ENTREPRENEURSHIP

COURSE OUTLINE/ TOPICS

a) Introduction (week 1-4)
b) Entrepreneurial culture (week 5)
c) Employment and un employment (week 6)
d) Entrepreneurial/ Career opportunities (7)
e) Delegation(week 8)
f) Entrepreneurship Change (week 9)
g) Entrepreneur Creativity (week10)
h) Entrepreneurship motivation (week 11)
i) Business Ethics (week 12)

COURSE DESCRIPTION
This course offers an over view of entrepreneurial process. They will earn skills and
characteristics of successful entrepreneurs, record keeping, and techniques for evaluating
business opportunities, planning tools, selling and marketing basics, financial analysis and
government policies.

Aim of entrepreneurship education

 To enable individuals to recognize commercial opportunities (business idea) and giving
them self-esteem, knowledge and skills to act on them/ turn them into real business
 To identify the talents and skills to become a successful entrepreneur i.e. personal talents,
technical skills, educational back ground etc.
 To prepare a report summarizing the findings of the business findings and research

Objectives of teaching entrepreneurship

 To provide learners with skills needed to succeed in the business environment.
 To enable learners acquire practical skills for starting and operating business enterprises.
 To emphasize imagination and risk taking in business
 To enable learners address some contemporary needs of business education in a way that
traditional systems do not.
  To instill in the learners the value of creativity, self-confidence, innovativeness in the
business world.
 To enable the instructor to teach what has been perceived unteachable i.e the idea that the
entrepreneurs are born but not made.
 To change the belief/attitude people had that military is for academic failures.
 To instill into the learners the skill of problem solving and critical thinking

Mindset shift
Emphasize that entrepreneurship isn’t just about starting a business, it’s a mindset that encourage
creativity, problem solving and resilience.

Teaching and learning patterns

The teaching and learning approaches will combine class room lectures, discussions, group
activities, Quizzes and take home assignments.

Brainstorming sessions
Divide students into groups and give them open ended challenges. A group project shall form
part of the course work, the material presented in class will overlap that of the text but will
contain additions and variations.

Learning out comes

 On completion of this course unit, a student will be able to;
 Compare the advantages and disadvantages of different business opportunities
 Perform a competitive analysis within a selected industry
 Determine social and ethical responsibility
Assessment methods
This will be done in form of;
a) Weekly tests and practical exercises (30%),
b) Industrial training (10%)
c) Final exam (60%)
 1. INTRODUCTION ENTREPRENEURSHIP
I. Who is an entrepreneur?
II. What is entrepreneurships?
III. Objectives of teaching entrepreneurship
IV. Types of entrepreneurship
V. Characteristics
VI. Importance
VII. Key concepts
VIII. Entrepreneurial traits
IX. Reasons for studying entrepreneurship
X. Entrepreneurship management skills
XI. Barriers/ Limitations of entrepreneurship
XII. Factors that influence one’s choice of business career

2. ENTREPRENEURIAL CULTURE
 Definition
 Objectives
3. ENTREPRENEURAL OPPORTUNITIES AND CAREER
 Definition
 Process of choosing a career
 Factors to consider when choosing a career

4. EMPLOYMENT AND UNEMPLOYMENT

 Types
 Wage differences
6. ENTREPRENEURIAL DELEGATION
 Definition
 Merits and demerits
 Fear of delegation
7. ENTREPRENEURSHIP CHANGE
 Types of entrepreneurship change
 Transforming change
 Reasons for resisting change

8. Business Creativity
 Business creativity
 Importance of business creativity
 Factors that influence business creativity
 Characteristic

(9) Motivation in business

 Definition of motivation
Challenges of motivation
 Concepts
 Benefits
Business ethics
 Definition
 Principles of business ethics
 Beneficially of business ethics

ENTREPRENEURSHIP LECTURE NOTES

INTRODUCTION TO ENTREPRENEURSHIP EDUCATION;
It is the subject that trains, motivates and allows learners to develop and use their creativity, take
initiatives, responsibilities and risks in order to encourage entrepreneurial success in a variety of
settings.
The concept of entrepreneurship was introduced by Joseph Alois Schumpeter, and he is
regarded as the father of entrepreneurship.
Definition of an Entrepreneur
Is a person who has the ability and desire to establish, administer and succeed in a startup
venture along with risks entitled to it to make profits.

Definition of Entrepreneurship
Is the process of starting and operating a new business, taking on financial risks in the hope of
making profits.

Types of entrepreneurship
The 4 types of entrepreneurship include;
 Small business entrepreneurship
 Scalable startup entrepreneurship
 Large company entrepreneurship
 Social entrepreneurship

Characteristics of entrepreneurship
Not all entrepreneurs are successful, there are definite characteristics that Make entrepreneurship
successful; these are:
 Hard working and commitment to work in terms of time, money and life style.
 Willingness to listen and seek for help from other people.
 Demonstrated imitativeness by being personally responsible for the success or failure in
the business
 Ability to take a risk
 Innovation and creativity
 Visionary and leadership quality
 Open minded
 Flexible and goal oriented
 Persistent
Characteristics of an enterprising person
 He works hard to achieve the set targets
 He is self-motivated and takes personal decisions
  He turns challenges into opportunities
Importance of entrepreneurship
 Creation of employment opportunities
 Innovation
 Impact on social and community development
 Increase standards of living
 Supports research and development

Key concepts of entrepreneurship

 Innovation
 Risk taking
 Vision
 Organization

Entrepreneur traits
 Passion
 Risk taking ability
 Persisting nature
 Innovative
 Leading from the front
 Ethical in nature

Entrepreneurial management skills

 Finance management skills i.e ability to manage business funds
 Time management skills; ability to manage time efficiently and effectively
 Leadership skills; ability to influence other people to take up a course of action.
 Decision making skills; ability to take up the course of action
 Communication skills; ability to pass on information to various parties.
 Planning skills; ability to determine what to do, when and ability to set goals and
objectives for the business and how to achieve them.
Barriers/ Limitations/ hindrances/ obstacles of entrepreneurship
 Limited role model or shortage of successful entrepreneurs
 Limited business ethics
 Career dependence i.e. depending on professions or jobs
 Unfavorable policy on entrepreneurship
 Poor management
 Limited access to finance
 Bureaucracy in form of long and complicated procedure to be followed to obtain a
trading license and register a company

Factors that influence one’s choice of a business career

 Job security
 Personal interests of an individual
 Talents and abilities of a person
 Nature of the society where one lives
 Family bias or preferences
 Demand for the career in the job market
 Peer pressure or college influence
 Government policy in relation to career
 Influence of teachers and career masters
 Natural resources in the community
 Expected income or profits from the business career
 Job satisfaction i.e. in terms good and regular pay

ENTREPRENEURIAL CULTURE
This refers to a culture that encourages the whole population to take advantage of the
abundant opportunities in the environment. Be in contact with very many successful role
models.

Objectives/reasons for developing the entrepreneurial culture

  To acquire formal/informal managerial knowledge and practice in business.
 To link with a wider network of independent family/business contacts.
 To be in contact with numerous familiar successful role models.
 To familiarize themselves with small business tasks during youth
 To build capacity for living in uncertainty and ambiguity.
 To get support from financial and technical institutions
 To embrace opportunities to practice entrepreneurial competencies

CAREER
A career is defined as an activity/ work/occupation that a person does over a period of time for
his/ her survival and to achieve his/ her goals.
People engage in economic activities to earn a living, generate wealth and improve their
standards of living.

Career guidance
This is the process of assisting/helping a person to choose a career. It is normally done by
parents, teachers, counselors etc.

PROCESS/ STEPS INVOLVED IN CHOOSING A CAREER

 Defining one’s needs and targets/objectives
 Defining resources required for a given career
 Identifying career options available
 Carrying out research on the career options identified
 Deciding on the career to undertake after comparing the costs and benefits of the
identified careers
 Implementing the career selected for survival and to achieve the intended
targets/objectives

Factors that influence one’s choice a business career (Factors considered when choosing a
business career).
 Job security, people normally select careers which guarantee high level of job
security e.g. government jobs
 Personal interest of an individual, people normally choose careers they prefer and
those that lead to their satisfaction than those they do not have interest in
 Talents and abilities of a person, a person selects in a career in line with his talents
and abilities e.g. a person who is talented in football ends up playing football as his
career
 Nature of the society where one lives, a person who lives in farming society chances
are high that he will be a farmer
 Family bias or preference, some people take up careers that are favored or liked by
their family members than those disliked by family members
 Demand for the career in the job market careers with a high level of demand are
usually preferred to those whose demand is low
 Peer/ colleague influence/pressure, some youth normally do what their friends are
doing, so they end up choosing careers of their friends.
 Government policy in relation to career, government may support a certain career
hence encouraging people to choose such careers e.g. in Uganda to day people are
taking careers in the science fields due to government support of science
 Influence of teachers and career masters especially in high schools
  Natural resources in the community, one chooses a career basing on the resources
available in a given area e.g. presence of minerals in a given area makes people join
mining as their career.
 Expected income/ profits from the business career, people normally select careers
that generate high incomes compared to those that generate low incomes
 Job satisfaction, careers that are satisfying in terms of goods and regular pay are
preferred to those which are not satisfying

EMPLOYMENT AND UNEMPLOYMENT

Categories/ Types of employment
There are two broad categories of career options from which one can choose. These are;
o Wage/ paid employment.
o Self-employment /entrepreneurship/ becoming an entrepreneur

WAGE EMPLOYMENT.
This is where an individual works for another party and he/she is paid wage or salary
periodically i.e. weekly, monthly etc.
One may work for the government, individual, non-governmental organization, and church
etc .In this case a person follows instructions put in place by the employer. One may work in a
public sector or private sector.

Advantages of paid employment

 A paid employee is assured of his/ her regular payment at the end of a given period of
time whether the business has made profits or not.
 A paid employee is given specific duties and responsibilities depending on the agreed
upon payment.
 A paid employee is given fringe benefits such as medical allowance housing allowance
etc. as may be agreed.
 It reduces fatigue of the employee because he/ she works for fixed and favorable working
hours.
  The income one gets from wage employment helps him/her to improve his/her standard
of living.
 It promotes an individual’s financial discipline i.e. one becomes responsible in the way
he/ she uses his/ her funds.
 A paid employee normally works under set and well organized systems of control/
administration.
 A paid employee may be assured of promotion and a certain future as long as the
employer is operating well.

DISADVANTAGES OF WAGE EMPLOYMENT

 A wage employee can lose the jobs any time e.g. in case of fall in demand for the
business’ products. Therefore, there is no job security, the job depends on the employer’s
preference to a particular worker, and therefore one can be terminated any time.
 Some employers are unfair, rude, and highly emotional and therefore they make work
unpleasant.
 The wage employee gets a fixed wage/ salary as agreed which may not be increased even
when the business makes more profits.
 It hinders creativity of a worker because he/ she does only a task(s) agreed upon.
 Loss of independence of the worker, one is required to follow strict orders/ instructions
from the employer without deviating.

Causes of wage differences between careers

 Differences in the nature of work done by different people
 Differences in bargaining power of individuals
 Differences in terms of employment of different employers/organizations
 Differences in experience by different people
 Differences in seniority/responsibilities of different people
 Differences in levels of profits made by different businesses
 Differences in demand for the services rendered by the workers
 Government policy of setting different levels of payments/wages
 Differences in duration of training for different careers
  Differences in strength of trade unions
 Differences in levels of education and training of different people

Self-employment
This refers to a situation where an individual starts his/her own income generating activity using
his/her own resources and gets employed in it

Benefits of self-employment/ being an entrepreneur

 It makes one his own boss and independent when performing business activities.
 Provides employment and other benefits to the owner and other people in the community.
 Gives financial benefits to the person in form of profits which leads to improved
standards of living.
 Leads to provision of goods and services to the community.
 It is a source of government revenue through taxation.
 Encourages creativity/ innovativeness on the side of the entrepreneur through making his/
her decisions.
 It improves one’s status in the community i.e. one becomes recognized and respected due
to the contribution of the business to the society.
 It leads to job and income security i.e. the entrepreneur is assured of his/ her job and
income as long as the business is still in existence and successful.
 It encourages self-motivation especially when the business is doing well.
 It leads to self-actualization/ self-fulfillment, a self-employee is able to get all his/ her
needs in life.
 Develops self-confidence and self-esteem as the person develops the attitude of managing
activities

Disadvantages of self-employment/ being an entrepreneur

 It leads to fatigue/ exhaustion due to long hours of work which reduces the entrepreneur’s
quality of life.
 Leads to neglect of personal responsibilities such as attending to family matters. This is
because an entrepreneur spends most of his/ her time in his/ her business.
  The entrepreneur is uncertain of income i.e. he engages in business without knowing how
much profits he is going to get at the end of a given period.
 It creates frustrations to an entrepreneur in case there is failure in business.
 Makes an entrepreneur to sacrifice other important aspects of life like leisure.
 A self-employee/ entrepreneur faces the risks of his business alone.
 The business of the self-employed person is exposed to possible favorable government
policies, possible unfair competition from other businesses etc.
 There is limited delegation of tasks since one may not find people he trusts in the
business
 It is associated with many risks, all risks of the business such as bad debts, loss of sales
are suffered by the self-employee

Differences between wage employment and entrepreneurship/ self-employment/ being an

entrepreneur
 In wage employment one works for other people while in self-employment one becomes
his/ her own boss.
 In wage employment one follows instructions of the employer while in self-employment
one makes his/ her own plans or generates his her own ideas.
 In wage employment one does a routine job i.e. a job agreed upon with the employer
while in self-employment one becomes creative and innovative.
 In wage employment one gets a fixed pay while an entrepreneur gets surplus income.
 In wage employment one can hardly create wealth/ become rich while self-employment
creates wealth for an individual and contributes to the national income of a country.
 Wage employment is rarely negative i.e. it rarely yields negative returns to the employees
while an entrepreneur may get losses/ negative profits.

Measures that should be taken by government to encourage self-employment

The following should be done in order to encourage self-employment;
 Vocationalizing the education system i.e. the government should encourage vocational
subject such as entrepreneurship education, fine art, agriculture, wood work, technical
drawing, music, computer etc.
  Extending soft loans/ credit facilities to potential entrepreneurs.
 Maintaining peace and stability in the country.
 Widening the market of the products both domestically and internationally.
 Ensuring infrastructural development i.e. provision of roads, water, power etc. to
facilitate production.
 Sensitizing the masses about the importance of self-employment.
 Recognizing and rewarding successful entrepreneurs to encourage others to come up.
 Providing incentives for small scale/ cottage industries such as tax holidays, tax waivers,
tax reduction etc.
 Furthering liberalization of the economy ie remove unnecessary restrictions on trade to
encourage people to engage in trade activities.
 Ensuring macroeconomic stability such as controlling inflation in the country.

UNEMPLOYMENT
This refers to a situation when a person is actively looking for a job and willing to take whatever
is offered as a salary or wage but cannot find one.

Causes of unemployment in Uganda

 High population growth rate, this makes the speed at which jobs are created slower
than the speed at which the population is growing. This renders many people
unemployed.
 Discrimination in the job market, some employers in Uganda recruit particular
genders, tribes or religions, family members and leave others with similar skills hence
unemployment.
 Rural urban migration, many people tend to move from rural areas to towns searching
for jobs which become scarcer and they end up becoming unemployed.
 Inappropriate education and training, the education system in Uganda mainly trains
job seekers instead of job creators. This makes may fail to get jobs.
 Poor attitude towards work, some people from wealth back grounds minimize low
income jobs. This leaves them unemployed.
  Lack of information on available job opportunities, some people do not know where
the jobs exist. This ignorance makes them fail to access jobs hence unemployment.
 Political instability in some parts of the country, this makes people abandon jobs yet
they cannot exploit any other opportunities.
 Use of advanced technology, this makes some workers to be laid off from their jobs and
substituted with fewer machines such as computers, ATMs etc
 Change in seasons in the agricultural sector, farmers are normally rendered
unemployed during the dry season.
 Inadequate capital, some people fail to create jobs on their own due to shortage of
resources hence rendering them unemployed.
 Physical and mental disabilities, this makes some people unemployed because they are
unable to perform certain jobs.
 Nature of land ownership, some land lords own very large pieces of land especially in
rural areas leaving others without land where they would be employed.
 Displacement of local labor force by foreign labor force. In this case the jobs that
would be done by the local people are taken by foreigners.
 Restructuring in ministries/companies/industries, this leads to retrenchment and
downsizing of labor force hence rendering many people unemployed.
 Closure of industries leading to labor lay off e.g. due to over taxation.
 Privatization of state enterprises, this makes new management reduce the number of
workers employed by the enterprise
 Changing jobs, some people become unemployed during the short time of looking for
another job after leaving the previous job e.g. builders, plumbers etc

Suggestions on how to reduce unemployment in Uganda

 Providing proper career guidance on subject combinations to do courses that provide
skills needed in the current job market.
 Developing a positive attitude towards science and technical subjects as they equip skills
on job creation than job seeking.
 Measures such as family planning methods should be put in place to minimize on the
high population growth rate
  Government should encourage local and foreign investor by providing favorable terms
like low taxes, tax holidays etc.
 Setting up and improving on infrastructure by government to encourage entrepreneurs to
establish industries.
 Public enterprises should be privatized to facilitate expansion and creation of more jobs
 Employment bureaus should be created to collect information and advertise jobs to the
public
 Rural electrification should be emphasized by the government to enable rural people start
small industries
 Government should create political stability that leads to peace and creation of more jobs
 Diversification of the economy
 Training and retraining of people in entrepreneurship skills.
 Provision of credit facilities at favorable terms to enable people start economic activities
 Migration and labor policies to specify what jobs can be done by foreigners
 Curriculum reform to emphasize skills development
 Redistribution of land to enable poor people get land for job creation.
 Sensitizing people on the value and importance of work to change people’s attitude
towards work

DELEGATION
This refers to the process of granting authority to subordinates in executing responsibility. It
takes place when the superior gives the subordinates to perform work on his /her behalf and in
his /her name.

Merits of delegation
 Enhances good spirit of work in the organization
 It prepares the junior staff promotion
 Acts as a tool for extension of management to other workers
 Instills confidence among the subordinates
 Enables office work to move on smoothly even in absence of the boss
 Gives the bosses more freedom to concentrate on major planning and creative work
  Leads to development of staff and full use of their skills
 Enhances staff morale, motivation and commitment to work
 Enables decisions to be made by those closer to the action resulting into faster
implementation

Demerits of delegation (why managers fear delegation)

 Fear of job replacement as the subordinates learn about what they do
 to know more than expected
 Ignorance of some managers about why and when to delegate
 Desire to get self-praise and retain it for good and the urge to cling on power.

Reasons why subordinate fear to be delegated authority to

 Lack of self-confidence, capacity and initiative to handle the task given
 Inadequate information (resources) to handle a particular task given
 Fear of criticism i.e. a subordinate who fears to make mistakes and who does not accept
criticism will not accept delegation
 Dependence on superiors’ subordinates who depend on their superior to take decisions
will not accept to be delegated.

CHANGE
Coping with change
This refers to giving a completely different form or appearance to an object. Chance is a fact of
business life which cannot be avoided, however, the different kinds of change that businesses
experience need different strategies and plans so as to gain employee’s acceptance.

Types of change
There are three types of change that normally occur in business /organizations. These include;
 Developmental change.
 Transitional change.
 Transformational change.
Developmental change
This is a type of change that involves making improvements to the current business/product such
as improving on its production process, performance standards. For an enterprise to remain
competitive there is need for developmental change and this should not cause a lot of stress to
the current workers.
Therefore, there is need to explain to the workers the reasons for the change and educate them on
the new techniques adopted or to be adopted.

Transitional change
This is a type of change that involves gradually replacing the existing process/ procedures with
something that is totally new to the business.
A transitional phase is the period when the old process is being dismantled/ removed and the new
process is being installed. The transitional change is more challenging to implement than the
developmental change.
Examples of transitional change;
 Introduction of new technology in the business.
 Introduction of a new product.
 Business reorganization.
 Merging of the business with another one.

Implications of transitional change

 It causes stress among the employees as they adjust to new processes/procedures
 It creates uncertainty among the employees concerning the future of their jobs in the
business
 It is expensive /costly because it involves retraining the employees to match with the new
methods or processes

Solutions to the above implications

 By educating/sensitizing employees on the new process/procedure/change
 By involving workers whenever change is being implemented
  By providing assurance to workers that they are not going to lose their jobs to reduce the
feeling of insecurity/uncertainty
 By developing programs that support /help workers to make personal adjustments e.g.
organizing workshops, seminars etc

Transformational change
This is a type of change that involves the drastic change of the production process i.e.
abandoning the old methods and introducing new methods/systems. It involves both
developmental and transitional change.
A transformational change takes place in organizations or businesses when there are major
change in demand, emergence of totally different technology, sudden competition and other
shifts which may make the developmental and transitional changes unable to offer a solution.
In this case organizations have to drastically transform themselves.

Reasons why people resist change

Change is rarely accepted by all people involved in the business organization due to the
following reasons;
 It is costly, change involves an initial financial investment or some short term economic
hardships before long term benefits can be realized.
 Fear of consequences, change normally benefits some people and hurts others.
Therefore people resist change for fear that it may hurt them
 Change involves investment of time and effort for it to be implemented. This makes
individuals to resist it e.g. adopting a new record keeping system for a growing business.
 Fear of uncertainty, Change involves some degree of uncertainty e.g. unemployment
therefore people resist change for security purposes.
 Inadequacy, this refers to the feeling of inability to handle change. This is due to lack of
self-confidence, ability, experience etc.
 Stubbornness and need to be independent, even when the evidence is convincing that a
certain change is good some people tend to resist it in favor of their ideas, decisions etc.
Ways of fostering/ encouraging change in business.
 By rewarding success, it involves acknowledging/ appreciating what someone has done
well. This changes the attitudes of the workers towards change i.e. it makes workers
accept change.
 By assessing readiness, this involves trying to find out how prepared workers are to
handle change
 Proving adequate training of workers to meet the challenges that change may cause to
them.
 Managing/ getting prepare for resistance; this involves being prepared for anything
that workers may do to resist change

CREATIVITY
This refers to the ability to come up with innovative solutions to needs and to market them.
Creativity means the ability to come up with new ideas and applying them to satisfy people’s
needs.
Creativity is a basic characteristic in all human beings and it is absent in animals. For one to be
creative he/she has to allow him/herself to make mistakes.

Importance of creativity in business

 It helps entrepreneurs to solve every day problems in their businesses.
 It is used to promote the produced products of the business.
 It helps the entrepreneur to update/ improve the business products.
 It enables an entrepreneur to make proper use of the limited resources that may be
available.
 It increases entrepreneur’s potential /chances for success in the business through
developing different products/ideas.
 It helps the entrepreneur to develop new and original ideas by using the existing ideas as
the starting point.
 It increases awareness by paying attention to insights and sounds that we usually ignore
hence enabling people to open up their minds to new ways of thinking.
Factors that limit creativity.
 Fear for failure, fear of looking a fool or being at limits creativity.
 Too much obedience to the rules and regulations, trying to do things in a way that is in
accordance to the rules limits creativity.
 Failure to have time to think creatively, this is due to stress or work commitment
which reduces the individual’s ability to think objectively
 Applying too much logic in issues, having too much analytical and calculative thinking
without proper imagination hinders creativity. Creativity is not a result of logical
thinking.
 Thinking negatively, focusing on the negative aspects of the problem/idea than the
positive outcomes of the idea and spend time and energy on worry.
 Thinking that one is not creative due to lack of self-confidence.
 Making assumptions, assuming that things are done in certain way without getting
proper information about them may limit creativity.
 Looking for one right answer, believing that there is only one right answer to a problem
limits creativity
 Sterile environment, an environment that is too hectic that does not provide enough time
for reflection and introspection hinder creativity.

Characteristics of creative people/ creative thinkers

 Originality, they are able to do something that nobody else has done. They think of an
idea, redesign it and make something new out of it.
 Search for better ways of doing tasks, they work hard to find out new ways of doing
things.
 Ask questions, creative people ask questions about the things they do not understand.
They do not just accept/ take things as they are.
 Sensitivity, creative people are sensitive to what is taking place in the environment so
that they do things according to the demand in the environment.
 Flexibility, creative people are not fixed in the way they do things i.e. they change
according to the challenge ahead of them.
  Independent thinking, creative people always think for themselves. They think
independently, gather information and come up with their own findings
 Growth and change, creative people constantly search for change i.e. they do not restrict
themselves to using the same old way of doing things. They learn to change for the better
so as to grow and succeed.
 Innovation, creative people have a capacity to transform the resources of the enterprise
in to new resources to make them more productive/useful.
 Stages of the creative process
 The creative process has four stages namely;
 Preparation, this involves gathering data, opinions, information and speculations to
obtain an in depth understanding of the problem at hand. It involves brain storming
oneself.
 Incubation, this involves letting the person’s mind work on the information gathered to
continue the process of generating solutions to the problem. It involves making necessary
connections, linkages, associations with concepts already formed so as to come up with
the idea/ solution.

MOTIVATION
This refers to the inner state which consist of wishes, desires or drives that influence the behavior
of an individual
Motivation is a psychological process which is concerned with sustaining, directing or
discouraging behavior most human behavior is goal oriented i.e. one behaves in a certain way
because of the desire to achieve a given target or goal which satisfies psychological needs such
as recognition, self-esteem, belongingness, self-actualization etc.

Motivation process
 Felt need, this stage of the motivation process involves determining what one wants to be
motivated to do or accomplish. A felt need is the starting point in the process of
motivation
 Goal oriented behavior; these are things that one needs to do to maintain motivation
  Need satisfaction, this stage of the motivation process involves removing distractions or
obstacles, hindrances so that one remains motivated

Entrepreneurial motivation: This refers to the strong desire, impulse, dedication or drive
possessed by an individual that encourages him or her to accomplish a specific business goal or
target.
Classical concepts of entrepreneurial motivation
 Unconscious motive, this is the motivation that occurs without some being aware, it
involves desires/attitudes which influence/change one’s behavior.
 Power motive, this is the ability to influence others to behave in a particular way that
suits one’s interest. It involves the desire to influence others
 Competence motive(achievement motive), this is the desire to excel i.e. the desire to do
something better than others
 Affiliation motive, this is the desire to be with other people i.e. the desire to gain
company of others regardless of whether they help him or her to achieve an objective or
not

Characteristics of people with high achievement motivation

 They want to be challenged i.e. they want situations that challenge them so that they are
motivated to take action to overcome that challenge
 They set moderately difficult goals but which are possible or achievable to ensure that
they are challenged
 They take realistic risks which they can afford to manage
 They assume personal responsibility for the outcome of what they have done
 They prefer specific and prompt feedback to be able to measure progress or to establish
whether they are successful or not
 They are goal oriented i.e. they set realistic targets/goals and work hard to achieve them

Benefits/importance/merits of motivation
 Promotes self confidence among entrepreneurs and this is achieved after attaining success
in the set target/goal
  It encourages entrepreneurs to take calculated risks because of the satisfaction one
derives from the risky activities
 It promotes self-evaluation/assessment as one tries to find out the progress or the
attainment of the set target
 It encourages an entrepreneur to scan or analyze the environment to identify possible
opportunities which can be undertaken to ensure or achieve success
 It promotes goal setting which inspires an entrepreneur to work hard to achieve them in
order to be successful
 It enhances other entrepreneurial skills such as creativity, innovation etc which lead to
success in business ventures

Factors that hinder/limit/retard entrepreneurial motivation/obstacles / barriers to

entrepreneurial motivation
 Some socio- cultural rigidities/beliefs in society which act as barriers e.g. they believe
that high profits are unethical, believe that some activities are for a specific class, gender
etc.
 Unfavorable political and government policies on entrepreneurial activities e.g.
government policies that discourage private freedom, free operation of the forces of
demand and supply
 Poorly developed infrastructure, i.e. inadequate provision of physical, social or
economic infrastructure in a given area e.g. roads, banks power etc
 Limited number of role models, shortage of role models to inspire others to develop
entrepreneurial culture or spirit
 Psychological factors such as security, orientation, high need for affiliation etc which
do not promote entrepreneurial excellence
 Political instability, this discourages individual freedom, free market economy and
private enterprises which affects individual desires to excel
 Societal barriers, there are some cultures in societies that do not facilitates spirit and the
urge to excel which hinders entrepreneurial motivation
 Un favorable economic environment in terms of policies, this could be in form of high
taxes on business, high rate of interest on borrowed money which hinders motivation
  Inadequate labor and skills, limited skilled labor to implement policies in business
limits motivation great risk, risks are high in low developed countries since there is lack
of reliable information, market for products among others. This limits motivation

BUSINESS ETHICS
Business ethics, these are the acceptable behavior that should be exhibited by
businesses/entrepreneurs when dealing with customers, employees, society, government and
other businesses.
Or
These are moral principles and values that should govern and control the activities of a business
enterprise.
Or
The ways by which businesses should conduct themselves towards their employees, customers,
community, government and shareholders or owners
Business ethics may be written down or not.

Principles of good business ethics

 Being honest, this means testing the truth, not cheating, misleading, and being fair. There
is need for honesty while operating business transactions/ activities.
 Keeping promises, this means keeping commitment or making promises that one can
fulfill.
 Respecting others, this means honoring and valuing the abilities and contributions of
other people.
 Compassion, maintaining an awareness of the needs of other people and acting to meet
those needs whenever possible. An entrepreneur should minimize harm wherever
possible and act in ways that are consistent with his/her commitment to social
responsibilities.
 Integrity, living up to ethical principles or being morally up right even when faced with
personal, professional and social risks or economic pressures.
Parties/beneficiaries to business ethics
 Customers/clients
 Employees and shareholders or owners
 Government
 Society
Business ethics towards customers
 Honesty, an entrepreneur should be honest to his/her customers in terms of price charged
for the quality and quality of goods purchased ie. he should not cheat his customers
 Courtesy – an entrepreneur should be polite, patient and sincere when dealing with the
customers i.e. the entrepreneur should not sell damaged, expired, or underweight
products to customers.
 Responsibility, an entrepreneur should try to meet his/her obligations as agreed upon egg
he should deliver on time
 Geniality, an entrepreneur should be kind, cheerful and try to balance his/her temper
when dealing with customers. Never abuse, shout or bark at customers.
 Widening the distribution system in order to avail goods and services to the customers.
 An entrepreneur should ensure that the goods or services provided to customers have no
negative effects.
 Understanding customers’ needs an entrepreneur should understand the needs of his
customers and try as much as possible to satisfy them.
 Providing sufficient information about the use of the product including its side
effects, an entrepreneur should give full information about his products including the
risks involved to the customers.
 Providing after sales services, entrepreneurs especially those who deal in technical
products such as computers, radios, TVs, machinery etc. are required to provide sufficient
after sales services to their customers
 An entrepreneur should increase production so that customers get what they want at the
time they want it

Business ethics towards employees

 An entrepreneur should treat his/her workers in an ethical manner through observing the
following;
 Giving employees a fair pay (wage or salary), an entrepreneur should pay his her
workers fairly and timely however, this should depend on ability of the business and
value of work done by the worker.
  Provision of good working conditions, workers should be provided with healthy
working conditions because they spend most of their time at their work places. In this
case an entrepreneur should provide fringe benefits.
Such as transport, accommodation, medical allowance, lunch and protective gadgets to
them e.g. gloves, overalls, goggles, helmets, bolts etc.
 Providing clear and fair terms of payments. In this case workers wages and salaries,
duties and responsibilities should be clearly specified. More so workers should be given
appointment letters which state whether they are employed on contract, temporary or
permanent basis.
 Giving room for creativity to workers, an entrepreneur should treat workers as human
beings who have the right to think and act i.e. they should be given chance to exercise
their thinking while carrying out the b/s activities.
 Providing on job training to workers in order to improve their skills and performance.
 Appreciating, recognizing and encouraging special skills of workers to motivate them.
 Listening to workers personal problems, an entrepreneur should listen to the personal
problems of the workers and where possible should assist to solve them.
 Respect, an entrepreneur should respect his workers for the positive contribution they
make towards the success of the business.
 Job security, employees should look with certainty in respect to their jobs.
 Politeness, an entrepreneur should treat his employees politely in all situations.

Business ethics towards government

 Observing business laws such as registration, licensing, labor laws etc.
 Paying all taxes to government as required by law.
 Meeting production standards in terms of quality and weights.
 Producing/ selling acceptable products only i.e. not engaging in illegal trade such as
selling opium.
 Contributing to the national effort of building a better society e.g. by not polluting the
environment
 Contributing to research and development of the country.
 The business should comply with occupational, hygiene, environmental regulations etc
Business ethics towards society
 Preserving /conserving the environment, an entrepreneur should ensure that he does not
release waste materials that may pollute or destroy the environment such as water, air,
swamp etc.
 Ensuring that business operations do not harm people’s health i.e. poisonous gasses, loud
noise and explosions should be well handled.
 The business should have strict consideration for the norms of the society where it is
located.
 Providing employment opportunities to the members of the society where it is located
before foreigners.
 Helping society in case of emergence situations e.g. floods.
 Involving in society’s needs by helping the sick, poor, orphans etc.

Business ethics towards owners/ share holders

The manager and the workers have to practice the following business ethics towards the business
founders.
 Management should ensure protection of the business’ property.
 Safe guarding the capital of the shareholders i.e. management of the business should
ensure that business capital is not misused
 Management should work to uplift the business’ public image to make the founders enjoy
self-esteem and recognition.
 Management should protect the interests of the founders/shareholders.
 Management should ensure that the business makes profits to enable the owners to
achieve their goals.
 Management should work to ensure that the business attains financial independence.

Business ethics towards competitors/ other businesses;

 Avoiding persuading employees of competitors
 Avoiding de-campaigning competitors’ products
 Ensuring fair trading practices e.g. avoiding price wars
  Discussing with competitors on how to improve the quality of the product e.g. through
carrying out research jointly
 Carrying out restrictive trading policies e.g. conniving with the competitor to charge a
price that prevents others from joining production of the same
 Referring customers to competitors for what is missing
 Adapting anti-competitive practices i.e. relating well with competitors
 Observing copy right i.e. respecting the competitor’s brand

Benefits of observing ethics to the business

The business that practices ethics towards the various groups enjoys the benefits below;
 Society is willing to provide human resources to the business which leads to efficiency
and increased production.
 The assets of the business are safe guarded.
 Its market expands through maintaining its old customers and attracting new ones.
 Business is able to get raw materials at low costs from the society.
 Business operates without fear of being closed by government.
 Ensuring fair-trading practices such as fair pricing, fair treatment of customers etc. leads
to high business turn over.
 Business gets good reputation in the society.
 It can easily get government support and sympathy during times of need e.g. subsidies,
winning tenders etc.
 Practicing ethics leads to increased profits which lead to business growth.
 It creates customer loyalty to the business.

Revision questions:
1(a) Define the term business ethics
(b)What are the business ethics that should be practiced by a business when dealing with
customers?
2(a) Explain the ethics expected of a business when dealing with;
(i) Society
(ii) Employees
 (iii) Government
(iv) Competitors
(b) Explain the benefits enjoyed by a business that practices ethics towards the various groups of
people.

REFERENCE:
1. Bruce R Barringer & R Duane Ireland (2006). Entrepreneurship: Successfully launching new
ventures.
2. Thomas W Zimmerer and Norman M Scarborough (2006) Essentials of entrepreneurship and
small scale business management 4TH Edn.
3. Entrepreneurship theory and practice: A Kenyan perspective by Prof Henry Bwisa
4. Business studies simplified by Salemi