Entrepreneurship in Perspective PDF

BM2313 ENTREPRENEURSHIP IN PERSPECTIVE Entrepreneurship in the Modern World Entrepreneurs seek opportunities, take risks beyond security, and have the drive to push an idea...

BM2313 ENTREPRENEURSHIP IN PERSPECTIVE Entrepreneurship in the Modern World Entrepreneurs seek opportunities, take risks beyond security, and have the drive to push an idea to reality. Some people are born with it, while others can develop an entrepreneurial mindset. This mindset generates creative ideas inside or outside an organization, profit or non-profit enterprises, and business or non-business activities. Thus, entrepreneurship is an integrated concept that innovatively permeates an individual's enterprise. This mindset has revolutionized business and social ventures at every level and country (Kuratko, 2020). Today, enterprise (or enterprising) is still used as an "attitude to life, an attitude of exploring, developing, leading, and taking initiatives." Enterprise is identifying, developing, and bringing a vision to life, be it an innovative idea or a better way of doing something. Enterprise applies to business ventures and political and social decisions (Kuratko, 2020) Enterprising means "marked by imagination, initiative, and readiness to undertake new projects." Entrepreneurial means "willing to take risks to create value." Anyone – from an artist to a zoologist – can be enterprising. Entrepreneurship has a more business connotation. Both terms, whether inside or outside of business, mean that a person is the sole proprietor of his life (Kuratko, 2020). Entrepreneurial Economy Entrepreneurship is the symbol of business tenacity and achievement. Entrepreneurs are the pioneers of today's business successes. Their sense of opportunity, drive to innovate, and capacity for accomplishment have become the standard by which free enterprise is measured. This standard is taking hold within free and open economies throughout the world. Entrepreneurs make three (3) indispensable contributions to the economy: 1. Entrepreneurs create new businesses. The goods and services offered by entrepreneurs can produce a cascading effect by stimulating related industries or sectors supporting the new venture to further economic development. EXAMPLE: The first call center operations in the Philippines encouraged other BPOs to also set up in the country due to its relatively cheap rates. Thus 2015, the Philippines replaced Mumbai as the 2nd ranking BPO destination. 2. Entrepreneurs contribute greatly to national development. Entrepreneurial ventures generate new wealth. Existing businesses may remain confined to the scope of existing markets and may hit a glass ceiling in terms of income. New and improved products, services, or technology from entrepreneurs enable new markets to be developed and new wealth to be created. EXAMPLE: Increased employment and higher earnings in the Philippines shall contribute to better national income through higher tax revenue and government spending. The government can use this revenue to invest in other struggling sectors and human capital. 3. Entrepreneurs create social change. Through their unique offerings of new goods and services, entrepreneurs break away from tradition and indirectly support freedom by reducing dependence on obsolete systems and technologies. This results in an improved quality of life, morale, and economic freedom. EXAMPLE: The water supply in a water-scarce region sometimes forces people to stop working to collect water. This will impact their business, productivity, and income. Imagine an innovative, automatic, low-cost, flow-based pump that can automatically fill people's water containers. This 01 Handout 1 *Property of STI  [email protected] Page 1 of 4  BM2313 innovation ensures people can focus on their jobs without worrying about necessities like water. More time to devote to work translates to economic growth. Entrepreneurship Spectrum The following are the various spectrums of entrepreneurship: Entrepreneurs on starting a business from scratch. Many entrepreneurs start their businesses with a vision. Starting a business from scratch enables the entrepreneur to be productive. As a sole proprietor, the entrepreneur gets the first and only say – without having to run his/her decision by other parties, there will be no need for team meetings, collaboration, or voting. The entrepreneur can do what s/he wants and needs to do effectively, and the results will be up to his/her high standards. Entrepreneurs on starting a family business. Entrepreneurs choose to start a family business due to its long-term orientation. Most family businesses aim to maximize the well-being of current and future generations from a transgenerational perspective. Thus, they focus on the potential for growth and investment projects. This orientation results from the willingness of family members to pass down to their heirs a healthy and competitive firm. Family members' strong economic and emotional involvement in the enterprise implies that the firm is an asset to be safeguarded and, at the same time, to be developed (Del Giudice, 2017). Entrepreneurs on entering a partnership. A partnership is an excellent way for entrepreneurs to leverage existing resources between parties. Having partners can mean multiple sources of cash flow, which will benefit the business during the start-up and growth phases. The investment risk will be spread among others, which can protect the entrepreneur if the business does not work out as planned. Other entrepreneurs choose to enter a partnership to diversify their expertise. By engaging with partners of different expertise, the entrepreneur can broaden the scope of their business. This may lead to an expanded customer base, increasing earning potential. Partners can also be an additional source of creativity during brainstorming and problem-solving. Entrepreneurs on buying an existing business. The idea is that buying an existing business is less risky than starting from scratch, however expensive it is. In buying a business, the entrepreneur takes over an operation already generating cash flow and profits. There is already an established customer base, reputation, and employees familiar with all aspects of the business. The entrepreneur does not have to set up new procedures, systems, and policies since a successful business formula has already been implemented. In addition, it is often easier to get financing to buy an existing business than to start a new one. Bankers and investors generally feel more comfortable dealing with a company with a proven track record. Also, buying an existing business may give the entrepreneur valuable legal rights, such as patents or copyrights, which can prove very profitable. As for franchising, entrepreneurs enjoy a support system from the franchisor. Entrepreneurship and Sustainable Development Understanding how sustainability is becoming a corporate priority at the Chief Executive Office (CEO) and board levels is vital. The first step is perhaps the simplest and the hardest; seeing the entire Industrial Age system with fresh eyes. As shown in Figure 1, many executives still see the world from an Industrial Age point of view: They see the largest and most important circle as the economy, with society and environment as much smaller domains within (Senge, Smith, Figure 1. Industrial Age System vs. Modern Age System Kruschwitz, Laur, & Schley, 2010). The only 01 Handout 1 *Property of STI  [email protected] Page 2 of 4  BM2313 way to begin shifting priorities and integrating sustainability into organizations is to consider the Modern Age system. In this new way of looking at the world, the biggest circle is the environment; within that circle is human society. The economy, industries, and individual businesses are much smaller circles that fit within society and the environment. As Ray Andersen, CEO of Interface, says, businesses need to wake up to the simple fact that "the economy is the wholly owned subsidiary of nature, not the other way around." Similarly, a healthy economy can be without a stable and vibrant social order. Fortunately, many smart organizations understand the importance of this shift in perspective and practice and act accordingly (Senge, Smith, Kruschwitz, Laur, & Schley, 2010). Triple Bottom Line (TBL) The phrase "the triple bottom line" was coined in 1994 by John Elkington, the founder of a British consultancy called Sustainability. He argued that companies should prepare three (3) different bottom lines. One is the traditional measure of corporate profit—the "bottom line" of the profit and loss account. The second is the bottom line of a company's "people account"—a measure in some shape or form of how socially responsible an organization has been throughout its operations. The third is the bottom line of the company's "planet" account—a measure of its environmental responsibility. The TBL thus consists of three (3) Ps: profit, people, and the planet. It aims to measure the financial, social, and environmental performance of the corporation over some time. Only a company that produces a TBL considers the full cost of doing business. (Miller, 2020) TBL provides a framework for measuring the business's performance and the organization's success using the economic, social, and environmental lines. The term has also been called the practical framework of sustainability. Targeted toward corporations, the TBL agenda consistently focuses on the organizations' economic, social, and environmental values. Profit refers to the real economic value created by the business and enjoyed by the host society. It is the income and expenditures, taxes, business climate factors, employment, and business diversity factors, as well as the business's economic impact on society. People refer to a business's impact on employees and people outside the business (community). A business that promotes the triple bottom line addresses the well-being of and benefits the people in which the business operates. All stakeholders are interdependent via fair wages, fair-trade practices, safe work environments, retention rates, ethical standards, local hiring, local sourcing, local participation, local charitable contributions, and contributions to community living standards. Planet refers to environmental stewardship. Entrepreneurs enhance the natural order and minimize their ecological impact in a wide variety of ways that are cost-effective and easy to implement and adopt. It can be done through small efforts such as managing energy consumption, employing eco- friendly materials, managing water consumption, and minimizing waste in landfills. Entrepreneurs also contribute substantial measures such as reducing waste from packaging and determining the actual environmental cost of manufacturing, from harvesting raw materials to disposal by the end user. References: Del Giudice, M. (2017). Understanding Family-Owned Business Groups: Towards a Pluralistic Approach. Palgrave Macmillan. 01 Handout 1 *Property of STI  [email protected] Page 3 of 4  BM2313 Kuratko, D. (2020). Entrepreneurship: Theory, Process, Practice. Cengage. Miller, K. (2020, August 16). Business Insights. Retrieved from Harvard Business School Online: https://online.hbs.edu/blog/post/what-is-the-triple-bottom-line Scaborough, N. M., & Cornwall, J. R. (2016). Essentials of Entrepreneurship and Small Business Management (8th ed.). Harlow, Essex: Pearson Education Limited. Senge, P., Smith, B., Kruschwitz, N., Laur, J., & Schley, S. (2010). The Necessary Revolution: How Individuals and Organizations Are Working Together to create a Sustainable World. Nicholas Brealey Publishing. 01 Handout 1 *Property of STI  [email protected] Page 4 of 4