ENTREPRENEURIAL BEHAVIOR

JOSHUA DEL PILAR

ORIGIN OF ENTREPRENEURSHIP
The term entrepreneur or entrepreneurship originated in Europe
sometime in the Middle Ages. The word entrepreneur is of French
origin from the word entreprendre which simply means to undertake.
Lloyd Shefsky defined entrepreneur by dissecting the word
entrepreneur into three parts:
Entre means to enter
Pre means before and
Neur means nerve center
Joseph Schumpeter described entrepreneurship as doing things
that are not generally done in the ordinary course of business routine.
ROLES OF ENTREPRENEUR
-ORIGINATOR
-CREATOR
-ORGANIZER
-INSPIRER
-INNOVATOR
-IMPLEMENTOR
Is someone who plans, organizes and puts together all resources
required to bring a new enterprise into existence and to run and
manage it on a long term basis
Percieves business opportunities in the environment
Takes risks to make use of these business opportunities
Invest in his own or borrow money to use in the business
Introduces innovations or improvements to make business better,
more efficient and more profitable

Makes plans and decision for the business and

Generates profit for the business
HUMAN DEVELOPMENT AND ENTREPRENEURSHIP
Factors that affect countrys development
SOCIAL
POLITICAL
CULTURAL LIFE
Michael Todaro
He defined development as multidimensional process, involving major
changes in social structures population, attitudes and national
institutions, as well as acceleration of economic growth, the reduction
of inequality, and eradication of absolute poverty.
Three Core Values
Life Sustenance
-the ability of the economy to provide the basic needs.
Self-esteem
-the sense of self-worth and self respect, of not being used as a tool
by other for their own selfish ends.
Freedom from Servitude
-the extent that a person is free in making choices.
e.g. the choice to work abroad or in own country

HOW COUNTRIES GROW AND BECOME RICH

1. ECONOMIC DEVELOPMENT IS BROUGHT ABOUT
BY AN INVISIBLE HAND (ADAM SMITH 1937)
Development is brought about by individual who set out to produce
valuable goods and services for their personal gain and profit. As they
work for this selfish motives, they benefit their fellowmen wihtout
intending to. As unseen force seems to motivate and lead them to do
what is best for the interest of their community or society as a whole.
Thus, any country can prosper with little or no effort because
development happens naturally.
2. The push of Church for social justice and equality
(two encyclical)
Rerum Novarum (Of new things)
by Pope Leo XIII (1891)
-discussed about the rights and duties of capital and labor
Centessimus Anus (One hundred years)
by Blessed John Paul II (1991)
-a workmans wages should be sufficient to enable him to support
himself, his wife and his children
DEVELOPMENT AND GROWTH THEORIES
a. Laissez-Faire Theory-explains that the government should not
interfere in the economic activities

b. Keynesian Theory- explains that the government should play the

key role in economic development
c. Ricardian Theory- by David Ricardo, focusing on agriculture
playing the major role in economic development.
d. Harrod-Domar Theory- conceptualized by Sir Harrod of England
and Prof. Domar of US, more products can be produced through the
use of machines.
e. Kaldor Theory- by Nichols Kaldor, the key factor is technology.
This theory explains that the application of modern technology to
the production of goods and services has been responsible to the
economic success of the highly developed countries.
f. Innovation Theory- by Joseph Schumpeter, stresses the role of
innovators or entrepreneurs in economic development.
PERSONAL ENTREPRENEURIAL COMPETENCIES
-measures an individuals weak and strong personal entrepreneurial
attributes.
Opportunity Seeking
Persistence
Commitment to work contract
Demand for quality and efficiency
Risk Taking
Goal Setting
Information Seeking

Systematic Planning/Monitoring
Persuasion and Networking
Self-confidence
4 BRAINS
QUADRANT A (LEFT CEREBRAL)
-prefers to think in factual, analytical, quantitative, logical, rational
and critical manner.
Lawyers, Engineers, Doctors, System Analysis
QUADRANT B (LEFT LIMBIC)
-excel in safeguarding properties and monitoring assets, maintaining
detailed records and making progress reports.
Accountants, Administrators, Budget Officers, Planners and
Personal Managers
QUADRANT C (RIGHT LIMBIC)
-concerned with interpersonal relations and hooks their thinking to
their emotional context
Social workers, Teahers, Nurses, Entertainers, Communicators,
Salesmen, and Public Relations Agent.
QUADRANT D (RIGHT CEREBRAL)
-creative and intuitive, imaginative and innovative, conceptual and
spatial, hollistic, flexible and open.
Visual artist, Scientist, Entrepreneurs, Desginers, Creative Writers,
Societal Vissionaries and Inventors.

MULTI-INTELLIGENCE by Dr. Gardner

SPATIAL INTELLIGENCE
LINGUISTIC INTELLIGENCE
INTERPERSONAL INTELLIGENCE
THE NATURALIST INTELLIGENCE
MUSICAL INTELLIGENCE
INTRAPERSONAL INTELLIGENCE
LOGICAL INTELLIGENCE
BODILY KINESTHETIC INTELLIGENCE
ACHIEVEMENT CLUSTER
OPPORTUNITY SEEKING
-sees and acts on business
PERSISTENCE
-takes repeated or different actions to overcome an obstacle.
RISK TAKING
-takes moderate risks, after assesing pros and cons
COMMITMENT TO WORK CONTRACT
DEMAND FOR EFFICIENCY AND EQUALITY

PLANNING CLUSTER
GOAL SETTING
INFORMATION SEEKING
SYSTEMATIC PLANNING AND MONITORING
POWER CLUSTER
PERSUASION AND NETWORKING
SELF-CONFIDENCE
SOCIAL RESPONSIBILITY
-obligation of the businessman/entrepreneur to earn profit and use it
responsibly for the development of the community or socitey.
HISTORICAL DEVELOPMENT OF SOCIAL RESPONSIBILITY
During the Acient Times, both Greeks and Romans despised trade
and commerce and has negative attitude towards business. The
Romans preferred being soldiers or farmers. Personal ethics and moral
judgement guided those who became businessmen.
During the medievial times, Christian Doctrines influenced business
activties and the most famous was the compensatory justice of St.
Thomas Aquinas, composed of just wage and just price.
In the start of industrial revolution, the influence of the Church
faded away and capitalism grows. The State adopted the laissez-faire
policy. Capitalists exploit their workers, customers and suppliers. Such
abuses produced great social philosophers and reformers, Karl Marx
and Robert Owen.
KARL MARX
-stressed the importance of social labor
Scientific Social Evolution
-when society was still primitive, there was social equilibrium
however, when new ideas and tools of doing things where introduced,
the old system was disturbed resulting to greediness for power and
wealth.

ROBERT OWEN
-Social Utopian/Reformist
-Father of Socialism and Cooperatives
-just/fair wages for the people
-He proposed Unionism/Cooperations
Organization of Labores/Workers
Collective Bargaining Agreement (CBA)
-list of the needs of the workers
THEORIES ON SOCIAL RESPONSIBILITY
ECONOMIC MODEL
-the primary objecive of the business is to earn reasonable profit,
as well as to offer quality goods and services, and to provide
employment.
SOCIO-ECONOMIC MODEL
-businessmen have their responsibility to stockholders, as well as to
their employees, customers, suppliers, and the general public.
CLASSICAL MODEL
-an enterprise is socially responsible if it stresses to use, as
efficiently as possible, the resources at its disposal, in producing the
goods and services that society needs, at a price consumers are willing
to pay.
ETHICS
-the study of right or wrong. It is a moral choice by an individual.

SOCIAL RESPONSIBILITY TO ITS CONSUMERS

4 Basic rights of consumers, according to
former U.S. President John F. Kennedy, 1960
1. RIGHT TO SAFETY
2. RIGHT TO BE INFORMED
3. RIGHT TO CHOOSE
4. RIGHT TO BE HEARD
Other Social Responsibilities
1. Employment-business enterprise should adopt the policy equal
opportunity employment
2. Education and Training-big and successful business organizations
should contribute their resources to the education and training of
the poor and disabled persons in the community
3. Community Development-a social responsibilty wherein the
business organization must help the development of the
community.
THE SEARCH FOR BUSINESS OPPORTUNITY, IDEATION,
INNOVATION, AND CREATIVTY
FACTORS ON RESOURCES
1. MARKETS
-refers to the number of prospective buyers,competitors, the
price, and the quality of goods and services that have to be
analyzed.
2. INDIVIDUAL INTEREST
-business interest of individuals should match business
opportunties.

3. CAPITAL
-serves as the fuel that keeps the business operating
4. SKILLS
5. SUPPLIERS OF INPUTS
-it is important that there are steady suppliers of raw material
and other inputs to the business.
6. MANPOWER
-the success of any business depends on the efficiency of its
employees
7. TECHNOLOGY
-improve their products or services, or introduce new
innovations in the market.
PRODUCT LIFE CYCLE
INTRODUCTION

GROWTH

MATURITY

SATURATION

DECLINE

TYPES OF BUSINESSES (CATEGORY or SECTOR)

1. SERVICE-BASED BUSINESS
-there is no need to manufacture something
2. PRODUCT-BASED BUSINESS
-this is a buy-and-sell transaction that can happen in structured
or structureless environment.
3. MANUFACTURING BUSINESS
-production-based business by creating a product
4. LICENSED BUSINESS OPPORTUNITIES
-similar to franchising.
5. DISTRIBUTORSHIP
-this is where an entrepreneur and a company enters to an
angreement or contract to offer, sell, or distribute a particular
product, but is not entitled to use the manufacturers trade name
as part of its own trade name.
6. RACK JOBBER
-an agreement between an agent and its parent company to
market its goods by means of strategically loacted store racks.
7. WHOLESALERS
-selling the products of manufacturers to retailers or any other
who have direct dealings to end users or customers.
8. SUBCONTRACTING
-this involves signing up an arrangement with a major producer
to complete a set of product components on a pre-agreed price.
9. VENDING MACHINE ROUTES
10. RETAILING

IDEATION
-the beginning of business endeavor
FINANCIAL STATEMENTS
PROFIT AND LOSS STATEMENT-presents details regarding sales and
expenses incurred or will be incurred by the business as of a given
date.
BALANCE SHEET-presents details of what the business owns(assets)
and its values.
CASH FLOW STATEMENT- presents in detail the projected cash
expenses and disbursement for a given period.
LEGAL FORM OF BUSINESS
SOLE PROPRIETORSHIP-registered to DTI
-a form of business orgaization initiated, organized;owned and/or
capitalized, and managed by a single person
PARTNERSHIP-registered to SEC
-association of two to four business partners who co-own a business
for the purpose of making a profit.
TYPES OF PARTNERS
GENERAL PARTNER
LIMITED PARTNER
SILENT PARTNER
DOMINANT PARTNER
CAPITALIST PARTNER
MANAGING PARTNER

INDUSTRIAL PARTNER
SECRET PARTNER
NOMINAL/PARTNER BY ESTOPPEL
LIQUIDATING PARTNER
CORPORATION-registered to SEC
-an artificial being, invisible, intangible, and exists only in the
contemplation of law. Its owners are the stockholders.
COOPERATIVE-registered to CDA
-a duly registered association of persons, with a common bond of
interest, who have voluntarily joined together to achieve a lawful
common social or economic end, making equitable contributions to the
capital required, and accepting a fair share of risks and benefits.
CAPITAL REQUIREMENTS
FIXED CAPITAL-refers to the money needed to purchase fixed assets
or capital goods
WORKING CAPITAL-refers to the money needed to fund day-to-day
operations of the business
GROWTH CAPITAL-capital needed when an existing business is set
to expand, diversify or change its directions.
SOURCES OF CAPITAL
Savings
Lending Institutions
Banks
Mortgage collateral
Family and Friends

Userer
THE Cs OF CREDIT
Lenders or creditors applies the following basic principles:
COLLATERAL
CAPACITY
CHARACTER
CONTRACT
CONDITIONS
BUSINESS PLAN
-a written document which explain what your business is all about and
presents the internal and external factors that will affect your
business.
FEASIBILITY STUDY
-a study to check and analyze if the business is viable or profitable
OUTLINE OF BUSINESS PLAN
Sample Format from Hisrich and Peters
(REFER TO PAGE 46, ENTREPRENEURSHIP IN PHILIPPINE SETTING,
WINEFRED B. ASOR Ph.D.)
MOTIVATION

-driving force to let the person give its maximum output in order to
reach a goal
POSITIVE REINFORCEMENT
-according to B.F. Skinner, jobs well done should be rewarded.
-rewards could come form incentives, bonuses etc.
UNDERSTANDING THE BUSINESS ENVIRONMENT
The entrepreneur must know and monitor the business environment
on a daily basis to operate smoothly or might encounter rough
weather.
PROCESS FLOW OF STARTING A SMALL ENTERPRISE
SELF-ANALYSIS, are you entrepreneurial?

DETERMINING YOUR PRODUCT/SERVICE AND

TYPE OF BUSINESS, LEGAL FORM OF BUSINESS

CONSIDERING OTHER FACTORS

-ENVIRONMENTAL SCANNING, SWOT ANALYSIS

DETERMINING YOUR FINANCIAL REQUIREMENTS

WRITE A BUSINESS PLAN

INTERNATIONAL DEVELOPMENTS THAT AFFECT MSMEs
OPEC(ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES)
-dictating price of crude oil
FASHION CAPITAL LIKE PARIS AND MILAN
-dictate style and color of clothes and home furnishing
INTERNATIONAL INSTITUTIONS THAT AFFECT MSMEs
WORLD TRADE ORGANIZATION (WTO)
-deals with the global rules of trade between nation
ASEAN (ASSOCIATION OF SOUTHEAST ASIAN NATION)
-main purpose is to accelerate economic growth, social progress
and cultural development in the region
APEC
LENDING INSTITUTIONS FOR DEVELOPING COUNTRIES
WORLD BANK
ASIAN DEVELOPMENT BANK
ENVIRONMENTAL SCAN
FACTORS:
1. SOCIAL-Demographic-statistical profile of a particular
population; age, gender, etc.
Generations:
1. Baby Boomers- 1940s-1960s
2. Generation X- 1960s-1980s
3. Generation Y-1980s-2000s
4. Generation Z-2000-Present
2. POLITICAL-rules and regulations that will affect your business
enterprise
3. ECONOMIC-spending capacity of the market
4. ENVIRONMENTAL/ECOLOGICAL-this is the use of natural and
man-made resources for the business
5. TECHNOLOGY-use of applied science or engineering tools that
can help the business