Kim Ally L.

Lorenzana BSIT 3-1

Chapter 2
TECHNOPRENEURSHIP

1. Briefly describe the evolution of the term entrepreneurship.

 The French phrase "entreprendre," which means "to undertake," is where the term
"entrepreneurship" originated, and it has changed throughout time to refer to people
who organized, managed, and took on the risks of a firm. But as time went on, the term
grew to include those who create, spot opportunities, and turn them into workable
concepts while contributing value in a variety of ways, including time, money, effort, or
talents. These firm owners are seen as change agents in the industry, frequently
exhibiting qualities like self-reliance, ingenuity, management aptitude, autonomy, and
risk-taking attitude.

2. How were entrepreneurs historically viewed? What challenges did they face throughout history?

 Throughout history, entrepreneurs have been perceived differently based on cultural and
societal norms. In ancient Assyria and Phoenicia, entrepreneurship was esteemed, with
merchants and traders venturing into uncharted territories despite risks like political
instability. However, in Biblical times, entrepreneurs faced societal biases, especially
against practices like usury. Similarly, in Rome and Medieval China and Europe, political
structures often hindered entrepreneurial endeavors, with wealth accumulation tied to
land ownership or government positions. Despite these challenges, the transition to
capitalism saw the emergence of merchant entrepreneurs who capitalized on global
trade. Today, entrepreneurs are recognized as catalysts for change, embodying traits like
individualism and adaptability, with the potential to reshape governance and commerce in
a digital era.

3. Why do we use the French word instead of an English equivalent?

 The reason we use the French word instead of English is because

unfortunately, undertaker is already used by another profession. Although the definition of an

entrepreneur is defined as an individual who takes on the responsibility of organizing, managing, and
taking on the risks associated with running a business. However, this definition has been expanded to
include an innovator or developer who sees and seizes opportunities, transforms them into viable and
marketable ideas, adds value through labor, capital, time, or expertise, takes on the risks associated with
implementing these ideas in a competitive marketplace, and realizes the rewards of their efforts.

4. When was the word entrepreneur first used in the economic literature?

 The word "entrepreneur" was first used in the economic literature by economist Richard
Cantillon in the 18th century. Cantillon associated entrepreneurs with 'risk-bearing'
activity in the economy. Additionally, during the same period in England, entrepreneurs
played a significant role in risk-taking and the transformation of resources, especially
during the growing Industrial Revolution. So, it was in the 18th century that the concept
of entrepreneurship and the term "entrepreneur" started to gain recognition in economic
literature.

5. What are the 10 myths associated with entrepreneurship? Discredit each.

 Here are the 10 myths associated with entrepreneurship:

Myth 1: Entrepreneurs are doers, not thinkers

Entrepreneurs are both action-oriented and thoughtful individuals who carefully plan their moves.
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Myth 2: Entrepreneurs are born, not made

Entrepreneurial traits can be taught and learned through the recognition of entrepreneurship as a
discipline.

Myth 3: Entrepreneurs are always inventors

Entrepreneurs engage in various innovative activities beyond just invention, showcasing different forms of
innovation.

Myth 4: Entrepreneurs love risk

While entrepreneurs take risks, they do not necessarily love risk; they manage and mitigate risks
effectively.

Myth 5: Entrepreneurs are motivated by money

While financial gains are important, entrepreneurs are often driven by passion, problem-solving, and
making a difference.

Myth 6: All entrepreneurs need is money

Money is essential but not the sole factor for success; other aspects like planning, strategy, and innovation
play crucial roles.

Myth 7: All entrepreneurs need is luck

Luck is a combination of preparation and seizing opportunities, rather than sheer chance.

Myth 8: Ignorance is bliss for entrepreneurs

Detailed planning, strategy formulation, and problem-solving skills are essential for successful
entrepreneurship, not ignorance.

Myth 9: Entrepreneurs seek success but experience high failure rates

While failures can occur, they provide valuable lessons, and successful entrepreneurs persist and learn
from setbacks.

Myth 10: Entrepreneurs work alone

Collaboration, networking, and building a strong team are crucial for entrepreneurial success, debunking
the myth of solitary entrepreneurship.

6. What is the difference between macro and micro level schools of thought?

 The difference between macro and micro level schools are macro view of
entrepreneurship takes a broad perspective, considering external factors that can
influence the success or failure of entrepreneurial ventures. It looks at larger societal and
environmental forces that impact entrepreneurship. This view often emphasizes factors
outside the individual entrepreneur's control, such as institutional frameworks, social
values, and political environments. While the micro view of entrepreneurship zooms in on
specific internal factors and individual characteristics that drive entrepreneurial behavior.
It focuses on the traits, skills, and behaviors of the entrepreneur themselves, as well as
the specific opportunities they identify and pursue. This perspective delves into the
individual level of analysis, looking at the personal qualities and actions of the
entrepreneur. By considering both macro and micro levels of analysis, scholars and
practitioners can gain a holistic understanding of entrepreneurship, blending external
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influences with internal factors to comprehend the complexities of the entrepreneurial

process.

7. What is the macro view of entrepreneurship?

 The macro view of entrepreneurship encompasses a broad array of factors that

contribute to the success or failure of entrepreneurial endeavors. It considers external
processes that can influence these ventures, often beyond the control of individual
entrepreneurs. This perspective emphasizes factors such as institutions, values, societal
norms, and political frameworks that shape and impact the development of
entrepreneurs. The environmental school of thought within the macro view specifically
focuses on these external factors that can either positively or negatively influence an
individual's entrepreneurial aspirations. This school of thought highlights how the socio-
political environment, including factors like freedom, support, and opportunities for
innovation, plays a significant role in fostering or inhibiting entrepreneurial initiatives.

8. What are the schools of thought that use the macro view of entrepreneurship?

 Environmental School of Thought:

o This school of thought focuses on external factors that influence an individual's

entrepreneurial desires. It considers institutions, values, and societal frameworks
that shape and impact the development of entrepreneurs.

 Financial/Capital School of Thought:

o This perspective examines the financial and capital-related aspects that affect
entrepreneurial activities. It delves into how access to resources, funding, and
financial networks can impact the success of entrepreneurial ventures.

 Displacement School of Thought:

o The displacement school of thought explores the displacement of existing

economic activities by new entrepreneurial endeavors. It looks at how
entrepreneurs introduce innovative solutions that can disrupt traditional
industries and market structures.

9. What is the micro view of entrepreneurship?

 The micro view of entrepreneurship focuses on individual-level factors and characteristics

that drive entrepreneurial behavior. It delves into the personal traits, skills, experiences,
and psychological characteristics of the entrepreneur themselves. This perspective
emphasizes the internal aspects of entrepreneurship, such as the individual's decision-
making abilities, creativity, vision, leadership style, management skills, and capacity to
recognize and seize business opportunities. By zooming in on the specific qualities and
actions of the entrepreneur, the micro view provides insights into how personal attributes
and behaviors influence the success and growth of entrepreneurial ventures.
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10. What are the schools of thought that use the micro view of entrepreneurship?

1. Entrepreneurial Trait School of Thought (People School):

o This school of thought focuses on identifying common traits and characteristics shared by
successful entrepreneurs. Researchers in this field study successful individuals to identify
qualities such as achievement, creativity, determination, technical knowledge, and other
factors that contribute to entrepreneurial success.

2. Venture Opportunity School of Thought:

o The venture opportunity school of thought delves into recognizing and capitalizing on
specific business opportunities. It emphasizes the process of identifying, evaluating, and
exploiting entrepreneurial opportunities in the market.

3. Strategic Formulation School of Thought:

o This school of thought concentrates on strategic planning and decision-making processes

within entrepreneurship. It looks at how entrepreneurs formulate and implement
strategies to achieve their business goals and navigate the competitive landscape
effectively.

11. What are the three specific types of displacement?

1. Political Displacement:

o This type of displacement is caused by factors such as political regimes rejecting free
enterprise, governmental regulations, and policies that can limit or redirect certain
industries.

2. Cultural Displacement:

o Cultural displacement deals with social groups being excluded from professional fields
based on factors like ethnicity, religion, race, and gender. This can lead individuals to
pursue entrepreneurial ventures instead of traditional business professions.

3. Economic Displacement:

o Economic displacement is concerned with economic fluctuations like recessions and

depressions. Job losses, capital reductions, or challenging economic times can serve as
catalysts for entrepreneurial pursuits or impact the development and scaling of ventures.

12. In the strategic formulation school of thought, what are the four types of strategies involved

with unique elements? Give an illustration of each.

In the strategic formulation school of thought, the four types of strategies involved with unique elements
are:

1. Unique Markets - Mountain vs. Mountain Gap Strategies:

o This strategy involves identifying major market segments as well as interstice (in-
between) markets that emerge from larger markets. For example, a company specializing
in outdoor gear may target both the general outdoor market and the niche market for
extreme sports enthusiasts.
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2. Unique People - Great Chef Strategies:

o In this strategy, the focus is on the skills or special talents of one or more individuals
around whom the venture is built. An illustration could be a tech startup founded by a
renowned software engineer known for groundbreaking innovations.

3. Unique Products - Better Widget Strategies:

o This strategy centers on innovations that cover new or existing markets. For instance, a
company developing a revolutionary smartphone with cutting-edge features not available
in the current market.

4. Unique Resources - Water Well Strategies:

o This strategy pertains to the ability to gather or harness special resources (land, labor,
capital, raw materials) over the long term. An example is a renewable energy company
securing exclusive access to a key natural resource for their sustainable energy
production.

13. What is the process approach to entrepreneurship? In your answer describe the entrepreneurial
assessment approach.

 The process approach to entrepreneurship involves examining the entrepreneurial

activities through various models that structure the entrepreneurial process and its
components. One of the methods used in this approach is the entrepreneurial assessment
approach, which focuses on making qualitative, quantitative, strategic, and ethical
assessments concerning the entrepreneur, the venture, and the environment.

In the entrepreneurial assessment approach developed by Ronstadt, assessments are

made based on the type of venture, the type of environment, and the type of
entrepreneur. These assessments aim to ensure that the results align with factors such as
the state of the entrepreneurial career, prior experience, and education. The model
stresses the importance of comparing assessment results to the stage of the
entrepreneur's career - whether it is early, mid-career, or late. This process, termed 'the
entrepreneurial edge,' provides a framework for evaluating entrepreneurship based on
individual characteristics, career stage, and environmental factors.

14. What are the major elements in the framework for entrepreneurship presented in fi gure 2.4?

Give an example of each.

1. Individual(s):

o Need for achievement: An individual with a high need for achievement may be driven to
start a business to fulfill personal goals and aspirations.

o Locus of control: An entrepreneur with an internal locus of control believes they have
control over their success and is more likely to take risks in their ventures.

o Risk-taking propensity: Entrepreneurs who are willing to take calculated risks may pursue
innovative business ideas with high growth potential.

2. Environment/Organization:

o Venture capital availability: The presence of venture capital firms willing to invest in
startups can provide crucial funding for entrepreneurial ventures.
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o Technically skilled labor force: Access to a skilled workforce in a specific industry can
enhance the operational efficiency and competitiveness of a new venture.

o Governmental influences: Government policies and regulations can impact the ease of
doing business and influence entrepreneurial decisions.

3. Process:

o Locating a business opportunity: Identifying a gap in the market or a unique business idea
that addresses a specific need can be the starting point for an entrepreneurial venture.

o Accumulating resources: Securing financial resources, human capital, and other necessary
assets to bring the business concept to life.

o Marketing products and services: Developing effective marketing strategies to promote

products or services to the target audience and generate sales.

These elements play a vital role in shaping the entrepreneurial journey and outcomes of new venture
creation.
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Read each of the following 10 statements and to the left of each indicate your agreement or
disagreement. If you fully agree with the statement, put a 10 on the line at the left. If you totally
disagree, put a 1. If you tend to agree more than you disagree, give a response between 6 and 9
depending on how much you agree. If you tend to disagree, give a response between 2 and 5.

1. Successful entrepreneurs are often methodical and analytical individuals who

carefully plan out what they are going to do and then do it.
2. The most successful entrepreneurs are born with special characteristics such as
high achievement drive and a winning personality and these traits serve them
well in their entrepreneurial endeavours.
3. Many of the characteristics needed for successful entrepreneurship can be
learned through study and experience.
4. The most successful entrepreneurs are those who invent a unique product or
service.
5. Highly successful entrepreneurs tend to have very little formal schooling.
6. Most successful entrepreneurs admit that dropping out of school was the best
thing they ever did.
7. Because they are unique and individualistic in their approach to business, most
successful entrepreneurs find it hard to socialise with others; they just do not fi t
in.
8. Research shows that although it is important to have adequate financing before
beginning an entrepreneurial venture, it is often more important to have
managerial competence and proper planning.
9. Successful entrepreneurship is more a matter of preparation and desire than it is
of luck.
10. Most successful entrepreneurs do well in their first venture, which encourages
them to continue; failuress tend to come later on as the enterprise grows.
Put your answers on the following list in this way:
• enter answers to numbers 1, 3, 8, and 9 just as they appear
• then subtract the answers to 2, 4, 5, 6, 7 and 10 from 11 before entering them here.
Thus, if you gave an answer of 8 to number 1, put an 8 before number 1 here. However, if you gave an answer of 7 to
number 2 here, place a 4 before number 2 here. Then add both columns of answers and enter your total in the space
provided.

INTERPRETATION
This exercise measures how much you believe the myths of entrepreneurship. The lower your total,
the stronger your beliefs; the higher your total, the less strong your beliefs. Numbers 1, 3, 8, and 9
are accurate statements; numbers 2, 4, 5, 6, 7 and 10 are inaccurate statements. Here is the scoring
key:
• 80–100 – excellent; you know the facts about entrepreneurs.
• 61–79 – good, but you still believe in a couple of myths.
• 41–60 – fair; you need to review the chapter material on the myths of entrepreneurship.
• 0–40 – poor; you need to reread the chapter material on the myths of entrepreneurship and
study these findings.