Chapter 2

Review of Related Literature and Related Studies

Chapter two presents a critical related literature and studies review of the research topic.

The trends of success indicators of entrepreneurial ventures among young entrepreneurs are

presented. Then, there follow the discussion of different factors such as the independent variable

(which are the business revenue, type of business and demand) affecting the business of young

entrepreneurs specifically to the dependent variables including the entrepreneurial skills and

business success. The review of related literature and studies about this research topic are

involved containing local and foreign studies.

Related literature

What are entrepreneurs, entrepreneurial activity and entrepreneurship?

The Organization for Economic Cooperation and Development (OECD) has definition of

entrepreneurs, entrepreneurial activity and entrepreneurship that focuses to the target business

related entrepreneurship ignoring the social entrepreneurship because it will brings many

conceptual and practical difficulties to the concerned variables of the definition.

 “Entrepreneurs- are those persons (business owners) who seek to generate value,

through the creation or expansion of economic activity, by identifying and exploiting new

products, processes or markets.

  Entrepreneurial activity- is the enterprising human action in pursuit of the generation of

value, through the creation or expansion of economic activity, by identifying and

exploiting new products, processes or markets.

 Entrepreneurship- is the phenomenon associated with entrepreneurial activity.”

(OECD, 2007b)

Merely to say, these definitions set out to capture a particular aspect of entrepreneurship

related specifically to businesses, since the interests of the OECD and the bodies that have been

participating and supporting the OECD in this work are in this domain.

From above mentioned definition, entrepreneurs are those “who seek to generate value,

through the creation or expansion of economic activity, by identifying and exploiting new

products, processes or markets.” In connection to this study, young entrepreneurs are also

covered by the definition of entrepreneur. The researchers will use young entrepreneurs as

students from Senior High School department who start a business and also seek to generate

value or profit through creating products or services.

What are the different business indicators or factors that may affect its success?

In business, there are many factors to consider in order to a successful entrepreneur.

These factors serve as the indicators to determine the action to implement in the business

because it affects the transaction of the business and in the variables such as the business
performance, business type and the demand. The related articles about these

indicators/determinants are the following:

According to Hisrich et al. (2008), the divisions entrepreneurial characteristics are the:

education, personal values, age, work experience, moral support network and professional

support network. Sorensen and Chang (2006) those entrepreneurial that determine the business

success include the following:

1. Psychological Factor

It includes the psychology literacy that affects business performance which includes the

need for achievement, focus of control, and personal traits.

2. Education or Experience

The level of the education or experience of the entrepreneur regarding to the business

performance is also a factor to fact that it has a big impact to their business in terms of the

abilities in managing or conceptualizing business ideas.

There are also characteristics of entrepreneurs that may affect the business success

(Blackman, 2003), namely:

1. Attribute

Attribute is characteristic owned entrepreneur includes: age, gender, religion, the

influence of the family (family influence).

 2. Attained

Attained qualifications include education, and business experience.

The number of internal and external factors such as the environment, education, personal

values and work experience (Shane et al. 2003) can influence the establishment of the

entrepreneur’s character.

Entrepreneurial competencies including the entrepreneurial traits, motives, self-image,

attitude, behavior, skills, and knowledge are defined as the individual characteristics including

attitude and behavior, which allows the entrepreneur to achieve business success. (Shane et al.,

2003)

Man (2001) recommend components for measuring entrepreneurial competencies:

strategy that develop vision and strategy, set goals standards, commitment that shows strong

motivation to compete, drive to see venture through fruition, capacity to make an impact, drive

and dedication, conceptual that demonstrate the possession of cognitive ability and decision-

making skill, ability to weigh risks, think analytically, be innovative, be creative, show

reasoning, capacity to reduce risks, opportunity that deals with the ability to recognize

opportunity, ability to capture opportunity, ability to identify customers need or the customer

wants, relationship that deals with the possession and use of good interpersonal and

communication skills, ability to influence others and gain support, learning in a certain field,

learn from a variety of means, learn proactively, keep up to date in the field, apply learned skills

and knowledge to actual practices, and personal that deals with the self-motivation, management
of own career development, time management, and managing the strength and weaknesses to

match them with opportunities and threats.

Ahmad et al. (2010) using the measurement of entrepreneurial competence covering:

strategic, conceptual, opportunity, relationship, learning, personal, ethical, familism.

Related Studies

Local Studies

According to the study from EDSA Shangri-La Hotel “The Characteristics of Selected

Micro Entrepreneurial Ventures: A Vital Tool Towards Success” (Ngaosi and Navarro,2007), it

confirmed that there is no such thing as “true entrepreneurial profile” as Hisrich and Peters

contend. Thus, a potential entrepreneur could be young or old, male or female, first born or not.

A person may venture into business at whatever age he or she feels ready in terms of ideas and

financial.

According also from the Entrepreneurship in the Philippines: 2013 Report, (Velasco et.

al., 2017) of De La Salle University, they found out that Filipinos have a very positive outlook

on entrepreneurship. They see their country as a land of opportunities given that close to half

(48%) of all respondents see good opportunities for entrepreneurship, a figure that ranks highest

among countries in the Asia-Pacific and South Asia. More than half (68%) have the confidence

that they have the capabilities and skills required to start a business. Filipinos rate themselves

highest in the region in terms of the ability to start a business. They likewise display a low fear of
failure (39%) in venturing into business. They also found out that the Philippines has a high rate

of entrepreneurship activity. Around 7% (6.6%) of the adult population are established business

(EB) owners, and 18.5% are in early stage entrepreneurship (TEA), higher than the region’s

average of 12%. On the other hand, the rate of business discontinuance is triple the regional

average of 4%. Poor profitability and lack of access to capital are two primary reasons for

business closures. More males start businesses, but more females are established business

owners.

These two studies support the researchers’ idea that even young entrepreneurs

(specifically the G12 students of SCNHS’ Senior High) have their own potentials to engage

entrepreneurial venture in order to be a successful entrepreneur.

Foreign Studies

A research conducted from Punjab Province, Pakistan, “Youth Employment and

Entrepreneurship: A Case Study of the Punjab Province, Pakistan” (Akhtar et. al.,) the indicators

that drive youth entrepreneurship and what measures are available to facilitate/improve/assist

youth entrepreneurship are factors that need improvements to strengthen entrepreneurship with

the conceptual definition/source of factors that need policy level attention to remove barriers in

terms of youth entrepreneurship. It also include business environment for youth to indulge in

entrepreneurship, government schemes etc. The operational definition of this is the level of

support community, institutes and government is providing to improve youth entrepreneurship

while the variables that drive youth entrepreneurship are business environment, social

entrepreneurship activities, government schemes, trainings and many more.

A research report entitled “Determinants of Successful Entrepreneurship” (Bosma et. al.,

2000) they found out that human capital variables appear important determinants of the profit of

an entrepreneur. Four variables appear to be significant. The experience in the (business) sector

appears to have the largest influence: entrepreneurs with experience in the sector earn about

thrice as much compared to those entrepreneurs lacking this experience, the influence of high

education and experience in self-employment is substantial: having a high education

approximately doubles profit, the same holding true for having experience in self-employment,

although the uncertainty about the right value of this latter influence is larger. They also found

out that age appears to have a negative influence on profit: an entrepreneur that is 10 years older

at the start of his business earns about 25% less than his younger equivalent.

Compared to the study Entrepreneurship in the Philippines: 2013 Report, there is

an opposing result to the research report of Bosma et. al. but this study will focus on the success

indicators of entrepreneurial ventures among young entrepreneurs of G12 students of Sta.

Catalina Senior High School so it will give another knowledge to the beneficiaries of this

research to regarding to different factors and indicators that may affect the business of an

entrepreneur.