Archdiocese of Tuguegarao

LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
COLLEGE DEPARTMENT
SUBJECT TITLE and CODE : ENTREPRENUERIAL MIND – LOT Entrep 1-22
Professor : Mr. Allan E. Samonte

INTRODUCTION TO ENTREPRENEURSHIP

LESSON 1
ENTREPRENEURIAL MIND
Introduction to Entrepreneurship
Objectives
➢ Definition of entrepreneurship
➢ Definition of entrepreneur
➢ The Evolution of Entrepreneurship Theory (Theories of Entrepreneurship)

ENTREPRENEURSHIP
It is the process of creating launching and managing:
➢ Creating business operation
o Creating new businesses
o Creating new ideas
o Creating goods & Services
o Creating procedures
➢ Launching business operation
○ Launch the new businesses, ideas, goods & services and procedures
➢ Managing business operation
o Managing of the new businesses, ideas, goods & services and procedures
➢ The “act” of being an entrepreneur

ENTREPRENEUR
➢ comes from the French word “entreprendre”
➢ means to undertake, to set about, “to undertake or to try”; to start off or to begin (Richard
Cantallion 1775)
➢ Individual that develops new creations and assumes the risk of business to produce products
that satisfies the customers need (essential) and wants (desires)

Has the ability to find, act on opportunities, translate these opportunities into
products that would satisfy the market. Has the capacity to recognize the market potential of
creativity and organize the resources needed {capital, talent & other resources turn creation into
a beautiful market innovation}

OTHER DEFINITIONS OF ENTREPRENEUR

➢ Someone who establishes a new entity to offer a new or existing product or service into a new
or existing market, whether it is for a profitable or non-profitable outcome.
➢ An individual who is able to perceive an opportunity for a business and create an organization to
develop and manage that business successfully.
➢ One who undertakes innovations, finance and business acumen in an effort to transform
innovations into economic goods.
➢ Business Acumen - keenness and quickness in understanding and dealing with a “business
situation” in a manner that is likely to lead to a good outcome.

THEORIES OF ENTREPRENEURSHIP

1. The Economic Theory - Entrepreneurs as a Risk Taker

Indicators:
❖ Entrepreneurship and economic growth takes place when economic conditions are
favorable.
❖ Economic incentives are the main motivators
❖ Economic incentives include:
o Taxation policy
 Archdiocese of Tuguegarao
LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
COLLEGE DEPARTMENT
o Industrial policy
o Sources of finance & raw material
o Infrastructure availability
o Investment & marketing opportunities
o Access to information (market conditions, technology, etc.)
❖ Richard Cantillon - an Irish French Economist; established the economic theory
o He viewed entrepreneurs as an agent who buys factors of production at certain prices in
order to combine them into a product with a view to selling it at uncertain prices in the
future.
o He illustrated farmers, as an entrepreneur, who pays out contractual incomes to the
landlords and laborers, which are certain, while selling their crops at a price, which is
certain.
o He views entrepreneurs as RISK TAKER.

2. The Sociological Theory - Entrepreneurs as an Organizer

❖ Entrepreneurship is likely to get a boost in a particular social culture
❖ The (entrepreneurial) behavior of individuals in a society is influenced by:
- Society’s values
- Religious beliefs
- Customs
- Taboos
❖ The entrepreneur merely performs a role as per expectations of the society.
❖ As per Jean Batiste Say, an aristocratic industrialist,
- Entrepreneur is one who combines the land of one, the labor of another and the
capital of yet another to produce a product.
- By selling the product in the market he pays interest on the capital, rent on land and
wages to laborers and what remains is his profit.
❖ Entrepreneur as an organizer

FACTORS OF PRODUCTION - 20TH CENTURY

1. Land
2. Capital
3. Labor
This was for the first time that a distinction was made between the capitalist as the financier and
the entrepreneur as the organizer.

3. Entrepreneurship Innovation Theory - Entrepreneurs as an Innovator

❖ Theory was propounded by Joseph Schumpeter.
❖ As per this theory, Entrepreneurship is Innovation itself
❖ This theory ignores the earlier two abilities, which were till then considered key for an
entrepreneur
o Organizing Abilities
o Risk Taking Abilities
❖ According to Joseph Schumpeter a 20th Century Austrian Economist
o An entrepreneur is a person who is willing and able to convert a new idea or
invention in a successful innovation
o Entrepreneurship resulted in new industries, even though it entailed combining the
existing inputs, in a new way
❖ The introduction of a new good which consumers, are not yet familiar or of a new quality
of a good.
❖ The conquest of a new source of supply of raw materials or half manufactured goods,
irrespective of whether this source already exists or whether it has first to be created.
ENTREPRENEURSHIP AND INNOVATION
An entrepreneur innovates when he:
- Introduces a new production (e.g. virgin galactic)
 Archdiocese of Tuguegarao
LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
COLLEGE DEPARTMENT
- Introduces a new production method (e.g. line production system in food by McDonalds,
(speedy system)
- Opens up a new market (e.g. Blue Ocean Strategy professes that organization should seek
out markets that are less competitive that is why there are people business or tycoons
from the first world countries coming in to the developing countries to set up their
businesses because it’s less competitive )
- Finds out a new source of raw material supply (e.g. moving from coal to petroleum to
nuclear energy sources)
- Introduces a new organization in any industry

4. Psychological Theory - Entrepreneurs are formed during the individual’s upbringing, the need to
achieve and prove something
❖ Entrepreneurship gets a boost when society has sufficient supply of individuals with
necessary psychological characteristics.
❖ The psychological characteristics include:
o Need for achievement
o A vision or foresight
o Ability to face opposition, etc.
❖ These characteristics are formed:
o During the individuals upbringing For example, an individual who have faced trying
times during their childhood is more likely to developed an entrepreneurial trait.
o By high standards of excellence
o Self-reliance and
o Low father dominance
▪ When an individual is not habituated by being guided by his elders
decision he’s more likely to garner the entrepreneurial trait. Probably,
breadwinner or he is forced to support his own or for his family.

This comes out when they have the need to achieve something, they have a vision or foresight. Probably
they want to be rich as well and they have the ability to face any trials and not be afraid to take risks.
Probably, their family is into a business which could also be

5. Theory of Achievement Motivation/Achievement Theory - Entrepreneurship can be developed and

traditional beliefs do not inhibit entrepreneurs.
❖ David McClelland identified three characteristics of people:
o Need for achievement
o Need for affiliation
o Need for power
❖ As the basis of entrepreneurial personality, he emphasized
o The importance of achievement motivation
o Through which, entrepreneur fulfills:
▪ Economic & Social Developments
❖ The need for achievement was found the highest among entrepreneurs through an
experiment.
❖ McClelland identified two (2) characteristics of entrepreneurship:
o Doing things in a new and better way
o Decision making under uncertainty
❖ Stressed that people with high Achievement Orientation (need to succeed) are more likely to
become entrepreneurs.
o People are not influenced by money or external incentives
o Profits are only a measure of success and competency

10 CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS

1. Curiosity
Successful entrepreneurs have a distinct personality trait that sets them apart from other
organizational leaders: a sense of curiosity. An entrepreneur's ability to remain curious allows them to
 Archdiocese of Tuguegarao
LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
COLLEGE DEPARTMENT
continuously seek new opportunities. Rather than settling for what they think they know, entrepreneurs
ask challenging questions and explore different avenues.
This is validated in the online course Entrepreneurship Essentials, where entrepreneurship is
described as a “process of discovery." Without curiosity, entrepreneurs can’t achieve their main
objective: discovering new opportunities.
The drive they have to continuously ask questions and challenge the status quo can lead them
to valuable discoveries easily overlooked by other business professionals.

2. Structured Experimentation
Along with curiosity, entrepreneurs require an understanding of structured experimentation.
With each new opportunity, an entrepreneur must run tests to determine if it’s worthwhile to pursue.
For example, if you have an idea for a new product or service that fulfills an underserved demand, you’ll
have to ensure customers are willing to pay for it. To do so, you’ll need to conduct thorough market
research and run meaningful tests to validate your idea and determine its potential.

3. Adaptability
The nature of business is ever-changing. Entrepreneurship is an iterative process, and new
challenges and opportunities present themselves at every turn. It’s nearly impossible to be prepared for
every scenario, but successful business leaders must be adaptable. This is especially true for
entrepreneurs who need to evaluate situations and remain flexible to ensure their business keeps
moving forward, no matter what unexpected changes occur.

4. Decisiveness
To be successful, an entrepreneur has to make difficult decisions and stand by them. As a leader,
they’re responsible for guiding the trajectory of their business, including every aspect from funding and
strategy to resource allocation.
Being decisive doesn’t always mean being correct. If you want to be an entrepreneur, it means having
the confidence to make challenging decisions and see them through to the end. If the outcome turns out
to be less than favorable, the decision to take corrective action is just as important.

5. Team Building
A great entrepreneur is aware of their strengths and weaknesses. Rather than letting
shortcomings hold them back, they build well-rounded teams that complement their abilities.
In many cases, it’s the entrepreneurial team, rather than an individual, that drives a venture toward
success. When starting your own business, it’s critical to surround yourself with teammates who have
complementary talents and contribute to a common goal. Related: 10 Tips to Help You Boost Team
Performance

6. Risk Tolerance
Entrepreneurship is often associated with risk. While it’s true that launching a venture requires
an entrepreneur to take risks, they also need to take steps to minimize it. While many things can go
wrong when launching a new venture, many things can go right. According to Entrepreneurship
Essentials, entrepreneurs who actively manage the relationship between risk and reward position their
companies to “benefit from the upside.” Successful entrepreneurs are comfortable with encountering
some level of risk to reap the rewards of their efforts; however, their risk tolerance is tightly related to
their efforts to mitigate it.

7. Comfortable with Failure

In addition to managing risk and making calculated decisions, entrepreneurship requires a
certain level of comfort with failure. It’s estimated that nearly 75 percent of new startups fail. The
reasons for failure are vast and encompass everything from a flawed business model to a lack of focus or
motivation. While many of these risks can be avoided, some are inevitable. Despite this, successful
entrepreneurs must prepare themselves for, and be comfortable with, failure. Rather than let fear hold
them back, they allow the possibility of success to propel them forward.
8. Persistence
 Archdiocese of Tuguegarao
LYCEUM OF TUAO
Centro 02, Tuao, Cagayan, 3528
Email address: lyceumoftuao1965@yahoo.com.ph
COLLEGE DEPARTMENT
While many successful entrepreneurs are comfortable with the possibility of failing, it doesn’t
mean they give up easily. Rather, they see failure as an opportunity to learn and grow. Throughout the
entrepreneurial process, many hypotheses turn out to be wrong, and some ventures fail altogether. Part
of what makes an entrepreneur successful is their willingness to learn from mistakes, continue to ask
questions, and persist until they reach their goal. Related: How to Become a More Resilient Leader

9. Innovation
Many ascribe to the idea that innovation goes hand-in-hand with entrepreneurship. This notion
is often true. Some of the most successful startups have taken existing products or services and
drastically improved them to meet the changing needs of the market. Innovation is a characteristic
some, but not all, entrepreneurs possess. Fortunately, it’s a type of strategic mindset that can be
cultivated. By developing your strategic thinking skills, you can be well-equipped to spot innovative
opportunities and position your venture for success.

10. Long-Term Focus

Finally, most people think of entrepreneurship as the process of starting a business. While the
early stages of launching a venture are critical to its success, the process doesn’t end once the business
is operational. According to Entrepreneurship Essentials, “it’s easy to start a business, but hard to grow
a sustainable and substantial one. Some of the greatest opportunities in history were discovered well
after a venture launched.” Entrepreneurship is a long-term endeavor, and entrepreneurs must focus on
the process from beginning to end to ensure long-term success.

RESOURCES:

https://www.studocu.com/ph/document/velez-college/mtlbe/entrepreneurial-mind-lesson-1/21678164
https://online.hbs.edu/blog/post/characteristics-of-successful-entrepreneurs