PA 512 : ENTREPRENUERIAL

DEVELOPMENT AND COOP

DEVELOPMENT
Professor: Dr. Susan F. Atienza

Group 3 Reporters

Mary Joy G. Delfin Marienick Jane S. Minayo

Arnold S. Delfin Odessa E. Montaṅez

Unit III Topics

• Entrepreneurial Behavior and Entrepreneurial Motivation –

Mary Joy G. Delfin
• N-achievement and management success, entrepreneurial
success in rural areas – Arnold S. Delfin
• Innovation and entrepreneur – Odessa E. Montanez
• Establishing entrepreneurs systems – Marienick Jane S.
Minayo
 Entrepreneurial Behavior
 can be defined as a set of behaviors that an individual exhibits
which allows them to innovate and/or improve upon existing ideas to
market a product or service effectively in a competitive market.
2 types of entrepreneurial behavior :
1. Strategic entrepreneurship can be described as the pursuit of
opportunity
2. Effectual entrepreneurship looks to generate wealth by relying
on resources that the entrepreneur already has readily available
and utilizing them effectively to ensure success.
What Are the Key Elements of
Entrepreneurial Behaviour?
• Mitigating Risks
• The Ability to Bootstrap
• Understanding Affordable Loss
• Pivoting Where Necessary
 Entrepreneurial Motivation
the process that activates and motivates the entrepreneur to exert
higher level of efforts for the achievement of his/her entrepreneurial
goals.
Internal Factors External Factors
These include:
•These include the following factors: Government assistance and support.
• Desire to do something new. Availability of labour and raw material.
• Become independent. Encouragement from big business houses.
• Achieve what one wants to have in life.
Promising demand for the product.
• Be recognized for one’s contribution.
• One’s educational background.
• One’s occupational background and
experience in the relevant field.
N-achievement and Management Success
1. Need for Achievement
• The Achievement Motivation Theory developed by David McCelland in
the early 1960.
• It states that an individual need for achievement refers to the need for
personal accomplishment which is a drive to excel, advance and grow.
Entreprenuership is learned and that such can be encouranged fruitfully.

2. Locus of Control
• are those individuals who also believe in themselves to be in control of
their destiny (chell, and collegues, 1991)
• Rotter hypothesize that individuals with internal beliefs would more likely
strive for achievement than would individuals with external beliefs.
3. Risktaking
• Researchers like Dr. Sandra Palmer and Likes speculate that in
becoming an entrepreneur, an individual risks financial well being ,
career opportunities, family relatives and psychic well being. The
level of uncertainty involved in an entrepreneurial venture indicates
that individuals drawn to such lines of business a certain level of risk
taking propensity
• Hull University Business School researchers (1980) found that the
personality characteristics most important in identifying
entrepreneurial types of individuals are 1. functional task preference
and 2. personality constructs creativity, risk and flexibility
4. Values
• One of the major studies of personal values of entreprenuers done by
Hornaday and Aboud (1971 as cited by Sexton and Smilor, 1982) found that
entreprenuers scored significantly higher than the general population
reflecting the need for achievement
• Thus, it is concluded that values maybe effective in distinguishing successful
entreprenuers from the general population.

5. Problem Solving Style and Innovativeness

• Garner (1989) refers to innovation as the central value of the
entrepreneurial behavior.
• Innovation and problem solving capabilities are expected to be the core
entrepreneurial capability of an entrepreneur.
• The level of innovation is dependent upon the entrepreneurs' formal
education and managerial experience.
Most notable Criticisms on McClellands achievement theory:
- The predictive power of a scientific theory refers to its ability to
generate stable predictions. Theories with strong predictive power
are highly valued because predictions can often encourage the
falsification of the theory. It did not directly connect need for
achievement with the decision to own and manage a business
( Brockhaus( 1982, as cited in Sexton and Smilor, 1986)
- To relate economic development to the prevalence of achievement
imagery. The cultural basis of the achievement is motive. In some
cultures, failure is seen as a positive learninf experience while in
others it has a certain negative stigma ( Chell, Haworth and Brearley, 1991)
- Consistently found that Achievement motivation exists as a stable
characteristic and is more prevalent among entreprenuers when
compared to others.(Begly [1995] and Hornaday and Aboud [1971])
Concept of Entrepreneurial Success in Rural
Areas
Development “from below” approach
- Stressed the importance of community development based on local
entrepreneurial initiatives, with the xplicit goal to ensure balanced
technological development of rural areas which would offer adequate
employment opportunities and a quality of life comparable to urban
areas.
- This approach assumes that the development of rural areas is based
on stimulating local entrepreneurial talent and subsequent growth of
indigenous companies.
- The community must develop links among key institutions, a vibrant
entrepreneurial spirit and a commitment and dedication to risk takng and risk
sharing.
 Requirements for Entreprenurial Success in Rural
Areas Requirements:
Institutions of Education
Inter-firm Institutions
Business incubators
Industrial Parks
Institutions Facilitating Networking
Business Support Centres
Financial Institutions
Public-private institutions partnership
Steps to Establish an Entrepreneurial
System
1. Search for Business Ideas: the idea may originate from various sources.
2. Sources of Ideas:
i. Observing Markets - careful observation of markets can reveal a business idea.
Market surveys can also reveal the demand and supply position for various
products.
ii. Prospective Consumers - contacts with prospective consumers can reveal the
features that should be built into a product/service.
iii. Development in other Nations – people in underdeveloped countries generally
follow the fashion trends of developed countries e.g. video, washing machines,
micro ovens etc. which are now “In things” in India were being used in the
United states and Europe.
Cont. Steps to Establish an Entrepreneurial System
3. Study of Projects Profiles: these profiles describe in detail the
technical, financial and market requirement and prevailing position
a careful scrutiny of such project profiles is very helpful in choosing
the line of business.
i. Government Organizations – assist entrepreneurs in discovering and
evaluating business ideas.
ii. Trade Fairs and Exhibition – National and international trade fairs are a very
good source of business ideas. Provides information about new
products/machines.
4. Process the Ideas: Once the business ideas are discovered, screening and
testing of these ideas is done. The following considerations are significant in
the evaluation and testing of business ideas.
Cont. Steps to Establish an Entrepreneurial System…

5. Technical Feasibility : is the possibility of producing the product.

6. Commercial Viability : a cost benefit analysis is required to ascertain the
profitability of the ideas. An elaborate study of market condition and
prevailing situation is made to assess the viability and prospectus of the
proposed projects.
7. Idea Selection
i. Products whose imports are banned or restricted by the government.
ii. products which can be exported exceeds easily and profitability.
iii. Products whose demand exceeds their supply so that there exists ready demand.
iv. Products which showed high profitability.
v. Products for which incentives and subsidies are available.
vi. Products favoured by the country’s industrial/licensing policy
vii. Products based on the expansion or diversification plans of existing firms of the
family/friends/relatives.
Steps to Establish an Entrepreneurial System
Cont. Steps to Establish an Entrepreneurial System…
Steps to Establish an Entrepreneurial
System
10. Establish the Enterprise : this is the last step of entrepreneurial
system. It is a very important step. In this phase the entrepreneur
integrate their resources and establish the enterprise.
 Innovation Related to Entrepreneur
• Gartner (1989) refers to innovation as the central value of the entrepreneurial
behavior, since it is successfully taking an idea or invention to market.

• Innovation and problem solving capabilities are expected to be the core of

entrepreneurial capability of an entrepreneur. The vast majority of
entrepreneurs studied were characterized by sensation-thinking problem
styles. Such individuals were shown to be short-term oriented dealing with
immediate problems.

• Entrepreneurs are faced with a number of challenges as they try to

implement new ideas. Innovation is one of the central characteristics of
entrepreneurial endeavor.
Cont. Innovation Related to Entrepreneur…
• Looking at history, entrepreneurial activity is most active during
periods of upheaval: economic, social or political. This is usually when
the traditional systems and ways of doing business are no longer
effective. Those who survive the changes will be the businesses that
act entrepreneurially.

• Entrepreneurs are not uniformly innovative. The level of innovation is

dependent upon the entrepreneur’s formal education and managerial
experience.
Features of Innovation
Sources of Innovation
What is entrepreneurial
support system?
 Entrepreneurial support
systems generate
community-wide benefits.
These systems have a
transformative impact on
economic development, by
promoting collaboration,
improving productivity, and
increasing effectiveness.
4 Ways to Build an Entrepreneurial
Support System
 Other business owners are an
obvious entrepreneurial support
system
 Mentors are great too
 Professionals in other industries
 Online communities are highly
accessible
There are many times entrepreneurship can
feel like a lonely pursuit. By creating a support
system, you’ll be better prepared to handle the
inevitable highs and lows of business ownership.
https://fundbox.com/blog/build-an-entrepreneurial-support-system /
How entrepreneurial support system can be established?

 This is the basis for the concept of entrepreneurial system. The

entrepreneurial system consists of all economic factors and
environmental factors existing in a geographical area. The
quality and capacity of the entrepreneurial system is determined
by the number of factors with entrepreneurial experience and
potential
 It is very difficult and complicated to create a system for
entrepreneurs. While public officials and service providers
understand the differences between, say, a Small Business
Center and a Small Business Technology Development
Center and the services they offer, entrepreneurs do not.
 Thus, when an entrepreneur seek assistance and is referred to
“some other office”, her typical response is intense
frustration. Most entrepreneurs simply want help. They do
not care which agency or program provides it.
 The challenges in fragmentation are not new to economic
development professionals. The traditional solution has been
to create a one- stop shop.
From One Stop Shop to no
Wrong Door
 This type of sophisticated
business diagnosis system does
not really exist today for most
entrepreneurs.
 A reformed systems approach is
needed. The system would be
defined by the concept of “no
wrong door.”
 In addition to improving services
for the entrepreneur, this
system also offers benefits to
service providers.
What does an entrepreneur
support system look like?
 Many regions claim that they have a
small business support system in
place, but, in most cases, these
“systems” are simply a loose
federation of non-profits and other
support providers
 A true system links all relevant service
providers, operates and according to
common procedures, and offers a
customized and comprehensive set of
public and private services for local
entrepreneurs.
 Several Characteristics:

 Common intake procedures

 Clear referral systems
 Clear guidelines for entrepreneurs
 Regular Collaboration

Program Offerings

 Every region must develop its own set of

program offerings targeted to the needs of
local entrepreneurs.
Some of the key program
offerings to be found in
comprehensive entrepreneur
development systems
 Entrepreneurship Education
 Access to Capital
 Access to Networks
 Entrepreneurial Culture
It’s Benefits
 Creating an effective
entrepreneur support
system can generate huge
benefits for local business
owners and aspiring
entrepreneurs. It can also
stimulate a transformation
for economic developers.