Republic of the Philippines

UNIVERSITY OF EASTERN PHILIPPINES

University Town, Northern Samar
Web: http://uep.edu.ph; Email: [email protected]

THE ENTREPRENEURIAL MIND

MODULE 1: A PERSPECTIVE ON
ENTREPRENEURSHIP

MS. ARRAN JOYCE B. ROJERO

CBA PART-TIME LECTURER
GEE Elective The Entrepreneurial Mind

STUDY GUIDE FOR MODULE NO. 1

A PERSPECTIVE ON ENTREPRENEURSHIP

MODULE OVERVIEW

This module is an overview of what entrepreneurship is all about. It begins by defining

entrepreneurship and entrepreneur and stating its importance especially in the different field in the
industry. It also discusses the functions and tasks of an entrepreneur as an individual and contributor to
the economy. It also introduces the concept of innovation as a specific tool for entrepreneurs. This part
also includes the entrepreneurial process and the different rewards for having a successful
entrepreneurship.
MODULE LEARNING OBJECTIVES

1. Define entrepreneurship and entrepreneur

2. State the importance of entrepreneurship and entrepreneur
3. Describe and understand the tasks of entrepreneurs
4. Familiarize with the concept of innovation in entrepreneurship
5. Enumerate the entrepreneurial process
6. Know and appreciate the rewards for a successful entrepreneurship

LEARNING CONTENTS (Define Entrepreneurship)

Entrepreneurship came from the French word entreprendre which means to undertake.
Entrepreneurship aims to bring about the cohesive integration of social, economic, institutional, and
cultural environments, both at the individual level and the group level.

Also, Entrepreneurship, as defined by Robert Hisrich, Ph.D., a professor of global

entrepreneurship, is the process of creating something new with value by devoting, the necessary
time and effort, assuming the accompanying financial psychic, and social risks, and receiving the
resulting rewards of monetary and personal satisfaction and independence. People who are
practitioners of entrepreneurship are called entrepreneurs. The said definition above emphasizes four
concepts:

First, entrepreneurship involves the process of creation. It is the capacity of an individual to

utilize resources to create something unique or new, or improve something that already exists and make
them available in the market.

Second, entrepreneurship requires time and effort. An entrepreneur must devote his/her time
to establish his/her business. He/she must exude passion, commitment and dedication in making
his/her crafts.

Third, entrepreneurship is a challenging task. Risks are inevitable in making a business.

Entrepreneurs may face multiple risks such as financial risks, competitive risks, environment risks,
strategic risks and many more. An entrepreneur must be prepared for these things.

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GEE Elective The Entrepreneurial Mind

Lastly, being an entrepreneur is a fulfilling endeavor because of its rewards and personal
satisfaction. Aside from the profit that he/she gets, the feeling of starting up your own business and
making it successful is different. The experience of the entrepreneur changes his/her personality and
character especially in decision making and management.

LEARNING CONTENTS (Define Entrepreneur)

Like Entrepreneurship, Entrepreneur has no single definition. There are different perspective and
thoughts towards the term “entrepreneurs”. Some of this are:

• An entrepreneur is a person who is action oriented, highly motivated, takes risks to achieve goals;
• An entrepreneur is a person who establishes his own business with the intention of making profits;
• An entrepreneur is a person who only provides capital without taking active part in the leading role
in an enterprise; and
• An entrepreneur is a one who innovates, raise money, assemble input, choose managers and set
the organization growing.

Fortunately, we have a ton of entrepreneurs to look up to whenever we need the inspiration to work
on our own ideas instead of others. Some of the famous entrepreneurs in the world are:

• Jeff Bezos is the founder of Amazon which is the largest eCommerce marketplace and is used
by millions of customers worldwide.

• William Henry Gates (popularly known as Bill Gates) is an American business magnate,
investor, author, and philanthropist. He is the founder of Microsoft, which he launched along
with Paul Allen in 1975.

• Mark Elliot Zuckerberg is an American technology entrepreneur and he’s the founder of the
widely popular social media platform Facebook. Facebook is undoubtedly the #1 social media
platform used by everyone, from students to marketers to leaders from all over the world.

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GEE Elective The Entrepreneurial Mind
LEARNING ACTIVITY 1

ESSAY. Answer the following questions in paragraph form.

1. Observe the entrepreneurs in your community. Tell your own definition of an entrepreneur
based on your observation.
2. Do you like to become an entrepreneur someday? Why?

LEARNING CONTENTS (Differentiating Entrepreneur and Entrepreneurship)

Although both term Entrepreneur and Entrepreneurship are understood similar, however, there are
some key differences when it comes to the difference between entrepreneur and entrepreneurship. But
how would you differentiate an entrepreneur from entrepreneurship?

Entrepreneur (Person) + Entrepreneurship (Process) = Enterprise (Outcome)

In short, the above formula states that “A person follows certain processes to set up and establish an
enterprise, hence, that person will be an entrepreneur, the process is entrepreneurship and the outcome
would be enterprise/ organization.”

To dig down more on the key differences between entrepreneur and entrepreneurship, we should go
through the following pointwise comparison on the basis of different angles and terms.

• An Entrepreneur is often the founder of the business enterprise whereas Entrepreneurship ranges
from single projects to multiple projects to generate various employment opportunities in society.

• Entrepreneur innovates/develop some unique products or services or technology whereas the

processes/ measures to innovate or discover that products or services are Entrepreneurship.

• Entrepreneurs typically not only initiates and operates a new venture but at the same time they are
also accountable for risks associated in business whereas entrepreneurship is the procedure of
starting new businesses or enterprises which is responsible for identifying opportunities.

• An entrepreneur is an administrator whereas entrepreneurship is administration.

• An entrepreneur is creator and entrepreneurship is creation.

LEARNING CONTENTS (Importance of Entrepreneurship)

Entrepreneurship is the dynamic process of creating incremental wealth and innovating things of
value that have a bearing on the welfare of an entrepreneur as an individual and the growth of the economy
as a whole. This means that the importance of entrepreneurship can be seen both in the micro and macro
perspective.

Importance of Entrepreneurship in the Macro Perspective:

• Generates Job Opportunities

Entrepreneurship is not only important for the entrepreneur and business itself, but it also opens
job opportunities for other people. If an entrepreneur plans to put up his own business, he gets to hire
employees. This is also a chance for entry level jobs for unskilled workers to be trained and to gain
experience. Entrepreneurship is a good way to end unemployment.

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GEE Elective The Entrepreneurial Mind

• Enhances Economic Growth

When an entrepreneur establishes his business, he produces goods and services. This adds
up to the gross domestic product of an economy. If more individuals will start a business, more goods and
services will be produced. This will enhance a country’s economic growth. Entrepreneurial ventures make
a significant contribution to national income.

• Improves the Community

Entrepreneurs are not just the big and rich ones. There are also many small and medium
enterprises especially in the rural community. A lot of entrepreneurs began by selling in their barangay
which greatly helps their families. Many individuals need not to work or migrate from other places because
they can earn a living by becoming entrepreneurs of their own.

Importance of Entrepreneurship in the Micro Perspective

• Develops the Character of the Individual

When an individual engages in the practice of entrepreneurship, he/she undergoes many
circumstances that would improve his character and personality. The duties and responsibilities drives an
entrepreneur to become better in managing and decision making. Entrepreneurship is not just all about
business, but also for character development.

• Improves the Economic Status of the Individual

The main objective of many entrepreneurs is to make a living and earn profits. Entrepreneurship
has become the source of income of many individuals which helps their families. It has also helped improve
the standard of living of many people.

• Acquires a Sense of Fulfillment

Many individuals prefer to have their own business than to become employees of other
companies. They want to become leaders and bosses of their own businesses. This gives them a sense
of fulfillment, much more if the business is a success. Also, as an entrepreneur, one is able to help others
by employing them. Embracing this social responsibility gives fulfillment to the individual.

• Enhances Many Skills of the Individual

Entrepreneurship enhances many skills such as critical thinking, problem-solving, decision-

making, organizing and creating. These are necessary skills that one must possess in order to establish a
successful business enterprise.

LEARNING ACTIVITY 2

Reflection Time. Answer the following question.

1. Why do you think entrepreneurship is important in your course?

2. How will you relate your course to entrepreneurship?
3. Do you think there is a relevant relationship between your course and entrepreneurship?

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GEE Elective The Entrepreneurial Mind
LEARNING CONTENTS (The Entrepreneurial Tasks and Functions)

An entrepreneur has to perform the following tasks and functions:

1. Risk Taking and Uncertainty Bearing
An entrepreneur must be prepared for all the risks and adversities. He/she has to face these
circumstances. For example, the business might suffer from loss and bankruptcy. The entrepreneur
must be able to adjust and find ways to solve problems like this because success in entrepreneurship
is uncertain and risks are inevitable.
2. Taking Business Decisions
An entrepreneur must be able to formulate an action plan for all the decisions that he/she has to
make. He/she has to decide on what goods and services to produce, how to produce, and how to
promote and distribute them. He/she must be able to make good decisions for the success of the
business.
3. Managerial Functions
An entrepreneur performs various managerial functions. He/she must know how to manage the
different operations in the business like financial and supply management. This is an important task that
an entrepreneur must embrace.
4. Innovation
This is the most important function of an entrepreneur. He initiates to introduce and craft new
products. He thinks of many ways on how to improve the quality of these products and develop the
business.
5. Maintain Good Relations
An entrepreneur must be able to establish a good relationship with his employees and most
especially with his clients and customers. Having good relations with employees makes the job easier.
Communicating well with the clients is a very important task to maintain the progress of a business.

6. Planning and Organizational Function

As an entrepreneur, planning and organizing are very vital tasks. These are the first things that an
entrepreneur must do when starting up his/her own business. Planning is deciding in advance what is
to be done, which is to be done, and how is to be done. This is a very important function because without
planning, goals cannot be achieved. Also, an entrepreneur must learn how to organize his/her business
like taking the right processes and system.

Main Differences in Tasks between an Entrepreneur and a Manager

Entrepreneur Manager
An entrepreneur is involved with the A manager is with a running business over
start-up process a long period of time
An entrepreneur assumes financial, A manager does not have to bear risks
material and psychological risks
An entrepreneur is driven by A manager by the resources he currently
perception of opportunity possess
An entrepreneur initiates change A manager follows rules and procedure
An entrepreneur is his own boss A manager is a hired employee
An entrepreneur gets uncertain A manager gets fixed rewards and salary
rewards
Source: Essentials of Entrepreneurship

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GEE Elective The Entrepreneurial Mind

LEARNING ACTIVITY 3

TRUE OR FALSE. Write T if the statement is correct, F if false.

_____ 1. A manager is the same as an entrepreneur in their tasks.

_____ 2. An entrepreneur does not need to maintain a good relation with clients as long as his
employees already do.
_____ 3. A manager gets uncertain rewards same as entrepreneur.
_____ 4. It is important for an entrepreneur to take business decisions.
_____ 5. An entrepreneur must be open to changes for the well fair of the business.
_____ 6. A manager is a hired employee.
_____ 7. An entrepreneur performs various managerial functions.
_____ 8. The entrepreneur sometimes can’t adjust and couldn’t find ways to solve problems.
_____ 9. A manager follows rules and procedure as well as an entrepreneur.
_____ 10. A manager is with a running business over a long period of time.

LEARNING CONTENTS (The Entrepreneurial Tasks and Functions)

What is Innovation?

Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an
opportunity for a different business or a different service. It is capable of being presented as a discipline,
capable of being learned, capable of being practiced. Entrepreneurs need to search purposefully fot
the sources of innovation, the changes and their symptoms that indicate opportunities for successful
innovation. And they nees to know and to apply the principles of succesful innovation (Drucker, 1985).

Innovation came from the Latin word Innovare which means to make new. Entrepreneurs create
new value form existing things and processes. There would be no entrepreneurship without innovation
because thinking of what to produce, how things should be done, and what to market are all parts of
innovation.

Main Types of Innovation

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GEE Elective The Entrepreneurial Mind

1. Product Innovation – These are innovation of goods and services. This is a creation or
improvement of new products.

2. Process Innovation – This refers to the creation or improvement of processes and methods. An
entrepreneur must be able to innovate ways to conduct his operations in production and
delivery.

3. Organizational Innovation – this is defined as doing this differently in the organization. It is

the implementation of a new organizational method in a firm’s business practice, workplace or
external relations.

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4. Marketing Innovation – This refers to the implementation of marketing strategies to promote

the products.

THE ENTREPRENEURIAL PROCESS

The process of starting a new venture is embodied in the entrepreneurial process, which involves
more than just problem solving in a typical management position. An entrepreneur must find,
evaluate, and develop an opportunity by overcoming the forces that resist the creation of something
new (Hisrich, 1985).

The process has four phases:

Determine
Identify and Develop the
the Manage the
Evaluate the Business
Resources Enterprise
Opportunity Plan
Required

1. Identify and Evaluate the Opportunity

This is the first and most difficult part in the process. To be able to establish a business
enterprise, an entrepreneur must be open to opportunities. This is the most important part because
this is where the entrepreneur starts. This is the part where the generation of ideas to establish the
business happens. A good entrepreneur does not only grab opportunities but takes time to evaluate
them. He/she must establish mechanisms to identify potential opportunities. An entrepreneur must be
able to weigh or calculate whether an opportunity gives more risks or rewards. This is what you call
opportunity analysis or opportunity assessment. An opportunity assessment includes the description
of the product or business and specifications of all activities and operations. Also, before an
entrepreneur accepts an opportunity, he/she must see to it that there are resources available.

2. Develop the Business Plan

If opportunities have been evaluated already, the next step is to make a good business plan.
This is a document that serves as a guide or a roadmap that contains all the goals and details on how
an entrepreneur plans to achieve those goals. The parts of the business plan will be discussed on a
section in a different module.

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GEE Elective The Entrepreneurial Mind

3. Resources Required
To operate a business enterprise, resources are necessary. An entrepreneur must be able to
determine the resources needed. These are human resources, financial resources, and physical
resources. Human resources are the people or the employees. If the business is highly labor intensive,
it means it needs more people. Another important resources is the financial capital. Without money,
the business is dead. All businesses need money to start their operation. Lastly, the physical resources
includes the land or location and the different equipment needed. These are also called factors of
production because these are the necessary things to produce goods and services.

4. Manage the Enterprise

How the business is managed depends on the second and third part of the process. This is the
part where the entrepreneur must focus because mismanagement of enterprise could just put all the
planning and resources into waste. The success of the business lies on this part. For aspiring
entrepreneurs, they must undergo seminars and trainings on this matter so they would know what to do.

LEARNING ACTIVITY 4

Essay. In more than five sentences, explain the entrepreneurial process.

________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
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LEARNING CONTENTS (Rewards for a Successful Entrepreneurship)

The rewards for a successful entrepreneurship that an entrepreneur enjoys can be in the form of
financial and non-financial.

NON-
FINANCIAL FINANCIAL

Profits Satisfaction
Dividends Contribution
Capital Growth Character
Development

For the financial rewards, the entrepreneur gets profits. Profit is a financial gain obtained
from an investment. It is calculated by subtracting the amount of expenses used in the production
from the amount earned. Dividend, on the other hand, is the amount of money paid by a company to
its shareholders out of its profits. An entrepreneur can be a shareholder of one company and can
earn from it. Lastly, capital growth is the increase in the value of an asset or investment.

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GEE Elective The Entrepreneurial Mind

For the non-financial reward, the entrepreneur gets satisfaction from the endeavor.
Establishing a business enterprise is personally satisfying because it takes a lot of effort to do such.
Aside from that, the contribution to society is also personally rewarding. An entrepreneur is able to open
job opportunities for people. Also, the most important reward is the transformation that entrepreneurship
does to the entrepreneur’s character and personality. Becoming an entrepreneur makes one to become
responsible, independent, risk-taker, and perseverant.

SUMMARY

This module introduces the concept of entrepreneurship, its importance, the tasks of an
entrepreneur, the concept of innovation, the entrepreneurial process and the rewards of a successful
entrepreneurship.

Entrepreneurship is the process of innovating new venture that entails risks and rewards. A lot
of people engage in this activity because of its major contribution to them and to the economy.

Once an individual establishes his/her own business enterprise, he gets to open job
opportunities for people. This is personally satisfying on the part of the entrepreneur because he does
not only earn from the business, he is also able to help the economy. The entrepreneur must also be
able to do his functions guided by the entrepreneurial process which begins at identifying and evaluating
opportunities. Developing a business plan is also an important part of the process because this will
serve as the guide of the entrepreneur in running his business. Then, the necessary resources must
also be acquired in order to complete the establishment of the business. Managing the business is the
last part of the process which is very crucial because this is the part where the different operations
happen. Lastly, an entrepreneur gets rewards if the business enterprise becomes a success. It could
be in the form of money like profits, dividends and capital growth. It could also be in the non-financial
form like self-satisfaction, contribution to the economy and character development.

REFERENCES

Fajardo, F. (1994). Entrepreneurship. Mandaluyong: National Bookstore.

Essentials of Entrepreneurship. 3G Elearning FZ LLC, 2016.

Hisrich, R. & Peters, M. (1999). Entrepreneurship. Fourth Edition. Irwin/Mcgraw-Hill.

Drucker, P. (1984). Innovation and Entrepreneurship. Available at: http://www.untag-

smd.ac.id/files/Perpustakaan_Digital_1/ENTREPRENEURSHIP%20Innovation%20and%20entrepre
neurship.PDF

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