“In order to develop an optimal mindset for entrepreneurship, there is need to recognize its

importance and consciously take the steps to nurture it through the practice of self-
leadership, creativity, and improvisation. Working on those areas help Build higher levels of
self-efficacy that give us the confidence to create, pursue and share our ideas. By building a
strong mindset, enables us to identify exciting opportunities and to take action to begin new
ventures, products, organizations. A continuously expanding and growing mindset is the key
to successful entrepreneurship.”

Introduction

The key to successful entrepreneurship is a continuously expanding and growing mindset

(Neck et al., 2016). To develop an optimal mindset for entrepreneurship, there is need to
recognize its importance and consciously take the steps to nurture it through the practice of
self-leadership, creativity, and improvisation. Building a strong mindset, enables us to
identify exciting opportunities and to take action to begin new ventures, products, and
organizations

An entrepreneurial mindset is a set of skills that enable people to identify and make the
most of opportunities, overcome and learn from setbacks and succeed in a variety of
settings. It can make one more adaptable to the rapid changes in today's job market. “Those
who are able to identify problems or opportunities and then work to generate creative
solutions to those issues can also improve situations in their personal lives”, (Livengood,
2021) Research shows that an entrepreneurial mindset is valued by employers, boosts
educational attainment and performance, and is crucial for creating new businesses.

A. Entrepreneurial Mindset and the Entrepreneur

Entrepreneurial mindset is awareness and focus on identifying an opportunity
through solving a problem, and a willingness to move forward to advance that idea. The
entrepreneurial mindset is the lens through which the entrepreneur views the world, where
everything is considered in light of the entrepreneurial business.

 Establishing/building a business is always a consideration when the entrepreneur

decides,
 The action that the entrepreneur takes is for the benefit of the business,
 Helps the entrepreneur get ready to adopt the appropriate mindset.
 The mindset becomes a way of life for the entrepreneur.
 Entrepreneurs often are predisposed to action to achieve their goals and objectives.
 They are forward thinking, always planning, and they are engaged in “what if”
analyses. They frequently ask themselves, “What if we did this?” “What if a
competitor did that?”—and consider what the business implications would be.

Anyone can become an entrepreneur.

 There is no restriction on age, gender, race, country of origin, or personal

income.
 To become an entrepreneur, you need to recognize that an opportunity exists
and be willing to act on it.

Note, however, that the execution of the entrepreneurial mindset varies in different
parts of the world. For example, in many Asian cultures, group decision-making is more
common and valued as a character trait. In these regions, an entrepreneur would likely ask
the advice of family members or other business associates before taking action.

In contrast, individualism is highly valued in the United States and so many US

entrepreneurs will decide to implement a plan for the business without consulting
others.

Entrepreneurial Spirit and Passion

An entrepreneurial spirit allows entrepreneurs to carry a manner of thinking with

them each day that allows them to overcome obstacles and to meet challenges with a can-
do attitude. It could mean being passionate, purposeful, positive, bold, curious, or
persistent. The entrepreneurial spirit involves a passion for presenting an idea that is
worthwhile and valuable, and a willingness to think beyond established patterns and
processes, while keeping in mind local laws and regulations, in the quest to change those
established patterns, or at least to offer alternatives to those established patterns.

Airbnb is an example. The founders of Airbnb have a passion for supporting

individual rights to rent out unused space. Airbnb has succeeded in creating more flexible
and affordable options in the space of the rapidly growing "sharing" economy. However,
some states and municipalities have raised issues about the regulations monitoring ventures
like this. While entrepreneurial spirit is partly about fighting for individual rights and
freedoms, there should be a balance between economic freedom and consumer protection.

Passion is a critical component of the entrepreneurial process. Without it, an

entrepreneur can lose the drive to run the business. Passion can keep an entrepreneur going
when the outside world sends negative messages or less-than-positive feedback. For
example, if you are truly passionate about starting an animal shelter because of your love of
animals, you will find a way to make it happen. Your internal drive to help animals in need
will spur you on to do whatever it takes to make the shelter become a reality. The same is
true of other types of startups and owners with similar passions. However, passion
needs to be informed by the entrepreneur’s vision and mission—passion of the sake of
passion is not enough. A clear mission statement—which details why the business exists and
the entrepreneur’s objectives for achieving that mission—will guide an entrepreneur’s
passion and keep the business on track. Passion, vision, and mission can reinforce each other
and keep the entrepreneur on the right track with next steps for the business.

Further, research recognizes that an entrepreneurial mindset differs from a

managerial mindset, and the shift from a managerial to an entrepreneurial mindset can
create a sustained competitive advantage (Wright, Hoskisson, Busenitz, & Dial, 2000). In fact,
scholars note that a better understanding of an individual’s entrepreneurial mindset (EM)
will advance the study of entrepreneurship and related disciplines (Kirzner, 1997; McGrath &
MacMillan, 2000)

Entrepreneurial mindset/thinking is developing new ends using available resources

while managerial mindset/thinking is using available means to achieve a goal.

B. Ethical and Social Responsibility of Entrepreneurs

By the end of this section, you will be able to:
 1. Define and describe corporate social responsibility (CSR) and social
entrepreneurship.
2. Identify types of social entrepreneurship ventures, and the key values
accompanying them

Martin Shkreli, an aspiring pharmaceutical entrepreneur, and former hedge (hedge funds are
financial partnerships that use pooled funds and employ different strategies to earn active
returns for their investors). fund manager, made headlines in 2015 when he capitalized on a
profitable and controversial business opportunity. As the founder and CEO of Turing
Pharmaceuticals, Shkreli obtained the expired patent for a lifesaving drug used to combat
HIV. He raised the US market price overnight from $13.50 to $750 per pill—a 5,000 percent
increase. When criticism by the medical community, the public, and politicians led to
demands for a return to the original pricing, Shkreli defended his decision as a smart
business practice that contributed to his firm’s bottom line. Eventually, he agreed to reverse
the price but later reneged on his promise, offering instead to provide discounted pricing to
hospitals.

The damage to Shkreli’s reputation, however, was already complete. The BBC
described him as the “most-hated” CEO in America due to his business decisions, obnoxious
behavior, and negative social media rants. Infectious disease specialists and patient
advocates rejected Shkreli’s argument that his “price adjustment strategy” was helpful for
patients since those being treated would need the drug long after being released from the
hospital. Although the pricing strategy was not illegal, Shkreli was eventually investigated
and found guilty of securities fraud that involved falsely raising money from hedge fund
investors and stealing money from his drug company to repay investors.

Corporate Social Responsibility and Social Entrepreneurship

To understand the role of a socially responsible entrepreneur, it is important to first

look at the major tenets of corporate social responsibility (CSR) and the underlying reason
why this concept was conceived. Few directives in business can override the core mission of
maximizing shareholder wealth, and today, that particularly means increasing quarterly
profits. Such an intense focus on one variable over a short time (i.e., a short-term
perspective) leads to a short-sighted view of what constitutes business success.

Measuring true profitability, however, requires taking a long-term perspective. We

cannot accurately measure success within a quarter of a year; a longer time is often required
for a product or service to find its market and gain traction against competitors, or for the
effects of a new business policy to be felt. Satisfying consumers’ demands, going green,
being socially responsible, and acting above and beyond the basic requirements all take time
and money. However, the extra cost and effort will result in profits in the long run. If we
measure success from this longer perspective, we are more likely to understand the positive
effect ethical behavior has on all who are associated with a business.

Corporate Social Responsibility (CSR)

If you truly appreciate the positions of your various stakeholders, you will be well on
your way to understanding the concept of corporate social responsibility (CSR). CSR is the
practice by which a business views itself within a broader context: as a member of society
with certain implicit social obligations and environmental considerations and issues. As
previously stated, there is a distinct difference between legal compliance and ethical
responsibility, and the law does not fully address all ethical dilemmas that businesses face.
CSR ensures that a company is engaging in sound ethical practices and policies in accordance
with the company’s culture and mission, above and beyond any mandatory legal standards.
A business that practices CSR cannot have maximizing shareholder wealth as its sole
purpose, because this goal would necessarily infringe on the rights of other stakeholders in
the broader society. For instance, a mining company that disregards its CSR may infringe on
the right of its local community to clean air and water if it pursues only profit. In contrast,
CSR places all stakeholders within a broader contextual framework.

An additional perspective of CSR is that ethical business leaders opt to do good at

the same time that they do well. This is a simplistic summation, but it speaks to how CSR
plays out within any corporate setting. The idea is that a corporation is entitled to make
money, but it should not only make money. It should also be a good civic neighbor and
commit itself to the prosperity of society as a whole. It ought to make the communities of
which it is part better at the same time that it pursues legitimate profit goals. These ends are
not mutually exclusive, and it is possible—indeed, praiseworthy—to strive for both. When a
company approaches business in this fashion, it is engaging in a commitment to CSR.

An interesting example of an entrepreneurial company that is committed to CSR is

the New Belgium Brewing Company (NBBC), maker of Fat Tire Beer, among other brands.
The NBBC is 100 percent employee owned, which makes this company different from the
more traditional corporation in which investors own the company rather than the
employees. This type of company with employee ownership means that the workers benefit
directly from the profits generated by their efforts for the company, a sort of democratized
capitalism. The NBBC is focused on sustainability. It has a brewery in Fort Collins, CO, where
the brewery produces almost 20 percent of its own electricity—a large percentage for a
commercial factory—through solar panels and wastewater. It makes a corporate
commitment to contribute to causes related to sustainability, for example, to bicycle-related
organizations supplying people with green personal transportation options. According to the
company’s director of CSR, the NBBC considers social and environmental well-being to be a
high priority of the company.12

From a historical perspective, the development of CSR has been somewhat like a
rollercoaster ride, characterized by low points with extreme ethical failures (see Table 3.2)
followed by high points in which corporate conduct improved, largely as a result of statutory
laws and/or agency regulations enacted in response to failures. After such scandals, we also
saw a number of voluntary ethics-based ideas begin to find their way into the corporate
world, such as CSR and corporate citizenship. While these concepts have provided strategies
and tools to strengthen the ethical foundations of businesses, scandals do continue, and
new approaches to address them emerge. Ethical failures such as the Michael Milken/Drexel
Burnham Lambert scandal, the Enron collapse, and many others, including the recent
2008/2009 mortgage industry/derivatives scandal, led Congress to enact new laws.
Examples of statues enacted by the federal government in response to ethical failures
include laws such as the Sarbanes-Oxley Act, the Insider Trading and Securities Fraud
Enforcement Act, and the Dodd-Frank Act.
 In addition to the enactment of statutory reforms, various government agencies
have also promulgated new regulations in an attempt to prevent companies from engaging
in unethical, illegal, and otherwise damaging activities. Examples of agencies that have
created new regulations in response to ethical failures in the business sector include the
Securities and Exchange Commission (SEC), the Public Company Accounting Oversight Board
(PCAOB), the Consumer Financial Protection Bureau (CFPB), and the Financial Industry
Regulatory Authority (FINRA).

C. Ethical and Legal Issues in Entrepreneurship

By the end of this section, you will be able to:

1. Develop the ability to identify ethical and legal issues

2. Develop an approach to resolve ethical/legal dilemmas once identified

What does it mean to be both ethical and socially responsible as an entrepreneur? When
Martin Shkreli decided to increase the price overnight of a lifesaving HIV drug from $13.50 to
$750 per pill, the public immediately characterized his actions as unethical. However, he
viewed his position as responsible behavior that served the best interests of his company
and his shareholders. Although Shkreli’s decision to raise prices was within legal limits, his
actions were critically judged in the court of public opinion.

As an entrepreneur, should Shkreli’s concerns be with ensuring the sustainability of

his business or with providing patients with a more affordable (less profitable) lifesaving
drug? This fundamental question raises a number of related questions about the ethics of
the situation. Was the decision to raise the price of the HIV drug by 5,000 percent in the best
interest of the business? Was Shkreli aware of all aspects (ethical, legal, financial,
reputational, and political) of the decision he made? To critically examine the decisions of an
individual such as Shkreli, one needs an enhanced awareness of the multitude of
stakeholders to be considered, as opposed to only shareholders.

Stakeholders

A comprehensive view of business and entrepreneurial ethics requires an

understanding of the difference between shareholders, a small group who are the owners
(or stockholders), and stakeholders, a large group that includes all those people and
organizations with a vested interest in the business. Serving the needs of the shareholders,
as perhaps Shkreli thought he was doing, is based on a limited view of organizational
purpose. This view, known as the “shareholder primacy” doctrine, stems from a famous
Michigan Supreme Court case involving the Ford Motor Company and two shareholders
named the Dodge brothers (who would go on to form the Dodge Motor Company).3 This
case established a precedent that lasted for decades, built on the premise that the only
thing that should matter to a CEO and their company is shareholder profits. However, this
concept has gradually been replaced by a more progressive viewpoint, mandating the
consideration of all stakeholders when making key business decisions that have potentially
far-reaching consequences. As an example of this new awareness, the Business Roundtable,
a group of CEOs from the biggest and most successful companies in the US, recently released
a new statement addressing business ethics. The CEOs prefaced this statement saying,
“Together with partners in the public, private and non-profit sectors, Business Roundtable
CEOs are committed to driving solutions that make a meaningful difference for workers,
families, communities and businesses of all sizes.”4
Business Roundtable Official Statement on the Purpose of a Corporation5

Read the following statement on the purpose of a corporation from Business Roundtable:
“Americans deserve an economy that allows each person to succeed through hard work and
creativity and to lead a life of meaning and dignity. We believe the free-market system is the
best means of generating good jobs, a strong and sustainable economy, innovation, a
healthy environment and economic opportunity for all. Businesses play a vital role in the
economy by creating jobs, fostering innovation and providing essential goods and services.
Businesses make and sell consumer products; manufacture equipment and vehicles; support
the national defense; grow and produce food; provide healthcare; generate and deliver
energy; and offer financial, communications and other services that underpin economic
growth. While each of our individual companies serves its own corporate purpose, we share
a fundamental commitment to all of our stakeholders. We commit to:

 Delivering value to our customers. We will further the tradition of American

companies leading the way in meeting or exceeding customer expectations.
 Investing in our employees. This starts with compensating them fairly and providing
important benefits. It also includes supporting them through training and education
that help develop new skills for a rapidly changing world. We foster diversity and
inclusion, dignity and respect.
 Dealing fairly and ethically with our suppliers. We are dedicated to serving as good
partners to the other companies, large and small, that help us meet our missions.
 Supporting the communities in which we work. We respect the people in our
communities and protect the environment by embracing sustainable practices
across our businesses.
 Generating long-term value for shareholders, who provide the capital that allows
companies to invest, grow and innovate. We are committed to transparency and
effective engagement with shareholders.
 Each of our stakeholders is essential. We commit to deliver value to all of them, for
the future success of our companies, our communities and our country.”

Question: Does it appear that Shkreli, in the preceding pharmaceutical example, considered
all the stakeholders as the Business Roundtable Statement recommends, or did he follow
the older shareholder primacy doctrine approach?

Chapter II. Concepts and Terminologies

Entrepreneur vs Intrapreneur

An entrepreneur is someone who designs and launches a new business, takes on all of the
rewards and risks that come with running a business. An intrapreneur is an individual who
uses entrepreneurial skills to create and develop a new project in the company that they
already work at, which eliminates many of the risks that come with running a business as an
entrepreneur.

The main difference between an entrepreneur and an intrapreneur is that an Intrapreneur is

an employee, and an entrepreneur is the founder who designs, launches, and manages a
new business, which almost always starts out as a small business.
Successful intrapreneurs will foster innovation in the company that they work for. In most
cases, an intrapreneur is given full control over the project that they are working on even
though the project is usually designed to have a significant impact on the company itself.
Many individuals who begin as intrapreneurs will eventually develop into entrepreneurs
once they decide to leave the company that they work at and form their own business.

Both are leaders that create and innovate. An entrepreneur runs own company and have
complete freedom and responsibility. An intrapreneur is responsible for innovating within an
existing organization. Intrapreneurship is less risky, but it also comes with less autonomy.

Entrepreneurship and the Entrepreneur

What is an entrepreneur?

R. Cantillon – bearer of risk in provision of capital;

J. B. Say – shifter of resources to higher productivity;

J. Schumpeter – innovation as disturbing status quo;

Knight – directs resources in the presence of uncertainty;

P. Drucker – creating something new, transmuting value;

Modern view

The pursuit of opportunities to combine and redeploy resources without regard to

current ownership or control of the resources.

Entrepreneurship is Multidimensional

The entrepreneur must:

 perceive an opportunity to create value by redeploying society’s resources.

 devise a strategy for marshaling control of necessary resources.
 implement a plan of action to bring about the change.
 harvest the rewards that accrue from the innovation.

Types of Entrepreneurship:

1. Replicative versus innovative

2. Opportunity-based versus necessity-based
3. Corporate Venturing
4. Social Venturing

Replicative entrepreneurs function as efficient coordinators of resources, start and maintain

businesses that mimic predecessors provide more of existing goods and services.
Innovative entrepreneurship reshapes industries and has the potential to add huge value to
economies e.g. Google, Intel, Facebook, and e-Bay

Necessity-based entrepreneurs start businesses due to a lack of alternatives, small, low-

capital ventures, almost always replicative, common in emerging economies.
Opportunity-based entrepreneurs are motivated by the idea, accounts for virtually all
innovative entrepreneurship, most frequently found in developed economies.
Corporate venturing is common for projects requiring large and complex research teams,
generic testing equipment, lengthy development times.
Incentives to encourage entrepreneurship are difficult to implement in large
organizations, motivating people to work on the right projects, rewarding success,
perceived inequities.

Social Venturing:
 Primary objective of the venture’s product or service is to address a social issue.
 Financial returns are traded off against social objectives.
 Includes efforts by non-profit entities to create for-profit subsidiaries, e.g. museum
shops
 Recent trend in “green-tech” or “clean-tech”

Characteristics of Entrepreneur

An entrepreneur is an individual who conceives the idea of starting a new venture, take all
types of risks, not only to put the product or service into reality but also to make it an
extremely demanding one. He is someone who:

1. Initiates and innovates a new concept,

2. Recognizes and utilizes opportunity,
3. Arranges and coordinates resources such as man, material, machine and capital,
4. Takes suitable actions,
5. Faces risks and uncertainties,
6. Establishes a startup company,
7. Adds value to the product or service,
8. Takes decisions to make the product or service a profitable one,
9. Is responsible for the profits or losses of the company.

Entrepreneurs are always the market leader regardless of the number of competitors
because they bring a relatively new concept in the market and introduce change.

Characteristics of Intrapreneur

An intrapreneur is nothing but an entrepreneur within the boundaries of the

organization. An intrapreneur is an employee of a large organization, who has the authority
of initiating creativity and innovation in the company’s products, services and projects,
redesigning the processes, workflows and system with the objective of transforming them
into a successful venture of the enterprise.

The intrapreneurs believe in change and do not fear failure, they discover new ideas,
looks for such opportunities that can benefit the whole organization takes risks, promotes
innovation to improve the performance and profitability, resources are provided by the
organization. The job of an intrapreneur is extremely challenging; hence they are
appreciated and rewarded by the organization accordingly.

From last few years, it has become a trend that large corporations appoint
intrapreneur within the organization, to bring operational excellence and gain competitive
advantage.

Key Differences Between Entrepreneur and Intrapreneur

The important distinguishing points between entrepreneur and intrapreneur, are given in
the following points:

1. An entrepreneur is defined as a person who establishes a new business with an

innovative idea or concept. An employee of the organization who is authorized to
undertake innovations in product, service, process, system, etc. is known as
Intrapreneur.
2. An entrepreneur is intuitive in nature, whereas an intrapreneur is restorative in
nature.
3. An entrepreneur uses his own resources, i.e. man, machine, money, etc. while in the
case of an intrapreneur the resources are readily available, as they are provided to
him by the company.
4. An entrepreneur raises capital himself. Conversely, an intrapreneur does not need to
raise funds himself; rather it is provided by the company.
5. An entrepreneur works in a newly established company. On the other hand, an
intrapreneur is a part of an existing organization.
6. An entrepreneur is his own boss, so he is independent to take decisions. As opposed
to intrapreneur, who works for the organization, he cannot take independent
decisions.
7. This is one of the salient features of an entrepreneur; he is capable of bearing risks
and uncertainties of the business. Unlike intrapreneur, in which the company bears
all the risks.
8. The entrepreneur works hard to enter the market successfully and create a place
subsequently. In contrast to Intrapreneur, who works for organization-wide change
to bring innovation, creativity and productivity.

BASIS ENTREPRENEUR INTRAPRENEUR

For Comparison

Meaning set up his own business with

a new idea or concept. an employee of the organization

who is in charge of undertaking
innovations in product, service,
process etc.

Approach Intuitive Restorative

Resources Uses own resources. Use resources provided by the

company.

Capital Raised by him. Financed by the company.

Enterprise Newly established Existing one

Dependency Independent Dependent

Risk Borne by the Taken by the company.

entrepreneur himself.

Works for Creating a leading Change and renew the existing

organizational system and culture
 position in the market.

Who are the Intrapreneurs that inspire us?

1. Ken Kutaragi, creator of PlayStation at Sony

2. Brothers Lars and Jens Eilstrup Rasmussen, creators of Google Maps
3. Jim Delligatti, create the Big Mac early Ray Kroc franchise/McDonalds
4. Paul Buchheit, the creator of Gmail

Exercise # 1:

Make a list of Filipino and Chinese-Filipino entrepreneurs and intrapreneurs, their

background/origin, type of business and their secret formula (if any) of success.