MODULE 1
ENTREPRENEURSHIP
– the art of observing correct practices in managing and
operating a self-owned wealth-creating business
enterprise by providing goods and services that are
valuable to the customers.
– originates from the word entreprendre which means “to
undertake.”
- It refers to a particular field of practice or process. An
entrepreneur is a person practicing entrepreneurship.
- ENTREPRENEURSHIP is an ART and not a science. It is not
static or stagnant. It continuously grows, develop,
improves and expands; the change does not stop.
- As an art ENTREPRENEURSHIP is dynamic. The moment
the economic activity changes the political, social, and
entrepreneurial activities will eventually change.
Small business
– refers to a business or enterprise that correctly adopts
and practices the principles of entrepreneurship (SME’s),
and are strongly promoted by both government and
non-governmental organizations (NGO’s) to improve the
lives of Filipino people through entrepreneurship.
Ordinary small business
– a business enterprise managed and operated by an
owner who is not an advocate of and does not practice
the concepts and principles of entrepreneurship.
SALIENT FEATURES OF ENTREPRENEURSHIP
Five Salient features of entrepreneurship
1. It is an art of correct practices.
2. It is a wealth-creating venture.
3. It provides valuable goods and services.
4. It entails opening and managing the self-owned
enterprise.
5. It is a risk-taking venture.
Theories on Entrepreneurship
1. Innovation Theory
2. Keynesian Theory
3. Alfred Marshall Theory
4. Risk and uncertainty-bearing Theory
5. Other theories on Entrepreneurship
Innovation Theory
- regards economic development as the product
of structural change or innovation.
- Joseph Schumpeter strongly believed that
innovation is the force the will propel the
revolutionary change.
- It will cause creative destruction of the static
mode of the economy, stir the entrepreneurial
activity, and encourage competition.
FORMS IN INNOVATION
1. New product
2. New production method
3. New market
4. New supplier
5. New industry structure
Keynesian Theory
- John Maynard Keynes attributes economic
growth, especially during depression, on the
government.
- generalizes that the organization play the most
significant among the different factors of
production.
Risks and uncertainty-bearing Theory
- of Frank Hyneman Knight states that an
entrepreneur faces the risk of uncertainty in the
process of connecting the supplier and the
buyer.
Weber’s sociological theory
- Weber asserts that the social cultures have
significant contribution to entrepreneurship.
Kaldor’s technological theory
- gives importance to the advancement of the
technology as an element of production.
Leibenstein’s gap-filling theory
- advocates that entrepreneurship fills the gap in
any economic activity.
Kirsner’s learning-alertness theory
- focuses on learning and alertness as the primary
attributes of entrepreneurship.
Entrepreneurship and the ordinary small business activity
Entrepreneurship and the activities of ordinary small
businesses differ in the following areas:
1. Motive in opening a business
2. Perception of risk in the business
3. Reactions to changes in the environment
4. View on competition
5. Vision for development and growth
6. Horizon of business operation
7. Sources of business funds