Entrepreneurship and Small Business: Defining Key Concepts, Slides of English Literature

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LESSON 1:

DEFINING KEY TERMS

“WHAT COMES INTO YOUR MIND WHEN YOU HEAR

THE WORDS ENTREPRENEUR AND

ENTREPRENEURSHIP?”

“DO YOU IMAGINE YOURSELF BECOMING AN

ENTREPRENEUR AND MANAGING YOUR OWN

BUSINESS IN THE FUTURE?”

SMALL BUSINESS

• (^) Refers to a business or enterprise that correctly adopts and practices the principles of entrepreneurship
• (^) It is owned by one person with a limited workforce of not more than 20 persons. ORDINARY SMALL BUSINESS
• (^) Pertains to a business enterprise managed and operated by an owner who is not an advocate of and does not practice the concepts and principles of entrepreneurship.

LESSON 2:

SALIENT FEATURES OF

ENTREPRENEURSHIP

SALIENT FEATURES OF ENTREPRENEURSHIP 1.IT IS AN ART OF CORRECT PRACTICES 2.IT IS A WEALTH CREATING VENTURE 3.IT PROVIDES VALUABLE GOODS AND SERVICES 4.IT ENTAILS OPENING AND MANAGING THE SELF-OWNED ENTERPRISE 5.IT IS A RISK-TAKING VENTURE

THEORIES ON ENTREPRENEURSHIP

• (^) Innovation theory
• (^) Keynesian theory
• (^) Alfred Marshall theory
• (^) Risk and uncertainty – bearing theory
• (^) Other theories on entrepreneurship

INNOVATION THEORY

• (^) Contributed by Joseph Schumpeter, an Austrian Economist and political scientist.
• (^) The innovation theory regards economic development as the product of structural change or innovation.
• (^) Schumpeter strongly believed that innovation is the force that will propel the revolutionary New Produ ct Metho d New Produ ct New Marke t New Suppli er New Industr y Structu re

ALFRED MARSHAL THEORY

• (^) Theory of Alfred Marshall, an English economist
• (^) He strongly asserted that there are four factors in the

production (land,labor,capital and organization) of goods and

services in the economy, he considered organization as the

coordinating element.

• (^) Marshal regarded the entrepreneurs as the prime movers in

the organization.

RISK AND UNCERTAINTY BEARING THEORY

• (^) Frank Hyneman Knight, an American economist
• (^) Entrepreneur as an agent of the production process where he/she connects the producers and the consumers.
• (^) Risk-taking as an important dimension that will differentiate an entrepreneur from a worker.

KALDOR’S TECHNOLOGICAL THEORY

• (^) Nicholas Kaldor
• (^) Modern technology as an essential factor in production
• (^) In the absence of modern technology application in entrepreneurship, economic development would be slow and growth might not be expected.

LEIBENSTEIN’ GAP FILLING THEORY

• (^) Henry Leibenstein
• (^) Primary role of entrepreneurship in any economic activity is to fill the existing gap.
• (^) Entrepreneurship is responsible for recognizing trends in the market.

LESSON 4: ENTREPRENEURSHIP AND ORDINARY SMALL BUSINESS ACTIVITY

ENTREPRENEURSHIP AND ORDINARY SMALL BUSINESS DIFFER IN THE FOLLOWING AREAS:

• (^) Motive in opening a business
• (^) Perception of risk in the business
• (^) Reactions to changes in the environment
• (^) View on competition
• (^) Vision for development and growth
• (^) Horizon of business operation
• (^) Source of business funds