1

Chapter II

Related Literature

Entrepreneurial Competencies

Entrepreneurial competencies are the skills necessary for an entrepreneur to venture into an

enterprise, organize and manage an enterprise, and to ably and competently realize the goal for

which the enterprise is established. These competencies help entrepreneur to successfully

venture into an enterprise. The term refers to the key characteristics that should be possessed by

successful entrepreneurs in order to perform entrepreneurial functions effectively (Czobor,

2013).

It was classified into behavioural competencies: enterprise launching competencies and

enterprise managing competencies (Eship Notes). Ventureprise.com classified these

competencies into personal effectiveness competencies, workplace competencies and industry-

wide technical competencies

Entrepreneurial competencies mediate in the relationship between entrepreneurial characteristics

and business performance. It means that the more powerful entrepreneurial characteristics will

lead to an increase in the competence of the SMEs owner, which will ultimately have an effect

on business performance (Sarwoko, et. al, 2013). Bacigalupo, et. al (2016) defines

entrepreneurship as a transversal competence, which applies to all spheres of life: from nurturing

personal development, to actively participating in society, to (re)entering the job market as an

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employee or as a self-employed person, and also to starting up ventures (cultural, social or

commercial). It builds upon a broad definition of entrepreneurship that hinges on the creation of

cultural, social or economic value. It thus embraces different types of entrepreneurship, including

intrapreneurship, social entrepreneurship, green entrepreneurship and digital entrepreneurship. It

applies to individuals and groups (teams or organizations) and it refers to value creation in the

private, public and third sectors and in any hybrid combination of the three. Lastly, it is domain

neutral: one can act upon ideas and opportunities to generate value for others in any domain and

possible value chain. Johnson (2017) enumerates 11 entrepreneurial competencies as to his

study: opportunity recognition; opportunity assessment ability; risk mitigation; resource

leveraging; conveying a compelling vision; bricolage, guerrilla and bootstrapping skills; focus

and adaptation; creative problem solving or imaginativeness; value innovation or creation of

something; tenacity and perseverance; building and using entrepreneurial networks;

entrepreneurial selfefficacy and resilience. 33 As an attempt to investigate the relationships

between entrepreneurial characteristics and firm performance, Man, et.al. (2008) operationalized

a theoretical framework of the competitiveness of small and medium-sized enterprises (SMEs)

and empirically tested the four hypotheses derived from it. The framework links together

entrepreneurial competencies and SME performance with two further constructs: competitive

scope and organizational capabilities. The empirical study consisted of a stage of instrument

development specific to the research context, as well as a stage of hypothesis testing. The results

of hypothesis testing, involving a sample of 153 owner/managers of SMEs, provided evidence

for the direct and indirect contributions of the entrepreneur‘s opportunity, relationship,

innovative, human and strategic competencies in affecting the long-term performance of an SME

via competitive scope and organizational capabilities. This initial success, with the validated
 3

survey instrument of entrepreneurial competencies, may serve as the ground for further research

in this area. Throughout the past few decades, significance of entrepreneurial competencies has

been amplified due to the strategic role taken part by the entrepreneur of a business enterprise.

Therefore, Wickramartne, et.al (2014) examine the impact of owner/managers entrepreneurial

competencies on Entrepreneurial Orientation (EO) of tea manufacturing firms in Sri Lanka and

the relationship between background characteristics of owner/managers and entrepreneurial

competencies. The study reveals that the personal background of 34 the owner affects their

entrepreneurial competencies. The value of innovativeness is more prevalent than that of risk-

taking. Siwan and Rowley (2010) suggest that although the concept of entrepreneurial

competencies is used widely by government agencies and others in their drive for economic

development and business success, the core concept of entrepreneurial competencies, its

measurement and its relationship to entrepreneurial performance and business success is in need

of further rigorous research and development in practice. Four main clusters of competencies

were identified: personal and relationship, business and management, entrepreneurial, and

human relations competencies. Whilst previous research on the competencies of entrepreneurs

has identified the two clusters of business and management, and entrepreneurial competencies,

the competencies in the other two clusters have received less attention and have not been

identified as clusters. Arguably, competencies in these clusters are valued more highly by female

entrepreneurs than by their male counterparts. Barazandeh, et.al (2015) analyzed the relationship

between entrepreneurial competencies along with social norms and entrepreneurs‘ business

performance. It shows that the entrepreneurial competencies have a positive relationship to

business performance. It also reveals that social norms has a direct effect to entrepreneurial

competencies; however, social norms has nothing to do with business performance. 35

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Significant relationships were identified between entrepreneurial potential and the following

personality variables: entrepreneurial skills, resources organization, internal locus of control, and

creativity. No significant relationship between average risk propensity and entrepreneurial

potential was identified. The participants with high entrepreneurial potential proved to be more

aware of the discrepancy in this respect (RodicaLuna and Cazan, 2010). The study of Sanchez

(2011) indicates that entrepreneurial competence plays an influential role in organisational

capability and competitive scope, and also has a direct effect on firm performance. The use of

organisational capabilities affects positively the firm performance and it partially mediates the

relationship between entrepreneurial competence and firm performance. Although competitive

scope is not significantly related to business growth, it is a strong predictor of other performance

dimensions, such as efficiency and relative performance. Organisational capability is a strong

predictor of competitive scope. Opportunity competencies Opportunity recognition has always

been considered as a central aspect of entrepreneurship. However, in entrepreneurship education

research, little attention has been devoted to understand the learning needs associated to effective

entrepreneurial opportunity recognition. Opportunity recognition is a cognitive skill whereby an

entrepreneur aims to enhance an existing product or rather create a non-existing product. (Aouni,

2008). Specific human capital, in particular opportunity competence, importance of social

networks and specific motivation (i.e. self-efficacy) significantly contribute to engagement in

innovative work behavior, which, in turn, predicts innovative performance of employees. The

results, hence, underline the complex interplay between human capital, innovation, and

workrelated learning. Stimulating innovation and entrepreneurship in its defining initial stage is

not simply a matter of hiring high educated or experienced staff. Cooperation across the

traditional disciplinary boundaries is hence called for in efforts to effectively combine lifelong
 5

learning, human capital, and innovation (Lans, et. al , 2015). Opportunity identification is

emerging as an important content area in entrepreneurship education. DeTienne and Chandler

(2017) propose that opportunity identification is a competency that can be developed as are other

unique competencies and that the entrepreneurship classroom is an appropriate venue for

developing the skills necessary to improve the ability to identify opportunities. The study reveals

that opportunity identification is something that can be learned or developed. The idea of

innovation is not also determinant for an opportunity to be identified. Today‘s working life is

increasingly characterized by entrepreneurial challenges. Entrepreneurial challenges start at an

individual level with the identification of opportunities, which is acknowledged as one of the key

competencies for lifelong learning. Since 37 the identification of opportunities relies heavily on

the opportunity identification competence (OIC) of individuals, understanding the meaning of

OIC is relevant. Research conducted by Baggen (2017) shows that individuals have different

capabilities for identifying opportunities. Generating demand for your product requires much

more than simply releasing it onto the market. You need to conduct research, determine what

consumers' needs are, establish yourself as a leader in your industry and repeatedly prove your

products' worth (Kittaneh, 2014). Market research should provide information about industry

information, consumer close-up and competition close-up. Kinias (2013) has formulated the

opinion that the entrepreneur needs knowledge in order to recognize the entrepreneurial

opportunity and this knowledge comes from his personal background, his education, his working

experience and from the empirical knowledge of the field for which he is interested. Relationship

competencies This is the ability to persuade, convince or influence others in order to get them to

go along with or support a particular agenda, or get ‗buy in‘ from others. It requires the ability to

plan how to win support, gain co-operation or overcome barriers using a variety of approaches.
 6

Having gained support, it is the ability to build and maintain relationships with networks of

people who may be able to 38 effectively assist the organization. At lower levels it is about

presenting clear, logical arguments. At the higher level it requires taking a sophisticated strategic

approach to influencing. Relationship or network building maintains effective and constructive

working relationships, partnerships or networks of contacts with people who are, or might

someday be, instrumental in achieving work-related goals. Relationship competency is evident in

terms of developing long term trusting relationship with others, negotiating with others,

interacting with others, maintaining a personal network of work contacts, and communicating

with others effectively. In business, entrepreneurs are required to deal with many people

including suppliers, customers, employees, government authorities, competitors, and other

stakeholders. This contact gives them access to information and other resources. Evidence

suggests that small firms in particular are critically dependent on their networks because it is

through these that they gain advice and support from professionals and experts such as lawyers,

accountants, and consultants government bodies, research and training institutes, and even

suppliers and customers. This is consistent with the resource dependency theory which suggests

that entrepreneurs use their social relations to get the resources they need to support their

business. Entrepreneurs, therefore, need to possess or acquire interpersonal and communication

skills. Building relationships is about your ability to identify and initiate working relationships

and to develop and maintain them in a way that is of mutual benefit 39 to both yourself and the

other party. Good relationships are the keys to getting things done and are essential when your

success is dependent on others as well as understanding the techniques required to develop,

maintaining and managing business relationships with clients and partner organizations in order

to implement and manage projects and to identify new business opportunities. This includes
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managing clients'/partners' expectations during project delivery, establishing and maintaining

relationships at all levels of the organization, and increasing partner loyalty throughout the

course of an engagement and after. It includes using the available channels to obtain information

on the clients' ongoing and future strategic business needs with a view to increase profitable

business and commercialization opportunities with a win-win mindset. Relationship core

activities are to: set objectives necessary for obtaining feedback and assistance; maintain

effective communication; share ideas, issues, and opportunities with members of personal

network; seek referrals from others with relevant expertise and influence and attend and maintain

relationships with relevant formal and informal professional groups and organizations. Day, et. al

(2017) argued that relationship marketing can readily be adopted by a small entrepreneurial

business but it will need to be adapted to the entrepreneurial environment into which it is

introduced. Results from initial research suggest that entrepreneurial enterprises employ

relationship marketing more effectively than less entrepreneurial organizations and they derive

commercial benefits such as higher growth rates and fewer customer defections. 40 The authors

argue that entrepreneurship can be learned and so less entrepreneurial firms have the potential to

learn from more successful entrepreneurs. They offer some specific recommendations but they

recognize that the task is not easy because the SME has to create an internal culture that is

capable of both embracing relationship marketing and being alert to opportunity. Conceptual

competencies The ability in making cognitive and analytical thinking, learning, decision making

and problem solving, sustaining temporal tension, innovating and in coping with uncertainty and

risk belong to this category. They have a stronger linkage with entrepreneurial traits and are less

directly observable. They involve high level of conceptual activities and are reflected in the

entrepreneur‘s behaviors when they conduct analysis, learn, make decisions and solve problems
 8

etc. They may also enhance the effectiveness of carrying a task in the present or in the future.

Similar to strategic competencies, conceptual competencies require a more abstract level of

abilities. However, unlike strategic competencies, conceptual competencies are concerned with a

shorter-term perspective, resolving instant events, or requiring intuitive responses A managerial

competency that refers to a leader's ability to integrate information and make judgments used a

number of relevant factors. For example, the successful selection of a team depends on

understanding the interactions of a number of factors, such as the interrelationships between 41

players, their level of ability, the environmental conditions of the game, and the characteristics of

the opposing team. Within a corporate organization, top managers and supervisors differ with

respect to function, authority and responsibility. Top managers need to be conceptual thinkers

because they are responsible for entire divisions, whereas supervisors are responsible for

particular groups within the division. The manager's job is developing strategies, methods and

tactics, then conveying that vision and associated objectives to supervisors. The supervisor is to

implement the strategies and ensure that employees efficiently execute and achieve objectives

(Houston, 2017). Organizing competencies This is about adopting a methodical approach to

work. It involves planning and organizing oneself and others in order to deliver work and prevent

future problems. This includes the ability to adapt and change plans as the requirements of the

situation change. At the higher levels it involves long-term, strategic and creative thinking.

Efficiency orientation‖, ―concern for high quality of work‖, and ―monitoring‖ should be the

required competencies in managing various functional areas in a firm so as to keep the firm

operating efficiently. It also suggested the importance of managerial roles of an entrepreneur in

human competence. It is also similar with managerial competence. 42 Bowdoin.edu defines

organizational competencies as a systematic course of action for self and others in order to
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accomplish objectives; determines priorities and allocates resources effectively. Organizational

skills can be termed as a set of skills that help you achieve your higher goals in life. These skill

sets help you plan, implement the procedures, monitor growth and ultimately achieve your set

goals. To put it the other way, organizational skills are kind of self-discipline measures that

differentiate a leader (and good administrators) from the rest. These skills help an individual to

acknowledge a reason/purpose for each day. These skills make an individual focus towards a

higher goal in life. Organizational competencies are often thought to be simply employee skills

rather than the compelling cross company core competencies that drive integrated business

execution and management alignment. A broader definition of organizational competencies

focuses on the first word – ―organizational‖. Under this definition, the organization becomes the

focus. It is the organization as a whole that must perform – not just an individual employee.

Under this approach the organization must step outside itself and evaluate what things it does on

an ongoing, systemic basis that enables it to achieve its mission. (www.blandi.org) Recruits

groups and resources to achieve lofty goals with extreme adeptness, tackles multiple complex

projects and directs their operation concurrently and smoothly; communicates expectations to

organization and builds in accountability measures and maintains accurate and complete records,

43 and develops district-wide organizing systems and processes are core activities of organizing

function Chena (2008) demonstrate the potential of entrepreneurial self-efficacy as a distinct

characteristic of the entrepreneur. From these results, some important implications can be drawn

on entrepreneurial assessment, education, counseling, and community intervention. Self-efficacy

is a moderately stable belief that requires systematic and continuous efforts to be changed. The

teaching of entrepreneurial skills tends to be technical, with insufficient attention paid to the

cognition and belief systems of the entrepreneur. Educators should take into account
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entrepreneurial attitudes and perceptions when designing or assessing their course objectives.

Conscious efforts could be made to enhance self-efficacy by involving the students in ―real-life‖

business design or community small business assistance, by inviting successful entrepreneurs to

lecture, and by verbal persuasion from the instructor and renowned entrepreneurs

(www.microsoft.com). Shepherd and Patzelt (2014) introduce the notion of operational

entrepreneurship—the selection and management of transformation processes for recognizing,

evaluating, and exploiting opportunities for potential value creation—to offer examples of

research opportunities at the interface of entrepreneurship and operations management.

Specifically, most believe that operations management has been under‐utilized for gaining a

deeper understanding of (i) the knowledge and motivation required for opportunity recognition,

(ii) evaluations of a recognized opportunity to determine if it represents an opportunity for the

specific entrepreneur, and (iii) the role that feedback from an exploitation of a current

opportunity plays in the recognition and evaluation of subsequent opportunities.

Strategic competencies Being the owner of the firm, the entrepreneur must set the direction for

the whole company. This category of competencies requires the entrepreneur to have a vision or

a big picture in their mind for their business, to have clear goals to achieve, or to formulate and

implement strategies to achieve these vision and goals, for example, systematic planning, and

strategic planning competencies. Strategic competencies equip people and organizations to take

position and move in a highly dynamic context that poses constantly changing challenges to the

realization of their aims. Lacking such competencies undermines the ability to adapt to such

changing environments, leading to increasing marginalization. Strategic competencies go beyond

a 'how to' approach. They can be compared to the game of chess. Winning the game involves

much more than mere application of the rules of the game. There is no fixed course of action that
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can be planned beforehand, because of multiple uncertainties about the other player‘s moves.

Playing the game does involve knowing the rules of the game, but also the ability to apply

relevant experience, the ability to develop and constantly adapt scenarios, and more (Wigboldus,

2009).

Commitment competencies Successful entrepreneurs are often characterized as diligent people

with a restless attitude in their work. In other words, they have a strong competency in totally

committing, determining and dedicating, as well as taking proactive actions towards their

responsibilities and duties. This corresponds to the entrepreneurial role of the drive to see firm

through to fruition. Another aspect of this competency area is the initiative or proactive

orientation, which calls for the entrepreneurs taking actions before being asked or forced to by

events. Most entrepreneurs emanate from established firms, but the impact of these employment

histories on entrepreneurial outcomes is poorly understood. Sorensen and Phillips (2011) argue

that work experiences in the prior firm shape both the entrepreneur ‘s competence in and

commitment to the entrepreneurial role. They focus on the effects of employer size on the

prospective entrepreneur, and argue that employer size has a negative effect on both

entrepreneurial competence and commitment. This implies that entrepreneurs from small firms

should have superior economic performance and, for a given level of performance, be less likely

to exit entrepreneurship. Research on entrepreneurship focuses predominantly on success which

ignores the high failure rate of new ventures and precludes a holistic view of the entrepreneurial

process. Findings suggest that more coping and learning occur in the economic aspect of failed

entrepreneurs' lives in comparison to the social, psychological and physiological aspects.

Findings also provide a proposition for 48 testing in future research: Type of coping engaged in
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by failing entrepreneurs is related to the kind of learning experienced through failure (Singh, et.

al, 2017).

SURVEY QUESTIONNAIRE

Entrepreneurial Competencies

Opportunity Competencies 4 3 2 1
I can identify goods/services customer wants
Natutukoy ko ang maayos na serbisyong nais/ ninanais ng mga
mamimili / kostumer
I can perceive unmet consumer needs
Nakikita ko ng madalian ang mga pangangailangan ng mga
mamimili / kostumer.
I actively look for products/services that provides real benefits.
Aktibo akong humahanap ng mga alternatibong produkto at
serbisyo para sa kapakanan ng mamimili.
I seize high-quality business opportunities
Nais kong makamit ang mataas, malawak at maraming
oportunidad sa pagnenegosyo.
I treat new problems as opportunities
Tinitingnan ko ang bawat pagsubok at problema bilang
oportunidad sa pagnenegosyo
Relationship Competencies
I can develop long-term trusting relationships with each other’s
Nagtitiwala ako sa bawat kasapi ng negosyo para sa lalo pang
matagal na pagsama-sama.
I can negotiate with suppliers
Nakikipag-ugnayan ako ng lubos sa mga “Suppliers” na
kabalikat sa pagnenegosyo
I interact with customers
Nakikisalamuha ako ng maayos sa mga mamimili / kostumer
I maintain a personal network of work contacts.
Napapanatili ko ang maayos na pakikipag-ugnayan sa mga
taong kasapi sa pagnenegosyo.
I communicate with others effectively.
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Nakikipag-ugnayan ako ng maayos at may kahusayan sa mga

tao
Conceptual Competencies
I look at old problems in new ways.
Tinitingnan ko ang mga dating problema sa makabagong
paraan
I explore new idea.
Napapalawak ko ang mga bagong ideya.
I take reasonable job-related risks
Isinasaalang-alang ko ang mga panganib na kaunay sa
pagnenegosyo
I apply skills and knowledge into practice.
Iniuugnay ko ang aking kaalaman at kasanayan sa
pagnenegosyo.
I learn as much as I can in the business.
Nagpupursigi ako na matutunan ang mga bagay-bagay sa
negosyo hangga’t kaya.
Organizing Competencies
I plan the operation of the business.
Pinag-aaralan ko ang mga gawain sa pagnenegosyo
I plan the organization of different resources
Pinag-aaralan kong maisaayos ang mga bahagi at gamit sa
pagnenegosyo.
I keep organization running smoothly
Pinananatili ko ang maayos na paggalaw ng negosyo sa magandang
paraan.
I coordinate tasks
Nagkakaroon ako ng pagbabaha-bahagi ng mga gawain sa
pagnenegosyo.
I supervise and lead subordinates
Nakatutugon ako sa pangangailangan ng bawat isa sa
pagnenegosyo.
Strategic Competencies
I can determine long-term issues, problems and opportunities.
Nakikita ko ang posibleng maging sanhi ng malaking problema,
isyu at mga opotunidad sa gawain ng pagnenegosyo.
I am aware of the projected direction of the industry. Handa ako
sa mga posibleng pagbabago at hamon ng insdustriya sa
gawaing pagnenegosyo
My current actions are aligned with strategic goals Iniuugnay
ko ang kasalukuyang aksyon sa mga estratehiyang
kinakailangan sa pagkamit ng adhikain sa pagnenegosyo.
I assess day-to-day tasks in context of sustainability.
Nakapagtataya ako sa pang-araw-araw na gawain kaugnay ng
pagsasaayos at pagtataguyod ng negosyo
I evaluate business performance. Nakapag-aanalisa at
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nakapagbabalangkas ako ng kakayahan sa negosyo.

Commitment Competencies
I refuse to let the venture fail
May takot akong bumagsak ang karera sa pagnenegosyo
I possess extremely internal drive
Nagkakaroon ako ng malalim na potensyal sa pansariling
pananaw at adhikain sa negosyo
I commit myself to long-term goals.
Nagkakaroon ako ng pangmatagal na adhikain sa pagnenegosyo
I maintain a high energy level.
Napapanatili ko ang mataas na gawi at kilos sa pagnenegosyo
I motivate self to function at optimum performance
Nagaganyak ko ang sarili upang mapataas ang aking gawi /
kilos sa mataas na kakayahan sa pagnenegosyo.

Problems Encountered by the Beneficiaries

Ano ang mga hamon at pagsubok na kinahaharap mo o nang iyong grupo sa pagpapatakbo
ng inyong negosyo?

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