GEE 003 - General Education Elective 3 MODULE 1 1.1 Introduction, Entrepreneur' Skills Definition of Terms, Introduction Entrepreneurship particularly drives the modern global economy, is the primary source of job creation. Entrepreneurship in its broadest sense is any enterprise or effort that adds value to the lives of people. Everything all around has its roots in entrepreneurship in some way. It is the innermost component in the economic growth, the opening of new markets, and serves as a critical spur for the money-making, introduction of new goods and services, innovations, and inventions. Entrepreneurship is the philosophy in which an individual is an imaginative and innovative agent with an aspiration for ownership and the right to make proprietary decisions, a body of knowledge, and create wealth for the individual and value to the society. There are various definitions of entrepreneurship. However, the key concept is innovation. This refers to new or different ways of doing things which include technology, marketing management, HR management among others. Innovation can be observed when a creative individual creates a new product or when he sells his product considering a different approach. Thus, it is the innovation that distinguishes entrepreneurship from other activities. In view of the innovative nature of entrepreneurship, it is capable of generating or creating jobs, goods, services, and even wealth. Because of this, there is a better economy for a country and a higher standard of living. However, the real contributions of entrepreneurship can be measured in terms of the welfare of the people. Who are Entrepreneurs? Entrepreneurs normally defined as 'risktakers' in new-venture creations are uniquely optimistic, hard-driving committed individuals who derive great satisfaction from being independent. He combines sound judgment and planning with risk-taking to ensure the success of his or her own business. Entrepreneurs, driven by an intense commitment and determined perseverance, work very hard. They are optimists who see the cup as half full rather than half empty. They strive for integrity. They burn with the competitive desire to excel. They use failure as a tool for learning. They have enough confidence in themselves to believe that they personally can make a major difference in the final outcome of their ventures. Definition of Terms The ways to define terms will help students better understand the lessons and discussions and will serve as the standard level on how skilled students may become in sentence construction when defining terms. At the end of the course, you are expected to define words or terms or give meaning using the technical and operational definitions. The 'corridor principle' is which states that once an entrepreneur starts a firm and becomes immersed in an industry, “corridors” leading to new venture opportunities become more apparent to the entrepreneur than to someone looking in from the outside. GEE 003 - General Education Elective 3 The entrepreneur is an individual who creates a new business, bearing most of the risks and enjoying most of the rewards. Entrepreneurship is the process of setting up a business, it serves to generate economic wealth, growth, and innovation. Social entrepreneurship is to create a benefit to society and humankind, focusing on helping communities or the environment through their products and services. They are not driven by profits but rather by helping the world around them. External locus of control tends to believe that they are not able to affect a personal outcome and that luck or destiny are responsible for their actions. Strategic Entrepreneurship actions are planned for seeking competitive advantage, which accelerates entering into new products, processes, technological advancements, and markets by new ventures and incumbents. Ethical Dilemmas a situation in which a difficult choice has to be made between two courses of action, either of which entails transgressing a moral principle; The triple bottom line maintains that companies should commit to focusing as much on social and environmental concerns as they do on profits. Entrepreneurial cognition is concerned with the ‘knowledge structures’ that people use to make assessments, judgments, or decisions involving opportunity evaluation, creation, and growth Water well strategies are the ability to gather or harness special resources (land, labor, capital, raw materials) over the long term. Internal locus of control individuals generally hold themselves responsible for actions and consequences An intrapreneur is an employee who is tasked with developing an innovative idea within a company and can draw on its resources to do so. Macro view of entrepreneurship presents a broad array of factors that relate to success or failure in contemporary entrepreneurial ventures; The Entrepreneur skills Entrepreneurial skills can encompass a broad range of various skillsets like technical skills, leadership and business management skills, and creative thinking. Because entrepreneurial skills can be applied to many different job roles and industries, developing your entrepreneurial skills can mean developing several types of skill sets. Micro view of entrepreneurship examines the factors that are specific to entrepreneurship and are part of the internal locus of control For instance, to be a successful business owner, you may need to develop your business management skills. To build and maintain successful project teams you might need to improve your leadership and communication skills. Mountain gap analysis entails identifying major market segments as well as interstice (inbetween) markets that arise from larger markets. Entrepreneurs also have been characterized as the interaction of the following skills; inner control, planning and goal setting, risk-taking, innovation, reality perception, use of feedback, GEE 003 - General Education Elective 3 decision-making, human relations, and independence. In addition, many people believe that successful entrepreneurs are individuals who are not afraid to fail. 1.3 Confrontation with Risk, Characteristics of Successful Entrepreneurs 1.2 Success Stories Starting or buying a new business involves risk. The higher the rewards, the greater the risks entrepreneurs usually face. It should be noted that people who successfully innovate and start businesses come in all shapes and sizes but, they do have a few things others do not. They are willing to accept risk for what they believe in. Entrepreneurs face a number of different types of risk, the four basic areas are: 1. Henry Sy SM 2. Tony Tan Caktiong JOLLIBEE 3. Socorro Ramos NATIONAL BOOKSTORE 4. John Gokongwei Jr. ROBINSON CEBU PACIFIC 5. Joe Magsaysay POTATO CORNER 6. Edgar Sia MANG INASAL 7. Cresida Tueres GREENWICH 8. Milagros, Clarita, and Doris Leelin GOLDILOCKS 9. Mariano Que MERCURY DRUG STORE 10. Araceli and Jun Manas HEN LIN DIMSUM The Entrepreneur's Confrontation with Risk 1. Financial Risk. Entrepreneurs must have a solid understanding of financial management and put that knowledge to use in business every day. The knowledge of entrepreneurial finance is so often the difference between success and failure, all entrepreneurs should devote themselves to understanding the key financial indicators for their particular business. Some at stake are personal resources that were put into the venture and a likelihood, be lost if the venture fails. 2. Career Risk. A frequently raised question by would-be entrepreneurs is whether they will be able to find a job or go back to their old job, should their venture fail. This is a major concern to managers who have a secure organizational job with a high salary and good benefits package. 3. Family and Social Risk. To start a new venture requires much of the entrepreneur's energy and time, which can, in turn, create a family and social risk. His commitments expose his/her families to the risk of incomplete family experience and the possibility of GEE 003 - General Education Elective 3 permanent emotional scars, even old friends may vanish eventually as they missed get-togethers. 4. Psychic Risk. This may be the greatest risk to the well-being of the entrepreneurs. Some entrepreneurs who have suffered financial catastrophes have been unable to bounce back, at least not immediately. The psychological impact has proven to be too severe for them. 3. 4. Characteristics of Successful Entrepreneurs Many people dream of running their own businesses. They would like to become entrepreneurs. Entrepreneurship can be exciting, but many go into it not realizing how difficult it is to run their own business. In fact, statistics show that most new businesses will fail within a few years. These start-up businesses fail because of the owner's poor planning, lack of business knowledge, lack of entrepreneurial characteristics, inability to work with others, or failure to choose the right business. New characteristics are continually being added to the evergrowing list of the most often cited entrepreneurial characteristics, it does provide important insights into the entrepreneurial mindset 1. Determination and Perseverance. A total dedication to success as an entrepreneur can overcome obstacles and setbacks. Sheer determination and an unwavering commitment to succeed often win out against odds that many people would consider insurmountable 2. Drive to Achieve. Entrepreneurs are self-starters who appear to others to be internally driven by a strong desire to compete, to excel against self-imposed 5. 6. 7. standards, and to pursue and attain challenging goals Opportunity Orientation. It is the constant awareness of opportunities that exist in everyday life. Successful entrepreneurs start with the opportunity and let their understanding of it guide other important decisions. Persistent Problem Solving. Entrepreneurs are not intimidated by difficult situations. Although entrepreneurs are extremely persistent, they are realistic in recognizing what they can and cannot do and where they can get help to solve difficult but unavoidable tasks. Seeking Feedback. Effective entrepreneurs often are described as quick learners, with a strong desire to know how well they are doing and how they might improve their performance. Feedback is also central to their learning from mistakes and setbacks. Internal Locus of Control. Successful entrepreneurs believe in themselves. They do not believe that the success or failure of their venture will be governed by fate, luck, or similar forces and they believe that their accomplishments and setbacks are within their own control and influence and that they can affect the outcome of their actions. Tolerance for ambiguity. Start-up entrepreneurs faces uncertainty compounded by constant changes that introduce ambiguity and stress into every aspect of the enterprise. A tolerance for ambiguity exists when the entrepreneur can deal with the various setbacks and changes that constantly confront him/her. GEE 003 - General Education Elective 3 8. Calculated Risk Taking. Successful entrepreneurs are not gamblers, they are calculated risk-takers when they decide to participate in a venture, they do so in a very calculated, carefully through-out manner. 9. High Energy Level. Many entrepreneurs fine-tune their energy levels by carefully monitoring what they eat and drink, establishing exercise routines, and knowing when to get away for relaxation. 10. Creativity and Innovativeness. Entrepreneurs are able to blend imaginative and creative thinking with a systematic, logical process ability, they think of new ways to market their businesses and are always looking for new solutions to problems. 11. Vision. They have a vision or concept of what their firms can be, this vision develops over time as the individual begins to realize what the firm is and what it can become. 12. Passion. Entrepreneurial passion is a fundamental emotional experience for entrepreneurs to provide a coherent understanding of an emotional experience of intense arousal and energy mobilization involving an entrepreneur in his or her venture. This is also characterized by a discrete emotion that is quite intense being described as an underlying force that fuels our strongest emotions. Thus, entrepreneurial passion is recognized as a fundamental component of the entrepreneurial mindset.