BACHELOR OF SCIENCE OF AGRIBUSINESS MANAGEMENT

Course Code: ELEC 101

Course Title: Entrepreneurial Mind

Credits Units: 3 units

Acad. Yr. / Semester: 2020-2021/ 1st Semester

Instructor: Karl Vincent T. Naungayan

Course Description

This Course provides an overview of the entrepreneurial process that will teach you to identify,
assess, shape, and act on opportunities in a variety of contexts, settings and organization.

Course Objectives

At the end of the course, students should be able to:

A. Understand and internalize the characteristics, types, and advantages of entrepreneurship.
B. Identify and appreciate the Contributions and Capital Resources of Entrepreneurs.
C. Develop strategic and tactical technique in addressing vital management issues.
D. Recognize and develop strategies in dealing different kinds of risk, uncertainties and liability
in venturing into Entrepreneurship.
E. Identify different kinds of Entrepreneurial Leadership Styles, types of Management and
management styles according to the needs of an Organization.
F. Identify and Understand the factors that must be consider of an Entrepreneur Going Global

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

 CHAPTER I

THE ENTREPRENEUR

Introduction

Entrepreneur is a word borrowed from the French word entreprendre meaning “one who undertakes” – that
is, a “manager”. In fact, the word entrepreneur was shaped probably from celui qui entreprend, which
loosely translated as those who get things done. The capacity and willingness to develop, organize and
manage a business venture along with any of its risks in order to make a profit is an entrepreneur. One of
the best examples of entrepreneurship is staring of new business. In economic, entrepreneurship combined
with land, labor, natural resources and capital can produce profit. Entrepreneurial spirit is characterized by
innovation and risk taking, and is an essential part of a nation’s ability to succeed in an ever changing and
increasingly competitive global marketplace.

LESSON 1: CHARACTERISTICS OF AN ENTREPRENEUR

Entrepreneurs have the same character traits as leaders, similar to the early great man theories of
leadership. Studying the entrepreneurial personality found that certain traits seem to be associated with
entrepreneurs.

 The entrepreneur is motivated by an overwhelming need for achievement and strong urge to build
 The entrepreneurs are tough, pragmatic people driven by needs of independence and
achievement.
 Entrepreneurs have keen insights, prone to brainstorms, deceptions, ingeniousness and
resourcefulness.
 Entrepreneurs are cunning, opportunistic, creative and unsentimental.
 Entrepreneurs exhibit extreme optimism in their decision-making processes.
 Entrepreneurs are prone to over confidence and over generalizations.
 Entrepreneurs are Innovator
 Entrepreneurs are Calculating inventor
 Over optimistic promoter
 Organization builder
 An entrepreneur is usually
 A positive thinker and a decision maker
 An entrepreneur needs inspiration, motivation and sensibility.

Entrepreneurship is about taking risk. The behavior of the entrepreneur reflects a kind of person willing to
put his or her career and financial security on the line and take risks in the name of an idea, spending much
time as well as capital on an uncertain venture.

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

 LESSON 2: TYPES OF ENTREPRENEURS

1. Small Business, Lifestyle and Family Entrepreneurs - A small business entrepreneur is an individual who
establishes and manage a business for the principal purpose of furthering personal goals. The business
may overlap with family needs and desires. These ventures merely provide a reasonable lifestyle for the
founding entrepreneurs. Retailing is one of the few sectors where entrepreneurial activity is extensive.

2. Franchise Entrepreneurs – Franchising is a type of license that grants a franchisee access to a

franchisor’s proprietary business knowledge, processes and trademarks, thus allowing the franchisee to
sell a product or service under the franchisor’s business name. In exchange for acquiring franchise, the
franchisee usually pays the franchisor an initial start-up fee and annual licensing fees. An entrepreneur
buying into a franchise increases the odds for survival in as much as 90% over starting independently.

Key terms:

Franchisor – owns the brand, trademark and systems of the company.

Franchisee – will have to pay a certain fee and royalty to obtain the trademark and branding to operate the
business

Three basic types of Franchise:

 Product Franchising –.deal mainly with large products, such as car, car parts, vending machine,
computers, appliances etc.
 Service Franchising – examples are salons, spa and barbershops.
 Business Format – examples are fast food, restaurant, business services, fitness etc.

3. Professional Fast-Growth and Serial Entrepreneurs – They create about two-thirds of all new job growth.
Professional entrepreneurs lead these ventures, which typically employ between 20 and 500 people, have
sales growth of at least 20% each year for four straight years and target five-year revenue projections
between 10 pesos and 50 million pesos. Less than 10% of all startups make it to this level.

As can be expected, it is well documented that these high-growth ventures receive great investor interest. A
small business entrepreneur will typically retain 100 percent ownership, since the primary motivation is
financial independence and control. In contrast, serial entrepreneurs are comfortable with relinquishing
control to “a more traditional chief executive. They also accept dilution because “talking significant outside
investment” allows them to create a big venture quickly.

4. Corporate Entrepreneurs and Intrapreneurs – broadly speaking, corporate entrepreneurship also called
as intrapreneurship involves the developing of new business ideas and the birthing of new business activity
within the context of large and established companies. Entrepreneurship is beneficial for managing
established business but not easily maintained. Large mature conservative businesses need
entrepreneurial leadership so they can perform the continuous renewal that has become a requirement for
survival.

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

5. Creative Disrupters and Innovators – These entrepreneurs are a rare breed, living on the creative edge.
Most often, these brilliant “entrepreneurial-engineers” look to technology to solve problems in ways to
“unlock value”. They are visitors from the future, living among us here and now. They have an optimistic
passion for an idea that borders on the embarrassing and restless urge to make a difference in the world.
They bring us innovations that will have a deep impact on how we live, work and think in the decades
ahead.

6. Extreme Entrepreneurs – Entrepreneurship is the last frontier where someone can explore individuality
and pioneer a dream. German economist Johann Heinrich von Thunen described the entrepreneur as part
“explorer and inventor”. Branson says “Being an adventurer and entrepreneur are similar. You are willing
to go where most people won’t dare”

7. Social Entrepreneurs – Social entrepreneurs are the one who starts a business to solve a specific social
problem. These people can make money off their business. An example would be Blake Mycoskie founder
of Toms (footwear). He started Toms after a visit to Argentina where he saw a lot of kids without shoes. For
every one pair of Toms sold, he gave one pair of shoes to kids that needed shoes. Making money and
helping others.

LESSON 3: CONTRIBUTION OF ENTREPRENEURS

1. Develop New Markets –Under the modern concept of marketing, markets are people who are willing and
able to satisfy their needs. Entrepreneurs are resourceful and creative. They can create customers or
buyers. This makes entrepreneurship different from ordinary businessmen who only perform traditional
functions of management like planning, organization and coordination.

2. Discover New Sources of Materials – Entrepreneurs are never satisfied with traditional or existing
sources of materials. Due to their innovative nature, they persist on discovering new sources of materials to
improve their enterprises. In business, those who can develop new sources of materials enjoy a
comparative advantage in terms of supply, cost and quality.

3. Mobilize Capital Resources – Entrepreneurs are the organizers and coordinators of the major factors of
production, such as land labor and capital. They properly mix these factors of production to create goods
and service. Capital resources, from a layman’s view refer to money. However, in economics, capital
resources represent machines, buildings and other physical productive resources. Entrepreneurs have
initiative and self-confidence in accumulating and mobilizing capital resources for new business or business
expansion.

4. Introduce New Technologies, New Industries and New Products – Aside from being innovators and
reasonable risk-takers, entrepreneurs take advantage of business opportunities, and transform these into
profits. So, they introduce something new or something different. Such entrepreneurial spirit has greatly
contributed to the modernization of economies. Every year, there are new technologies and new products.
All of these are intended to satisfy human needs in a more convenient and pleasant way.

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

5. Create Employment – The biggest employer is the private business sector. Millions of jobs are provided
by the factories, service industries, agricultural enterprises and the numerous small scale businesses.

LESSON 4: CAPITAL RESOURCES FOR ENTREPRENEURS

1. Human Capital – This includes physical labor, one of the most important resources which can be
classified in a number of ways, direct or indirect labor, recurring/non-recurring, designated/non-designated,
wage/salary, blue collar/, management, union/no union, executive management and other employees. It
also includes the board of directors, professional service providers and consultants on the advisory board.

2. Opportunity Capital – It is the insight to the opportunity and particular know-how in solving a problem.
Also called intangibles and goodwill, it is the first of two business assets that includes intellectual property
like: patents, trade secrets, trademarks, confidentiality agreements, knowledge capital and relationship
capital which is especially important for strategic partnership and outsourcing. It could also include
exclusive access to sources of financial capital, primary marketing research and business models, special
leasing/rental agreements to winning location and can even include “social capital” or “social assets” which
are special friendships, access to lead users, unique obligations, that provides access to or framework for
the opportunity

3. Economic Capital – The second of two business assets is called tangibles. There are two types of
tangibles: fixed assets like land, physical building, machinery, equipment. The second type is called current
assets which include inventory, materials, direct materials and subcontract materials, like components and
parts produced by a supplier or vendor in accordance with designs and specifications.

4. Financial Capital – This includes cash in the checking account, and cash equivalents like publicly traded
stocks, sometimes accounts receivables from marquee customers and personal secured loans made to the
venture. Clearly these financial resources are most frequently needed.

5. Entrepreneurial Capital – This includes the collective domain expertise, the execution intelligence, the
time and commitment and combined intrinsic motivation of a venture team. It is assemble to assume risk
and begin a new business enterprise in a specific space to accomplish a specific thing. It is the
entrepreneur, who quite often includes other entrepreneurs that creates and drives value out of unique and
sometimes exclusive combinations of the four other resources above. Without entrepreneurs, the resources
would not be gathered and allocated towards a common goal- without this last resource, the venture never
takes place.

LESSON 5: ADVANTAGES OF ENTREPRENEURSHIP

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

Every successful entrepreneur brings about benefits not only for himself/herself but for the municipality,
region or country as a whole. The benefits that can be derived from entrepreneurial activities are as follows:

 Enormous personal financial gain.

 Self-employment, offering more jobs satisfaction and flexibility of the work force.
 Employment for others, often in better jobs.
 Development of more industries, especially in rural areas or regions disadvantaged by economic
changes, for example due to globalization effects.
 Encouragement of the processing of local materials into finished goods for domestic consumption
as well as for export
 Income generation and increased economic growth
 Healthy Competition thus encourages higher quality products
 More goods and services available
 Development of new markets
 Promotion of the use of modern technology in small-scale manufacturing to enhance higher
productivity
 Encouragement of more researches/studies and development of modern machines and equipment
for domestic consumption
 Development of entrepreneurial qualities and attitudes among potential entrepreneurs to bring
about significant changes in the rural areas.
 Freedom from the dependency on the jobs offered by others
 The ability to have great accomplishments
 Reduction of the informal economy
 Emigration of talent may be stopped by a better domestic entrepreneurship climate.

CHAPTER I

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

 ASSESSMENT

ESSAY/DISCUSSION: Answer the following Questions. Minimum of (4) Four Sentences.

Plagiarized answers will automatically receive a score of (0).

Plagiarism includes, but is not limited to:

 Copying and pasting text from online media, such as encyclopedias or journal articles without attribution.
 Copying and pasting text from any website.
 Replacing a few selected words using a thesaurus or just using words from your own head to get synonyms.
 Using another student's work and claiming it as your own, even with the other student's permission. The
latter is an act of collusion in which both students are plagiarizing.
 Submitting an essay or paper that was written for another class or another purpose without the consent of
the current instructor

Important Tips:

 Use your own ideas. The focus of the paper should be based on your own ideas.

QUESTIONS:

1. What motivates entrepreneurs to start a business? Give at least 3 factors and explain.

2. What impact does entrepreneurship have on the economy?

3. As a future entrepreneur how can you minimize the impact of your businesses on the environment?

4. Which resources are most difficult for entrepreneurs to obtain?

5. As a future Social entrepreneur, what social problem would you like to address and how would you
respond to it? How would you assess your social impact?

CHAPTER 2

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

 ENTREPRENEURIAL MANAGEMENT

Introduction

Peter Drucker Remarked that for the existing large company, the controlling words in the phrase
“entrepreneurial management is “entrepreneurial”. In any new business venture, the controlling word is
“management”. Therefore, for the purposes of our discussions we lean toward management as a discipline
for entrepreneurs.

LESSON 1: DEFINING ENTREPRENEURIAL MANAGEMENT

Entrepreneurial management - is the practice of taking entrepreneurial knowledge and utilizing it for
increasing effectiveness of new business venturing as well as small-and medium sized business.

The main purpose of entrepreneurial management is continually modifying or reorganizing these vital
management issues:

 What is this venture about? (mission and values statement)

 Where should it go? (goals and objectives)
 How will it get there? (growth strategy)
 What does it need to get there? (people and resources)
 What structure is best? (organizational capabilities)
 How much money does it need and when? (financing strategy)
 How will it recognize the final destination? (Vision Success)

These vital entrepreneurial management issues and activities play out in what we call the entrepreneurial
life cycle. The entrepreneurial life cycle repeats itself in businesses of all sizes, from start-ups in a garage
to corporate entrepreneurship activities in global Fortune 500 companies.

LESSON 2: DISTINCTION BETWEEN ENTREPRENEUR AND MANAGER

The term Entrepreneur and Manager are considered one and the same. But the two terms have different
meanings. The following are some of the differences between manager and entrepreneur.

ENTREPRENEUR MANAGER
 Entrepreneur’s start their own business  Manager provides his services in an
enterprise is because they comprehend the enterprise established by someone.
venture for their individual satisfaction and
has personal stake.
 Entrepreneur bears all the risk and  Manager is an employee and does not
uncertainties involved in running an accept any risk.
organization.
 Entrepreneur’s objective is to innovate and  Manager’s objective is to supervise and
create and he acts as an agent of change. create routines. He implements the
entrepreneur’s plans and ideas.

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

  Entrepreneur is faced with more income  Manager’s compensation is less dependent
uncertainties as his income is contingent on on the performance of the organization.
the performance of the firm.
 Entrepreneur is not induced to involve in  Managers may cheat by not working hard
fraudulent behavior. because his income is not tied up to the
performance of the organization.
 Entrepreneur is required to have certain  Managers are educated in the fields of
qualification and qualities like high management theories and practices.
accomplishment motive, innovative thinking,
forethought, risk bearing ability etc.
 Entrepreneur deals with faults and failures  Manager makes every effort to avoid
as part of learning experience. mistakes and he postpones failure.
 An entrepreneur is intensely dedicated to  Manager cannot replace an entrepreneur in
develop business through constant spite of performing the allotted duties
innovation. because a manager has to work as per the
guidelines laid down by the entrepreneur

LESSON 3: ENTREPRENEURIAL MANAGEMENT VS MANAGER OF A LARGE ORGANIZATION

Larger organization and entrepreneurial ventures are two totally different horses to ride on. Both have their
own unique strengths and weaknesses. While large organizations can make things work because of their
sheer size, they fall short when it comes to experimentation and flexibility. Entrepreneurial ventures can
move faster than large organization but lack resources as to streamline their processes.

ENTREPRENEUR VS MANAGER OF A LARGE ORGANIZATION

ENTREPRENEUR MANAGEMENT MANAGER OF A LARGE ORGANIZATION

Customer Handling and Satisfaction
 Entrepreneur being very flexible and  A manager of a large organization is
adaptive will quickly move to resolve any evaluated on organization specific
customer issues. She will be able to delight parameters when it comes to customer
customer as she will strive to do more than satisfaction. Managers might not have
what customer expects. enough room to satisfy all customers need
because of them.
Career Growth and Salary
 For entrepreneurs, career growth is all  For managers of a large organization, there
dependent on the growth of the venture. If is a certain career path. Salaries are
the venture succeeds entrepreneur gets guaranteed at the end of the month.
rewarded by lots of money. However, if the However promotions are time bound and
venture fails it may lead to loss of money career growth cannot be explosive.
and bankruptcy.
Problem Solving vs. Delivering
 Entrepreneurs have a lot of more  Manager of large organization is more
challenges and issues to handle. concerned about delivering in specified
Entrepreneurs are not only facilitator but budget, time, and quality. Managers are

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

 sometimes problem solver, hands on kind of more of a facilitator and coordinator rather
person. than a problem solver.

To summarize the entrepreneur vs. manager of large organization discussion, let us look at the essential
differences between an entrepreneur and a manager of large organization.

Manager of Large Organization Advantages:

A. Project Execution, Knowledge Aspect

 Manager has sizable company resource at disposal.

 Manager manages large sized teams, interact with big clients and gain better professional
experience than an entrepreneur.
 She handles complex and projects across geographies and is better equipped to handle cross
functional and geographical teams.

B. Salary, Career and Growth Aspects

 Managers have more certainty of the employment.

 Mangers have more learning opportunities from her organization
 Manager have fixed and easy to understand career path
 Managers gets salary at the end or half week of every month

Manager of Large Organization Disadvantages:

A. Project Execution, Knowledge Aspect

 Managers are confined to more or less one or two areas of expertise.

 Large bureaucracy of organization sometimes becomes a challenge.
 Managers cannot experiment a lot with processes and products offered by her organization

B. Salary, Career and Growth Aspects

 Time bound promotion

 Predetermined increase in salary and bonuses
 Restrictive corporate environment that subdues creativity and risk taking mostly
 Repetitive work

Entrepreneurs Advantages:

A. Project Execution, Knowledge Aspect

 Can design and modify products and processes at will

 Can delight customer with extra goods or deliveries

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

  Flexible and adaptable

B. Salary, Career and Growth Aspects

 Salary comes very late, only when organization is profitable

 Makers a lot of money if venture is successful
 Growth is explosive. On success, she may become CEO or chairan

Entrepreneurs Disadvantages:

A. Project Execution, Knowledge Aspect

 Non existing process can hamper project

 Time spent on solving day to day problem
 She needs to focus on non-essential task such as procurement, hiring, finance which are taken
care of by departments in large organization.

B. Salary, Career and Growth Aspects

 Most of the time her personal money us on the line

 Too many challenges can cause burnouts
 Spends lesser time spent with family initially
 Salary is not guaranteed.

LESSON 4: THE SEVEN STAGES IN THE ENTREPRENEURIAL LIFE CYCLE

The Entrepreneurial Life Cycle repeats itself in businesses of all sizes, from start-ups in a garage to
corporate entrepreneurship activities in global Fortune 500 companies. It starts with an entrepreneur who
perceives an opportunity, creates an organization to pursue it, assembles the required resources,
implements a practical plan, and assumes the risks and the rewards, all in a timely manner for all involved.

Not all entrepreneurial life cycles follow a single process, but our research suggests that the stages we
present below are common in the most successful emerging growth ventures. Size, profitability,
commitment, complexity, scale of organizational structure, decrease in risk, increase in value, and
decrease in founders’ involvement characterize each stage. We believe that by knowing and understanding
these stages entrepreneurs, business managers, investors, and consultants will be able to make more
informed decisions, and most of all, be prepared themselves for challenges that lie ahead.

Seven Stages in The Entrepreneurial Life Cycle:

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

Stage 1. Opportunity Recognition

This “gestation” period is quite literally the “pre-start” analysis. It often occurs over a considerable period of
time ranging from one month to ten years. At this stage it is important to research and understand the
dimensions of the opportunity, the concept itself, and determine how to decide whether it is attractive or
unattractive. The individuals need to look internally and see if they are truly ready for entrepreneurship. The
vast majority of people, including almost all inventors, never moves off of this stage and remain just
“considering” entrepreneurship.

Stage 2. Opportunity Focusing

This is a “sanity check,” a go/no-go stage gate for part-time entrepreneurs because it fleshes out shaky
ideas and exposes gaping holes. Venture capitalist Eugene Kleiner, of Kleiner Perkins Caufield & Byers,
says, “Focus is essential; there can be the possibility of the business branching out later, but the first phase
of a company should be quite narrowly defined.” It is important to include objective, outside viewpoints
because different people can investigate the same opportunity and come to opposite conclusions.

Stage 3. Commitment of Resources

Most entrepreneurs see commitment as incorporating their business or quitting their day job. But this stage
actually starts with developing the business plan. There is a huge difference between screening an
opportunity and researching and writing a business plan. Writing an effective business plan requires a new
level of understanding and intense commitment. The process will take between 200 to 300 hours, so
squeezing that amount of time into evenings and weekends can make this stage stretch over three to
twelve months. A common mistake entrepreneurs make is skipping the business plan; commit other
resources, start the venture, then follow up and try to determine exactly what the focus will be for the
venture.

Stage 4. Market Entry

Profitability and success define the market entry stage. The entrepreneur is committed with a very simple
organization, the resources were correctly allocated according to the business plan, and the first sales were
made. This is what defines success in the very early stages. If the business model was profitable,
reasonable objectives were met, and the venture is on track for attaining true economic health, then the
entrepreneur can chose between a capital infusion for growth or remaining small with self-financing
(bootstrapping).

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

Stage 5. Full Launch and Growth

At this stage, the entrepreneur needs to choose a particular high-growth strategy. Upon considering such
alternatives, quite often the entrepreneur chooses to remain a small business and never passes this stage
or perhaps opts to remain operating as a sole proprietor. Or the venture could remain small for the simple
fact that not all small ventures can or will become big companies. They are not fast growth potential
because there is not enough room in the market for growth, their production and management systems are
not scalable, or they will not scale because the rate is too great of a challenge to the management.

Stage 6. Maturity and Expansion

Now the venture is a market leader at cruising altitude. The growth becomes a natural extension of the
venture through professional management practices. This professional management team is implementing
the venture’s growth strategy through global expansion, acquisitions, and mergers as cash is plentiful and
inefficiencies are completely flushed out.

Stage 7. Liquidity Event

This harvesting stage is focused on capturing the value created in the previous stages through a business
exit. Typical exits are an initial public offering (IPO) or being acquired by a larger publicly traded
corporation. Unfortunately, most of the literature in entrepreneurship has concentrated on the earlier
stages. Little attention has been given to exits. We know from experience that the opportunity to exit
successfully from a venture is a significant factor in the entrepreneurial life cycle, both for the entrepreneur
and for any investors providing investment capital along the way.

CHAPTER II

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

 ASSESSMENT

ESSAY/DISCUSSION: Answer the following Questions. Minimum of (4) Four Sentences.

Plagiarized answers will automatically receive a score of (0).

Plagiarism includes, but is not limited to:

 Copying and pasting text from online media, such as encyclopedias or journal articles without attribution.
 Copying and pasting text from any website.
 Replacing a few selected words using a thesaurus or just using words from your own head to get synonyms.
 Using another student's work and claiming it as your own, even with the other student's permission. The
latter is an act of collusion in which both students are plagiarizing.
 Submitting an essay or paper that was written for another class or another purpose without the consent of
the current instructor

Important Tips:

 Use your own ideas. The focus of the paper should be based on your own ideas.

QUESTIONS:

1. “An entrepreneur could be a manager but a manager cannot be an entrepreneur” Do you agree with this
phrase? Yes or No and why?

2. The heart of entrepreneurial management is continually juggling these vital management issues.

Select one Local company to be your reference in answering the following questions.

 What is this venture about? (mission and values statement)

 Where should it go? (goals and objectives)
 How will it get there? (growth strategy)
 What does it need to get there? (people and resources)
 How will it recognize the final destination? (Vision Success)

|Bachelor of Science in Agribusiness – Entrepreneurial Minds

|Bachelor of Science in Agribusiness – Entrepreneurial Minds