Entrepreneurship: Origins, Impact, and Characteristics

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Questions and Answers

Which scenario exemplifies an entrepreneur effectively 'buying at certain prices in the present and selling at uncertain prices in the future,' as described by Richard Cantillon?

  • A tech company patents a new technology to dominate the market for the next 20 years.
  • A restaurant owner sets menu prices based on competitor analysis and local market research to ensure profitability.
  • A retailer purchases goods from a supplier at a fixed rate with a long-term contract, ensuring stable profit margins.
  • An investor purchases a large quantity of wheat futures, betting on rising prices due to unpredictable weather patterns. (correct)

How does Joseph Schumpeter's view of innovation extend beyond the traditional understanding of merely using inventions?

  • Schumpeter emphasizes that innovation includes introducing new means of production and new forms of organization. (correct)
  • Schumpeter limits innovation to the realm of technology and patents only.
  • Schumpeter argues that innovation is only about creating entirely new markets, not improving existing products.
  • Schumpeter focuses mainly on the financial aspects of innovation like funding

Which of the following best illustrates the concept of 'blending risk-taking, creativity, and/or innovation with sound management' in entrepreneurship?

  • Developing a revolutionary technology without a viable business plan or market analysis.
  • Launching a new product line based solely on market research, without considering unique creative elements.
  • A company that uses customer feedback and market analysis to improve the customer's experience and business operations. (correct)
  • A startup secures significant venture capital funding but fails due to operational inefficiencies and poor financial oversight.

How does the introduction of services like Gojek or Grab exemplify the concept of 'the opening of new markets' as a business model innovation?

<p>They created a completely new value chain by connecting people who need transportation with people who can provide it. (B)</p> Signup and view all the answers

In what way does Alfred Marshall's definition of an entrepreneur as someone who coordinates 'the four factors (land, labor, capital and organization) together' reflect a holistic view of business?

<p>It considers the entrepreneur's role in managing and integrating different resources for value creation. (C)</p> Signup and view all the answers

Which of the following scenarios exemplifies an entrepreneur demonstrating 'demand for efficiency and quality' within the 'achievement cluster' of personal entrepreneurial competencies?

<p>An entrepreneur implements a rigorous quality control process and invests in employee training to exceed customer expectations and reduce waste. (A)</p> Signup and view all the answers

How might 'mergers and divestments' lead to innovation within an organization, according to the principles of entrepreneurship?

<p>By creating opportunities to restructure assets, integrate diverse expertise, and explore new market segments. (B)</p> Signup and view all the answers

Which of the following strategies does not exemplify an 'opportunity seeking' behavior in an entrepreneur?

<p>Relying solely on past successes and avoiding new ventures to minimize potential losses. (A)</p> Signup and view all the answers

How does the creation of 'Bianca's Ice Candy' featuring melon chili flavor reflect the business model innovation of 'the opening of new markets'?

<p>Introducing unique flavor combinations which cater to niche consumer preferences. (C)</p> Signup and view all the answers

An entrepreneur who is 'pro-active' is MOST likely to:

<p>Anticipate future challenges and devise risk mitigation plans in advance. (A)</p> Signup and view all the answers

In the context of personal entrepreneurial competencies, which statement most accurately distinguishes 'systematic planning and monitoring' from 'goal setting'?

<p>'Goal setting' focuses on defining objectives, while 'systematic planning and monitoring' involves creating strategies and tracking progress towards those objectives. (D)</p> Signup and view all the answers

Which of the following scenarios exemplifies the entrepreneurial competency of 'persuasion' from the 'power cluster'?

<p>An entrepreneur builds consensus among diverse stakeholders by articulating a compelling vision and addressing their concerns. (D)</p> Signup and view all the answers

How can understanding the 'history of entrepreneurship,' particularly the contributions of figures like Richard Cantillon, help contemporary entrepreneurs make better business decisions?

<p>By reinforcing the need to take calculated risks, anticipate uncertainty, and adapt effectively to changing market conditions. (D)</p> Signup and view all the answers

Which action best exemplifies introducing a 'new method of production'?

<p>Restructuring process to make quality control the responsibility of all employees. (D)</p> Signup and view all the answers

According to Frank H. Knight, what is the primary difference between 'risk' and 'uncertainty' in the context of entrepreneurship, and why does he argue that risk is impossible to estimate or predict statistically?

<p>Knight argues that risk involves situations where probabilities can be calculated, while uncertainty involves situations where probabilities are unknown and thus cannot be statistically predicted. (A)</p> Signup and view all the answers

What is the most nuanced interpretation of the phrase, 'Feet: Dream high but stick to the ground' with respect to the illustration of 'The Anatomy of an Entrepreneur'?

<p>Entrepreneurs should have grand aspirations while remaining practical and realistic about the steps required to achieve them. (C)</p> Signup and view all the answers

What does the 'power cluster' of entrepreneurial competencies primarily enable an entrepreneur to do?

<p>It helps entrepreneurs build connections and have confidence. (C)</p> Signup and view all the answers

How is the introduction of the MP3 player an example of 'introduction of new good'?

<p>The MP3 significantly improved the ability to store large numbers of high quality audio recordings without taking up much space. (C)</p> Signup and view all the answers

In the illustration of "The Anatomy of An Entrepreneur" what is the significance of the 'Brain: Pool of Ideas'?

<p>An entrepreneur needs a constant source of innovation and creative thinking to drive their business forward. (C)</p> Signup and view all the answers

Which one of these options is an example of 'The Conquest of New Supply'?

<p>Using cactus leaves as a clothing material. (C)</p> Signup and view all the answers

What is a key difference between how Jean-Baptiste Say and later economists viewed the role of the 'entrepreneur'?

<p>Say distinguished the entrepreneur from the capitalist, highlighting the entrepreneur's active role in driving economic activity. (A)</p> Signup and view all the answers

How does the introduction of a new toothpaste brand that focuses on 'all day freshness', exemplify the concept of "business model - the opening of new market"?

<p>The new toothpaste focuses on different, under addressed consumer desire within the oral hygiene market. (D)</p> Signup and view all the answers

How the illustration of 'Php 1.00' watermelons being turned into 'Php 10.00' watermelon smoothies demonstrating entrepreneurship?

<p>Because it turns something of low value, into very high value. (A)</p> Signup and view all the answers

What is the 'Mouth' represent in 'The Anatomy of An Entrepreneur'?

<p>The 'Mouth' represents communicating a vision. (C)</p> Signup and view all the answers

How did mang inasal's merger with Jollibee exemplify innovation?

<p>The merger of expertise between different companies leads to efficiency. (D)</p> Signup and view all the answers

Which of the following scenarios best illustrates an entrepreneur leveraging 'information seeking' within the 'planning cluster' of personal entrepreneurial competencies?

<p>An entrepreneur conducts extensive research on industry trends, competitor analysis, and customer preferences to inform strategic planning and decision-making. (B)</p> Signup and view all the answers

What is the most accurate interpretation of Hisrich, Peter, and Shepherd's explanation of entrepreneurship?

<p>Assuming risks for monetary and personal satisfaction. (B)</p> Signup and view all the answers

How did Henry Ford's introduction of the assembly line represent 'introduction of new method of production'?

<p>It dramatically reduced production time and costs, making cars affordable for the masses. (A)</p> Signup and view all the answers

How can entrepreneurship have a meaningful impact?

<p>It spurs economic growth, creates jobs and creates wealth. (A)</p> Signup and view all the answers

Flashcards

Entrepreneurship

The process of creating something new with value, devoting time and effort, assuming financial and social risks, and receiving monetary and personal satisfaction.

"Entreprendre"

The 13th-century French word meaning 'to undertake,' serving as the historical root of entrepreneurship.

Entrepreneurial Innovation

Innovate by figuring out how to use inventions & introducing new means of production, new products, and new forms of organization

Entrepreneurship defined

The mindset and process to create and develop economic activity by blending risk-taking, creativity, and/or innovation with sound management.

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Achievement Cluster

A cluster of competencies including opportunity seeking, persistence, risk-taking, commitment to work, and demand for efficiency and quality.

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Planning Cluster

A cluster of competencies which includes goal setting, information seeking, and systematic planning and monitoring.

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Power Cluster

A cluster of competencies includes persuasion and networking. and self-confidence

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Impact of Entrepreneurship

Creating opportunity and jobs, spurs economic growth and creates wealth. Bring Innovation.

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Study Notes

Session Theme

  • Entrepreneurship and its origins is the theme of the session.

Presentation Outline

  • The session will cover the origin and history of entrepreneurship.
  • It will also cover entrepreneurship's impact.
  • Different types of innovation.
  • It will also touch on different characteristics of entrepreneurs and proactive versus reactive entrepreneurial behavior.

Concept of Entrepreneurship

  • It is the creation of something new with value through time and effort.
  • The process involves assuming financial and social risks and uncertainties.
  • It yields in monetary rewards and personal satisfaction.
  • This has been observed by Hisrich, Peters, and Shepherds.
  • An entrepreneur's brain contains a pool of ideas.
  • They communicate a vision through their mouth.
  • Relying on their gut is indicated to be connected with their stomach.
  • Entrepreneurs dream high but stay grounded.
  • The eyes are always looking for opportunities.
  • Entrepreneurs use their ears to listen for feedback.
  • They stay moving, despite the tough moments, by using their legs.
  • A full of passion heart is something they posses.

History of Entrepreneurship

  • The 13th-century French word "Entreprendre" translates to "undertake".
  • "Entreprendre" serves as the root of "Entrepreneurship".
  • Richard Cantillon said that entrepreneurs buy at certain prices now, and sell at uncertain prices later and entrepreneurs bear uncertainty.
  • Daniel Defoe considered entrepreneurs to be "projectors" and adventurers.
  • Jean Baptiste Say said that entrepreneurs are rare individuals who make the economy work and he distinguished the entrepreneur from the capitalist.
  • John Stuart Mill stated that they are much more than capitalist but also venture mangers.
  • Alfred Marshall thought the entrepreneur coordinated the four economic factors.
  • The four economic factors, per Marshall, are land, labor, capital, and organization.
  • Frank H. Knight said that risk is impossible to to predict or statistically estimate.
  • Joseph Schumpeter said entrepreneurs innovate via new means of production, products, and organizational forms.

Innovation

  • Introduction of new and quality goods includes MP3 players and film cameras.
  • A "new method of production" is also a form of product innovation
  • Business models are another form innovation via "the opening of new markets".
  • The conquest of new supplies is key for innovation
  • Mergers and divestments is a form of expansion

Entrepreneurship Defined

  • It is a mindset and process to develop economic activity.
  • Includes the blend of risk-taking, creativity, or innovation with sound management.
  • All of the above is done within new or existing organizations.
  • It involves increasing the value of a product, in this case from Php 1.00 to Php 1.50.
  • It can also mean adding value to raw goods, watermelon, to create a beverage, at Php 10.00. which originally cost Php 1.00.

Impact of Entrepreneurship

  • Spurs economic growth.
  • Creates jobs.
  • Boosts innovation.
  • Creates wealth.

Role of an Entrepreneur

  • Perceives opportunities in the environment.
  • Takes risks.
  • Mobilizes capital for a business.
  • Introduces innovation.

Personal Entrepreneurial Competencies

  • The Achievement Cluster.
  • The Planning Cluster.
  • The Power Cluster.

The Achievement Cluster

  • Opportunity seeking.
  • Persistence.
  • Risk-taking.
  • Commitment to work.
  • Demand for efficiency and quality.

The Planning Cluster

  • Goal setting.
  • Information seeking.
  • Systematic planning and monitoring.

The Power Cluster

  • Persuasion and networking.
  • Self-confidence.

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