
development of concepts, and the implementation of
venture opportunities.
Corridor principle: New pathways or opportunities will
arise that lead entrepreneurs in different directions.
Table
1.2 Definitions And Criteria Of One Approach To The Micro View

Entrepreneurial
Model Definition Measures Questions
Great Person Extraordinary Achievers Personal principles What principles do you have?
Personal histories What are your achievements?
Experiences
Psychological Founder Locus of control What are your values?
Characteristics Control over the means Tolerance of ambiguity
of production Need for achievement
Classical People who make innovations Decision making What are the opportunities?
bearing risk and uncertainty Ability to see opportunities What is your vision?
Creative destruction Creativity How do you respond?
Management Creating value through Expertise What are your plans?
the recognition of business Technical knowledge What are your capabilities?
opportunity, the management Technical plans What are your credentials?
of risk taking . . . through the
communicative and management
skills to mobilize . . .
Leadership Social architect Attitudes, styles How do you manage people?
Promotion and protection Management of people
of values
Intrapreneurship Those who pull together Decision making How do you change and
to promote innovation adapt?
3. The Strategic Formulation School of Thought
Emphasizes the planning process in successful
venture development.

Ronstadts View
Strategic formulation is a leveraging of unique
elements:
Unique Marketsmountain gap strategies
Unique Peoplegreat chef strategies
Unique Productsbetter widget strategies
Unique Resourceswater well strategies
Our Entrepreneurial Economy
The Environment for Entrepreneurship

Entrepreneurship is the symbol of business


tenacity and achievement.
Entrepreneurs are the pioneers of todays
business successes.
Two perspectives on entrepreneurship:
Statistical: numbers that emphasize the
importance of entrepreneurs to the economy.
Academic: trends in entrepreneurial research and
education.
Predominance of New Ventures
in the Economy
Entrepreneurial Activity: Growth in Small
Businesses
New business incorporations average 600,000 per
year over the past decade.
There are over 25 million small businesses; the
number continues to grow 2% annually.
One of every 150 adults participates in the
founding of a new firm each year.
Approximately 600,000 to 800,000 are added
each year.
Effects of Entrepreneurship
The Global Entrepreneurship Monitor (GEM)
Provides an annual assessment of the
entrepreneurial environment of 42 countries.
Latest GEM study: the U.S. outranks the rest of
the world in important entrepreneurial support.
Entrepreneurs lead to growth by:
Entering and expanding existing markets.
Creating entirely new markets by offering
innovative products.
Increasing diversity and fostering minority
participation in the economy.
Entrepreneurs in the United States
Reasons for the exceptional entrepreneurial
activity in the U.S. include:
A national culture that supports risk taking and
seeking opportunities.
Americans alertness to unexploited economic
opportunity and a low fear of failure.
U.S. leadership in entrepreneurship education at
both the undergraduate and graduate level.
A high percentage of individuals with professional,
technological or business degrees who are likely to
become entrepreneurs.
ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
SIGNIFICANCE OF FILIPINO VALUES IN
RUNNING A BUSINESS
Filipino Values
These factors have to be considered by anyone
putting up a business.
Affects buying decision

Worth knowing for the entrepreneur

damaged culture
INTRODUCTION TO ENTREPRENEURSHIP
-UP INSTITUTE FOR SMALL-SCALE INDUSTRIES
Many have not developed enough faith and pride in
ourselves as masters of their own destiny
Many are:
Tamad
Segurista
Mahilig makisama
Gaya-gaya
Ningas-kugon
Balat-bisuyas
Bahala na attitude
Filipinos not only listened but also believed and
agreed with the criticisms from foreigners
with all their heart.
Filipinos must overcome the notion that just
because these traits exist, the Philippines will
remain underdeveloped.
Main influence:
Spain (300yrs)
America (45yrs)
Japan (3yrs)
FILIPINO CULTURE AND VALUES:

Excellent Human Relations


Pakikipagkapwa-tao

Pakikisama

Pakikibagay

Pagmamalasakit

Bayanihan

SIR (Smooth Interpersonal Relationship)


FILIPINO CULTURE AND VALUES:
Value of Self-Esteem and Good Public Image
Amor-propio
Delicadeza
Mapahiya

Generally Adventurous
Courageous
Bahalana
ang makipagsapalaran sa Maynila

Ability to Withstand Crisis


Natural strength of character
Faith in God
MORAL WEAKNESS OF FILIPINOS:

1. Extreme Personalism
2. Extreme Family-Centeredness
3. Lack of Discipline
4. Passivity and Lack of Initiative
5. Colonial Mentality
6. Kanya-kanya Syndrome
7. Lack of Self analysis and self reflection
TRENDS AND ISSUES IN THE
PHILIPPINE MARKET
A. Philippines before Colonial Rule
1. Prevalent (practiced)
composed of barangays
raja and datu
majarlika and timawa (farmers)
slaves
2. Feudal System
Present in the Moro sultanates
Mindanao and Sulu
sultan and datu
Farmers, religious teachers, warriors and scribes serve the ruler
3. Primitive Communal
Central Luzon and other nomadic tribes
Aetas
Tribesmen
B. Colonial Rule
1. Spain
Ferdinand Magellan
Galleon trade
Free speech was cutailed, education was stagnated and religion
was used to pacify inhibitants from harboring dissent
encomienda system in 18th century
Treaty of Paris
2. United States
1900s
Capitalist system (railroads, education, formal government and
democratic principles)
3. Japan
C. After Colonial Rule
1. Backward Agricultural
2. Pre-industrial
3. Foreign control
4. Western-originated capitalism
private enterprise
State
5. Globalization
Globalizing market- liberalization, privatization and
rationalization
Long-Term Philippine Development Plan
THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING

Philippines
Situation is hopeless

Drift aimlessly across the worlds economic


landscape
Other Countries

Improving

Way of life fitting the chart of progress


THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
Provide the readers with information
regarding the demographics and analysis of
the country
Hoped that information given may give the
appropriate framework from which the
entrepreneur
Could view the road in a better angle
Foundation in any decision and
innovation
THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
People with Entrepreneurial Spirit
harsh economic condition is not a
discouragement but a motivating factor
will easily notice that the poor economic
situation is abundant in opportunities
viewed as a transitory intermediate stage
for the upcoming changes
THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
Block and Stumpfs perceived objectives of
entrepreneurship education:
To acquire understanding of the concepts germane to
entrepreneurship
To integrate business knowledge across functional
areas and synthesize action plans
To identify and stimulate entrepreneurial drive, talent
and skill
To undo the risk averse bias of many analytical
techniques
To develop empathy and support for the unique
aspects of entrepreneurship
To change attitudes towards growth and development
THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
Challenges to Entrepreneurship Education
Research
Development of research methodologies
for measuring entrepreneurship education
effectiveness
Determining the educational needs of
different audiences
Needed characteristic, qualifications and
trainings of the entrepreneurship educator

THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
Challenges to Entrepreneurship Education
Research
Acceptance of entrepreneurship education in
professional schools other than business schools
Learning requirements of practicing
entrepreneurs at each stage of their venture life
cycle
Establishing a common body of knowledge in the
field
Knowing the parameters to test the relative
effectiveness of pedagogical alternatives
THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
Challenges to Entrepreneurship Education
Research
Large Corporations
Cannot discount the fact that entrepreneurship is
needed
Recognize the potential of small businesses to come up
with better products or processes
Intrapreneurism
THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
Challenges to Entrepreneurship Education
Research
Government
Machinery for delivering the assistance is slow
Greater need for government to provide information to
those who need it
Kalakalan 20 or R.A. 6810 (The Magna Carta for
Countryside and Barangay Business Enterprises)
R.A. 6977 (The Magna Carta for Small Enterprise)
THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
Challenges to Entrepreneurship Education
Research
Non-government organizations (NGOs)
Providing assistance to small business

Offer technical skills training and even financial


assistance
THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
Ten Reasons for Doing Business in the
Philippines:
1. The Philippines is creating incentives to entice
foreign investors, opening opportunities
particularly in the areas of industrial and
infrastructure development
2. Earnings and capital can be freely converted and
repatriated
3. Privatization and deregulation has added to
investment attractions
THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
Ten Reasons for Doing Business in the Philippines:
4. Philippines financial markets, have been most
rewarding emerging securities markets, posting
remarkable performance in the recent years
5. Philippines is one of Asias most accessible
countries for many Westerners because of its
historic links with Spain and U.S.
6. This island nation is strategically positions as a
perfect intermediary between Asia and the rest of
the world
THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
Ten Reasons for Doing Business in the
Philippines:
7. The country offers a skilled, highly trainable,
and inexpensive labor force many of whom
speak English
8. The Philippines has a long-established
reputation as a significant exporter of
agricultural products, minerals, and other raw
materials and commodity goods
THE NEED FOR ENTREPRENEURSHIP IN THE
PHILIPPINE SETTING
Ten Reasons for Doing Business in the
Philippines:
9. The Philippines reawakening industrial sector
has already begun to produce and export a
range of competitive, higher-value added
industrial products, and its effort at
diversification are succeeding
10. The nations population constitutes a huge
domestic market for modern consumer goods
BUSINESS IDEAS IN THE PHILIPPINES

Computer Software and Services


Rooms for Rent/Inns/Lodging

Lockers for Rent

One-stop Appliance Repair Shop

Event and Party Planner

Meat Processing

Food Carts
BUSINESS IDEAS IN THE PHILIPPINES

Fruit and Flavored Drinks


Hotdog, Barbeque, and Burger Stand

Car Wash and Minor Car Repairs

Signs and Silkscreen Printing

Fashion Accessories

Junk Shop and Recycling Center

Raising Pets
BUSINESS IDEAS IN THE PHILIPPINES

Telephone Answering Service


Softdrink and Beer Distribution

Water Filling Stations

Laundry and Ironing Service

Flower Shop

Carpooling
BENEFITS OF ENTREPRENEURIAL COURSES
1. enhance the entrepreneurial skills of the
Filipino youth
2. support the business ventures of young
people with technical and entrepreneurial
skills, who otherwise are ineligible under
regular credit facilities, by providing them
easier access to credit
3. encourage the self-employment of the Filipino
youth
4. establish a credit program for entrepreneurs
LIST OF GOVERNMENT AND INDUSTRIAL SUPPORT

Courses Offered:
Food Courses
Bread-making / Bakery Management
Ice Cream Making
Basic Meat Processing
Specialty Cakes and Pastries
Pastillas Making
Flavored Juices
LIST OF GOVERNMENT AND INDUSTRIAL SUPPORT

Agri / Aqua Courses


Dog Breeding

Fish Culture

Breeding and Culture of Aquarium Fishes

Piggery Business

Fruit Culture
LIST OF GOVERNMENT AND INDUSTRIAL SUPPORT

Business Livelihood Courses


Dollar/Foreign Currency Trading
Fast-food Business Operations
Jewelry Appraisal and Pawnshop Operations
Setting Up a Travel Agency
Establishing an Export Business
Wood Framing
Herbal and Bath Soap
Photography
Hardware and Construction Supplies
ASSISTANCE OFFERED BY THE GOVERNMENT

Eligable Program Partners


Loans
LIST OF PRIVATE SECTOR'S ASSISTANCE
Philippine Business for Social Progress
Tel. #: (02) 527-7741
Address: Philippine Social Development Building Magallanes cor. Real
St., Intramuros, Manila

Philippine Exporters Confederation


Tel. #: (02) 833-2531 to 34
Address ITC Complex Roxas Blvd. cor. Gil Puyat Ave., Manila

Chamber of Furniture Industries of the Philippines


Tel. #: (02) 637-2743
Address: Unit H, 9th floor, Strata 100 Ortigas Center, Pasig City

Chamber of Agriculutre and Natural Resources of the Philippines


Tel. #: (02) 819-1468
The Age of Gazelles
A Gazelle
A business establishment with at least 20% sales growth in
each year for five years, starting with a base of at least
$100,000 in annual sales.
Gazelles as leaders in innovation:
Produce twice as many product innovations per employee as
do larger firms.
Have been responsible for 55% of the innovations in 362
different industries and 95% of all radical innovations.
Obtain more patents per sales dollar than do larger firms.
Table
1.3 Mythology Associated with Gazelles

Gazelles are the goal of all entrepreneurs.


Gazelles receive venture capital.
Gazelles were never mice.
Gazelles are high-tech.
Gazelles are global.
Survival of Gazelles
How many gazelles survive?
Thesimple answer is none. Sooner or later, all
companies wither and die.
The Common Myth of Failure:
85% of all firms fail in the first yearin actuality,
about half of all start-ups last between 5 and 7 years.
Entrepreneurial Firms Impact
Entrepreneurial components of the U.S. Economy:
1. Large firms have increased profitability by returning to
their core competencies through restructuring and
downsizing.
2. New entrepreneurial companies have been blossoming
in new technologies and new markets.
3. Thousands of smaller firms established by women,
minorities, and immigrants have strengthened the
economy.
Entrepreneurial Firms Impact
Entrepreneurial firms make two indispensable
contributions to an economy:
1. They are an integral part of the renewal process that
pervades and defines market economies.
2. They are the essential mechanism by which millions
enter the economic and social mainstream of society.
21st Century Trends in Entrepreneurship Research

Venture
Financing

Corporate
Social Entrepreneurship
Entrepreneurship

Trends in Women
Entrepreneurial
Cognition
Entrepreneurship and Minority
Research Entrepreneurs

Global Entrepreneurial Entrepreneurial


Movement Education
Family
Businesses
21st Century Trends in Entrepreneurship Research

Major Research Themes:


Venture Financing: venture capital and angel capital financing and other
financing techniques strengthened in the 1990s.
Corporate Entrepreneurship and the need for entrepreneurial cultures has
drawn increased attention.
Social Entrepreneurship has unprecedented strength within the new
generation of entrepreneurs.
Entrepreneurial Cognition is providing new insights into the psychological
aspects of the entrepreneurial process.
Women and Minority Entrepreneurs appear to face obstacles and
difficulties different from those that other entrepreneurs face.
The Global Entrepreneurial Movement is increasing.
21st Century Trends in Entrepreneurship Research

Major Research Themes (contd):


Family Businesses have become a stronger focus of research.
Entrepreneurial Education has become one of the hottest topics in business
and engineering schools throughout the world.
The Entrepreneurial Mindset in
Individuals
Entrepreneurial Mindset
Describes the most common characteristics associated
with successful entrepreneurs as well as the elements
associated with the dark side of entrepreneurship.
Who Are Entrepreneurs?
Independent individuals, intensely committed and
determined to persevere, who work very hard.
They are confident optimists who strive for integrity.
They burn with the competitive desire to excel and use
failure as a learning tool.
Sources of Research on Entrepreneurs

Research and Popular Direct Speeches, Seminars


Publications Observation and Presentations

The
Entrepreneurial
Mindset
Common Characteristics of Entrepreneurs

Commitment, determination, and perseverance


Drive to achieve
Opportunity orientation
Initiative and responsibility
Persistent problem solving
Seeking feedback
Internal locus of control
Tolerance for ambiguity
Common Characteristics of Entrepreneurs

Calculated risk taking


Tolerance for failure
High energy level
Creativity and Innovativeness
Vision
Self-confidence and optimism
Independence
Team building
Outline of the Entrepreneurial
Organization

Imagination

Acceptance of
Flexibility
Risks
The Entrepreneurial Journey
Entrepreneurs
Create ventures much as an artist creates a painting.
Are formed by the lived experience of venture
creation.
Experiential Nature of Creating a Sustainable
Enterprise
Emergence of the opportunity
Emergence of the venture

End emergence of the entrepreneur


The Dark Side of Entrepreneurship
The Entrepreneurs Confrontation with Risk
Financialrisk versus profit (return) motive varies in
entrepreneurs desire for wealth.
Career riskloss of employment security
Familyand social riskcompeting commitments of work
and family
Psychicriskpsychological impact of failure on the
well-being of entrepreneurs
The Entrepreneurial Mindset in
Organizations
Factors in the emergence of the entrepreneurial
economy:
Therapid evolution of knowledge and technology
promoted high-tech entrepreneurial start-ups.
Demographic trends adding fuel to the proliferation of
newly developing ventures.
The venture capital market became an effective
funding mechanism.
American industry began to learn how to manage
entrepreneurship.
Reengineering Corporate Thinking
Steps that will help innovative people to develop an
entrepreneurial mindset:
1. Set explicit goals.
2. Create a system of feedback and positive
reinforcement.
3. Emphasize individual responsibility.
4. Give rewards based on results.
5. Do not punish failures.
The Corporate Entrepreneurship
Process

Strategic Corporate
Innovation
Renewal Venturing

Corporate
Entrepreneurship
The Nature of Corporate
Entrepreneurship
Defining The Concept
Corporate Entrepreneurship
Activities
that receive organizational sanction and
resource commitments for the purpose of innovative
results.
A process whereby an individual or a group of individuals, in
association with an existing organization, creates a new
organization or instigates renewal or innovation within the
organization.
A process that can facilitate firms efforts to innovate constantly
and cope effectively with the competitive realities that companies
encounter when competing in international markets.
The Need for Corporate
Entrepreneuring
Rapid growth in the number of new and sophisticated
competitors
Sense of distrust in the traditional methods of corporate
management
An exodus of some of the best and brightest people
from corporations to become small business
entrepreneurs
International competition
Downsizing of major corporations
An overall desire to improve efficiency and productivity
Successful Innovative Companies
Factors in large corporations that are successful
innovators:
Atmosphere and vision
Orientation to the market
Small, flat organizations
Multiple approaches
Interactive learning
Skunkworks
Types of Innovation
Radical Innovation
The launching of inaugural breakthroughs.
These innovations take experimentation and determined
vision, which are not necessarily managed but must be
recognized and nurtured.
Incremental Innovation
The systematic evolution of a product or service into newer
or larger markets.
Many times the incremental innovation will take over after a
radical innovation introduces a breakthrough.
Incremental versus Radical Innovation1

Incremental Radical

Emphasis Cost or feature improvements in existing products, Development of new businesses, products and/or processes that
services, or processes transform the economies of a business

Technology Exploitation of existing technology Exploration of new technology

Prototyping Ironing out wrinkles near the end of the design phase Teaching the market about the new technology and learning from the markets
how valuable that technology is in that application arena

Trajectory Linear and continuous Sporadic and discontinuous

Business Case Detailed plan can be developed at the beginning of the Business model and plan evolves through discovery-based learning
process

Idea Generation & Opportunity Occur at the front end; critical events are largely Occur sporadically throughout the life cycle, often in response to
Recognition anticipated discontinuities in the project trajectory

Key Players Formal cross-functional teams Cross-functional individuals, informal networks

Process Formal, phase-gate model Informal, flexible model at early stages due to high uncertainties
formal at later stages after uncertainties have been reduced

Organizational Structures Cross-functional project team operates within a Project starts in R&D migrates into an incubating organization
business unit transitions into a goal-driven project organization

Resources and competencies Standard resource allocation; the team has all Creative acquisition of competencies and resources from a variety of
competencies required to complete the process internal and external sources

Operating Unit Involvement Formal involvement from the very beginning Informal at early stages formal at later stages
3Ms Innovation Rules
Dont kill a project
Tolerate failure
Keep divisions small
Motivate the champions
Stay close to the customer
Share the wealth
Structuring for a Corporate
Entrepreneurial Environment
Reestablishing the drive to innovate:
Invest heavily in entrepreneurial activities that allow new
ideas to flourish in an innovative environment.
Provide nurturing and information-sharing activities.
Employee perception of an innovative environment is
critical.
Corporate Venturing
Institutionalizing
the process of embracing the goal of
growth through development of innovative products,
processes, and technologies with an emphasis on long-
term prosperity.