Topic 1: Understanding Entrepreneurship

What are the 5 Salient Features of Entrepreneurship

1. Art of correct practices 2. Wealth creating ventures 3. Providing values to customers 4. Opening and managing self-owned business 5. Risk-taking venture

What are the 5 misconception on entrepreneurship

1. Entrepreneurship applies only to manufacturing businesses 2. Entrepreneurship applies only to small businesses 3. Entrepreneurship applies mostly to persons with good educational background in business concepts. 4. Entrepreneurship applies only to a good economy. 5. Entrepreneurship is simply opening a small businesses.

What are the four tenets on entrepreneurship by Professor Stevenson

1. Entrepreneurship flourishes in communities where resources are mobile. 2. Entrepreneurship is greater when successful members of a community reinvest excess capital in the projects of other community members. 3. Entrepreneurship flourishes in communities in which success of other community members is celebrated rather than derided. 4. Entrepreneurship is greater in communities that see change as positive rather than negative.

This entrepreneurship theory strongly asserted that there are four factors in the production of goods and services in the economy, and considered organization as the coordinating element. Without the active participation of organization, the other factors of production will remain inactive in their role for economic development. It is also suggested that an entrepreneur must be able to see possible changes in the future supply and demand pattern.

Alfred Marshal Theory

Answer with key dimension and whether it is by an entrepreneur or administrator. Single-stage with Complete Commitment Upon Decision

Commitment Process by Administrator

Answer with key dimension and whether it is by an entrepreneur or administrator. Multi-stage with minimal exposure at each stage

Commitment Process by Entrepreneur

Answer with key dimension and whether it is by an entrepreneur or administrator. Evolutionary with Long Duration

Commitment to Opportunity by Administrator

Answer with key dimension and whether it is by an entrepreneur or administrator. Quick Commitment

Commitment to Opportunity by Entrepreneur

Answer with key dimension and whether it is by an entrepreneur or administrator. Ownership or Employment of Required Resources

Control of Resources by Administrator

Answer with key dimension and whether it is by an entrepreneur or administrator. Episodic use of Rent of Required Resources

Control of Resources by Entrepreneur

- He is an economist who focused on how the entrepreneur's drive for innovation and improvement creates upheaval and change. - He viewed entrepreneurship as a force of "creative destruction." (Name and Year)

During the 20th century, Joseph Schumpeter (1883-1950)

It connotes a business paradigm which signifies the start of a new business undertakings.

Entrepreneur

What kind of misconception on entrepreneurship is the statement below: To become a successful entrepreneur, you must know the basic concepts ad principles of entrepreneurship and apply properly to your chosen business.

Entrepreneurship applies mostly to persons with good educational background in business concepts

What kind of misconception on entrepreneurship is the statement below: New ideas and new business opportunities do not exist only when the economy is good. They also created when the economy is bad. This indicates that a business venture may grow in bad economy as long as the venture has been established based on new business oppurtunities. When business opportunity is created during the bad economy, the entrepreneur does not have to wait for the economy to turn good. By then, the business opportunity might have already been taken by others. Entrepreneurship, therefore, can operate even in a bad economy.

Entrepreneurship applies only to a good economy

What kind of misconception on entrepreneurship is the statement below: It should be remembered that merchandising and providing services are also business ventures. However it is in manufacturing that the concept of creativity and innovation are easily applied. In other words, a manufacturing business can easily make itself different from the others in terms of manufacturing process, product design and product components.

Entrepreneurship applies only to manufacturing

What kind of misconception on entrepreneurship is the statement below: The belief that entrepreneurship is applicable only to small businesses has been handed down from generation to generation. This concept is not correct. Since most of the entrepreneurial activities of government and non-government organizations have been focused on small businesses, people believe that entrepreneurship is only for small business.

Entrepreneurship applies only to small business

What kind of misconception on entrepreneurship is the statement below: Ø Entrepreneurship does not merely mean opening a small business. This is simply the first step in actualizing the entrepreneurial venture. Prior to thus, the businesses must have already passed through the preliminary stages of scanning the environment and preparation of the feasibility study and business plan Entrepreneurship does not start and end with opening a small business. It is a long, continuing process

Entrepreneurship is simply opening a small business

He is an American economist, who conceptualized the risk and uncertainty bearing theory of entrepreneurship in his book, Risk, Uncertainty and Profit.

Frank Hyneman Knight

Leibenstein's Gap-Filling Theory is made by

Henry Leibenstein

He is a Sarofim-Rock Professor of Business Administration at the Harvard Business School and defines Entrepreneurship as the "process of creating or seizing an opportunity, and pursuing it regardless of the resources currently controlled," (Name only)

Howard H. Stevenson

It regards economic development as the product of structural change or innovation. It becomes the primary role of the entrepreneur to introduce innovation in any forms.

Innovation Theory

Kirzner's Learning-Alertness Theory is made by

Israel Kirzner

He authored the Keynesian Theory on entrepreneurship. He is a British economist. He wrote the books, The General Theory of Employment, Interest and Money, which was published during the Great Depression in 1936.

John Maynard Keynes

He authored the innovation theory on entrepreneurship. He is an Austrian economist and political scientist. He wrote about it in his book, The Theory of Economic Development.

Joseph Schumpeter

This theory considered modern technology as an essential factor in production. In the absence of modern technology application in entrepreneurship, economic development would be slow and growth might not be expected. The entrepreneur is expected to keep abreast with modern technology and find ways to apply the same in the entrepreneurial endeavor. Proper application of modern technology will promote efficiency in the production of goods and services.

Kaldor's Technological Theory

This theory put so much emphasis on the role of the government in entrepreneurial and economic development, most especially when the economy was experiencing depression. It suggests that entrepreneurial activities may not be favorable in the future unless the short-term problem of economic disequilibrium is finally resolved through the active participation of the government.

Keynesian Theory

This theory pointed out spontaneous learning and alertness as the two major attributes of entrepreneurship in any given economy. The entrepreneur must be alert in recognizing entrepreneurial opportunities and the ignorance of consumers as well. He/She must immediately find appropriate remedy to correct the error or wrong perception.

Kirzner's Learning-Alertness Theory

This theory proposed that the primary role of entrepreneurship in any economic activity is to fill the existing gap. Entrepreneurship is responsible for recognizing trends in the market. The entrepreneur is expected to possess abilities that will connect the different markets. He/She must extend assistance to entrepreneurial ventures experiencing failures and deficiencies.

Leibenstein's Gap-Filling Theory

Answer with key dimension and whether it is by an entrepreneur or administrator. Formalized Hierarchy

Management Structure by Administrator

Answer with key dimension and whether it is by an entrepreneur or administrator. Flat with Multiple Informal Networks

Management Structure by Entrepreneur

Weber's Sociological Theory is made by

Max Weber

Kaldor's Technological Theory is made by

Nicholas Kaldor

An author who defines entrepreneurship as the art of observing correct practices in managing and operating the self-owned wealth creating business enterprise by providing goods and services that are valuable to the customers. (Name and book title)

Nick Alduana in Entrepreneurship in the Philippine Settings

He defines entrepreneur as a person who strongly advocates and correctly practices the concepts and principles of entrepreneurship in operating and managing the self-owned business ventures. (Author and Book)

Nick Alduana in his book of Entrepreneurship in the Philippine Settings

He is a business expert that describes the entrepreneur as someone who actually searches for change, responds to it, and exploits change as an opportunity. (Name and Year)

Peter Drucker (1909-2005)

Answer with key dimension and whether it is by an entrepreneur or administrator. Resource-Based; Individual and Promotion Oriented

Reward System by Administrator

Answer with key dimension and whether it is by an entrepreneur or administrator. Value Based & Team Based

Reward System by Entrepreneur

This theory viewed an entrepreneur as an agent of the production process where he/she connects the producers and the consumers. Also adding risk-taking as an important dimension that will differentiate an entrepreneur from a worker. It also considered uncertainty an important factor in the production of goods and services. It also believed that the entrepreneur must anticipate possible random events to happen while shouldering the risk at the same time. The entrepreneur would be eventually rewarded with high profits.

Risk and Uncertainty-Bearing Theory

He defines sntrepreneurship as the dynamic process of creating incremental wealth. This wealth is created by individuals who assume the major risks in terms of equity, time, and/or career commitment of providing value for some product or service. The product or service itself may or may not be new or unique but the entrepreneur must somehow infuse value by securing and allocating the necessary skills and resources.

Robert C. Ronstadt

They provide better understanding of the whole concept of entrepreneurship. They also act as the point of reference in determining whether a particular business endeavor is operating within the realm of entrepreneurship.

Salient Features of Entrepreneurship

It refers to a business or enterprise that correctly adopts and practices the principles of entrepreneurship. It is owned by one person with a limited workforce of not more than 20 persons.

Small Business

Answer with key dimension and whether it is by an entrepreneur or administrator. Driven by Resources Currently Controlled

Strategic Orientation by Administrator

Answer with key dimension and whether it is by an entrepreneur or administrator. Driven by Perception of Opportunity

Strategic Orientation by Entrepreneur

They define entrepreneur as a person who organizes, operates, and assumes the risk of a business ventures.

The American Heritage Desk Dictionary

It is a generalization that explains a set of facts or phenomena. It is not an absolute truth. It can be supported by another observation or proven to be otherwise.

Theory

They define entrepreneurship as an activity that involves the discovery, evaluation and exploitation of opportunities to introduce new goods and services, ways of organizing, markets, processes and raw materials through organizing efforts that previously had not existed. (Name and year)

Venkataraman, 1997; Shane & Venkataraman, 2000

This theory stressed that social cultures are the primary driving elements of entrepreneurship. The entrepreneur is expected to perform the role of a good constituent by executing his/her entrepreneurial activities in line with good customs and traditions, religious beliefs and morals.

Weber's Sociological Theory

Innovation theory can be introduced in 5 forms:

a. new product b. new production method c. new market d. new supplier e. new industry structure

The term "entrepreneur" was derived from the French word _________ which means

entreprendre, which means "to undertake"

What are the four factors of production?

land, labor, capital, and organization

It pertains to a business enterprise managed and operated by an owner who is not an advocate of and does not practice the concepts and principles of entrepreneurship.

ordinary small business

What does SME's stand for ?

small and medium enterprises