Identification 16. John Gokongwei Jr.

- He was the founder of JG

Summit which has interests in airlines, telecom,
1. Invention - Refers to the discovery or devising of new
banking, food, power, and property.
products and processes.
17. Rolando Hortaleza - The founder of hbc and Splash
2. Entrepreneurship - Refers to the economic activity of
Corporation?
a person who starts, manages, and assumes the risk of a
business enterprise. 18. Retailing - This covers all activities involved in the
sale of goods and/or services to the final consumers.
3. Entrepreneur - The ______ identifies an economic
need. 19. Small Business - may be defined as one which is
independently owned and operated and which is not
4. Innovation - Refers to the actual introduction of a
dominant in its field of operation.
new product or process.
20. Suppliers of - Products and services to other
5. Technology - These are composed of science,
businesses.
engineering, management, entrepreneurship.
21. Entrepreneurs - The one who make innovative
6. Innovation - This is also be viewed as the last stage in
products available to the public are recognized properly
an important process.
by society.
7. Capital Formation - These are composed of machines
22. Wholesaling - Refers to the activities of persons or
and roads.
establishments which sell to retailers and other
8. Development - This refers to the process by which merchants.
the ideas and principles generated from the stage of
23. Suyen Corporation - Bench, the fashion clothing
invention are embodied in concrete products and
line, under the family-owned.
techniques.

9. Entrepreneurship - This is a very important

component of a capitalist economy like the Philippines. TRUE OR FALSE

10. Economic development - This is a scheme aimed at 1. TRUE - Innovation may be defined as the introduction
improving the living standards of the nation’s citizenry. of a new method, procedure, custom, device, among
others.
11. Business size - This is one factor that does not
prevent one from engaging in entrepreneurship. 2. FALSE - a successful long-term enterprise consists of
at least five major stages.
12. General construction firms - This firms are those
engaged in the construction of buildings whether for 3. FALSE - They are five factors of production
private individuals or firms, or for the government.
4. TRUE - Small businesses have the advantage of
Many of them perform subcontracting jobs for the
switching to another business once whenever
bigger contractors
necessary.
12. Independent management - The owner is also the
5. TRUE - A review of the contributions of entrepreneurs
manager.
will reveal that no business, big or small, started without
13. Distributor of - Products and services produced by the hand of the entrepreneur.
large firms.
6. FALSE - A long hours and demanding work condition
14. Personal services - Those that provide service to the is an advantage of operating a small business.
person.
7. FALSE - The employee will do his work based on
15. Manufacturing Business - is one involved in the prescribed targets which may only require more than his
conversion of raw materials into products needed by full potential.
society.
8. TRUE - If the small business succeeds, all profits big or proceeds to assemble the resources required, and
small accrue to the owner. assumes the risk of either succeeding or failing.
9. FALSE - Small business may be classified in six types. THE ENTREPRENEUR’S TASK
10. TRUE - One of the disadvantages of total asset If all the requirements in a capitalist economy are
values are affected by inflation. in place, the entrepreneur can assume his assigned
role in the development of the economy. A review
11. TRUE - Blank operating a small business does not
of the contributions of entrepreneurs will reveal
provide the assurance of an income, unlike getting
employment which offers fixed monthly salaries.
that no business, big or small, started without the
hand of the entrepreneur. Even if many of these
businesses failed to survive, still a sizable number
developed and proceeded to make the capitalist
economy a viable concern.
THIS IS MADE POSSIBLE BECAUSE THE SURVIVING
Entrepreneurial Management
ENTERPRISES ARE RESPONSIBLE FORPROVIDING
LESSON 1: A PERSPECTIVE ON ENTREPRENEURSHIP
THE FOLLOWING:
ENTREPRENEURSHIP AND - Products and services for customers and
ECONOMICDEVELOPMENT producers;
Entrepreneurship is a very important component of - Training facilities for future entrepreneurs.
a capitalist economy like the Philippines. It thrives - Demand for suppliers' products and services.
in economic systems that support innovation and - Taxes
hard work. When entrepreneurs become - Employment
successful, the nation is immensely benefited. Many of the consumers before only have limited
Economic development is a scheme aimed at options before in choosing what brand of a product
improving the living standards of the nation's they want to buy. From then on there exist of the
citizenry. To achieve economic development goals, luxury of choosing from many options.
proper management of the following elements is
A review of the statistical reports prepared by the
necessary:
government shows that business organized by
- Human resources (labor supply, education, entrepreneurs employs millions of people.
discipline, motivation)
- Natural resources (land, minerals, fuel, climate)
- Capital formation (machines, factories, roads);
and
- Technology (science, engineering, management,
entrepreneurship)
WHAT IS ENTREPRENEURSHIP
Entrepreneurship refers to the economic activity of
a person who starts, manages, and assumes the
risk of a business enterprise. The person who
undertakes entrepreneurial activities is called an Whatever risk involved in the entrepreneurial
entrepreneur. activity, he must suffer the consequence of losses if
The entrepreneur identifies an economic he fails, but he will enjoy the profits as a reward if
need, considers offering a business solution,
he succeeds. to innovate and get ahead of his competitors lest
he is driven out of the market. Buyers of
commodities have a tendency to patronize
innovative offerings of any kind and if one wants
patronage, he must remember this motivation.
Innovation may be defined as the introduction of a
new method, procedure, custom, device, among
others. Innovation could be any of the following:
1. A new product;
2. A new process of production;
The Entrepreneur's Predicament 3. The substitution of a cheaper material in an
In the race for winning the all-important unaltered product;
consumers' pesos, the business will have to offer 4. The re-organization of production, internal
products or services that have certain advantages function, or distribution arrangement leading to
over the competition's wares. In the creation of a increased efficiency, better support for a given
new venture, the entrepreneur may be successful product, or lower costs or
in offering innovative products or services. 5. Innovation may also be viewed as the last stage
Entrepreneurship and Business Size in an important process consisting of the following:
To many people, entrepreneurship means running a a. invention - which refers to the discovery or
small business. New business ventures, however, devising of new products and processes;
can also be undertaken on a large scale. Both small b. development-which refers to the process by
and large businesses are confronted by problems which the ideas and principles generated from the
that are entrepreneurial in nature. stage of invention are embodied in concrete
products and techniques; and
To effectively compete, business of whatever size c. innovation-which refers to the actual
must adapt innovative approaches to its activities. introduction of a new product or process.
Examples of innovations are the following:
1. Offering business services during Sundays and New Ventures and Long-Term Enterprises
holidays; The entrepreneur must develop it into a small
2. manufacture and sale of new products; and business or make it grow into a mature and bigger
3. Selling on a deferred payment scheme. company if he is to recoup the cost of opening a
new venture and take advantage of the
Small businesses have the advantage of switching opportunities presented by a mature business.
to another business concept whenever necessary.
Large businesses cannot do the same without The transition from a new venture to a successful
spending much. To offset the disadvantage, long-term enterprise consists of at least four
however, large businesses have started to engage in major stages. The stages are as follows:
“entrepreneurship" where a person with 1. The prestart-up stage
entrepreneurial skills and is employed by the 2. The start-up stage
corporation is tasked to launch new products. This 3. The early growth stage
person is responsible for creating innovation of any 4. The late growth stage
kind in the organization. In the start-up stage, the following activities are
ENTREPRENEURSHIP AND INNOVATION undertaken:
The freedom of competition afforded by the 1. Formation of the business;
capitalist economy serves to drive the entrepreneur 2. Generation of necessary capital;
3. Purchase of facilities and equipment; TYPES OF SMALL BUSINESS
4. Constructing prototype products; and Small business may be classified into five types:
5. Testing the market. 1. Manufacturing
2. Service
The products or services that will be sold to the
3. Wholesaling
buyers must be bought or manufactured. In any
4. Retailing
case, there will be a need to hire the services of
5. General construction firms
employees, laborers, and managers. Equipment,
furniture, and machinery must be acquired. SERVICE BUSINESS
1. Manufacturing Business - is one involved in the
THE NATURE OF SMALL BUSINESS
conversion of raw materials into products needed
OVERVIEW by society.
Business size is one factor that does not prevent 2. Business Services - those that provide service to
one from engaging in entrepreneurship. Since only other business.
a small number of people have capital large enough [Link] Services - those that provide service to
to start a large enterprise, the bigger number of the person.
people with minimal resources are forced to 4. Repair Services - those that provide repair
operate on a small -scale basis. services to owners of various machinery and
appliances.
5. Entertainment and Recreation - includes movie
houses, resorts, billiard pool centers, and the like.
[Link] and Motels
7. Education Services - include Montessori schools
for children, high school, correspondence schools,
among others.
Wholesaling - Wholesaling refers to the activities of
persons or establishments which sell to retailers
and other merchants, and/or to industrial,
WHAT IS SMALL BUSINESS
institutional, and commercial users, but who do not
Market Share - Under market share approach,
sell in large amounts to final consumers.
small business may be defined as one which is
independently owned and operated and which is Retailing - Retailing covers all activities involved in
not dominant in its field of operation. the sale of goods and/or services to the final
consumers. The bulk of retailing activities are
Total Assets - Total sales of a business firm is less
performed by small businesses.
than one percent of the total demand for its
products, the firm may be considered small CHARACTERISTICS OF SMALL BUSINESS
business. Small businesses have their own distinctive
characteristics:
[Link] management - The owner is also
the manager.
2. Small capital requirement- Small business
requires only small capital and this can be supplied
by a single or a few individuals
3. Mostly local operation -Small business usually
operates in a certain locality although there are
cases when the market is not confined to a local [Link] - Products and services produced by
area. large firms.
ECONOMIC IMPORTANCE OF SMALL BUSINESS Entering a certain profession is also not an easy
Small businesses play an important role in the task. First, one must under. long years of study, and
development of our economy. second, one must pass a rigorous entrance
requirement hi passing the board examination.
THEY ASSUME THE FOLLOWING FUNCTIONS:
There are also too many people who cannot
1. Providers of economic opportunities for
exercise this option.
[Link] of economic opportunities
for entrepreneurs. The last option is small business operation.
2. Providers of products and services to Although entrance requirements are not as difficult
consumers. The production of many products and as the first two options, it does not mean this
services is oftentimes not feasible with big and option is easier to put into practice. A small
medium business operation. These limited business operator keeps long working hours and
opportunities are naturally fitted for Small absorbs whatever damages that happen as a result
businesses of his faulty decision-making.
3. Suppliers of products and services to other However, he is afforded the following benefits:
[Link] businesses require raw materials, [Link] opportunity to gain control over his own
semi-finished parts, finished components, or even destiny.
labor, which they cannot economically produce. 2. The opportunity to reach his full potential
The small businesses perform this task for them. 3. The opportunity to make a contribution to
4. Distributors of products and services of other society and receive recognition for his efforts.
[Link] manufacturers do not have the 4. The opportunity to reap unlimited profits
ability to distribute their products and services.
The Opportunity to Gain Control Over His Own
Many small businesses assume this role for them.
Destiny
5. Supporters of government. Small businesses
The perspective small business owner can choose
support the government with the taxes they pay, as
from several business opportunities that he would
well as performing other functions.
like to take advantage of. If after a few years, he
6. Providers of employment.A large proportion of
thinks that the business that he would like to take
the labor force are employed by small businesses.
advantage of. If after a few years, he thinks that the
ADVANTAGES OF OPERATING A SMALL BUSINESS business is not worth operating anymore, then he
An individual has various options to improve his can dissolve it and open a new one. This option is
economic lot. They are the following: not made available to plain employees and
1. be an employee; professionals.
2. be a professional; or
The Opportunity to Reach Full Potential
3. be a small businessoperator
The employee will do his work based on prescribed
SMALL BUSINESS IS PROVIDER OF: targets which may only require less than his full
1. Economic opportunities for entrepreneurs potential. This is not so with the small business
2. Products and services to consumers operator. His freedom to act is limited only by his
3. Funds to the government in the form of taxes potential and he can revise or amend his targets
4. Employment to the labor force within short notice.
SMALL BUSINESS The Opportunity to Make a Contribution to
1. Supplier of - Products and services to other Society and Receive Recognition for His Efforts
businesses. Entrepreneurs who make innovative products
available to the public are recognized properly by The owner-operator will take full responsibility for
society. Some of them, like Henry Ford, became whatever happens to the business. If the firm is
billionaires. Others, like Walt Disney, merited sued for selling unsafe products, for instance, then
listings in books of eminent personalities he suffers and carries whatever burden or penalty
is imposed by authorities. He cannot pass the
ADMIRED ENTREPRENER IN THE PHILIPPINES:
blame to anybody else.
BEN CHAN - In 1987, Ben Chan started a small t-
shirt shop at the SM Department Store in [Link]
would eventually become the beginnings of Bench,
the fashion clothing line, under the family-owned
Suyen Corporation.
JOHN GOKONGWEI JR. - He was the third-richest
person in the Philippines. He was the founder of JG
Summit which has interests in airlines, telecom,
banking, food, power, and property.
ROLANDO HORTALEZA - Dr. Rolando Hortaleza, was
born in a lower middle class community in THE NATURE OF SMALL BUSINESS
Sampaloc Manila. Growing up, he helped in his
family’s small retailing business called the OVERVIEW
HortalezaVaciador. Business size is one factor that does not prevent
one from engaging in entrepreneurship. Since only
JAIME ARISTOTLE ALIP - Dr. Jaime Aristotle B. Alip is a small number of people have capital large enough
the Founder and Managing Director of the Center to start a large enterprise, the bigger number of
for Agriculture and Rural Development Mutually people with minimal resources are forced to
Reinforcing Institutions (CARD MRI) operate on a small -scale basis.
DORIS MAGSAYSAY HO - Ms. Doris Magsaysay Ho is
President and CEO of the Magsaysay Group of
Companies, which is involved in shipping, human
resources, and business process outsourcing
services.
DISADVANTAGES OF OPERATING A SMALL
BUSINESS
1. Uncertainty of income
2. Risk of losing your entire capital investment
3. Lower quality of life until the business gets WHAT IS SMALL BUSINESS
established Market Share - Under market share approach,
4. Complete responsibility small business may be defined as one which is
5. Having to serve undesirable customers independently owned and operated and which is
6. Paperwork and other chores not dominant in its field of operation.
7. Long hours and demanding work condition.
Total Assets - Total sales of a business firm is less
Complete independence in making decisions than one percent of the total demand for its
exposes the small business operator to the products, thefirm may be considered small
consequences of errors of judgment which in some business.
cases could wipe out his investment.
 GENERAL CONSTRUCTION FIRMS
General construction firms are those engaged in
the construction of buildings whether for private
individuals or firms, or for the government. Many
of them perform subcontracting jobs for the bigger
contractors such as installing electrical facilities and
sewerage.
CHARACTERISTICS OF SMALL BUSINESS
Small businesses have their own distinctive
TYPES OF SMALL BUSINESS characteristics:
Small business may be classified into five types: 1. Independent management - The owner is also
1. Manufacturing the manager.
2. Service 2. Small capital requirement - Small business
3. Wholesaling requires only small capital and this can be supplied
4. Retailing by a single or a few individuals
5. General construction firms 3. Mostly local operation - Small business usually
SERVICE BUSINESS operates in a certain locality although there are
1. Manufacturing Business - is one involved in the cases when the market is not confined to a local
conversion of raw materials into products needed area.
by society. ECONOMIC IMPORTANCE OF SMALL BUSINESS
2. Business Services - those that provide service to Small businesses play an important role in the
other business. development of our economy.
3. Personal Services - those that provide service to
the person. THEY ASSUME THE FOLLOWING FUNCTIONS:
4. Repair Services - those that provide repair 1. Providers of economic opportunities for
services to owners of various machinery and entrepreneurs. Providers of economic
appliances. opportunities for entrepreneurs.
5. Entertainment and Recreation - includes movie 2. Providers of products and services to
houses, resorts, billiard pool centers, and the like. consumers. The production of many products and
6. Hotels and Motels services is oftentimes not feasible with big and
7. Education Services - include Montessori schools medium business operation. These limited
for children, high school, correspondence schools, opportunities are naturally fitted for Small
among others. businesses
3. Suppliers of products and services to other
Wholesaling - Wholesaling refers to the activities of businesses. Some businesses require raw materials,
persons or establishments which sell to retailers semi-finished parts, finished components, or even
and other merchants, and/or to industrial, labor, which they cannot economically produce.
institutional, and commercial users, but who do not The small businesses perform this task for them.
sell in large amounts to final consumers. 4. Distributors of products and services of other
Retailing - Retailing covers all activities involved in businesses. Some manufacturers do not have the
the sale of goods and/or services to the final ability to distribute their products and services.
consumers. The bulk of retailing activities are Many small businesses assume this role for them.
performed by small businesses. 5. Supporters of government. Small businesses
support the government with the taxes they pay, as
well as performing other functions.
6. Providers of employment. A large proportion of like to take advantage of. If after a few years, he
the labor force are employed by small businesses. thinks that the business that he would like to take
advantage of. If after a few years, he thinks that the
ADVANTAGES OF OPERATING A SMALL BUSINESS
business is not worth operating anymore, then he
An individual has various options to improve his
can dissolve it and open a new one. This option is
economic lot. They are the following:
not made available to plain employees and
1. be an employee;
professionals.
2. be a professional; or
3. be a small business operator The Opportunity to Reach Full Potential
The employee will do his work based on prescribed
SMALL BUSINESS IS PROVIDER OF:
targets which may only require less than his full
1. Economic opportunities for entrepreneurs
potential. This is not so with the small business
2. Products and services to consumers
operator. His freedom to act is limited only by his
3. Funds to the government in the form of taxes
potential and he can revise or amend his targets
4. Employment to the labor force
within short notice.
SMALL BUSINESS
The Opportunity to Reap Unlimited Profits
1. Supplier of - Products and services to other
If the small business succeeds, all profits big or
businesses.
small, accrue to the owner. If he is not satisfied, he
[Link] - Products and services produced by
may exert more efforts to increase his profits. This
large firms.
opportunity is not afforded to the plain employee.
Entering a certain profession is also not an easy
The Opportunity to Make a Contribution to
task. First, one must under. long years of study, and
Society and Receive Recognition for His Efforts
second, one must pass a rigorous entrance
Entrepreneurs who make innovative products
requirement hi passing the board examination.
available to the public are recognized properly by
There are also too many people who cannot
society. Some of them, like Henry Ford, became
exercise this option.
billionaires. Others, like Walt Disney, merited
The last option is small business operation. listings in books of eminent personalities
Although entrance requirements are not as difficult
ADMIRED ENTREPRENER IN THE PHILIPPINES:
as the first two options, it does not mean this
BEN CHAN - In 1987, Ben Chan started a small t-
option is easier to put into practice. A small
shirt shop at the SM Department Store in Makati. It
business operator keeps long working hours and
would eventually become the beginnings of Bench,
absorbs whatever damages that happen as a result
the fashion clothing line, under the family-owned
of his faulty decision-making.
Suyen Corporation.
However, he is afforded the following benefits:
[Link] opportunity to gain control over his own JOHN GOKONGWEI JR. - He was the third-richest
destiny. person in the Philippines. He was the founder of JG
2. The opportunity to reach his full potential Summit which has interests in airlines, telecom,
3. The opportunity to make a contribution to banking, food, power, and property.
society and receive recognition for his efforts.
ROLANDO HORTALEZA - Dr. Rolando Hortaleza, was
4. The opportunity to reap unlimited profits
born in a lower middle class community in
The Opportunity to Gain Control Over His Own Sampaloc Manila. Growing up, he helped in his
Destiny family’s small retailing business called the Hortaleza
The perspective small business owner can choose Vaciador.
from several business opportunities that he would
JAIME ARISTOTLE ALIP - Dr. Jaime Aristotle B. Alip is
the Founder and Managing Director of the Center
for Agriculture and Rural Development Mutually
Reinforcing Institutions (CARD MRI)
DORIS MAGSAYSAY HO - Ms. Doris Magsaysay Ho is
President and CEO of the Magsaysay Group of
Companies, which is involved in shipping, human
resources, and business process outsourcing
services.
DISADVANTAGES OF OPERATING A SMALL
BUSINESS
1. Uncertainty of income
2. Risk of losing your entire capital investment
3. Lower quality of life until the business gets
established
4. Complete responsibility
5. Having to serve undesirable customers
6. Paperwork and other chores
7. Long hours and demanding work condition.
Complete independence in making
decisions exposes the small business operator to
the consequences of errors of judgment which in
some cases could wipe out his investment.
The owner-operator will take full
responsibility for whatever happens to the
business. If the firm is sued for selling unsafe
products, for instance, then he suffers and carries
whatever burden or penalty is imposed by
authorities. He cannot pass the blame to anybody
else.