Entrepreneur

Theories on Entrepreneurship

Innovation Theory Keynesian Theory Alfred Marshall Theory Risk and Uncertainty - Bearing Theory Weber's Sociological Theory Kaldor's Technological Theory Leibenstein's Gap-Filling Theory Kirzner's Learning-Alertness Theory

/not to sell waste/ TRUE

One essential principle in entrepreneurship is "not to sell waste to customers but only valuable goods and services

/Ordinary business people/ TRUE

Ordinary business people equate wealth with the term profit

/ordinary small business people/ TRUE

Ordinary small business opens their business because of profitability aspects

Ordinary small business

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.

TRUE

The distinguishing mark of entrepreneur from ordinary small business is the commitent of entrepreneur to entrepreneural concepts and principles

/negatively/ FALSE

The entrepreneurship theory of alfred marshall suggest that the active participation of entrepreneurs will affect the econominy negatively

Land

The four factors of production: organization, capital, labor and

Government

The keynesian theory put so much emphasis on the role of the * in entrepreneural abd economic development, especially when yhe economy is experiencing depression

alertness

The learning-alertness theory of kirzner focuses on learning and * as the primary attributes of entrepreneurship

Organizations

The marshall theory generalize that the f playd the most significant role among the different factors of production

Social culture

The sociological theory of weber asserts that * has/have significant contributions to entrepreneurship

The entrepreneur seeks * rather than profit generating venture

Wealth creating venture

Consumer or customer

Who defines the value of the products or services

Frank Hyneman Knight

Who is the proponent of Risk and Uncertainty bearing theory

Joseph Schumpeter

Who is the proponent of innovation theory

True

The entrepreneur is expected to perform the role of a good constituent by executing his or her entrepreneural activitied in kine with good customers and tradition, religious belief, and morals

Source of business funds (ENTREPRENEUR)

internal(personal money) external resources(banks/financial institutions of entrepreneurs)

job production method

items are made individually and each item is finished before the next one is started

types of production methods

job production batch production mass production

Source of business funds (OWNER OF ORDINARY SMALL BUSINESS)

limit to the funding of his/her business enterprise to personal resources

Horizon of business operation (ENTREPRENEUR)

local and global business markets thinks globally & acts locally

Vision for development and growth (ENTREPRENEUR)

outlines the course of his/her entrepreneurial venture in terms of short-term, medium- term and long-term plans for action make sure that the vision and mission of his/her business are clear

Reactions to changes in the environment (OWNER OF ORDINARY SMALL BUSINESS)

passive and static to changes in the environment changes in the environment is not a plus factor to the daily operations but rather a source of negative consequences

Kirzner's Learning-Alertness Theory (Israel Kirzner) s

pontaneous learning and alertness as the two major attributes of entrepreneurship in any given economy entrepreneur must be alert in recognizing entrepreneurial opportunities and the ignorance of consumers as well

Motive in opening a business (OWNER OF ORDINARY SMALL BUSINESS)

primary goal of making it source of livelihood

Leibenstein's Gap-Filling Theory (Harvey Leibenstein)

primary role of entrepreneurship in any economic activity is to fill the existing gap entrepreneurship is responsible for recognizing trends in the market

Joseph Schumpeter

product innovation marketing production methods

Reactions to changes in the environment (ENTREPRENEUR)

reacts positively to the changes in the environment a creative mechanism for development and growth in the entrepreneurial activity

Innovation Theory (Joseph Schumpeter)

regards economic development as the product of structural change or innovation strongly believed that innovation is the force that will propel the revolutionary change (innovation will cause the creative destruction of the static mode of economy, stir the entrepreneurial activity and encourage competition)

Vision for development and growth (OWNER OF ORDINARY SMALL BUSINESS)

relies upon chances or luck in maintaining the status quo of his/her business

business risk

risk in entrepreneurship

Perception of risk in the business (ENTREPRENEUR)

risk is inherent in the business venture takes and faces the business risk squarely

Weber's Sociological Theory (Max Weber)

social cultures have significant contributions to entrepreneurship perform the role of a good constituent by executing entrepreneurial activities in line with good customs and traditions, religious beliefs and morals

Value

subjective not every person considers the same thing as valuable

mass production method

the same item, in large quantities, using standardized designs are produced on an assembly line

View on competition (OWNER OF ORDINARY SMALL BUSINESS)

unhealthy element in the business environment

3. It provides valuable goods and services

useful or helpful "not to sell waste to consumers but only valuable goods or services"

2. It is a wealth-creating venture

wealth = abundance of money, property or possession (improve the life of the owner) = cover the cost incurred by the business = development of the local economy and eventually the whole country

economy

wealth and resources of a country or region

economic depression

when a country is dealing with a serious financial downfall, or economic downturn production of items is low and business slows for many companies, job market also begins to suffer

1. It is an art of correct practices

- an art and not a science - not governed by fixed and absolute rules - denotes movement & innovation - not static or stagnant - evolves and respond to the changing needs of people - dynamic - economic activity changes - constant change or evolution

/Subjective/ FALSE

Not every person considers the same thing as valuabld therefore, values is objective

/modern technology/ TRUE

According to technological theory, economic growth is expected to slow unless the entrepreneurs apply modern technology in their business undertaking

Keynesian Theory (John Maynard Keynes)

emphasize role of the government in entrepreneurial and economic development, most especially when the economy is experiencing depression\ (government must make a strong intervention in entrepreneurial role played by private sector by pouring money to the economy and creating more jobs and projects for communities)

It is a risk-taking venture

entrepreneurial venture is born because of new ideas or opportunities, risk comes simultaneously with the venture inherent in an entrepreneurial venture.

Alfred Marshall Theory (Alfred Marshall)

four factors in the production of goods and services in the economy (land, labor, capital and organization) considered organization or entrepreneur as the prime movers in the organization without the active participation of entrepreneurs in the economy, development will surely be slow and limited

theory

generalization that explains a set of facts or phenomena not an absolute truth

Kaldor's Technological Theory (Nicholas Kaldor)

gives importance to the advancement of technology as an element of production

batch production method

groups of items are made together, each batch is finished before starting the next block of goods

Risk and Uncertainty

- Bearing Theory (Frank Hyneman Knight) an entrepreneur faces the risk of uncertainty in the process of connecting the supplier and the buyer

Entrepreneurship and ordinary small business differ in

1. Motive in opening a business 2. Perception of risk in the business 3. Reactions to changes in the environment 4. View on competition 5. Vision for development and growth 6. Horizon of business operation 7. Source of business funds

/Person managing=owner/ TRUE

A business is considered as a self-owned when the person managing is also the its owner

/generalization/ TRUE

A theory is a generalization that explains a set of factd or phenomenon. It is not an absolute true

/static/ FALSE

As an art, entrepreneur us static. By the movement of economic activity changes, the political, social, and entrepreneural activities will not change

Intrapreneurship

Business that being manage by other for the benefits of the owners, are under the concept of *

/new ideas=backbone/ TRUE

Creativity results is a new idea which is the backbone of the entrepreneurship

French

Entrepreneurs originates from * word entrepredre which meand to undertake

salient features of entrepreneurship

It is an art of correct practices It is a wealth-creating venture It provides valuable goods and services It entails opening and managing the self- owned enterprise It is a risk-taking venture.

Entrepreneurship

It is defined as the art of observing correct practices in managing and operating a self owned wealth- creating business enterprise by providing goods abd services that are valueable to others

/entrepreneural venture/ TRUE

It must be self owned in order to qualify as ab entrepreneural venture

small business

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

Innovation

Joseph schumpeter strongly believed that * is the force that propel the revolutionary change

View on competition (ENTREPRENEUR)

a sign of healthy economic environment force them to improve their products & services; will make them creative

Motive in opening a business (ENTREPRENEUR)

based on entrepreneurial concepts and principles and the aspiration to become successful

Perception of risk in the business (OWNER OF ORDINARY SMALL BUSINESS)

business risk is a deterrent to the operation of the business avoids the business risk (may lead to failure of business operation)

Horizon of business operation (OWNER OF ORDINARY SMALL BUSINESS)

centered only on the local environment

backbone of entrepreneurship

creativity results in new ideas