CHAPTER 2

THE ENTREPRENEURIAL PERSONALITY

Chapter Objective:
At the end of this chapter, students are expected to be able to discover entrepreneurial qualities
and competencies necessary for a successful enterprise

ENTREPRENEURIAL PERSONALITY

Definitions of Entrepreneur

1. According to Cantillon, Entrepreneur is one who bears uncertainty, buys labor and
materials, and sells products at uncertain prices. He is one who takes risks and makes
innovations on the factors of production.

2. In French concept, an Entrepreneur is an adventurer, undertaker, and projector. His

function is to supply and accumulate capital.

3. To Schumpeter, an entrepreneur is an innovator. He does new things or does things in

new way. He supplies new products; makes new techniques of production; discover
new markets; and develop new sources of raw materials.

4. Peter Drucker says that an entrepreneur always searches for change, responds to it,
and exploits it as an opportunity.

5. Say, an economist, explain that an entrepreneur is one who shifts economic resources
from an area of lower productivity to an area of higher productivity and greater yield.

6. The American Heritage Dictionary defines an entrepreneur as a person who

organizes, operates, and assumes the risk for business ventures.

7. The pure entrepreneurs are those who launch their own ventures from scratch. They
develop scarce resources

Role of an Entrepreneur

Some people think that the entrepreneur is someone who is engaged in selling, while
others think he is a middleman who stands between buyer and seller. The entrepreneur is,
in fact, much more than either of these. As you shall see, selling is only one among the
many functions that sets him apart from men of other occupations and have earned for
him the distinction of being the key to the country’s bid to progress. Indeed, without the
entrepreneur, there can be no development.

The entrepreneurial way of life combines creativity, challenge, hard work and
satisfaction. Entrepreneurship is a creative activity in much the same way as artistic or
scientific creativity is. An entrepreneur must, like the artist or the scientist, conceive an
idea out of his own imagination. Once the idea is born, he is faced with the challenge of
translating that idea into a reality. To accomplish this, he puts in long and unremitting
hours of work and takes financial risks. All these require a lot of energy and self-
discipline.

With these, what exactly does the entrepreneur do? Broadly speaking, there are eight (8)
entrepreneurial functions:

1. Perceives opportunity in the environment – It takes an entrepreneur to respond

in a concrete way to an opportunity in the environment. Others may see the
opportunity, hear about it, learn about it or even have some experience of it,
but only entrepreneurs do something about it. The entrepreneur keenly
observes the environment in search of ideas and opportunities that can be
turned into profit.

2. Takes risk in making use of these opportunities – The entrepreneur does not
merely perceive ideas as opportunities but also calculates the risks involved in
implementing these ideas. Risk denotes uncertainty or chance. When a
business is described risky, it means that the outcome of this business is
uncertain. In other words, there is a chance that the business may fail or
succeed.

Because of the uncommon risks inherent in the entrepreneurial role, not many
people end up entrepreneurs except the courageous ones who are willing to
accept challenges. Most people are afraid to fail, and therefore avoid taking
risks of any kind.

Entrepreneurs, on the other hand, takes risks because they focus their attention
on the chances for success rather than the chances for failure. They are
however, alert to the possibility of failure in business, and this in fact makes
the enterprise more challenging to them.

3. Mobilizes capital for the business – Entrepreneurs produces capital. There are
people who are kept from going into business simply because they have no
capital. But real entrepreneurs never allow lack of capital to stop them from
getting ahead.

The entrepreneur produces the capital in so many ways. He may look for
investors who will believe in his project and share the risk with friends or
relatives and establish a partnership or a corporation with them. They may
also put up their own capital. This indicates their remarkable ability to takes
risks. After all it is always easier to gamble or take risks with other people’s
money. But the more entrepreneurial one is, the less afraid he is to invest his
own capital. And if he does use other people’s money as well, he invests this
money wisely as though it were his own.
 4. Introduces innovations – Innovation implies newness, variation, originality,
novelty or uniqueness. Thus, the innovative person is open to change. The
entrepreneur introduces new products, new ways of doing things, new
methods of production, exploits new sources of materials and discovers new
markets. He is creative.

Introducing innovations is the entrepreneur’s response to the needs of people

or to perceive economic opportunities. Being innovative is essential in order
for the business to survive.

5. Organizes labor and production – The entrepreneur organizes the business, he

is responsible for getting together all resources needed for the business to get
started and going. He is the one who thinks of what, how, where, when and
how much land, labor, and capital are needed to transform an idea into a real
functioning enterprise. It is through the entrepreneur that activities needed are
identified and done by the right people at the right time. He then monitors all
the activities of his workers so that the output of one is ready when the others
need it.

6. Makes decisions – The business situation involves a lot of unknown and

uncontrollable factors which may affect the future success or failure of the
firm. Under these conditions of uncertainty, the entrepreneur considers all
alternatives in terms of usefulness to the business and chooses that course of
action which is most useful for the business.

7. Plans ahead – The entrepreneur can act in an emergency. She can make a rush
decision when the situation calls for it. This role, however, demands that she
be able to anticipate events in the future that will affect actions in the
business.

8. Sells his products at a profit – The entrepreneur is an economic man. As such,

he sees to it that his products will sell and bring him money. The profit is a
concrete indicator of how well an entrepreneur has managed the business from
the start. Profit shows how the market accepted or rejected his product.
Without profit, there will be no entrepreneurs. It is both the reward and motive
of entrepreneurship.
Qualities of an Entrepreneur

With the unique and diverse functions performed by an entrepreneur, let’s identify and
discuss the qualities common among individuals who are willing to undertake
entrepreneurial functions that would help us find out what is there in the entrepreneurial
personality that makes him behave the way he does.

The entrepreneur has seven general character traits which are not exclusive to them. Any
or all of these traits may also be found in other vocation that is far from being
entrepreneurial or business like that allows them perform excellently in their fields,
however, there is a possibility that they may tend to be discontented. This is so because
entrepreneurial individuals undertake activities (including careers) more to satisfy
psychological needs for independence and self-fulfillment rather than simply to earn
money.

General character traits:

1. Entrepreneurs prefer moderate risks – Moderate risks are those whose

outcome depends largely on a person’s skills or efforts. Entrepreneurs are
known individuals who are not afraid to take risks. However, the risks they
take are “calculated”. In other words, they are not so foolhardy as to undertake
activities where they know nothing at all about the possibilities for success.

2. Entrepreneurs take responsibility for their actions – The tendency for an

entrepreneur to prefer moderate risks is accompanied by a strong desire to be
the one responsible for outcomes or results.

3. Entrepreneurs are self-confident – Entrepreneurs believe that they can do

better than what other people or what other circumstances suggest they can
do. However, they are not impractical people who live in a dream world. They
rely on facts whenever they are available and adjust their estimates of risks
accordingly.

4. Entrepreneur seek concrete feedback on performance – Feedback on

performance may be a cause of anxiety for some individual because it may
bring news of failure rather than success but not to entrepreneurs who wants
and seeks concrete feedback as to how well or how poorly he is doing. The
feedback may be in the form of profits, sales, percentage control of the
market, size of the firm in terms of numbers of workers, volume of
production, rate of growth, customer reaction and others. He wants the
feedback to be immediate and constant and available each day to allow him to
continue or revise his method of working if necessary.
5. Entrepreneurs are task-oriented – Entrepreneurs care primarily about what is
supposed to be done and secondarily about the people who will do it. Even in
decision making, he puts profits and business goals ahead of personal rivalries
and hostilities. He is objective and always tries to keep personal relationship
apart from business matters. He therefore plays no favoritism on the basis of
friendships or relationships, but is fair and discriminating in his judgments.

6. Entrepreneurs are achievement-oriented – Entrepreneurs are people who

accomplish things, they have been found to be goal-directed in whatever they
do. That is, they always think of what is they really want to accomplish in the
long run and what today’s activity means in terms of that which they
eventually want. They are always aiming for something, and their aims are
very often no quite ordinary. Their goals often reflect a long-term perspective,
 which, most of the time is unique and something that would make an impact
on the world.

7. Entrepreneurs are creative – They sees something else, something different,

something beyond what others see, imagine new and different things form
what are ordinarily seen and felt. Has the ability to use thinking power to
solve problems when she is faced with unusual situations and make up new
ways of doing things in order to do something well.

PERSONAL ENTREPRENEURIAL COMPETENCIES

As a result of continuous study of these entrepreneurial character traits, several qualities

were evolved by the Management Systems International, a consulting firm based in
Washington. These are collectively called personal entrepreneurial competencies or
PECs. They are referred to as competencies because these qualities are translated into
actions – demonstrated and exhibited – by an individual in order to make things happen
rather than remain as passive traits or mere mental pre-occupations.

These competencies are clustered into the following:

A. Achievement Cluster

1. Opportunity seeking – An entrepreneur readily identifies opportunities for going

into or to improve his business. He does not merely spot opportunities to set up a
business but more importantly, act on these opportunities like actually setting up
the business. Moreover, he will seize unusual opportunities to tap sources of
financing, acquire equipment, land, work space or business information and
assistance.

2. Persistence – An entrepreneur does not give up easily when confronted with

obstacles. He is not easily discouraged at early signs of failure. Instead, he uses
his imagination to take repeated actions and if necessary, varies his approaches
until he gets the desired outcome.

3. Commitment to work – As soon as an entrepreneur commits himself, he takes full

responsibility for this commitment. When needed, he pitches in with workers or
performs extraordinary chores just to get the job done at a mutually-agreed time
and standard of quality.

4. Risk taking – The entrepreneur is known for being a risk-taker. He prefers tasks
which provides him some challenges. Equipped with the necessary knowledge
and experience required and aware of how much hard work he is willing to put
into the tasks, he knows he has a fair chance to succeed.

5. Demand for efficiency and quality – Setting high but realistic standards of
excellence for himself, he finds it difficult to compromise on those standards. So,
 in order to meet these standards, the entrepreneur always strives to find ways to
do things better, faster and at a lower cost.

B. Planning Cluster

1. Goal setting – An achievement-oriented individual, the entrepreneur plans out the

accomplishment of tasks. She sets clear and well-defined goals and breaks these
goals into short-term as well as long term goals.

2. Information seeking – To assure accomplishment of her entrepreneurial goals, the

entrepreneur continuously seeks for relevant information regarding the market,
clients, suppliers and competitors and consults experts’ advice on business and
other technical matters.

3. Systematic planning and monitoring – As a careful planner, the entrepreneur sets

what are to be accomplished and meticulously assesses how today’s activity can
contribute to the accomplishment of her long-term goal. She therefore, introduces
some system in achieving her goal by breaking this goal into short-term and long-
term goals. Furthermore, she keeps on monitoring her progress in order for her to
check whether she is in the right direction or if modification is needed along the
way.

C. Power Cluster

1. Persuasion and networking – A persuasive person, the entrepreneur easily

establishes a network or personal and business contacts around. An entrepreneur
ia aware that power is required to achieve business objectives. She is, therefore,
quick to identify sources of power is she cannot source power from within.

2. Self confidence – The entrepreneur has confidence that can make things happen.
Aware of the capabilities possessed, no doubt challenging tasks will be
accomplished.

THE FILIPINO ENTREPRENEUR

Based from the data published by the Department of Trade and Industry (DTI), Filipinos do have
the inclination to do business.

According to the DTI, 99.6% of the registered businesses in the Philippines are micro, small and
medium enterprises (MSMEs) and these provide 63.2% of total jobs in the country.
Consequently, Filipino entrepreneurs contribute so much to the country’s economy and provide
the livelihood of most of our workforce. This is why our micro, small and medium entrepreneurs
need and deserve all the support they can get.
Similarly, Globe Business went through a lot of research in order to tailor its solutions to the
needs of the Filipino entrepreneur. In the course of that research, the group discovered some
traits and qualities that make Filipinos good entrepreneurs.

Here are some of Globe Business’ insights into the character of the Filipino entrepreneur.

Practicality and common sense.

- The most successful Filipino entrepreneurs are not necessarily those who have the best
education, or have an impressive academic record. Some of them, in fact, never even
finished grade school. 
- Filipino entrepreneurs are said to be street-smarts and a great deal of common sense.
They are practical thinkers. They make decisions based on what they know about human
nature from experience. They are not only able to come up with good products but, more
importantly, they know how to relate to their customers and give what their customers
want.
- They have practical knowledge that is gained by relating to actual customers and trying
one’s own hand at a business.
- In other words, entrepreneurs develop their street-smarts and sharpen their common sense
through experience. They learn from both their successes and their mistakes. That’s what
makes them effective entrepreneurs.
- Filipino entrepreneurs are also practical when it comes to money. They make sure that
they get maximum profit for the lowest possible cost.

Passionate about business. When a Filipino entrepreneur decides on what business he will
establish, usually it will be related to something he or she is passionate about. This passion drives
him to learn everything possible about the products or services he is offering to customers. The
same passion also gives the Filipino entrepreneur a strong commitment and involvement in his
enterprise.

“Filipino entrepreneurs are all in business to earn for themselves and their families. However, the
most successful ones have the passion that fuels their minds, emotions and bodies to make the
business grow. This passion reaches the point where the business in no longer just about the
bottomline; the business itself brings fulfillment and happiness to the entrepreneur. This proves
that if one is passionate about one’s enterprise, then one will find the resources to make it
successful for its own sake.

Confident and self-reliant. The Filipino entrepreneur is always hands-on and self-reliant. When
he is just starting out his business, he is practically able to do everything involved in running it-
from finding the best suppliers to renting the place of business, to the marketing, selling and
customer relations, and even accounting.
All this would not be possible without the entrepreneur’s supreme confidence in himself or
herself.

Filipino entrepreneurs trust their own judgment and their own capacity to run their businesses.
They are able to take calculated or even daring, seemingly unwise, risks. They know that while
they can get the best advice, the best research, ultimately, the success of the business depends on
their own judgment.

Hard-working and goal-oriented. No one can doubt how hardworking the Filipino
entrepreneur is. His involvement in his business is nearly absolute, to the point that his personal
time for himself and his loved ones is compromised. He is also goal-oriented, and has the
discipline to set smaller goals that he will accomplish in order to meet his final objective.

A leader and an innovator. The most successful Filipino entrepreneurs have excellent
leadership skills. He is able to convince and influence his employees and his customers
positively. He is also able to innovate-to come up with novel solutions when a challenging
situation arises.

Value-oriented. Finally, the Filipino entrepreneur has a set of values that guides him in doing
business. The greatest value for a Filipino entrepreneur is his family.

In general, the Filipino entrepreneur, no matter how successful they have become, never loses
sight of why they are striving to make their business thrive and grow—they are doing it for the
well-being of their family.

REQUIREMENTS:

1. Chapter report – Write a summary of the chapter based on how you understood the lesson,
you may write your learnings in paragraph and bullet form, and you may also use the Filipino
language. Your output in this activity must have a minimum of 2 pages.

2. Assignment –
a. Map out and present your Personal Entrepreneurial Competencies
b. Interview one (1) online seller and ask the following:
- What made them decide to start e-marketing (online selling)?
- How long has she/he been doing e-marketing?
- What are the advantages of doing online selling? Disadvantages?
- What advice can they give to people who also want to start an online enterprise?
- How long do they see themselves doing online selling?
c. Name one (1) business establishment in your municipality or province and describe the
characteristics of their owners.

1. Quiz – Answer the question briefly and comprehensively.

a. How enterprising Filipinos are? Explain your answer.