Mater Dei College, Tubigon, Bohol

College of Accountancy, Business, and Management

LESSON 2 – ECONOMIC DEVELOPMENT OF ENTREPRENEURSHIP AND ITS

COMPETENCE

“The Success of a person is eighty percent human interaction/attitude and twenty percent knowledge of
the task/aptitude.”

LEARNING OUTCOMES
1. Describe the Philippine economic landscape in the present time
2. Explain the different factors in determining economic growth
3. Examine the contributory determinants in the making of an economy
4. Discuss the role of employment as a contributory factor in economic development
5. Explain entrepreneurship and socio-economic development

Philippine Economic Landscape in the Present Time

The Philippine Economic landscape remains to be the spring board of questions when
economic development is the focused of discussion. The leaders of this nation, aim greatness
for the Filipino people especially during the time of election. Their honest intention of improving
the economic condition is their battle cries that catapulted them into power, yet in spite of the
many promises Filipino remain poor. Instead of improving the living condition of the Filipinos,
they amassed wealth as a preparation for the next election. Politics becomes an investment for
power and money and it is not the true essence of public services. Two important factors hinder
our growth as a nation:

1) Poverty is the making of its people and kind of leaders that holds the wheels of
economic fortune.
Our country is still dominated by poverty and the unjust distribution of wealth. Income is
in the hands of the few opportunists. Power is in the hands of traditional and family politicians as
they amass wealth through graft and corruption.
2) Population explosion is another factor that contributes to the poverty of our nation.
We cannot increase the size of the land that is cultivated by the farmers, yet his family
size continues in number. Productivity in agriculture remains the same through the years.
Economic activities in the countryside remain in the hands of few entrepreneurs who take
advantage in the marketing of products to the urban center.

Factors in Determining Economic Growth

The following factors are contributory determinants to our slow growth in economic
development as a nation:

1. The Filipino Values and Culture.

a. Love for imported products
The country’s colonization for centuries has developed in the Filipino culture of
dependence and love for foreign products. We still feel that imported products are superior in
quality and we look our own products as inferior.
We love the taste of imported chocolates, the taste of apple rather than our local guava,
the taste of grapes rather than local berries, and the love for imported clothing rather made in

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Mater Dei College, Tubigon, Bohol
College of Accountancy, Business, and Management
the Philippines. Buying imported good develops the economy of the foreign countries and drains
the Philippine economy.

b. Our Values of BAHALA NA

A true Filipino entrepreneur will not put his destiny in the hands of the BATHALA. He
must act with strong determination and push for the development of his ideas. Innovation and
the creation of more goods and services are in the hands of the entrepreneur who has the ability
to make new and innovative products or create a new channel of their distribution.
BAHALA NA is the concept of belief in BATHALA, the gods of the lazy of bones and
undetermined individuals. Faith in GOD could be the driving force of any entrepreneur to make
things happen as he believes that his power to think and innovate comes from the true GOD
that guides the destiny of man.

c. Our Crab Mentality

Crab Mentality is the action of people to pull down other who are about to get out the
verge of poverty and reach for their success. Enviousness is the making of people who could
not think better for himself. There are many of us who destroy other yet when we look at the
mirror we are not better than them.
This could be a clear example of Pedro opening a SARI-SARI store and JUAN opening
the same king of business in the next corner. Thinking that someone on the other corner is
making good in selling barbeque or a LITSONG MANOK, he opens the same outlet not thinking
that competition is pulling down both of their profit. Why can we not think of anything better
rather pulling the other fellow in this entrepreneurial activity?

d. The Manana Habit

“Mamaya Na” or “Bukas Na” is a culture that is brought to us by the colonizers who were
fond of SIESTA after lunch time. We take time in stride wasting time. The real entrepreneurs do
not believe in siesta as they keep working until things are done to their plans.
Hard work and dedication are the qualities in the making of successful entrepreneurs. In
all books and records of successful people that developed economic fortune, we find in their
economic dictionary that success carries with it love for work and time management. They
would not keep any work unfinished during the day. Persistence is a value that we have to
develop to make our economy successful.

e. The Value of Time

Relative to the above discussion, is our lack of value to the precious time given to us, 24
hours a day and 364 days in a year. We are always late in the start of the program, coming to
our classes, attending to office work and even in important meetings and appointments. We
take all the time in our hands, not thinking that the meaning of progress rest in our value of this
precious gift of time.
The Japanese, our Asian neighbor, are noted for their sense of value of time. They
became successful because they are always on time. Meeting with them is meeting on the dot
or else you will not be able to get important business with them. Time wasted is opportunity lost
in making a fortune. Time is gold as the saying goes. Entrepreneurs get the golden opportunity
as they do not lose time to make money and fortune.

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Mater Dei College, Tubigon, Bohol
College of Accountancy, Business, and Management
f. Our Values of HIYA
HIYA could be a positive value in dealing with business condition. It could be a
propelling reason for us to create batter service and proper dealings in business transactions.
There are still many of us who make shortcuts in business dealings. Good in its face value but
with hidden agenda of fraud and deception.
Tourism could be a haven for economic development if our people love to treat our
visitors with HIYA of cheating them with taxi fares and services. Our beautiful country is noted
for hospitality, a value that may people of the world admire, yet many foreigners are afraid to go
to our country because there are still some of us who are acting WALANG HIYA.
Economic progress in the countryside and even in the urban centers could have come in
if we have developed the basic services in education and social development. Our political and
social system have not developed the value of HIYA, as graft and corruption still exist because
of our love for material things, money, and power. Power is the hands of WALANG HIYA that
amass the wealth of the people’s taxes which are supposed to eliminate poverty, and
development and improve education.

g. Fiesta and Social Occasions

The celebration of Fiestas of Saints that we inherited from the Spanish colonizers could
be another factor in the slow development of our economy. People especially in the country side
would have all their savings spent in a day of the fiesta, entertaining guest, to find out the next
day that there is no more rice to feed their children.
The fattest pig is slaughtered and the best food is prepared and all the festivities are
shown to the visitors. People will spend for the best clothes and attend the coronation of the
REYNA with all the fan fares of the local politicians who are attending and preparing for the
coming election.
There could be nothing wrong with celebration as it is a part of happy Filipinos. The
negative side, is the little money that we could spend for more important business that would
generate more profit in the long run. Spending money in birthdays, baptism, and other social
occasions is no means for an alarm but if we need to make loans with high interest rates, then
that creates problem to our daily budget.
Economic progress and development are the making of all people but it must come from
the top, the leaders of this nation. We need to harness or talent and skills toward economic
development. We, as a people, are not lazy. We are made the way we are because we have not
changed our values to a more positive system. Proper education could help us develop our
values towards work and proper dealings with other people. Graft and corruption should be
taken out of the political and social system in the management of our people. It must start from
us if we want this nation to develop economically.

2. Job Opportunities/Employment
Employment opportunities remain to be elusive among Filipino. The industries in the
economic zones and other urban centers could not accommodate the growing employable
people. Most still receive minimum wages that barely support the needs of five members of the
family.
a. Employment is one great factor in economic development
The entrepreneur provides the necessary work for people that propel economic
development of the nation. The money in circulation for wages and salaries will help local

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Mater Dei College, Tubigon, Bohol
College of Accountancy, Business, and Management
industries to develop new products and services that generate more small and medium
enterprise.
Contractual employment is till the name of the game in most factories as multinational
corporations still take advantage of the low labor cost. Workers are lured to this opportunity and
there exist no better employment. The national labor laws still favor multinational interest for fear
that they will pull out their investment when better employment terms will be implemented.
There are some multinational corporations operating in the country with great concern
for their employees who give them medical benefits and better wages and terms of condition of
employment. The government should look deeper into these firms and give them tax incentives
that would not necessarily reduce their taxes.
More regular employment also means more income taxes from employees. Economic
factor along this area for the country could be two-tone factors for the better services of those
employed. Security of tenure will provide peace of mind among local employees to support their
children’s education.

b. Income opportunity in the countryside is still subsistence in nature

Most people are still dependent on Old farming and fishing system. We have not
introduced modern farming technology and the proper culture of our fishery resources. Our
corals and fish sanctuary are damaged by destructive methods of fishing. Our vast shoreline
could be developed into haven for fishery development if new methods and technologies could
have been put in place to supply the food of the nation.
MANILA is the dream paradise. The bright attracted dreamers of wealth and fortune that
could be found at the end of the rainbow. Most ended up to be squatters or the political correct
term, informal urban settlers.
The theory that agriculture is an essential key to economic development must be
pursued with vigor by the government and those people in the rural setting. Agricultural
productivity will minimize internal migration to urban centers. This could be an entrepreneurial
venture in the economic development of the countryside.
We need to introduce new technology to make farming productive with the introduction
of new technology to improve irrigation, to improve working condition, and to increase
productivity of the farmers. Technology is one important factor in the development of the
economy and entrepreneurial activity.

3. Availability of Needed Capital

The banks are sources of limited capital for small and medium enterprises. These
resources are available in the banking institutions. The poor people are not aware of these great
opportunities and they do not know how to go about it to avail of the funds. Below are the
legality of this topic.

a. Republic Act 6977, known as the Magna Carta for Small Enterprise provides the
necessary funds for the development of entrepreneurs in the countryside.
Under this act, are small and medium enterprise engaged in industry, agribusiness, and
other services. These funds could be availed by single proprietorship, cooperatives, partnership
or corporation.

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Mater Dei College, Tubigon, Bohol
College of Accountancy, Business, and Management

In a small and medium enterprise whether engaged in

industry, agribusiness and/or services, whether single
proprietorship, partnership, corporation or cooperative whose total
assets, inclusive of this arising from loans but exclusive of the land
on which the particular business entity’s office, plant and equipment
are situated, must have value falling under the following categories.

Micro Less than P150,000.00

Cottage P150,001.00 P1,500,000.00

Small P1,500,001.00 P15,000,000.00

Medium P15,000,001.00 P60,000,000.00

Large P60,000,001.00 above

Source p.19 Entrepreneurship and Small Business Management by Melina, R G.

2003

The intention of the law is to provide the promotion, growth and development of SMALL
AND MEDIUM ENTERPRISES by assisting government and RELEVANT AGENCIES
(capitalize for emphasis) in tapping, local and foreign capital and the use of existing guarantee
funds.
The Law of Small AND MEDIUM ENTERPRISES DEVELOPMET COUNCIL has some
of the important powers that could develop the countryside and those of the local enterprises
described below:
1) To recommend to the President of the Philippines and Congress on policy matters
affecting small and medium enterprises;
2) To coordinate and integrate various government and private sector activities relating to
small and medium scale enterprises;
3) To monitor and determine the progress of various agencies geared towards the
development of the sector;
4) To provide appropriate policy guidelines and coordinate frame work in assisting relevant
government agencies in tapping of local and foreign funds for small and medium
enterprise;
5) To assist in the establishment of modern industrial estates outside the urban centers;
6) To promote the viability of small and medium enterprises by way of directing or assisting
relevant government agencies in the national, regional and provincial levels towards the
following.
a) Technical training courses and those related to business operation, like simple
accounting and bookkeeping;
b) Labor and management relation and improve working condition. Product
development and quality assurance and product diversification;
c) Improve production techniques and the use of technology in production and the
utilization of indigenous community resources and raw materials;

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Mater Dei College, Tubigon, Bohol
College of Accountancy, Business, and Management
d) Provision and assistance in the marketing and distribution of products;
e) Provide for concessional interest rates, lower financing fees, and incentives for
prompt credit payments, as well as arrangement tying amortization to business
cash flows, effective substitution of government guarantor cover on loans for
barrower’s lack of collateral;
f) It provides for the setting of a RELIEF SYSTEM for distress enterprise as
preventive bankruptcy measures and the setting up of insurance against
extraordinary disasters;
g) It provides for INTENSIVE INFORMATION CAMPAIGN and ENTREPRENEURIAL
EDUCATION (the intension of which is to give opportunity for all those with
entrepreneurial talent and interest);
h) The law provides easier access and uses of tax credits and other tax and duty
incentives as provided for in OMNIBUS investment code and other laws;
i) Provision for product research and development and system of experimentation
and access to information on commercial technologies.

Republic Act No. 6810 is the establishing of Magna Cart for Countryside and Barangay
Business Enterprise, granting exemptions from any and ALL government rules and regulations
and other incentives and benefits and for other purposes.
The important provisions of this ACT are the following:
1. To achieve development of countryside business enterprises in the BARANGAY level
through the absence of BUREUCRATIC RESTRICTIONS and granting of incentive and
other benefits;
2. The number of employees should not be more than twenty (20) at any time of the
purpose of undertaking a productive business enterprise that will help the economy in
the area;
3. The productive enterprise shall be principally engaged in the following activities:
a) Professional Service
b) Retailing
c) Wholesale or Trading of Commodities, Products, or Merchandise.
Base on the above discussions and the important provisions of the laws mentioned,
entrepreneurial activities in the local levels and the countryside have not developed when all the
opportunities were provided by the government for local entrepreneurs. We remain to be poor
and the budding entrepreneurs continue to search for available finds to finance their enterprises.
Analysis of the prevailing conditions and the business laws that grant these incentives
points to following failures in the implementation program:
1. An honest political will to implement the program to develop the countryside and the
local entrepreneur. Information dissemination falls to cascade down to all sectors
interested in the program.
2. Vested interest groups take advantage of the program by establishing NON
GOVERNMENT AGENCIES in the disguise of helping the lowly business sector but it
turned out that it is for their benefit. The establishment financing agencies with interest
rates that benefited their organization. Some NGO’s lost interest after taking advantage
of the government money and now they are nowhere to be found to be persecuted for
their acts of corruptions.
3. Banks and lending institutions required so many paper works beyond the
comprehension of small businessmen who don’t have formal training as provided for the
law.

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Mater Dei College, Tubigon, Bohol
College of Accountancy, Business, and Management
Entrepreneur and Socio-Economic Development
The development of the nation economic activity is the making of small and medium
enterprises mostly located in the countryside. They contribute to the economy of big
corporations as they are also consumers of their production. It is the entrepreneur who develops
new products and makes innovation that becomes the backbone of more economies.
The following are the contributions of the Entrepreneur in out Socio-Economic
Development:
1. The entrepreneur provides employment
Employment generates income and those employed pay taxes to the government
which is turn gives benefits to the social educational needs of the greater population. Those
with income through employment become less burdensome to the government.
2. The entrepreneur pays taxes
Entrepreneur pays taxes in the form of estate tax, sales tax, import and export tax,
and permits from the local and national government.
Taxes collected from the entrepreneur pump up the development of better
communities in terms of better road facilities, better school buildings for the masses, and
other social services. With the taxes paid the government could maintain better peace and
order situation as police and military personnel could better protect the people.

3. The entrepreneur provides new lifestyle and pleasures

Product innovation and development is the making entrepreneurs. Mobile phones
are the newest contribution of the entrepreneur to make a new lifestyle for more Filipinos.
Communication between individuals and business became so easy and handy as everyone
enjoys new innovations.
New technology like computers and other household convenience are the results of
entrepreneurial geniuses that turned our life to new lifestyle and pleasures. They provide life
convenience beyond the imagination of man.
Entrepreneurs do not stop searching for better product and services.

4. The entrepreneur improves the capital base of the economy

The entrepreneur mobilizes economic activity as the circulation of money which
pumps up the economic development of the community. Capital investment generates profit.
Profit, in return, is growth in investment base that will propel more business activities.
Entrepreneurs do not keep their money in the piggy banks or make this as idle
deposit in banks. The greater money in circulation the greater is the economic activity of the
nation. More investment generates more employment opportunities for the people.

5. The entrepreneur creates people empowerment and social mobility

Entrepreneurs accumulate financial resources that give them social power in the
community. They can afford to buy some personal luxuries of life. They acquire new life style
of travel and pleasure. They make new houses and invest in real properties that make them
respected in the community.
It empowers them to make decisions related to the wise use of money.
Their high income differentiates them from those employed as their life style become
more diverse and complex. Empowerment makes entrepreneur the idol of community for
their innovation and hard work.

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Mater Dei College, Tubigon, Bohol
College of Accountancy, Business, and Management
6. The entrepreneur provides healthy competition
Healthy competition provides people with choices of new products or better services.
Entrepreneur seeks better products and develops new ones that will satisfy their target
customers. Competition develops pride for the entrepreneur that their product or service is
superior from the other.
The entrepreneurial ego of human superiority in the development of new product or
service drives the entrepreneur to more innovation and development hence, the greater
goods cascade down to the consumer who wants new products and services.

Managerial Skills That Makes a Successful Entrepreneur

Being hardworking and industrious are no guarantee in the making of business activities
while they play and important role in the success of the enterprise. While many successful
entrepreneurs have not gone to business schools to acquire managerial theories in the
management of the enterprise, they have developed managerial skills through share
observation, or an inherent leadership ability and intelligence.

The entrepreneur has the following managerial skills:

1) The ability to plan and conceptualize

Conceptualization and planning go together. Good concepts need to be put in the
planning table to avoid the risk factor. The entrepreneur is able to forecast the future be seeing
to it that the risk involve are properly controlled.
He must be able to visualize the direction of the business towards successful takeoff. He
must see that the product or service, the pricing strategies, the cost of production, and the
inventory will generate reasonable profit and return of investment. The take off point of any
business is the generation of profit based on plans and programs.

2) The ability to organize the resources of the enterprise

A good business organization is based on around people and resources. An
entrepreneur works with others and needs people with the same values and working ability.
Efficiency and effectiveness in the work arena are the working of people with dedication and
talent to do the job properly.
The material and physical resources must be put in place. Waste of time and money has
no place in a good organization. The entrepreneur must be able to give specific directions and
work activities that will redound to efficient delivery of the necessary services to customers and
clients.

3) The ability to direct and motivate people in his organization

People are like machines that need oil that make them work smoothly and efficiently and
effectively. Machines will bug down if no oil is put into its chamber while in operation. The same
principles work with people. They need proper compensation and motivation for them to deliver
the necessary output.
Compensation and benefits are no guarantee for effective performance while it may
serve as important ingredients. The entrepreneur must be able to communicate ideas and plans
to his subordinates with the sense of humility. Good communications and human relations will
drive people to be motivated to perform their task and pride.

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Mater Dei College, Tubigon, Bohol
College of Accountancy, Business, and Management
4) The ability to control
Controlling the whole operation is a difficult task for entrepreneur. Safeguards and
control mechanism could put in place with carefully crafted policies and procedures. Such
policies and procedures must be carefully disseminated and understood by all who will
implement them.
In the implementation stage, check valves through monitoring and feedbacks
mechanism must be worked out through reports and at times conference with key people. The
progress of operation and other activities related to finance and marketing must generate the
necessary reports as bases for more plans and actions. Controlling cost and non-essential
expenses will save import profit that could be invested in profitable operations.

5) The ability to manage time

Time management is very essential ingredient to the success of an entrepreneur.
Because of the numerous activities to attend to the entrepreneur must be able to log on his time
schedule so that important activities could be attended on time.
Meetings and conferences occupy most of the time of entrepreneurs. They must be
scheduled properly that they will not complicate with important paper works in the office.
Some entrepreneurs who burn themselves out with stress die early and do not see the
fruits of their labor. They must have schedule for his family, his religion and enjoy some
personal pleasure that will eliminate the stressful task of managing his business.

6) The ability to adapt to the changing environment of business

Business today is fast changing with the advent of technology and innovations. The new
entrepreneur must be able to adapt to this changes in the business landscape for him to go with
the time of progress and expansion.
Consumers’ taste and preferences are gradually changing to better quality products and
services. Competition is shifting to more affordable quality products and entrepreneur must be
aware of this changing customer demand. Changes are applicable adaptability should be given
attention to gain continuous customer patronage.
While the above discussions are the theories and elements of good management, an
entrepreneur without formal training should attend seminars and advance schooling to get
further into the realms of better management theories that will help in the operation of the
enterprise. Learning is not the sole property of those in school. Reading and attending various
management interventions would make a great difference.
The entrepreneur, before launching into the field of business, must look forward to the
challenges of the entrepreneurial life. The decision to go into the business requires not only
investment in money and time but hard work and intelligence in order to succeed. The positive
qualities of the individual are needed to start an investment.

Characteristics of an Entrepreneur
1) Leadership and management abilities
Managerial Leadership is the ability to plan, organize, direct and control the
organizational towards the goals and objectives of the organization. It requires conceptual skills
in defining the direction of the business and the development of plans and programs that will
work effectively. The mission and vision of the organization must be set up based on his
investment and interest.
The human skill deals with how the leader will relate himself with the people around him
and those that he will encounter in the course of his business. Managers must treat their

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Mater Dei College, Tubigon, Bohol
College of Accountancy, Business, and Management
workers with dignity and honor. They are aware of their needs and problems and workers are
treated as partners in the growth of his organization. Leaders motivate people to excel in their
respective field and pay them commensurately with their efficiency and performance on the job.

2) Positive risk takers

The entrepreneur as a positive risk take, enjoys the challenging of putting his money and
time into the test. He calculated the various alternatives open to him and careful in the choice of
actions. They entrepreneur gathers complete data and makes careful analysis before making
decisions.
The entrepreneur makes things happen rather than wait for the things to happen. They
look at opportunities and make immediate actions before others plunge into the business
venture. They are confident in their intelligence and abilities and optimistic that results will be
positive.

3) Self-confidence and positive outlook

The entrepreneur has strong belief in his capacity to make difference in their chosen
field. They believe that achievements are guiding principles in man’s success as faith drives
them to do better. The entrepreneur believes in the Lord Almighty and that his talents are God
given gift that he must use for the well-being of mankind. His faith in God drives him to work with
great enthusiasm and perseverance to reach his target goals.
The entrepreneur looks at the bright side of the business. Threats are converted into
opportunities and he thinks of successes rather than failures. Positive outlook generates profit
and money that makes him richer. The poor becomes poorer because they do not think of how
to make money. They put their destiny to the BATHALA or the BAHALA NA attitude as
tomorrow is another day. The entrepreneur thinks of how to make money.

4) Innovativeness and forward looking

The blazing path to entrepreneurial success is the courage to make innovations in
products or service. The entrepreneur refuses to stop at his achievements. He looks forward in
creating new things, something different from others. He thinks of new technology that will
create new and better things for the customers. He introduces innovations that will satisfy
human needs and wants. He satisfies new market demand for new and better products.

5) Natural intelligence and decision making skills

The entrepreneur’s natural intelligence is an important requirement in making effective
decisions. The entrepreneur has to make decisions as he cannot make things happen without
making a wise choice of alternatives. Creativity and innovativeness carry with it the power to
make decisions as he needs to satisfy customer needs for new and better products and service.
The success of any business venture rests with good decisions. The entrepreneur has to
increase market demand. The customers’ wants and needs for better product changes over
time and the entrepreneur has to make decisions that would fit in in this market demand. The
entrepreneur has to follow a logical process in making decisions.

Characteristics of Entrepreneur
1. Facilitating Character – an entrepreneur must build a team, keep it motivated, and
provide an environment for individual growth and career development.
2. Self-Confidence – entrepreneurs must have belief in themselves and the ability to
achieve their goals.
3. Work with Vision and Mission – an entrepreneur must be committed to the project with a
time horizon of five to seven years. No ninety-day wonders are allowed.

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Mater Dei College, Tubigon, Bohol
College of Accountancy, Business, and Management
4. High Degree of Endurance – success of an entrepreneur demands the ability to work
long hours for sustained period of time.
5. Trouble Shooting Nature – an entrepreneur must have an intense desire to complete
task or solve a problem. Creativity is an essential ingredient.
6. Initiative and Enterprising Personality – an entrepreneur must have initiative, accepting
personal responsibility for actions, and above all make good use of resources.
7. Goal Setter – an entrepreneur must be able to set challenging but realistic goals.
8. Calculated Risk-Taking Ability – an entrepreneur must be a moderate risk-taker and
learn from any failures.

Types of Entrepreneurs
Entrepreneurs are classified as under different heads as given below. This helps the
potential entrepreneurs to choose his own nature and style of entrepreneurship.

According to the Type of Business

Entrepreneurs are found in various types of business occupations of varying size. We
may broadly classify them as follows:
1) Business Entrepreneur
Business entrepreneurs are individuals who conceive an idea for a new product or
service and then create a business to materialize their idea into reality. They tap both
production and marketing resources in their search to develop a new business opportunity.
They may set up a big establishment or a small business unit. Trading entrepreneur is one
who undertakes trading activities and is not concerned with the manufacturing work. He
identifies potential markets, stimulates demand for his product line and creates a desire and
interest among buyers to go in for his product. He is engaged in both domestic and
overseas trade.
2) Industrial Entrepreneur
Industrial entrepreneur is essentially a manufacturer who identifies the potential needs of
customers and tailors’ product or service to meet the marketing needs. He is a product
oriented man who starts in an industrial unit because of the possibility of making some new
product.

3) Corporate Entrepreneur
Corporate entrepreneur is a person who demonstrates his innovative skill in organizing
and managing a corporate undertaking. A corporate undertaking is a form of business
organization which is registered under some statute or Act which gives it a separate legal
entity.

4) Agricultural Entrepreneur
Agricultural entrepreneurs are those entrepreneurs who undertake such agricultural
activities as raising and marketing of crops, fertilizers and other inputs of agriculture.

5) Technical Entrepreneur
A technical entrepreneur is essentially an entrepreneur of “Craftsman type”. He develops
a new and improved quality of goods because of his craftsmanship. He concentrates more
on production than marketing. He does not care much to generate sales by applying various
sales promotional techniques. He demonstrates his innovative capabilities in matters of
production of goods and rendering services.

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6) Non-technical Entrepreneur
Non-technical entrepreneurs are those who are not concerned with the technical aspects
of the product in which they deal. They are concerned only with developing alternative
marketing and distribution strategies to promote their business.

7) Professional Entrepreneur
Professional entrepreneur is a person who is interested in establishing a business but
does not have interest in managing or operating it once it is established.

According to Motivation
Motivation is the force that influences the efforts of the entrepreneur to achieve his
objectives. An entrepreneur is motivated to achieve or prove his excellence in job performance.
He is also motivated to influence others by demonstrating his power thus satisfying his ego.

1) Pure Entrepreneur
A pure entrepreneur is an individual who is motivated by psychological and economic
rewards. He undertakes an entrepreneurial activity for his personal satisfaction in work, ego
or status.

2) Induced Entrepreneur
Induced entrepreneur is one who is being induced to take up an entrepreneurial task due
to the policy measures of the government that provides assistance, incentives, concessions
and necessary overhead facilities to start a venture. Most of the entrepreneurs are induced
entrepreneurs who enter business due to financial, technical and several other provided to
them by the state agencies to promote entrepreneurship.

3) Motivated Entrepreneur
New entrepreneurs are motivated by the desire for self-fulfillment. They come into being
because of the possibility of making and marketing some new product for the use of
consumers. If the product is developed to a saleable stage, the entrepreneur is further
motivated by reward in terms of profit and enlarged customer network.

4) Spontaneous Entrepreneur
These entrepreneurs start their business out of their natural talents and instinct. They
are persons with initiative, boldness and confidence in their ability which motivate them to
undertake entrepreneurial activity.

5) Growth Entrepreneur
Growth entrepreneurs are those who necessarily take up a high growth industry. These
entrepreneurs choose an industry which has substantial growth prospects.

6) Super-Growth Entrepreneur
Super-growth entrepreneur are those who have shown enormous growth of performance
in their venture. The growth performance is identified by the liquidity of funds, profitability
and gearing.

According to Stages of Development

1) First-Generation Entrepreneur
A first generation entrepreneur is one who starts an industrial unit by means of an
innovative skill. He is essentially an innovator, combining different technologies to produce a
marketable product or service.

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College of Accountancy, Business, and Management
2) Modern Entrepreneur
A modern entrepreneur is one who undertakes those ventures which go well
along with the changing demand in the market. They undertake those ventures which
suit the current marketing needs.

3) Classical Entrepreneur
A classical entrepreneur is one who is concerned with the customers and
marketing needs through the development of a self-supporting venture. He is a
stereotype entrepreneur whose aim is to maximize his economic returns at a level
consistent with the survival of the firm with or without an element of growth.

4) Innovating Entrepreneurs
Innovating entrepreneurship is characterized by aggressive assemblage of
information and analysis of results, deriving from a novel combination of factors.
Men/women in this group are generally aggressive in experimentation who exhibit
cleverness in putting attractive possibilities into practice. One need not invent but
convert even old established products or services, by changing their utility, their value,
their economic characteristics, into something new, attractive and utilitarian. Therein lies
the key to their phenomenal success. Such an entrepreneur is one who sees the
opportunity for introducing a new technique of production process or a new commodity
or a new market or a new service or even reorganization of an existing enterprise.

Imitative Entrepreneurs:
Imitative entrepreneurship is characterized by readiness to adopt successful
innovations by innovating entrepreneurs. They first imitate techniques and technology
innovated by others.

5) Fabian Entrepreneurs
These categories of entrepreneurs are basically running their venture on the
basis of conventions and customary practices. They don’t want to introduce change and
not interested in coping with changes in environment. They have all sorts of inhibitions,
shyness and lethargic attitude. They are basically risk averse or and more cautious in
their approach.

6) Drone Entrepreneurs
Entrepreneurs who are reluctant to introduce any changes in their production
methods, processes and follow their own traditional style of operations. Though they
incur losses and loses their market potential, will not take any effort to overcome the
problem. Their products and the firm will get natural death and knockout.

7) Forced Entrepreneurs
Sometimes, circumstances made many persons to become entrepreneurs. They
do not have any plan, forward looking and business aptitude. To mitigate the situational
problem, they are forced to plunge into entrepreneurial venture. Most of the may not be
successful in this category due to lack of training and exposure.

The Decision Making Process:

a) Identify the problem
The risk involved in the management of the business has to be identified and analyzed
before the solution could be made. Relevant data and information must be organized. The core

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College of Accountancy, Business, and Management
objectives are to minimize the risk factors involved as wrong choice of alternative would result to
production or operation losses.
b) Gather the data that brought the problem
Good and intelligent entrepreneur must be able to get the data that brought about the
problem. The solution to the problems is dependent on the data available at hand. Correct
information would give better solutions. False and irrelevant data would give the best solutions.

c) Analyze the data

Not all information is relevant to the solution of the problem. Some data must be
discarded. The data must focus on the problem at the hand. It must be timely gathered and the
information is based on the actual situations prevailing in the business environment. The
internal and external sources must be analyzed to find out which are relevant in formulating
alternatives solutions.
d) Formulating alternative solutions
The entrepreneur makes various alternative solutions to the problem at hand. These
solutions are subject to a series of analysis and he may need outside opinion. He may subject
the alternatives to further study before making decisions until he finds the right alternative
course of actions.

e) Selecting the best alternatives course of action

After all the alternative courses of action had been analyzed, the entrepreneur makes
the decision. The decision has to be implemented with the less possible risks in terms of money,
time, and effort. It must take into account the available manpower and material resources,
supported with financial logistics.

f) Implementing the best alternatives

The modern entrepreneur utilizes group efforts in solving business problems. Problems
and Solutions are best arrived when people who will be implementing the decisions are properly
consulted and their opinions and ideas are taken into account before the final decision is
implemented. Group effort is required in planning effective for implementation.

Organizing The Business Enterprise

The prospective entrepreneur before going into the intricate field of the business world
should first go into deep analysis of their personal and social attitudes. It is not only material
assets but personal values and characteristics. Before venturing into the field of business, it is
wise to develop entrepreneurial studies that will help determine the feasibility of the project.
Some entrepreneurs failed because they are “plain copy cats” in putting the business
because the neighbor Juan makes money going into a Mini-grocery. The entrepreneur must first
evaluate his personal interest, experience in the chosen field, the technical skills as well as
human skills as these are the vital component in the success of the business.
Business forecasting and planning skill is another vital component that must be
addressed before making investments. Careful preparation is an essential factor in setting the
enterprise into motion. Investment in money and effort may go to waste without adequate
preparation and careful planning. The loss of money and time must be prevented.

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College of Accountancy, Business, and Management
Entrepreneurial Studies
The entrepreneur must see for himself the kind of management control and how the
business will be able to generate his projected profitable investment. He sees the wide open
market of opportunities and the possible problems before he plunges into the intricate operation
of the enterprise. Wise investment through a careful analysis of the business environment would
minimize business failures.
The following steps in the business formation have been done by entrepreneurs that
applied a more scientific study of the business condition. A business project wither or an
expansion, undertake a careful panning of the project which will serve a guide in the
implementation.

Case 2 – Marian’s Organization: A Chaotic One

It was in November 2020 when Miss Marian Rivero, a business management graduate,
opened her store “Marian’s Sales” in downtown Caloocan City as an exclusive dealer of shoes
products of Parisiane in MS City. After a few days, she hired a 16-year old boy to help her in the
various manual tasks in the factory.

The five percent profit margin she attached to the cost of sales on items she was
handing provided enough reason for consumers to patronize her factory. The increasing volume
of sales justified her hiring a sales assistant after five months of operation. By February 2021,
her factory was attended by 10 workers plus the helpers and the teenage help.

Presently, Miss Rivero is performing the following functions:

1. Purchasing merchandise’ stocks outside the town;
2. Accounting;
3. Supervising sales activities
4. Cashiering and treasury;
5. Supervising inventory control
By December 2021, her factory sales reached an average of P1.5 million per month on a
P3.5 million net worth. Her customer comes from Pampanga and the nearby towns of
Pangasinan and others.
Marian realized that her sales were limited only by her ability to serve more customers.
She felt that if she could only expand her network, it would be more successful. She is
considering putting up a branch in San Carlos City and another one in Lingayen.

Her biggest problem now is how to set an organizational structure that will match her
expansion plans. Could you please help her?
(Source: Entrepreneurial Management by Marife Acierto (2019) pp. 21 – 37)

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