Chapter 2 The Entrepreneurs

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THC009
Entrepreneurship in Tourism & Hospitality with Franchising
CHAPTER 2: THE ENTREPRENEURS
Learning Outcomes:
At the end of this chapter, the student will be able to:
• Know the different traits of entrepreneurs.
• Learn the characteristics of entrepreneurs.
• Identify the contributions of entrepreneurs.
The Entrepreneurs
Entrepreneurs have many of the same character traits as leaders similarly to the early great
man theories or leadership; however, trait-based theories of entrepreneurship are increasingly
being called into question. Entrepreneurs are often contrasted with managers and
administrators who are said to be more methodical and less prone to risk-taking. Such person-
centric models of entrepreneurship have shown to be of questionable validity not least as many
real-life entrepreneurs operate in teams rather than as single individuals. Still a vast but now
clearly dated literature studying the entrepreneurial personality found that certain traits seem to
be associated with entrepreneurs:
• David McClelland (1961) described the entrepreneur as primarily motivated by an

overwhelming need for achievement and strong urge to build.
• Collins and Moore (1970) studied 150 entrepreneurs and concluded that they tough,
pragmatic people driven by needs of independence and achievement. They seldom are
willing to submit to authority.
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• Bird (1992) sees entrepreneurs as mercurial, that is, prone to insights, brainstorms,
deceptions, ingeniousness and resourcefulness. They are cunning opportunistic,
creative and unsentimental.
• Copper, Woo & Dunkelberg (1989) argue that entrepreneurs exhibit extreme optimism in
their decision-making processes. In a study of 2994 entrepreneurs they report that 81%
indicate their personal odds of success as greater that 70% and a remarkable
33%seeing odds of success of 10 out of 10.
• BUsenitz and Barney (1997) claim entrepreneurs are prone to overconfidence and over
generalizations.
• Cole (1959) found there, are four types of entrepreneur: the innovator, the calculating
inventor, the over-optimistic promoter, and the organization builder. These types are not
related to the personality but to the type of opportunity the entrepreneur faces.
VIDEO GUIDE:
Please check the video guide below of ‘What is an Entrepreneur’
https://www.youtube.com/watch?v=92ZmzD70sOU
Characteristics of entrepreneurship
• The Entrepreneur has an enthusiastic vision, the driving force of an enterprise.

• The entrepreneur’s vision is usually supported by an interlocked collection of specific
ideas not available to the marketplace.
• The overall blueprint to realize the vision is clear, however details may be incomplete,
flexible, and evolving.
• The entrepreneur promotes the vision with enthusiastic passion.
• With persistence and determination, the entrepreneur develops strategies to change the
vision into reality
• The entrepreneur takes the initial responsibility to cause a vision to become a success.
• Entrepreneurs take prudent risks. They assess costs, market/customer needs and
persuade others to join and help.
• An entrepreneur is usually a positive thinker and a decision maker
Kindly check the video below of 5 Traits of Successful Entrepreneurs, for further
information.
VIDEO GUIDE:
Please check the video guide below of ‘5 Traits of Successful Entrepreneurs’
https://www.youtube.com/watch?v=ky-wdvtx-9E
Contributions of entrepreneurs
1. Develop new markets. Under the modern concept of marketing markets are people
who are willing and able to satisfy their needs. In Economics, this is called effective
demand. Entrepreneurs are resourceful and creative. They can create customers or
buyers. This makes entrepreneurs different from ordinary businessmen who only
perform traditional functions of management like planning, organization, and
coordination.
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2. Discover new sources of material. Entrepreneurs are never satisfied with traditional or
existing sources of materials. Due to their innovative nature, they persist on discovering
new sources of materials to improve their enterprises. In business, those who can
develop new sources of materials enjoy a comparative advantage in terms of supply,
cost and quality.
3. Mobilize capital sources. Entrepreneurs are the organizers and coordinators of the
major factors of production, such as land labor and capital. They properly mixed these
factors of production to create goods and service. Capital resources, from a layman’s
view, refer to money. However, in economics, capital resources represent machines,
buildings, and other physical productive resources. Entrepreneurs have initiative and
self-confidence in accumulating and mobilizing capital resources for new business or
business expansion.
4. Introduce new technologies, new industries and new products. Aside from being
innovators and reasonable risk-takers, entrepreneurs take advantage of business
opportunities and transform these into profits. So, they introduce something new or
something different. Such entrepreneurial spirit has greatly contributed to the
modernization of economies. Every year, there are new technologies and new products.
All of these are intended to satisfy human needs in more convenient and pleasant way.
5. Create employment. The biggest employer is the private business sector. Millions of
jobs are provided by factories, service industries, agricultural enterprises, and the
numerous small-scale businesses. For instance, the super department stores like SM,
Uniwide, Robinson and others employ thousands of workers. Likewise giant corporations
like SMV, Ayala and Soriano group of companies are great job creators. Such massive
employment has multiplier and accelerator effects in the whole economy more jobs
mean more incomes. This increases demand for goods and services. This stimulates
production. Again, more production requires more employment.
Advantages of Entrepreneurship
Every successful entrepreneur brings about benefits not only for himself/ herself but for the
municipality, region or country as whole.
The benefits that can be derived from entrepreneurial activities are as follows:
1. Enormous personal financial gain.

2. Self-employment, offering more job satisfaction and flexibility of the work force.
3. Employment for others, often in better jobs.
4. Development of more industries, especially in rural areas or regions disadvantaged by
economic changes, for example due to globalization effects.
5. Encouragement of the processing of local materials into finished goods for domestic
consumption as well as for export.
6. Income generation and increased economic growth.
7. Healthy competition thus encourages higher quality products.
8. More goods and services available.
9. Development of new markets.
10. Promotion of the use of modern technology in small-scale manufacturing to enhance
higher productivity.
11. Encouragement of more researches/ studies and development of modern machines and
equipment for domestic consumption.
12. Development of entrepreneurial qualities and attitudes among potential entrepreneurs to
bring about significant changes in the rural areas.
13. Freedom from the dependency on the jobs offered by others.
14. The ability to have great accomplishments.
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15. Reduction of the informal economy.

16. Emigration of talent may be stopped by a better domestic entrepreneurship climate.
Kindly check the vided link below of A 15-Year-Old Entrepreneur that Impresses the
Sharks - Shark Tank
VIDEO GUIDE:
Please check the video guide below of ‘A 15-Year-Old Entrepreneur
Impresses the Sharks - Shark Tank’
https://www.youtube.com/watch?v=o0etimvtD74
DISCUSSION QUESTIONS:
1. Give an example where an entrepreneur was able to introduce new technology?

2. An entrepreneur is usually a positive thinker and decision maker. Explain.
3. Discuss the contribution of entrepreneur in creating new markets.
REFERENCE/S:
BOOK SOURCE: Entrepreneurship in Tourism & Hospitality by: Dr. Rene D. Osorno and Dr.
Grayfield T. Bajao

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MODULE

CHAPTER 2: THE ENTREPRENEURS

• David McClelland (1961) described the entrepreneur as primarily motivated by an

• The Entrepreneur has an enthusiastic vision, the driving force of an enterprise.

1. Enormous personal financial gain.

15. Reduction of the informal economy.

1. Give an example where an entrepreneur was able to introduce new technology?

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