ILOCOS SUR

POLYTECHNIC STATE
SantaCOLLEGE
Maria Campus

MODULE

MODULE IN
Elective 104
THE ENTREPRENEURIAL MIND

Module 2

ALBERT G. NAUNGAYAN
Assistant Professor I

Course Code: AGRO 152

Descriptive Title: CEREAL PRODUCTION
Instructor: ALBERT G. NAUNGAYAN
 ILOCOS SUR
POLYTECHNIC STATE
SantaCOLLEGE
Maria Campus

MODULE
MODULE 2
A PERSPECTIVE ON ENTREPRENEURSHIP

Entrepreneurship is a very important component of a capitalist economy like the Philippines. It

thrives in economic systems that support innovation and hard work. When entrepreneurs become
successful, the nation is immensely benefited.
What is entrepreneurship and how does it affect the economic well-being of many people?
What is the task of the entrepreneur regarding economic development?
This module attempts to provide answers to concerns like those stated above.

LISTS OF TOPICS TO BE INCLUDED IN THE MODULE

1. Entrepreneurship and Economic Development
2. What is Entrepreneurship

LEARNING OBJECTIVES
1. Discuss entrepreneurship as an important component of economic development.
2. Infer innovation as an important entrepreneurial activity.
LEARNING CONTENT

Entrepreneurship and Economic Development

Economic development is a scheme aimed at improving the living standards of the nation’s
citizenry. To achieve economic development goals, proper management of the following elements is
necessary:
a. Human resources like labor supply, education, discipline, motivation.
b. Natural resources like land, minerals, fuel, climate.
c. Capital formation like machines, factories, roads.
d. Technology like science, engineering, management, entrepreneurship.

The effective and efficient use of the various resources elements contribute to the economic
growth. This happens when the element of entrepreneurship is performed well by the players. The
abundance of natural resources like fertile land, minerals, fuels, and good climate are additional factors
but are not guarantees for positive economic development. There is a need for entrepreneurs to
perform their function of harnessing the potentials of any or all of the various elements, determining the
right quantity of resources needed, and applying the elements at the right time. But their performance
will also sometimes depend on the support of the government. Government restrictions will likewise
affect the effectiveness of entrepreneurs.

What is Entrepreneurship?

Entrepreneurship refers to the economic activity of a person who starts, manages, and
assumes the risk of a business enterprise. Any person who undertakes entrepreneurial activities is
called an entrepreneur.
The entrepreneur identifies an economic need, considers offering a business solution,
proceeds to assemble the resources required, and assumes the risk of either succeeding or failing.

Course Code: AGRO 152

Descriptive Title: CEREAL PRODUCTION
Instructor: ALBERT G. NAUNGAYAN
 ILOCOS SUR
POLYTECHNIC STATE
SantaCOLLEGE
Maria Campus

MODULE
Example of Entrepreneurship Activity
Entrepreneur’s Concern Problem at Hand Entrepreneur's Action
1. Identifying an economic 1. High income families are 1. Establish an elementary
need not satisfied with the school with high standards.
services provided by
elementary schools in their
area.
2. Assembling resources 2. Availability of the resources 2. Acquire finds, hire people,
required is a must. construct buildings, etc.
3. Assuming risk 3. Venture must be made 3. Prepare project study,
advertise, maintain good
relationship with employees
and customers, among
others.

The Entrepreneur’s Task

The entrepreneur can assume his/her assigned role in the economy’s development if all the
needed requirements in a capitalist economy are in place. Based from the review of the contributions of
entrepreneurs it reveals that no business, bog or small, started without the hand of the entrepreneur.
Even if many of these businesses failed to survive, still a sizable number developed and proceeded to
make the capitalist economy a viable concern. This is made possible because the surviving enterprises
are responsible for providing the following:
a. Products and services for customers and producers.
b. Employment
c. Taxes
d. Demand for suppliers’ products and services.
e. Training facilities for future entrepreneurs.
As inspection of the array of products offered for sale in a typical supermarket reveals a wide
choice provided to the consumer. When a consumer is making a decision on which brand of soap he is
going to buy, for instance, he will be choosing from as many as 10 different brands.many years ago, his
choice was limited to one or two brands. Much earlier, soap was not even available for sale, so the
consumer had to produce his own preference.
What brought the consumer to the situation where he has the luxury of choosing from many
options? And this does not refer to soaps alone but other products as well.
Services which were not previously available are now at the motion and call of the consumer.
The fastfood canteen at the corner, parcel delivery, communication through cellphones, cable
televisions, short-term credit through credit card, money remittance, and others, are among the many
services made possible by entrepreneurs.
Based from the review of the statistical reports prepared by the government, it shows that
business organized by entrepreneurs employs millions of people.
The taxes paid to the government out of licenses, fees, and permits applicable to the
enterprise, as well income taxes applicable to the employees and entrepreneurs, easily amount to
billions of pesos the taxes collected are, in turn, poured into development projects of the government.
The entrepreneurs also make sure that the suppliers will have a ready market for their products
and services. For example, the retailer assure the viability of big companies like the San Miguel
Corporation and Purefoods Company.

Course Code: AGRO 152

Descriptive Title: CEREAL PRODUCTION
Instructor: ALBERT G. NAUNGAYAN
 ILOCOS SUR
POLYTECHNIC STATE
SantaCOLLEGE
Maria Campus

MODULE
Lastly, business enterprises provide a training ground for future entrepreneurs. Many
entrepreneurs were former employees of enterprising entities or companies. Majority of them used their
skills, knowledge, and experiences gained from their former employers in starting new business. Some
even improved on their entrepreneurial skills that were passed to them.

Land Labor Capital

(Natural Resources) (Human resources) (Financial resources)

Entrepreneur

Production
Process

Finished Goods
and Services

In the attempt to make profits, the entrepreneur performs the following specific functions:
a. To supply the necessary capital.
b. To organize production by buying and combining inputs like materials and labor.
c. To decide on the rate of output, in the light of his expectation about demand.
d. To bear the risk inherent to the venture.

Any business enterprise must offer products or services to the buyers whether these buyers
are consumers or producers.the products or services that will be sold to the buyers must be bought or
manufactured. In any case, there will be a need to hire the services of employees, laborers, and
managers. Equipment, furniture, and machinery must be acquired. All of these will need funds which
the entrepreneur must produce, in addition to whatever fund reserves are required.
The next specific function of the entrepreneur is to assemble a production unit complete with
manpower and equipment, the quality and quantity of which have been predetermined by him.
The entrepreneur will also determine and make decisions on the rate of output the firm must
produce. This will have to be tied up with demand.
Finally, whatever risk is involved in the entrepreneurial activity, he must suffer the consequence
of losses if he fails, but he will enjoy the profits as a reward if he succeeds.

Course Code: AGRO 152

Descriptive Title: CEREAL PRODUCTION
Instructor: ALBERT G. NAUNGAYAN
 ILOCOS SUR
POLYTECHNIC STATE
SantaCOLLEGE
Maria Campus

MODULE
Entrepreneurship and Innovation

The freedom of competition afforded by the capitalist economy serves to drive the entrepreneur
to innovate and get ahead of his competitors fear he is driven out of the market. Buyers of commodities
have a tendency to patronize innovative offerings of any kind and if one wants patronage, he must
remember this motivation.
Innovation may be defined as the introduction of a new method, procedure, custom, device,
among others. Innovation could be any of the following:
a. New product
b. New process of production
c. Substitution of a cheaper material in an unaltered product.
d. Reorganization of production, internal function, or distribution arrangement leading to increased
efficiency, better support for a given product, or lower costs.
e. Improvement in instruments or methods of doing innovation. Innovation may also be viewed as the
last stage in an important process consisting of the following:
1) Invention - which refers to the discovery or devising of new products and processes.
2) Development- refers to the process by which the ideas and principles generated from the stage of
invention are embodied in concrete products and techniques.
3) Innovation- refers to the actual introduction of a new product or process.

Innovation must provide value to the buyers over and above those offered by competitors. This
can be achieve when innovation reduce costs or improve the quality of products or services offered for
sale.

Examples of successful innovations

1. Cordless microphone
2. Microwave oven
3. Cellular phone
4. Kung fu fight scenes developed by Bruce Lee in the movies
5. Karaoke music appliance
6. Use of laser in the treatment of eye conditions
7. Use of computers by engineers and architects in the design of buildings

New Ventures and Long-term Enterprises

A new venture cannot remain as such forever. The entrepreneur must develop it into a small
business or make it grow into a mature and bigger company if he is to recoup the cost of opening a new
venture and take advantage of the opportunities presented by a mature business.

4 Major Stages of the transition from anew venture to a successful long-term enterprise
1. Prestart-up stage- this happens when the entrepreneur starts to question the feasibility of an idea,
product, or service. He seeks answers to question regarding potential market, production, and
financing. This is very important stage that the entrepreneur must consider.
2. Start-up Stage- activities to be undertaken during this stage: 1) formation of the business, 2) capital
generation, 3) purchase of facilities and equipment, 4) constructing prototype product, and 5) testing
the market. No full-scale activity must be undertaken at this stage for the reason that feasibility must be
established and verified.
3. Early growth stage- it follows after establishing feasibility. Activities will be on a small scale like
selling to limited markets with limited resources. If losses occur, it will naturally be limited also. If the
enterprise is successful at this stage, the option to move to the next stage can be happened.

Course Code: AGRO 152

Descriptive Title: CEREAL PRODUCTION
Instructor: ALBERT G. NAUNGAYAN
 ILOCOS SUR
POLYTECHNIC STATE
SantaCOLLEGE
Maria Campus

MODULE
4. Late growth stage- this is the final stage before the new venture matures into a stable enterprise.
This is when management is structured, long-term financing is established, and facilities planning are
undertaken. This is also the stage where the skills of the entrepreneur are less needed. Instead, the
skilled manager begins to take over.

Rewards for Successful Entrepreneurship

1. Rent- refers to the price paid per unit of time for the services of a durable good, which most often,
refers to land or building. Ex. When land is used in production activities, the owners of land are paid a
compensation called rent.
2. Wages or Salaries- wages may be determined on a piece-rate basis while salary is based on time-
rate. Ex. Effort of laborers, they are paid wages or salaries.
3. Interest- compensation paid to owners of invested capital.
4. Profit- amount/income left after all the factors of production are properly compensated and it is
credited to the account of the entrepreneur.

As the landowner earns rent for allowing use if his property, the owner of capital earns interest
for allowing use of his capital. The laborer on duty earns wages for his effort, while the entrepreneur
earns profits for deciding how the business shall be run. If he succeeds, hi is compensated for his
vision, originality, and bold undertaking.

The Entrepreneur’s Predicament

In the race for winning the all-important consumers’ pesos, the business will have to offer
products or services that have certain advantages over the competition’s wares.
In the creation of a new venture, the entrepreneur may be successful in offering innovative
products or services. At this stage, he will reap the profits for being ahead of the competitors. This
situation may be temporary because the competitor may attempt to improve his position by making
moves to outpace the entrepreneur in the race. The competitor may either imitate or offer better
innovations. If the competitor is successful, the profits of the entrepreneur will decline.
To be ahead again, the entrepreneur will consider offering newer and better innovations. The
cycle continues until one or both find a reason to stop.

Entrepreneurship and Business Size

Entrepreneurship means running a small business based from the ideas or thinking of many
people. But new business ventures can also be undertaken on a large scale. Small and large business
are confronted by problems that are entrepreneurial in nature.

Innovative Approaches to effectively compete to business

1. Offering business services during Sundays and holidays.
2. Manufacture and sale of new products.
3. Selling on a deferred payment scheme.

Small businesses have the advantage of switching to another business concept whenever
necessary while large ones cannot do the same without spending much. To offset the disadvantage,
however, large businesses have started to engage in “entrepreneurship” where a person with
entrepreneurial skills and is employed by the corporation is tasked to launch new products. This person
is responsible for creating innovation of any kind in the organization.

Course Code: AGRO 152

Descriptive Title: CEREAL PRODUCTION
Instructor: ALBERT G. NAUNGAYAN
 ILOCOS SUR
POLYTECHNIC STATE
SantaCOLLEGE
Maria Campus

MODULE
ASSESSMENT

Answer the following questions briefly and concisely. Submit it in our google classroom.

1. Why is entrepreneurship an important component of economic development?

2. Identify a business in your area which became successful due to innovation. Write about the ROLE
played by innovation in its success.

3. Prepare a list of five innovative or services currently introduced in the market.

Note: Quiz will be given through the Testmoz Application.

REFERENCE

Medina, Roberto G. 2014. ENTREPRENERSHIP AND SMALL BUSINESS MANAGEMENT. Third

Edition

Course Code: AGRO 152

Descriptive Title: CEREAL PRODUCTION
Instructor: ALBERT G. NAUNGAYAN