MODULE 1 Why called Innovators?
INTRODCUTION TO ENTREPRENEURSHIP Because they recognize opportunities where others
Task No. 1
Think of an instance where you have engaged in
money-making activities. At the end of the
discussion of module 1, be able to:
§ Discuss briefly the profitable activity in terms of
nature, income and duration;
§ Determine whether it was an entrepreneurial
activity or a small business activity and explain;
§ Create a unique and experience-related
definition of entrepreneurship.
Entrepreneurship defined.
It is the dynamic process of creating incremental
wealth. This wealth is created by individuals who
assume the major risk in terms of time and/or career
commitment of providing value for some product or
service. This term is synonymous with enterprise and
capitalism. In a modern view, entrepreneurship is
termed pioneership.
A more comprehensive view on entrepreneurship
reads:
It is a dynamic process of vision, change and
creation. It requires an application of energy and
passion towards the creation and implementation of
innovative ideas and creative solutions.
see chaos, contradiction and confusion.
How is Entrepreneurs distinguished from Small
Business Owners?
Small Businesses are independently owned and
operated, NOT dominant in their fields and do NOT
engage in innovative practices. They manage their
business by expecting STABLE SALES.
On the other hand, Entrepreneurs are those for which
the prime objective is innovation, profit and growth.
They seek for RAPID GROWTH or immediate profits. In
fact, they may even sell the business itself if there is a
potential for large capital gains.
The Modern Entrepreneur.
It comes from the Latin word “entreprende” which
means to undertake. An entrepreneur is one who
undertakes to organize, manage and assume the risk
of a business.
Today, an entrepreneur is one who:
ü Recognize & seize opportunities;
ü Converts opportunities into marketable ideas;
ü Adds value through time, effort, money or skills;
ü Assumes risk in the implementation of these ideas;
and
ü Realizes the rewards from these efforts.
Avoiding Myths on Entrepreneurship. overcome the lack of money while establishing
their ventures. To those entrepreneurs, money is a
There are various myths about entrepreneurship - resource but never an end in itself.
probably due to lack of researches conducted All that Entrepreneurs Need is Luck. Being in the
about it. Here are a few: right place at the right time is always an
advantage but luck happens when there is:
Entrepreneurs are Born, not Made.
Entrepreneurship can be learned. Like other
disciplines, entrepreneurship has models, OPPORTUNITY + PREPAREDNESS = LUCK
processes, and case studies that allows it to be
studied and knowledge to be acquired.
Entrepreneurs are always INVENTORS. A “Prepared entrepreneurs who seize the
contemporary view on entrepreneurship is that it opportunity when it arises seem “lucky”.
covers more than just an invention, it requires a
complete understanding of innovative behaviors Theories of Entrepreneurship.
in all its forms. This is exemplified by McDonalds. It It is a verifiable and logically coherent formulation
was not invented, rather, innovated. of relationships, or underlying principles, that either
Entrepreneurs are Extreme Risk takers. Taking risk is explain entrepreneurship, predict entrepreneurial
an element of entrepreneurship. But what activity, or provide normative guidance.
entrepreneurs actually take are calculated risks,
not a mere gambling on a wild chance.
All that Entrepreneurs need is Money. It is true that Schools of Thought Approaches to
a venture needs capital to survive; it is also true Entrepreneurship
that a large number of business failures occur
because of a lack of adequate financing. Yet Macro View Micro View
having money is not the only bulwark against 1. Environmental Schools of 1. Entrepreneurial Trait
Thought Schools of Thought
failure. Failure due to lack of proper financing 2. Financial Schools of 2. Venture Opportunity
often is an indicator of other problems: Thought Schools of Thought
managerial incompetence, lack of financial 3. Displacement Schools of 3. Strategic Formulation
Thought Schools of Thought
understanding, poor investments, poor planning,
and the like. Many successful entrepreneurs have
Macro View
It presents a broad array of factors that relate to
success or failure in entrepreneurial ventures. These
arrays include external factors that are beyond the
control of the individual entrepreneur for they exhibit
a strong locus of external control.
1. Environmental Schools of Thought. - Deals with
factors that affect a potential entrepreneur’s
lifestyle; the focus is on values. Example: if a
manager of a company experiences support
and freedom of his ideas, initiate contracts and
initiate new methods, the work environment
will serve to promote the person’s desire to
pursue an entrepreneurial career.
2. Financial Schools of Thought. This thought
deals with the capital seeking-process. It deals
with the different stages of entrepreneurial
venture, i.e.
a. start-up
b. ongoing
c. decline/succession
3. Displacement Schools of Thought. This thought
focuses on the negative side of phenomena in
which someone feels out of place or is literally
displaced. It holds that there are some
phenomena that hinders a person from
advancing. Here are some examples of
displacement:
a. political;
b. cultural - religion, race or sex, or ethnic
background; and
c. economic - concerned with recession or
bad times.
Micro View
This view examines the factors that are specific to
entrepreneurship and are part of the internal locus
of control. Each potential entrepreneur has the
ability or control to direct or adjust the outcome of
each of the major influence of this view.
1. The Entrepreneurial Trait School of Thought –
This approach focuses on researches about
successful entrepreneurs and recognizing
similar traits and characteristic that if copied
could increase success opportunities for the
emulators. They believe that certain attributes
are usually exhibited by entrepreneurs
(creativity, determination etc.). The influences
of family and education are also examined.
Some researchers argue that educational
involvement challenges entrepreneurial nature
and kills creativity. The family development is
considered very important in the creation of
entrepreneur; certain traits established and
supported early in life will lead eventually to
entrepreneurial success.
2. The Venture Opportunity School of Thought –
Opportunity aspect of venture development is
 the main focus in this school of thought and the
interest areas are the search for idea sources,
the development of concepts, and the
importance of venture opportunities.
Developing the right idea at the right time for
the right market niche is extremely important
for the entrepreneurial success and creativity
and market awareness are viewed as
essential.
3. The Strategic Formulation School of Thought –
This approach emphasizes the planning
process in successful venture development.
The effective venture formations are
constructed by unique markets, unique
people, unique products, or unique resources.
Each of these unique aspects has its own
strategy.