COURSE CODE: ENT 101

COURSE DESCRIPTION: THE ENTREPRENEURIAL MIND

COURSE INTENDED 1. Understand the basic principle of entrepreneurship

LEARNING OUTCOMES:
2. Examine and practice critical tools, functions, concepts and
skills that are required for an entrepreneur in a small scale
business.
3. Interpret the results of environmental scanning and conduct a
feasibility study.
4. Construct a comprehensive business plan in preparation for
entrepreneurial career.

LEARNING MATERIAL
FOR WEEK NUMBER:
5
I. TITLE: Social Entrepreneurship and the Global
Environment for Entrepreneurship
II. OBJECTIVES: After this lesson, you are expected to:

1. To introduce and examine the social entrepreneurship

movement.
2. To delve into the concept of shared value.
3. To introduce the global opportunities and challenges for social
entrepreneurs.
4. To present the newest developments that have expanded the
global marketplace.
5. To examine the methods of entering international arena and the
key steps for the entrepreneurs in seeking global markets.
III. INTRODUCTION: This lesson will gives an overview to the opportunities of an
entrepreneur to global markets, the key challenges and the new
developments that can build their potential characteristics as an
entrepreneur. To build a global economy, there’s always a
accountability and responsibility as an entrepreneur to create a more
opportunities to their businesses.
IV. CONTENTS:

SOCIAL ENTREPRENEURSHIP
Social entrepreneurship is a form of entrepreneurship that exhibits characteristics of non-
profits, governments, and businesses, combining private-sector focus on innovation, risk taking, and
large scale transformation with social problem solving. The social entrepreneurship process begin
with a perceived social opportunity translated into an enterprise concept, resources are then
ascertained and acquired to execute the enterprise’s goals.

Defining the Social Entrepreneur

The term social entrepreneur has come to mean a person (or small group of individual) who
founds or leads an organization or initiative engaged in social entrepreneurship. Social
entrepreneurs are sometimes referred to as “public entrepreneurs”, “civic entrepreneurs”, or “social
innovators”. Noted expert Arthur C. Brooks outlines the following activities that characterize the
social entrepreneur:

 Adoption of a mission to create and sustain social value (beyond personal value)
  Recognition and relentless pursuit of opportunities for social value
 Engagement in continuous innovation and learning
 Heightened sense of accountability

As social entrepreneurship rapidly finds its way into the vocabulary of policy makers,
journalists, academics, and the general public, the world faces incredible societal challenges. The
social entrepreneurship boom, and its promise as a mean to address daunting social problem
across the globe, are of particular importance for every entrepreneur.

Social entrepreneurs are change agents; they create large-scale change using pattern-
breaking ideas, address the root causes of social problems, and possess the ambition to create
systematic change by introducing a new idea and persuading others to adopt it. These types of
transformative changes can be national or global.

Defining the Social Enterprise

With this huge growth and interest in social entrepreneurship come challenges to the
boundaries of what is and what isn’t a social enterprise. Because social causes can be so different and
many times very personal, it can be very tough to decipher.

There is general agreement that social entrepreneurs and their ventures are driven by social
goals, that is, the desire to benefit society value, that is, to contribute to the welfare or well-being in
a given community. However, arguments begin over the location and purposes of the social goals.

Thus, many critics argue that the location of any social enterprise should be in the world of
nonprofit organizations. For instance, one research article asked the question of whether earned
income is essential to social entrepreneurship. The answer was an emphatic no as the researchers
claimed that social entrepreneurship is about finding new and better ways to create and sustain
social value.

There has been significant increase in the emphasis of social value creation by all
organizations, including for-profit organizations, because (1) customers want to buy from these
companies, (2) employees want to work with them, (3) investors are willing to invest in them, and
(4) entrepreneurs hope to start them. The challenge has been for established organization to find a
way to measure how conducive their organization is to creating social value.

SOCIAL ENTERPRISE AND SUSTAINABILITY

It takes various forms in different industries and companies, the basic challenge of social
enterprise- is the same for all. These obligations can extend into many different areas, as presented
4.1, but questions concerning the extent to which corporations should be involved in these areas is
open to debate.

Sustainable Entrepreneurship

Researchers Dean A. Shepherd and Holger Patzelt define sustainable entrepreneurship as

being “focused on the preservation of nature, life support, and community in the pursuit of perceived
opportunities to bring into existence future products, processes, and services for gain, where gain is
broadly construed to include economic and noneconomic gains to individuals, the economy, and
society”.
 Sustainable development is perhaps the most prominent topic of our time. Commonplace are
reports of ozone depletion, climate change, and destruction of biodiversity that demonstrate the
negative and potentially deadly consequences these processes hold for living species.

Sustainable entrepreneurship includes:

 Ecopreneurship (i.e., environmental entrepreneurship with entrepreneurial actions

contributing to preserving the natural environment, including the Earth, biodiversity, and
ecosystems);
 Social entrepreneurship, which encompasses the activities and processes undertaken to
discover, define, and exploit opportunities in order to enhance social wealth by creative new
ventures or managing existing organization in an innovative manner;
 Corporate social responsibility, which refers to actions that appear to further some social
good, beyond the interests of the firm and that which is required by law, and often denote
societal engagement of organizations.

Ecopreneurship

The twenty-first century is one of greater environmental concern. The reawakening of the
need to preserve and protect our natural resources has motivated businesses toward a stronger
environmental awareness. Green capitalism, also referred to as green entrepreneurship, and has
emerged as a powerful new force in examining the manner in which business is conducted in relation
to the environment. This term refers to a concept of ecologically sustainable development being
transformed into economically sustainable development.

The environmental movement consists of many initiatives connected primarily by values

rather than by design. A plan to create a sustainable future should realize its objectives through a
practical, clearly stated strategy. Some of the key steps recommended by Hawken and McDonough
are as follows:

1. Eliminate the concept of waste. Seek newer methods of production and recycling.

2. Restore accountability. Encourage consumer involvement in making companies accountable.

3. Make prices reflect costs. Reconstruct the system to incorporate a “green fee” where taxes are
added to energy, raw materials, and services to encourage conservation.

4. Promote diversity. Continue researching the needed compatibility of our ever-evolving products
and inventions.

5. Make conservation profitable. Rather than demanding “low prices” to encourage production
shortcuts, allow new costs for environmental stewardship.

6. Insist on accountability of nations. Develop a plan every trading nation of sustainable development
enforced by tariffs.

SHARED VALUE AND THE TRIPLE BOTTOM LINE

Companies have traditionally viewed value creation with a narrow scope. They have been
optimize short term financial performance while ignoring the elements that determine their long
term success. The solution lies in a concept they refer to as shared value. It is an approach in creating
economic value that also creates value for society by addressing its needs and challenges.

The triple bottom line (referred as TBL) is an accounting framework that goes beyond the
traditional measures of profit, return on investment, and shareholder value to include environmental
and social dimensions.

Bottom-Line Measures of Economic Performance

Economic measures deal with the bottom line and income flows such as income,
expenditures, taxes, business climate factors, employment, and business diversity factors. Examples
include the following:

 Personal income
 Cost of underemployment
 Establishment sizes
 Job growth
 Employment distribution by sector
 Percentage of firms in each sector
 Revenue by sector contributing to gross state product

Bottom-Line Measures of Environmental Performance

Environmental measures are related to natural resources and reflect potential influences to
viability. Air and water quality, energy consumption, natural resources, solid and toxic waste, and
land use are examples. Specific examples include the following:

 Hazardous chemical concentrations

 Selected priority pollutants
 Electricity consumption
 Fossil fuel consumption
  Solid waste management
 Change in land use/land cover

Bottom-Line Measures of Social Performance

Social measures refer to social dimensions of a community or region such as education, social
resources, health and well-being, and quality of life. Example include the following:

 Unemployment rate
 Median household income
 Relative poverty
 Percentage of population growth with a post-secondary degree or certificate
 Average commute time
 Violent crimes per capita
 Health-adjusted life expectancy

THE GLOBAL MARKETPLACE

Capitalism is the world’s dominant economic system, having, over recent decades, replaced
many socialistic and centrally planned systems worldwide. Like capitalism, entrepreneurship has
expanded its reach across the globe is now an engine for economic growth not only in America but
also elsewhere in the world.

Global entrepreneurs are opportunity-minded and open-minded, able to see different points of
view and weld them into a unified focus. They rise above nationalistic differences to see the big
picture of global competition without abdicating their own nationalities.

Global thinking is important because today’s consumers can select products, ideas, and services
from many nations and cultures. Entrepreneurs who expand into foreign markets must be global
thinkers in order to design and adopt strategies for different countries.

Dispora networks are relationships among ethnic groups that share cultural and sexual norms.
Dispora networks have three powerful advantages for global entrepreneurs. First, they speed the
flow of information across borders; second, they create a bond of trust; and third, they create
connections that help entrepreneurs collaborate within a country and across ethnicities.

METHODS OF GOING INTERNATIONAL

Importing is buying and shipping foreign-produced goods for domestic consumption.

Exporting is the shipping of domestic produced good to a foreign destination for consumption.

International Alliances and Joint Ventures

Another alternative available to the entrepreneur in the international arena is international

alliances. The 3 types of these strategic alliances are: Informal international cooperative alliances,
Formal international cooperative alliances, and International joint venture.
Joint Venture is the more traditional self-standing legal entity. A joint venture occurs when two or
more firms analyze the benefits of creating a relationship, pool their resources, and create a new
entity to undertake productive economic activity.

Direct Foreign Investment is a domestically controlled foreign production facility. This does not
mean the firm owns a majority of the operation. In some cases, less than 50 percent ownership can
constitute effective control because the stock ownership is widely dispered.

Licensing is a business arrangement in which the manufacturer of a product for a firm with
proprietary rights over certain technology or trademarks grants permission to some other group or
individual to manufacturer that product in return for specified royalties or other payments.

For developing an international licensing program, three basic types of program are:

1. Patents
2. Trademarks
3. Technical know-how

RESEARCHING FOREIGN MARKETS

 Government regulations
 Political climate
 Infrastructures
 Distribution channels
 Competition
 Market size
 Local customs and culture

Political Risks include unstable governments, disruptions caused by territorial conflicts, wars,
regionalism, illegal occupation, and political ideological differences.

Economic Risks that need to be monitored include changes in tax laws, rapid rises in costs, strikes,
sudden increases in raw materials and cyclical/ dramatic shifts in GNP.

Social Risks include antagonism among classes, religious conflict, unequal income distribution,
union militancy, civil war, and riots.

Financial Risks incorporate fluctuating exchange rates, repatriation of profits and capital, and
seasonal cash flows.