Lesson 1: PERSONAL ENTREPRENEURIAL COMPETENCIES

Studies have proven that personal entrepreneurial competencies (PECs) are vital
in establishing a business. Identifying relevant entrepreneurial competencies should
provide insights into the field of entrepreneurship and help an individual predict
business formation and success within and across cultures. Also, proper entrepreneurial
competencies are required to successfully start, operate, ensure the survival of a new
business in the market.

The business environment is very complex and competitive. It is constantly

changing, and the changes it undergoes are aided by rapid advancements in
technology. In order to cope with the continuously evolving business environment, an
entrepreneur must equip him- or herself with a set of competencies that will ensure
his/her success.

Terminologies

Before discussing the different PECs that one looking to start a business must
have, it is important to review the following terminologies.

1. Entrepreneur

An entrepreneur is an individual who organizes and runs a business, assuming

all its risks and rewards. He/she decides what, how, and how much of a good or service
to produce and sell for profit. Moreover, he/she monitors and controls all activities
related to the business.

An entrepreneur is a person who:

 sees an opportunity to make a profit and is willing to risk money for that chance;
 sees an opportunity to create something new or improve on something;
 takes necessary actions to turn an idea into reality;
 organizes and manages an enterprise, especially a business, usually with
considerable initiative and risk;
 innovates new ideas and business processes;
 has the skills and initiative necessary to take good ideas to market and make the
right decisions to make the ideas profitable, considering that the reward for the
risks taken is the potential economic profit he/she could earn;
 reforms or revolutionizes the pattern of production through the utilization of a new
technology for producing a new good or service or an old one in a new way; and
 plays a key role in any economy.
2. Entrepreneurship

Entrepreneurship is the process of identifying and starting a business venture. It

involves the development of new ways to combine resources in order to produce a good
or service.

Entrepreneurship causes people to get ideas that help to improve the jobs they
do, the products they make, and the service they provide.

However, one cannot be successful in the process of entrepreneurship if he/she

does not possess the PECs vital in any business venture.

3. Entrepreneurial Competency

Entrepreneurial competency is a characteristic of a person that enables him/her

to be effective and to show superior performance in a business venture. It may be an
aspect of one's self-image, a body of knowledge, a set of skills, or a cluster of
appropriate motives or traits that an individual possess that he/she uses to perform well
in his/her business.

Personal Entrepreneurial Competencies: The EMPRETEC Model

As defined by EMPRETEC, an integrated capacity building program of the United

Nations Conference on Trade and Development (UNCTAD), the following are the PECs
that a person must possess in order to succeed in a business venture. These were
identified based on the results of a study funded by the United States Agency for
International Development (USAID), which involved successful entrepreneurs in India,
Ecuador, and Malawi. The EMPRETEC model organizes these into three main clusters,
which are as follows.

A. Achievement Cluster

The PECs in this cluster include traits that demonstrate a person's desire to
achieve a particular goal by seeking and taking opportunities, and persevering despite
setbacks in order to fulfill commitments and meet the demands of clients.

1. Opportunity-seeking and Initiative

 Does things before asked or forced to

 Acts in order to extend the business into new areas, products, or services
 Seizes opportunities to start a new business, obtain financing, equipment, land,
work space, and assistance

2. Risk Taking

 Deliberately calculates risks and evaluates alternatives

 Takes action to reduce risks or to control outcomes
 Places him- or herself in situations involving a challenge or moderate risk

3. Demand for Efficiency and Quality

 Finds ways to do things better, faster, or cheaper

 Acts to do things that meet or exceed standards of excellence
 Develops or uses procedures to ensure that work is completed on time or meets
agreed-upon standards of quality
4. Persistence

 Takes action in the face of a significant obstacle

 Takes repeated actions or switches to an alternative strategy to meet a challenge
or overcome an obstacle
 Takes personal responsibility for the performance necessary to achieve goals
and objectives

5. Commitment to Work Contract

 Makes a personal sacrifice or expands extraordinary effort to complete a job

 Pitches in with workers or in their place to get a job done
 Strive to keep customers satisfied and places long-term goodwill over short-term
gain

B. Planning Cluster

This cluster of PECs describes how an entrepreneur's ability to strategize or plan

the right approach in tackling tasks needed in ensuring the success of a particular
business venture.

1. Information Seeking

 Personally, seeks information from clients, suppliers, or competitors

 Does personal research on how to provide a product or service
 Consults experts for business or technical advice

2. Goal Setting

 Sets goals and objectives that are personally meaningful and challenging
 Articulates clear and specific long-range goals
 Sets measurable short-term objectives

3. Systematic Planning and Monitoring

 Plans by breaking large tasks down into time-constrained sub-tasks

 Revises plans in the light of feedback on performance or changing circumstances
 Keeps financial records and uses them to make business decisions

C. Power Cluster

These PECs refer to how one behaves in order to get others to cooperate and
assist him/her in achieving his/her goals.

1. Persuasion and Networking

 Uses deliberate strategies to influence or persuade others

 Uses key people as agents to accomplish his/her own objectives
 Acts to develop and maintain business contracts

2. Independence and Self-confidence

 Seeks autonomy from the rules or control of others

 Sticks with own judgment in the face of opposition or early lack of success
 Expresses confidence in own ability to complete a difficult task or meet a
challenge
Competence Assessment

Conducting a competency assessment will show the effectiveness or

ineffectiveness of an entrepreneur. It will show that an entrepreneur almost certainly
possesses some specific competencies and lacks others. A competency assessment
can assist individuals in identifying and targeting their development strategies through
the use of multi-rater feedback. The process helps in identifying areas of strength and
opportunities for improvement. This, in turn, will help a person in preparing learning and
development plans.

Competency Assessment Tools

Competency assessment tools are reflective in nature and contribute in making

needed improvements. They are helpful in gauging growth, learning from missteps, and
solving problems.

Reflecting on one's skills and overall work performance is necessary in order to

continue in learning. When assessment is used to look earnestly at strengths and
learning gaps, competency becomes a work in progress.

The following are the competency assessment tools.

1. Competency Assessment Inventory

These are tools for reflection, which can encourage greater competence if the
follow-up involves new planning and adjusted direction. As a guide for development,
assessment inventories overview what resources are needed to become more confident
and build new skills.

2. Competency Checklist

 A competency checklist uses criteria similar to an inventory, but no rating or

judgment is involved. For instance, each category on the checklist lists actions
necessary to reach the objectives. Objectives and standards are checked off as they
are acted upon.

3. Competency Self-questionnaire

Self-assessment questionnaires are designed to evaluate and analyze training

protocols, interventions, strengths, and weaknesses. The questions asked force
thinking, analyzing, and digging for answers, making the self-questionnaire a powerful
assessment tool. Attitudes, policies, and regular practices are considered when testers
develop questions for questionnaires and when responses are analyzed. Questions
focus on opportunities, group differences, team interaction, team strengths, and any
workplace social problems.

Core Competencies and Role-specific Competencies 

An entrepreneur should possess certain innate or learned qualities in order for

him/her to be successful. These can be classified into two groups: core competencies
and role-specific competencies.
A. Core Competencies

These are the vital competencies that a person must possess.

1. Adaptability

 Tell about a time when his/her priorities changed to meet others' expectations.
 Describe a time when his/her own behavior was altered to fit the situation.
 Tell about a time when his/her point of view or plans were changed to take into
account new information or changing priorities.

2. Client Focus

 Give an example of how services are provided to a client/stakeholder beyond

their expectations. How were the needs identified? How were these responded
to?
 Tell about a time when a client/stakeholder service issue was dealt with.
 Describe a situation in which he/she acted as an advocated within the
organization for stakeholders' needs, where some organizational resistance
should be overcome.

3. Communication

 Describe a situation wherein he/she was involved that required a multi-

dimensional communication strategy.
 Give an example of a difficult or sensitive situation that required extensive
communication.
 Tell about a time when his/her attention was given to what someone else saying,
actively seeking to understand the message.

4. Organizational Awareness

 Describe the culture of his/her organization and give an example of how his/her
work is done within this culture to achieve a goal.
 Describe the things considered and the steps taken in assessing the viability of a
new idea or initiative.
 Tell about a time when he/she used his/her knowledge of his/her organization to
get what he/she needed.

5. Problem Solving and Judgment

 Tell about a time when he/she had to identify the underlying causes to a problem.
 Describe a time when a problem was analyzed and a solution was generated.
 Tell about a situation wherein a problem had to be solved or a decision had to be
made with careful thought. What did he/she do?

6. Results Orientation

 Tell about a time when a goal was set and achieved.

 Tell about a time when he/she improved the way of doing things from how it was
typically done.
 Describe something he/she has done to improve the performance of his/her work
unit.
 Describe something he/she has done to maximize or improve the use of
resources beyond one's own work unit to achieve better results.
7. Teamwork

 Tell about a time when he/she worked successfully as a member of a team.

 Describe a situation wherein he/she was successful in getting people to work
together efficiently.
 Describe a situation wherein he/she was a member (not a leader) of a team, and
a conflict arose within the team. What was done?

B. Role-specific Competencies

These are the competencies that a person must possess in the performance of a
specific role.

1. Developing Others

 Tell about a time when he/she coached someone to help improve that person's
skills or job performance. What did he/she do?
 Describe a time when feedback was provided to someone about his/her
performance.
 Give an example of a time when he/she recognized that a member of the team
had a performance difficulty/deficiency. What did he/she do?

2. Innovation

 Describe something that he/she did that was new and different for the
organization, which improved performance and/or productivity.
 Tell about a time when he/she identified a new, unusual, or different approach for
addressing a problem or task.
 Tell about a recent problem in which old solutions did not work. How was the
problem solved?

3. Impact and Influence

 Describe a recent situation wherein an individual or a group was convinced to do

something.
 Describe a time when he/she went through a series of steps to influence an
individual or a group on an important issue.
 Describe a situation wherein he/she needed to influence different stakeholders
with different perspectives.

4. Leadership

 Tell about a time when he/she had to lead a group to achieve an objective.
 Describe a situation wherein he/she had to ensure that one's actions spoke
louder than his/her words to a team.
 Describe a situation wherein he/she inspired others to meet a common goal.

5. Relationship Building

 Describe a situation wherein he/she developed an effective win-win relationship

with a stakeholder or client. How did the building of relationship go?
 Tell about a time when he/she relied on a contract in the network to help him/her
with a work-related task or problem.
 Give an example of a time when he/she deliberately attempted to build rapport
with a co-worker or customer.
6. Resource Management

 Describe a situation wherein he/she took a creative approach to resourcing to

achieve a goal.
 Tell about a time when he/she had to deal with a particular resource
management issue regarding people, materials, or assets.
 Describe the options he/she considered to resource a project or goal if one did
not have the available resources within one's own span of control.
 Describe a situation wherein he/she established a partnership with another
organization or stakeholder to achieve a mutual goal. What steps were taken to
ensure the partnership was effective.

7. Self-management

 Describe the level of stress in his/her job and what was done to manage it.
 Describe a time when he/she was in a high-pressure situation.
 Describe a time when things did not turn out as he/she had planned, and he/she
had to analyze the situation to address the issue.

8. Strategic Thinking

 Describe a challenge or opportunity that he/she identified based on his/her

industry knowledge and how he/she developed a strategy to respond to it.
 Describe a time when he/she created a strategy to achieve a longer-term
business objective.
 Describe a time when he/she used one's business knowledge to understand a
specific business situation.

Lesson 2: BUSINESS ENVIRONMENT AND BUSINESS OPPORTUNITIES

In the business world, the terms business environment and business opportunity
are thrown around a lot. An understanding of these as well as their importance are vital
to an individual who wants to start a business. Understanding the relationship between
the two can help an entrepreneur achieve his/her objectives.

The business environment is the sum of all factors that influence a business and
its functions. These factors are interrelated, complex, and dynamic, and are beyond the
control of the enterprise.

An analysis of the business environment helps a person identify opportunities

that can assist in starting or expanding the business unit. Once these opportunities are
determined, it will be easy for an entrepreneur to exploit them in a manner through
which the enterprise will profit and grow.

Business Environment

Business environment may be defined as a set of social, legal, economical,

political, or institutional conditions that is by nature uncontrollable and affects the
functioning of an organization.

In general, the business environment can be defined according to some

characteristics.

1. It is compound in nature.
2. It is constantly changing.
3. It differs from business unit to business unit.
4. It has both long-term and short-term impacts.
 5. It has unlimited influence on external environment factors.
6. It is very uncertain.
7. It has interrelated components.
8. It includes both internal and external environments.

The business environment is represented through the diagram below.

Internal and External Business Environments

There are two main components of a business environment: the internal and the
external.

1. Internal Environment

The internal environment includes factors that are usually within the control of the
business. It is represented by the 5Ms: man, material, money, machinery, and
management. These factors can be altered according to changes in the functioning of
the enterprise.

2. External Environment

The external environment includes factors that are beyond the control of the
business enterprise. These factors include government, legal, geophysical, political,
socio-cultural, and demographical factors.

There are two types of external environment: micro- or operating environment and
macro- or general environment.
a. Micro- or operating environment – external business environment close to the
business and affects the business’ capacity to work or function. It consists of the
following groups.

 Suppliers – persons who provide raw materials and required components to the
company.
 Customers – recipients, which include wholesalers, retailers, industries,
government, and other institutions, of a good or service offered by a business.
The level of customer satisfaction determines the success of a business.
 Market intermediaries – individuals or groups that work as links between the
business and the final consumers. They include middlemen, marketing agencies,
financial intermediaries, and physical intermediaries.
 Competitors – companies that are in the same or similar industry and offer a
similar product or service. The presence of one or more competitors can reduce
the prices of goods and services as the rival companies attempt to gain a larger
market share, bigger sales volume, and increased profits. Competition also
compels companies to become more efficient in order to reduce costs. Every
move of the competitors affects the business. A particular business needs to
make adjustments according to the strategies of its competitors.
 Public – a group of people who may be users or non-users of the product or
service and who have actual interest in the business.

b. Macro- or general environment – includes factors that create opportunities and

threats to business units. The following are the elements of the macro-environment.

 Economic environment – changes with every change in policies and political

situations. There are three elements of the economic environment: the public’s
economic conditions, the country’s economic policies, and the economic system
and other economic factors, like infrastructural facilities, banking, insurance
companies, money markets, capital markets, and others.
 Non-economic environment – also called political environment. It affects the
different business units extensively. The components of the different business
units extensively. The components of the non-economic environment are political
belief of government, political strength of the country, relation with other
countries, defense and military policies, center state relationship in the country,
and thinking opposition parties towards the business unit.
  Socio-cultural environment – refers to the influence of social and cultural
factors, including people’s attitude towards work, family system, religion,
education, marriage, and the like. They are not within control of a business.
 Technological environment – factors or changes in technology that affect the
operations and products or services of a business.
 Natural environment – includes natural resources, weather and climatic
conditions, and topographical factors, like land, water, rainfall, duration of
daylight, and others. The natural environment is particularly important when
choosing a site or location for a business.
 Demographic environment – refers to how specific demographic groups affect
the business as well as the behavior of the market. Defining the demographic
environment often involves looking into the population size, standard of living,
growth rate, age-sex composition, family size, income level, education level, and
other factors. These features as well as the needs of the population can be used
in determining what to produce and which segment of the population to target.
 International environment – consists of factors that are important to the import-
export industry. Factors such as globalization, liberalization, foreign business
policies, and cultural exchange can have a profound effect on the business.

Business Opportunity

Success comes to people who grab opportunities as they arrive. There are many
opportunities that come, but timing is important to be able to grab and take full
advantage of these. Business ideas could also serve as a springboard to take full
advantage of these. Business ideas could also serve as a springboard to start one’s
own business or help in improving the performance of an existing one.

A business opportunity is a speculative position, chance, or prospect to generate

income by entering a business venture. It consists of four elements: the existence of a
need, the resources to meet the need, a process or method that utilizes the resources
to meet the need, and a method to profit or benefit. These four elements need to be
present at the same time and within the same geographical location in order to be
considered a business opportunity.

Moreover, these four elements can be combined in any number of ways, making
for different forms of business opportunities, each of which is unique in its own way. If
an individual or institution has more control over the elements, the more likely it is to
succeed in making the most of the business opportunity and become a leader in a
particular kind of business.

Business Opportunity

One of the most important steps in developing a successful business venture is

identifying business opportunities. The creation and development of innovative business
ideas presents opportunities to fill gaps in the market as well as produce new and
unique goods and services for consumers.

Typically, a person seeking to identify business opportunities conducts an

analysis of the business environment. The information gathered can be used to
recognize the strong opportunities from the weak opportunities in order to increase
chances of success.

Below are some of the questions an entrepreneur must ask when conducting
market research or an analysis of the business environment.
 1. Is there a client base to be targeted?
2. Are there any gaps in the market that the business idea could fill?
3. Are there businesses offering similar goods and services? If so, can the needs
and expectations of customers be better met by the new business idea?
4. Are there any constraints or limits to the successful pursuit of a business
opportunity? If so, what are these?
5. What alternatives could be taken by the entrepreneur?
6. What risks could be taken in pursuing the business opportunity?

Lesson 3: MISE EN PLACE