ILOCOS SUR POLYTECHNIC STATE COLLEGE

TAGUDIN Campus

MODULE 1
MODULE 1: INTRODUCTION: CONTEXT AND ISSUES
Learning Outcomes
By the end of this topic, you should be able to:
1) Understand the history of entrepreneurship
2) Know and explain the different contemporary views of entrepreneurship.
3) Define entrepreneurship
4) Differentiate the differences between small business and entrepreneurial venture.

CONTENTS:
 History of Entrepreneurship
 Defining Entrepreneurship
 Entrepreneurship as Field of Study
 Growth of Entrepreneurship Education

TOPIC 1
ORIGIN OF ENTREPRENEURSHIP

HISTORY OF ENTREPRENEURSHIP
In the Earliest period, definition of entrepreneurship began as early as the Marco Polo
who comes to the Middle East for trade. Marco Polo has signed an agreement with the
capitalists to sell their products. In the contract merchant adventurer took a loan at 22.5% rate
including insurance. Capitalist was the passive risk bearer and merchant adventurer took the
active role in trading, bearing all physical and emotional risks. When the merchant adventurer
successfully sold the goods and completed the trip, the profits were divided with the capitalist
taking most of them up to 75%, while the merchant adventurer settled for the remaining 25%.
In middle ages, Entrepreneur is described as someone who is involved in the care and
control of a large production projects. It is possible to control the project using the resources
provided by the government. In this case, the entrepreneur does not bear any risk. Entrepreneurs
in this age, is a have control and authority of construction works such as public buildings and
churches. A typical entrepreneur in the middle age was the cleric – the person in charge of
great architectural works, such as castles and fortification, public buildings, abbeys and
cathedrals.
In 17th century, the evolution of entrepreneurship can be related with the relationship
between risk and entrepreneurs. Entrepreneurship is the person who signed the contract
agreement with the government to provide a service or supply products that have been
determined. The contract price is fixed. Then, the entrepreneurs are fully responsible for the
gains and losses of the business. John law, a Frenchman was one of the entrepreneurs in that
period. The founder of the royal bank of France and the Mississippi Company, which had an
exclusive franchise to trade between France and the new world. Monopoly on French trade
eventually led to collapse of the company. Richard Cantillion, an economist defines
entrepreneurs earlier. In his view, the entrepreneur is risk insurers. Merchants, farmers,

Course Code: ELECT 101

Descriptive Title: ENTREPRENEURIAL MANAGEMENT Instructor:RHEA P. CORTEZ
ILOCOS SUR POLYTECHNIC STATE COLLEGE

TAGUDIN Campus

MODULE 1
craftsmen, and so is an entrepreneur. They buy things at a certain price and sell it at a price that
is uncertain, with the risks.
In the 18th century, the person with capital was differentiated from the one who needed
capital. The entrepreneur was distinguished from the capital provider. One reason for this
differentiation was the industrialization occurring throughout the world. Eli Whitney was an
American inventor best known for inventing the cotton gin. This was one of the key inventions
of the industrial Revolution. Thomas Edison, the inventor of many inventions. He was
developing new technologies and was unable to finance his inventions himself. Edison was a
capital user or an entrepreneur, not a provider or a venture capitalist.
late 19th and early 20th century, Entrepreneurs are not always associated with the
management. The entrepreneur organizes and manages an enterprise for personal gain. The
materials consumed in the business, for the use of the land, for the services he employs, and
for the capital he requires. Andrew Carnegie is one of the best examples of this definition.
Carnegie, who descended from a poor Scottish family, made the American Steel Industry one
of the wonders of the industrial world. In the middle of the 20th Century, the function of the
entrepreneurs is to recreate or revolutionize the pattern of production by introducing an
invention. Innovation, the act of introducing some new ideas, is one of the most difficult tasks
for the entrepreneur. For example, Edward Harriman, who reorganized the railroad in the
United States and John Morgan, who developed his large banking house by reorganizing and
financing the nation’s industries. Besides, the Egyptian who designed and built great pyramids
out of stone blocks weighing many tons each, to laser beams, supersonic planes and space
stations.
In 21st century, Entrepreneurs are known as a hero for Free Enterprise market.
Entrepreneur of the century created many products and services and is willing to face a lot of
risks in the business. According to Kuratko & Hodgetts, most people say entrepreneurs are
pioneers in creating new businesses. In the year 2005 Hisrich, Peter and Shepherd regarded
entrepreneur as an organizer who controls, systematize, purchases raw materials, arranges
infrastructure, throw in his own inventiveness, expertise, plans and administers the venture.
The Future of entrepreneurship will be growth with development of technologies. The modern
technologies and internet have improved the ways of conduct business. Entrepreneurs now
have the luxury of putting their business idea into action through the click of button.

CONTEMPORARY VIEWS OF ENTREPRENEURSHIP

Lloyd Shefsky, in his book, Entrepreneurs are Made Not Born, defined entrepreneur by
dividing the word into 3 parts: Entre means to enter, Pre means before, Neur means nerve
center. Entrepreneurship is someone who enters business – any business – in time to form
change substantially that business nerve center. He describes an Entrepreneur in a broader
perspective by postulating that Entrepreneurship is now a concern of various professionals.
Karl Vesper. “Entrepreneurship is now a concern of various professions”
 Economist: Brings resources, labor, materials and other assets who increases its value
 Psychologist: Driven by certain forces; Need to obtain something, to accomplish or
escape from authority of others
 Businessman: Threat, aggressive competitor, ally, a source of supply, customer or
someone good to invest in.

Course Code: ELECT 101

Descriptive Title: ENTREPRENEURIAL MANAGEMENT Instructor:RHEA P. CORTEZ
ILOCOS SUR POLYTECHNIC STATE COLLEGE

TAGUDIN Campus

MODULE 1
 Capitalist: Creates wealth for others, finds better ways to use resources, reduce waste
and produce jobs.
Robert Nelson, “a person who is able to look at the environment, identify opportunities to
improve the environment, marshal resources, and implement action to maximize opportunities.
Include people in work situation in large, medium and small business enterprises, cooperatives
and government.
Joseph Schumpeter, “Doing things that are not generally done in the ordinary course of
business routine.
Jeffry Timmons, “the ability to create and build a vision from practically nothing.” The vision
requires willingness to take calculated risks (personal and financial) and do everything to
reduce chances of failure.
Albert Shapero, “a kind of behavior that will include:
 Initiative taking
 Organizing and recognizing of social/economic mechanisms to turn resources and
situations to practical account
 Acceptance of risks and failures
DEFINING ENTREPRENEURSHIP
Entrepreneurship, the entrepreneur, small business and entrepreneurial ventures
There has not been an agreed definition of an entrepreneur or entrepreneurship by
scholars. In most cases the term entrepreneurship is associated with new venture creation and
small business management (Gibb, 1996) and the concepts of self-employment and owner-
management. Not all small businesses can be regarded as entrepreneurial nor are all owner-
managers can be regarded as entrepreneurs. It must be recognized that entrepreneurship is not
confined to solely to new ventures, or that entrepreneurs only work for themselves in their own
business. Many large organizations are entrepreneurial (Carland, 1984 cited in Kirby, 2009)
and many entrepreneurs are found in such organizations.
Entrepreneurship is the emergence and growth of new businesses that will eventually
make profits. It is also a process that causes changes in the economic system through
innovations of individuals who respond to opportunities in the market (Kirby, 2009).
According to Timmons (2000) entrepreneurship is the process of creating or seizing an
opportunity and pursuing it, regardless of the resources currently controlled.
Hirsch and Peters (1998) believe that an entrepreneur is someone creating something
new with the value by devoting time and effort, assuming the accompanying financial, physical
and social risks, and receiving the resulting rewards of monetary and personal satisfaction as
well as independence.
Kirby (2009) sees an entrepreneur as a person who sees an opportunity in the market,
gather resources and creates and grows a business venture to meet these needs, He or she bears
the risk of the venture and is rewarded with profit if it succeeds.
From these definitions the key concepts that can be derived about entrepreneurship and
the entrepreneur are:
 Opportunity identification; this means that there must be a real business
opportunity

Course Code: ELECT 101

Descriptive Title: ENTREPRENEURIAL MANAGEMENT Instructor:RHEA P. CORTEZ
ILOCOS SUR POLYTECHNIC STATE COLLEGE

TAGUDIN Campus

MODULE 1
 Gathering resources. Capital, labor and equipment must be available
 Creating and growing the venture. This refers to the starting of a new business
venture or the conversion of an existing business.
 Taking risk. This means that there will be personal and financial risk involved
for the person who embarks on the entrepreneurial process.
 Being rewarded. This can be in the form of profit or an increase in the value of
the business.
 Managing the business. This means that there must be planning, organization,
leadership and control of all the functions in the business venture
SMALL BUSINESS VS ENTREPRENEURIAL VENTURE
Small Business
It is essential to know the difference between entrepreneurial ventures and small
businesses. They both contribute to the growth of the economy in different ways. They pursue
and create new opportunities differently, they fulfil the ambitions of their founders and
managers in different ways and they present different challenges to economic policy makers.
Both need entrepreneurial action for start-up, but the small business venture tends to stabilize
at a certain stage and grows only with inflation.
Small business owners are individuals who establish and manage their businesses for
the principal purpose of furthering personal goals and ensuring security. A small business is
therefore any business that is independently owned and operated, but is not dominant in its
field and does not engage in any new marketing or innovative practices. Owners of small
businesses are not necessarily interested in growth as an objective. Profitability of the business
means success to them. Autonomy and security are the primary objectives of some owners of
small businesses. They consider themselves successful even if they earn a smaller income than
they would have as employees.
Entrepreneurial Ventures Entrepreneurial ventures are businesses in which the principle
objectives are profitability and growth, three characteristics that distinguish entrepreneurial
ventures from the small businesses according to Wickham (2001) are:
 Innovation. Entrepreneurial ventures thrive through innovation, this could be
technological innovation, a new product or a new way of producing, offering a
service, marketing or distribution or even the way the organization is structured or
managed. Small business is usually involved in delivering an established product or
service.

 Potential for growth. Due to its innovative approach, an entrepreneurial venture

has a great deal more potential for growth than a small business. It is in a position
to create its own market. The small business operates in an established industry
and is unique only in terms of its locality. It operates within a given market.

 Strategic objectives. The entrepreneurial venture will usually set itself strategic
objectives in relation to: - market targets, market development, market share,
market position.

Course Code: ELECT 101

Descriptive Title: ENTREPRENEURIAL MANAGEMENT Instructor:RHEA P. CORTEZ
ILOCOS SUR POLYTECHNIC STATE COLLEGE

TAGUDIN Campus

MODULE 1

TOPIC 2
ENTREPRENEURSHIP EDUCATION

Learning Outcomes
By the end of this topic, you should be able to:
1. Explain the importance of entrepreneurship in education
2. Understand the growth in entrepreneurship education

ENTREPRENEURSHIP AS A FIELD OF STUDY

There has been a debate world over on whether entrepreneurs are born or made.
To some entrepreneurs are born not bred, while to others “….to teach individuals to be
more enterprising ….is an undertaking that in both time and scope is beyond the
capabilities of an academic business school….” (Johannisson, 1991, p.79). The teaching
of entrepreneurship in institution of higher learning dates back to 1947 as one of the first
causes was offered at Harvard Business School and Drucker taught another at New York
University in 1953 (Brockhaus, 2001). Since then numerous courses have been developed
globally.

Researchers have come to the conclusion that entrepreneurial skills can be acquired by
a process of learning. Barlett (1988, p.26) states that, “education in the form of a formal
academic training dulls the cutting edge of commerce”. Solomon (1989) argues that courses
designed to introduce students to the principles of business and management have appeared
to teach students how to become good employees instead of successful business persons.

It is believed that numerous entrepreneurial programs that have been introduced in

many parts of the world often do little to develop the entrepreneurial tendencies that are being
sought. It is believed that such programs educate “about” entrepreneurship rather than “for”
entrepreneurship. They fail to develop in their students the skills, attributes and behaviors
of the successful entrepreneur (Kirby, 2009).

Most entrepreneurship programs seek to educate students on; the entrepreneurial

process, opportunity recognition, entry strategies, market opportunities and marketing, creating
successful business plans, financial projections, venture capital, debt and other forms of
financing, external assistance for start-ups and small business, legal and tax issues,
intellectual property, franchising, harvesting and entrepreneurship economics. With this
knowledge, very few graduates will set up entrepreneurial ventures (Kirby, 2009).
The successful entrepreneur has a set of personal skills, attributes and behavior that
go beyond the purely commercial. It is these attributes, the way of thinking and behavior that
needs to be developed in our students to enhance their entrepreneurial capabilities.

Course Code: ELECT 101

Descriptive Title: ENTREPRENEURIAL MANAGEMENT Instructor:RHEA P. CORTEZ
ILOCOS SUR POLYTECHNIC STATE COLLEGE

TAGUDIN Campus

MODULE 1
Therefore, the contents of courses and the learning process need to change to accommodate
this view.
The study of entrepreneurship should therefore be balanced in terms of having
a curriculum that develops students’ business skills and understanding as well as
developing their entrepreneurial skills, attributes and behaviors. The education system
should not be constraining, rather it should release and develop the enterprising tendencies
of our young people.
Developing entrepreneurs in the classroom is about developing the enterprising
environment and approaches to learning in which entrepreneurial aptitudes and capabilities
can flourish together with business knowledge and understanding. It is about spurring a spirit
of innovation and development of new combinations.
With references to the citation patterns of entrepreneurship articles in the years
after 2000, the following themes have attracted considerable attention; - risk taking
among entrepreneurs, organizational learning and problem solving, trust and relational
capital, leadership and management teams, psychological characteristics of entrepreneurs.

GROWTH IN ENTREPRENEURSHIP EDUCATION

Recognition of the importance of entrepreneurship and its contribution to the
economic development and facilitation of social cohesion, empowerment for the disadvantaged
in the society has led to the massive growth in entrepreneurship teaching. Most universities
and colleges world over are seeking to facilitate the ‘fostering of entrepreneurial
mindsets” throughout the society by including a course on entrepreneurship on programs
on offer.
Jack and Anderson (2001) suggest that teaching entrepreneurship is difficult
because the entrepreneurial process (i.e., imagination, creativity, innovativeness, creating
and identifying resources, assembly in and managing resources, etc.) involves both an “art”
(i.e., the creative and innovative attributes) and a ‘science’ (i.e., functional skills of business
and management). Numerous business and management schools worldwide are now
delivering entrepreneurship and small business modules at various levels. Programs are
now being designed for non-business students (i.e. arts, media, science and engineering
students
Case studies have been a common mode of delivery to illustrate how problems and
opportunities are addressed by real entrepreneurs. A number of practical, theoretical and policy
books are available relating to entrepreneurship. Most of these texts make use of case
studies to illustrate how theoretical and practical issues are actually exhibited by real
entrepreneurs and businesses. The case study approach aims at stimulating critical thinking
and reflective learning relating to issues briefly discussed in lectures.
Themes explored in this module illustrate the development in the field of
entrepreneurship. The themes are as follows:
 Theory. The basic theoretical concepts to the approach to entrepreneurship
 Types of entrepreneur examined in terms of academic, novice, serial, portfolio
and social entrepreneurs

Course Code: ELECT 101

Descriptive Title: ENTREPRENEURIAL MANAGEMENT Instructor:RHEA P. CORTEZ
ILOCOS SUR POLYTECHNIC STATE COLLEGE

TAGUDIN Campus

MODULE 1
 The process of entrepreneurship is examined in terms of opportunity creation,
recognition, information search and learning, resource acquisition and business
strategies.
 Type of organizations. Organizational modes selected by entrepreneurs are
examined including family firms, corporate entrepreneurship, management
buyouts and social enterprises.
 The external environment for entrepreneurship. Governments in developed and
developing economies have introduced policies to address attitudinal, resources,
operational and strategic barriers to business formation and development. The
merits and disadvantages of targeted and customizes support to entrepreneurs
and firms are being considered by practitioner.
 Outcomes of entrepreneurial endeavors. The economic and non-economic of
entrepreneurial are discussed.

INTENDED LEARNING ACTIVITY 1: REINFORCEMENT

Instructions: Answer the following reinforcement activity in the answer sheet provided
in the google classroom and be ready to discuss your answers on our first meeting.

How would you consider yourself? Would you describe yourself

primarily as a critical thinker, a creative thinker, or a Strategic thinker?

REFERENCES:
 ttp://news.gcase.org/2011/02/04/what-is-the-history-of-entrepreneurship/_
 http://cid.mk/new/wp-content/uploads/2015/12/MODULE-1.pdf
 https://www.studocu.com/ph/document/mariano-marcos-state-
university/accountancy/entrepreneurial-management-module-i/9486401

CONGRATULATIONS!!!!
You have successfully completed Module 1 for your course ENTREPRENEURIAL
MANAGEMENT. Remember to keep on improving to attain quality curriculum.

Course Code: ELECT 101

Descriptive Title: ENTREPRENEURIAL MANAGEMENT Instructor:RHEA P. CORTEZ