Introduction to Entrepreneurship

INTRODUCTION TO ENTREPRENEURSHIP EDUCATION

Entrepreneurship education refers to the discipline or field of study that imparts knowledge, skills and values in the learners to identify opportunities around them and undertake businesses activities with a view of earning profits.

^0R ‘ Entrepreneurship education is a discipline or field of study that involves equipping learners/ students with the knowledge, skills and capacity to generate ideas which are converted into businesses.

Components / elements/ contents/ aspects/ structure of entrepreneurship education

Entrepreneurship education covers the following aspects: –

• introducing entrepreneurship; it involves learning about common concepts in entrepreneurship.
• Recognising/ identifying opportunity; it involves discovering a clear business idea or developing an idea into a feasible/workable business concept over time i.e.it involves generating business ideas, evaluating them and then selecting the most profitable business idea(s).
• Commercialising an opportunity / developing commercial opportunity; it involves turning or converting a good business idea into a suitable product or service that generates profits.
• Identifying and allocating resources; it involves identifying the inputs required for starting a business like labour, capital, technology etc. and committing them to a business venture despite the presence of risks.
• Initiating a business venture; it involves starting a business following the right/appropriate procedures or steps.
• Mastering entrepreneurial management; it involves equipping or imparting the learners with entrepreneurial management skills for proper business management.
• Marketing information systems and finance. This involves providing information on marketing and finance to ensure effective financing of the businesses and marketing of the products.

Reasons / objectives/ purpose/ rationale/ need for studying entrepreneurship education

• To equip or provide learners with knowledge and skills needed to succeed in the business environment.

To enable learners acquire practical skills which can make them job creators rather than being job seekers.

• To enable learners identify business opportunities in which they can invest capital and operate successfully.
• To emphasize and help learners/students to develop their imaginative and risk taking abilities in business.
• To prepare students to make career choices or selection.

Entrepreneurship

This is a process of creating an opportunity and pursuing it regardless of the resources currently controlled (by the entrepreneur).

OR

Entrepreneurship is a process of creating an opportunity and pursuing it regardless of the resources available to an entrepreneur to ensure its success with a view of maximizing profits. Entrepreneurship involves identifying an opportunity in an entrepreneurial environment, mobilizing the necessary resources, starting and sustaining a business with a view of making profits.

Therefore, entrepreneurship is a practice of starting new businesses in response to identified business opportunities.

Watch the Video below to understand more about an entrepreneur.

COMPONENTS OF ENTREPRENEURSHIP EDUCATION
 Opportunity recognition. This means discovery of a clear business idea or development of an idea into a more feasible business concept overtime.
 Commercial opportunity. This involves turning an idea into commercial service or a saleable product.
 Allocating resources in the face of risk. This involves identifying an idea or an opportunity and committing resources to turn the opportunity into a business despite the presence of risks.
 Initiating a business venture. This involves starting business through established procedures.
 Instructions in traditional business disciplines such as management. This involves equipping learners with traditional business skills to empower them to manage their own business properly.
 Marketing information systems and finance. This involves providing information on marketing and finance.

REASONS / IMPORTANCE OF STUDYING ENTREPRENEURSHIP EDUCATION

There are a number of reasons why people (students) study Entrepreneurship education, at the same time they are importance of studying entrepreneurship education, these may include.
 It provides one with knowledge and skills of setting up, i.e. it provides learners
with transferable skills needed to succeed in an increasingly divergent business environment.
 It enables students to integrate programmes that teach practical skills for starting and expanding business enterprises.
 Through Entrepreneurship education, one is equipped with skills of how to mobilize the various resources needed in production like human resource, financial resources (like capital)
 It provides one with knowledge on how to properly relate and communicate with clients /customers. This is because in business a customer is the boss.
 It provides one with skills of how to scan the environment so as to identify existing and new business opportunities in order to come up with an opportunity that can be managed, run well so as to make profits.
 Through entrepreneurship, one develops the skills of taking self-employment as a career and this helps one to get rid of job seeking which could cause unemployment due to limited jobs.
 It provides one with the necessary skills to have a successful business, like marketing skills, financial management skills, personal skills etc.
 Through acquisition of the entrepreneurial skills, many people would come up with numerous businesses and this leads to economic development, social development through increased employment opportunities, infrastructural
development etc.
 Entrepreneurship education is now recognized as an important education innovation that provides the impetus for learning.

THE ROLES OF ENTREPRENEURSHIP IN ECONOMIC DEVELOPMENT

Characteristics / features /traits /attributes of entrepreneurship

• Risk taking: entrepreneurship involves taking risks in order to create and implement new business ideas.
• Profit potential: entrepreneurship is undertaken by an entrepreneur with the view of getting a reward or a return.
• Gap filling: entrepreneurship involves identifying human need(s) and taking appropriate actions to meet the need(s)
• Organising function: entrepreneurship brings together factors of production/ resources like land, labour, capital etc. for a productive use.
• Concerned with innovation: entrepreneurship involves continuous discoveries for new business ideas in order to provide new goods or services demanded/ required in the community.

The role/ contribution/ responsibilities of entrepreneurship in economic development

• Creating employment opportunities: This is through entrepreneurs identifying and starting profitable business opportunities that lead to creation of job opportunities for labour.
• Promoting creativity and innovation: This is through entrepreneurs coming up with new business ideas which they eventually turn into new goods and services hence successful businesses.
• Promoting small enterprises. This is because they can be started with little capital hence income generation.

y Facilitating utilisation of locally available resources. This is by

encouraging/promoting use of appropriate technology hence effective exploitation of would be idle resources.

• Reducing regional imbalances in development. This is by promoting or undertaking income generating activities in various parts of the country OR by setting up business enterprises in various parts of the country.

>• Developing an entrepreneurial culture: This is by encouraging people in a country to take advantage of opportunities existing in the environment.

• Generating or increasing government revenue: This is through taxing businesses and incomes of the workers.
• Promoting linkages. This is through establishment of new businesses which either provide raw materials or market for the already established business.
• Promoting international trade: This is through establishment of businesses that produce goods and services for exportation hence promoting trading activities with other countries.
• Developing entrepreneurship skills: Phis is through training to equip members of the community with business knowledge experience.
• Developing of infrastructure: Entrepreneurship promotes development of infrastructural facilities like roads to enable easy access of raw materials and market centre.
• Reducing dependence on other countries: This is by encouraging production of goods and services domestically that used to be imported from other countries hence reducing reliance on foreign goods.

y Encouraging savings; This is by encouraging people to put a side part of their income in order to accumulate funds for investment.

• Increasing/widening consumers’ choices. This is by providing a variety of goods and services to the public by entrepreneurs.
• Providing market for products: This is through entrepreneurs buying inputs or products from the members of the community.
• Preventing rural urban migration: This is through entrepreneurs establishing business enterprises both in rural and urban areas.
• Facilitating technological development: This is through increased innovations, inventions and creativity in order to produce high quality and quantity goods and services.
• Promoting industrialisation. This is by establishing many industries or business enterprises in various parts of the country.

Barriers/ limitations/ obstacles/ constraints/ hindrances to entrepreneurship growth

Barriers to entrepreneurship refer to factors that limit or hinder its growth/ development.

The following are the barriers to entrepreneurship development;

y Limited capital/finance: This limits effective business operations or expansion hence limiting the development of entrepreneurship.

• Limited number of role models: This limit individual inspiration or motivation to undertake business ventures in society.
• Unfavourable government policy on business/entrepreneurship: This increases the costs involved in business which discourages the potential entrepreneurs from undertaking entrepreneurial activities because of low profits expected hence limiting entrepreneurship development.
• Narrow/ small market for goods and services. This leads to low sales and low profits

hence limiting the growth of entrepreneurship.

• Low level of technology: This leads to low level of efficiency in entrepreneurial activities which limits entrepreneurship development.

y         Political instability: This creates fear among the potential entrepreneurs about safety of

life and property which limits entrepreneurial activities and investment hence low levels of entrepreneurship development.

• Underdeveloped infrastructure: This leads to increased costs of production or investment making it difficult for entrepreneurs to access raw materials and market areas.

y         High rate of inflation: This increases the production/ operation/ investment costs in

terms of labour costs, transport costs, raw materials costs etc. hence low profits realised by the entrepreneurs which limits the development of entrepreneurship.

y         High population growth rate: This leads to high dependency burden which limits

savings and capital accumulation hence limited funds available for entrepreneurs to undertake entrepreneurial activities.

y         Limited raw materials: Inadequate supply of business inputs disorganises/interrupts

production of goods and services which limits business activities hence limiting entrepreneurship development.

• Shortage of skilled manpower/limited labour skills: This lowers labour productivity or efficiency hence low amount of goods and services produced limiting entrepreneurship development.
• Poor land tenure system: This limits access to land by potential investors or entrepreneurs which limits investment activities hence low level of entrepreneurship development
• High interest rate on loans: This discourages the potential entrepreneurs from borrowing to start /maintain/expand entrepreneurial activities which limit the entrepreneurship development.
• Low level of savings: Limited savings lead to low capital accumulation hence limited funds available for undertaking investment or entrepreneurial activities.
• Inadequate support services: limited business support services like insurance, communication, transport etc. make it difficult for entrepreneurs to coordinate entrepreneurial or business activities which limit the development of entrepreneurship. Ways/ measures/ techniques/ strategies of promoting/ encouraging/ enhancing /fostering development of entrepreneurship
• Providing initial capital/affordable loans to individuals/ groups of people like the

youth. This avails them with funds to start businesses in different parts of the country.

• Recognising successful entrepreneurs/ role models. This inspires/ motivates other people to carryout business activities e.g. giving certificate of recognition.

y Providing tax/investment incentives. This helps to reduce the costs of production e.g. tax holidays, tax exemptions etc. hence high production levels and eventually high entrepreneurship development.

• Widening the market. This leads to high sales and high profits hence high production levels and eventually high entrepreneurship development.
• Improving technology/cncouraging the development and use of appropriate technology. This leads to high level of efficiency in production/ resource exploitation hence high quality and quantity goods produced or services provided thereby promoting entrepreneurship development.
• Improving the political climate. This helps to create confidence among the potential entrepreneurs about safety of life and property hence increase in the level of entrepreneurial activities.
• Improving infrastructure. This leads to reduced cost of production which facilitates the movement of inputs and final products hence high production levels which promotes development of entrepreneurship.
• Controlling inflation. This helps entrepreneurs to carryout effective planning during the production of goods and services because the costs involved tend to be stabilised.
• Controlling population growth rate. This enables families/people to save more money for undertaking investment/entrepreneurial activities.
• Identifying/ looking for reliable suppliers of raw materials that are affordable. This helps to ensure continuous production of goods and services hence promoting entrepreneurship development.
• Introducing/undertaking educational reforms. This helps to equip individuals with practical/relevant skills for starting income generating projects.
• Lowering/ reducing the interest -ate on borrowed funds/money: this encourages/enables potential entrepreneurs to borrow from financial institutions and other financiers for starting or expanding income generating activities.
• Formulating/ strengthening bodies/ organisations that support entrepreneurship like Enterprise Uganda, URA etc. This helps in promoting/coordinating entrepreneurial activities in the country hence promoting entrepreneurship.

^ Developing an entrepreneurial culture. 1 his encourages people in a given area/society to take advantage of the opportunities existing in the entrepreneurial environment.

• Undertaking land reform policies. This helps the potential investors or entrepreneurs to access land for establishment of enterprises/ for expansion of business activities.
• Encouraging creativity and innovation. This helps people/entrepreneurs to develop innovative solutions/ strategies to meet the needs of the customers.
• Liberalising the economy. This leads to reduction in costs of carrying out business which allows many people to participate in entrepreneurial or business activities.

>■ Promoting gender partnership. This enables men entrepreneurs to work harmoniously/together with the women entrepreneurs as joint partners hence eliminating threats of victimisation/exploitation.

• Encouraging privatisation of public enterprises. This promotes efficiency among the entrepreneurs thereby increasing production hence high entrepreneurship development.

Sample/revision questions;

1 a)    Explain the role / contribution / responsibilities of entrepreneurship in economic

development of Uganda, b)                Discuss the importance/ benefits of entrepreneurship in economic development in                                                                                                                  your

country.

2a)        Describe the barriers to development of entrepreneurship in Uganda.

1. What measures are being taken by the government of Uganda to develop entrepreneurship?
2. Explain factors that influence/ determine/affect the development of entrepreneurship in

Uganda.

• Availability of capital. Limited capital limits the development of entrepreneurship while adequate capital promotes the development of entrepreneurship.
• Level/state of technology. Low level of technology limits the development of entrepreneurship while high level of technology promotes development of entrepreneurship.
• Political climate. Poor political climate limits development of entrepreneurship while stable political climate promotes the development of entrepreneurship.

Entrepreneurial culture

This is a culture that encourages the whole population to take advantage of opportunities existing in the environment.

Entrepreneurial culture involves collective values, benefits and principles followed by members of business/ community that support entrepreneurship.

Reasons/ objectives/ need/ purpose/ rationale/aims for promoting or encouraging or enhancing or fostering entrepreneurial culture

y To encourage/inspire individuals to be business or opportunity oriented in nature. y To increase customer satisfaction which enables the business to attract new customers and maintain the old ones.

y To encourage individuals to be in contact or to network with various familiar successful role models in business.

• To encourage individuals to embrace opportunities identified to practice entrepreneurial competences like knowledge, skills and traits.
• To help individuals to acquire formal/informal managerial knowledge and practices in business.
• To increase/ improve the productivity/ efficiency of the workers in an enterprise.
• To reduce labour turnover in the business due to high employee motivation and loyalty.
• To improve the creativity of the employees because they learn to think beyond the existing standards to get new solutions to problems.
• To get support from various financial, technical and professional institutions hence support the development of entrepreneurship.
• To encourage workers/individuals to build capacity/ability for living with uncertainty.

Question;

1 (i) What is meant by entrepreneurial culture? (01 marks)

• Give any three objectives for promoting entrepreneurial culture in Uganda (03 marks)
• Mention any three benefits of promoting entrepreneurial culture in business.

E.g. encourages workers to build capacity for living with uncertainty.

Entrepreneurship as a career option

A career refers to an occupation or work that an individual does to earn a living.

OR

A career refers to a person’s progression through a series of jobs over his/her life span.

OR

A career refers to a continuous, ever evolving and expanding opportunity for personal as well as

business growth and development.

Examples of careers in Uganda include;

Teaching                                 –          Engineering

Designing                                –          Nursing

Acting                         –          Sports etc.

Accounting

Business /entrepreneurship career refers to a person’s involvement in long term business for

the purpose of making profits.

Factors to consider when selecting/ choosing / determining a career

r’ Personal interest/ passion. A person normally selects a career he/she prefers/likes than one he/she does not like.

• Level of job security. A person usually selects a career that offers/ensures high job security.
• Level of demand for the career in the job market. A person normally selects/ prefers a career that is on high demand in the job market than one with low demand in the job market.
• The level of job satisfaction. An individual usually prefers a career that gives or ensures high job satisfaction in terms of good working conditions than one that gives low job satisfaction.
• Family influence. An individual selects a career that is favoured /liked by the family members than one disliked by them.
• Talent and ability of an individual. A person normally selects a career that is in line with his/her natural abilities or one in which he/she has the ability to perform the tasks involved.
• Government policy towards different careers. An individual prefers selecting careers favoured/supported/promoted by the government policy in terms of providing job

opportunities e.g. careers in the field of science/ business/ information technology compared to those less favoured by the government e.g. in the field of Arts.

• The influence of the role model. A person selects a career he/she has been attracted to by a role model than one without an attraction factor.
• Job advancement prospects. A person normally selects a career that has high chances of promotion than one with limited chances of promotion.
• Level of income earned in the career/income benefits from the career. A person usually prefers career options that give higher level of income to those that give lower income.
• The influence of the religion. A person prefers selecting a career that does not interfere with his/her religious beliefs/ norms/ values compared to those careers that interfere with religious beliefs/norms/values.

Question;

1. la) Distinguish between a career and a business career. (04 marks)
2. Explain the factors to consider when selecting a career in your country. (16 marks) Section A question: Mention any four factors that should be considered when selecting a career in Uganda. (No need for explanations, just mention the points) e.g.

Job security.

The concept of self employment

Self employment is one where an individual works for him/herself in his/her occupation/ enterprise to earn income for a living.

OR

Self employment is where an individual or a person starts his or her own income generating activities or business enterprise(s) to earn profit.

OR

Self employment refers to a person’s fulltime involvement in his/ her own income generating activities started using personally or externally sourced resources.

Benefits/ merits/ rewards/ advantages/ relevance of self employment (benefits of being an entrepreneur)

• Encourages hard work and commitment. Self employment inspires an individual to put in more efforts to ensure success of the business activities to enable him/her enjoy the financial benefits.

y Ensures (high) job security. Self employment promotes job security because the self employed is the boss of himself/herself.

• Enables realisation of unlimited income. In self employment, income is not fixed hence one is able to realise as much as possible income depending on his/her efforts.
• Creates a network of friends. Self employment enables an entrepreneur to be in contact with a number of people like suppliers, customers and employees who are helpful in times of need.
• Leads to easy decision making. This is because there is no need to consult anyone/many people to exploit the identified opportunities.

y Leads to creation of employment opportunities. This is due to various activities

undertaken by the entrepreneur leading to demand for workers hence improvement in the standards of living.

• Promotes creativity and innovation. Self employment enables an individual to develop new ideas which are transformed into new products hence realisation of reasonable profits.

y Increases self confidence/ self esteem. This is because the self employed does things independently.

• Promotes respect and recognition in society. This is because of providing goods/services needed or it is because of creating employment opportunities for the people in the community or it is because the self employed has something to show that he/she is successful in society.

y Helps to reduce interference from other people. Self employment gives a person freedom to work without supervision/ interference because one is inspired to do what brings success in his/ her business.

• Enables an entrepreneur to give appropriate guidance and support to other people who want to be self employed. This is possible basing on his/ her experience in business.

^ Gives an opportunity for one to lead others. This is because the self employed is able to give orders or instructions like directing the workers to do specific activities in the business.

Demerits/ disadvantages/costs/challenges of self-employment

• Involves long and irregular working schedule or time. This is because the entrepreneur works beyond normal working time in order to ensure business success.
• Leads to unstable incomes/earnings. This is because incomes keeping on increasing and decreasing depending on the performance of the business making planning by the entrepreneur difficult.
• Involves broad responsibilities. This is because self employment is associated with many activities or tasks especially at initial stages of the business or it is because there is no specialisation and it is difficult to delegate duties.
• Makes future uncertain. This is because the self employed may not be assured of the monthly earnings.
• It is difficult to delegate duties / This is because the self employed has broad responsibilities and finds him or herself doing a lot of things.
• Absence of fringe benefits. There are no additional or extra benefits like medical allowance, transport allowance etc. especially for the owner because of being the boss.
• Causes tension and stress to the entrepreneur. This is because the risks in the business are suffered by entrepreneur alone.
• Leads to payment of high taxes/high tax burden which reduce the profits of an entrepreneur. This is possible especially when the entrepreneur carries out business activities on a large scale.

y Reduces the quality of life of an entrepreneur. This is because the entrepreneur is forced to work beyond normal working time to ensure business success due to broad responsibilities.

• There is limited time for leisure and other social activities. This is because the entrepreneur spends more time working in the business to ensure its success.

Paid/wage employment

This is one where a person takes up a job in return for a salary or wage paid on a periodic basis.

OR

Paid employment is when a person works for other: and carries out specific duties in return for

salary or wage.

OR

Paid employment is a form of employment where one is working for an individual or an organisation or government in return for a wage / salary paid on a periodic basis for specific assignments given by the employer.

Advantages/ merits/ benefits/relevance/rewards of paid employment

• Enables realisation of stable/steady income. This is due to regular payment of salary/ wage by the employer which makes planning easier by the employee.
• There are specific responsibilities in paid employment. This is because each employee is allocated particular duties/tasks which make him/her well organised and efficient.

y Ensures job security for a worker. This is because some jobs are permanent and pensionable especially government jobs, and this makes a worker be confident of his/her continuity in employment.

• Leads to en joyment of fringe benefits. This is because employees receive additional / extra benefits like free accommodation, food allowance, medical allowance etc. hence improvement in the standards of living.
• Minimum risks are faced. This is because workers face limited uncertainties since they do not own the business enterprise.
• Provides/ensures favourable hours of work. This is because employees work for specific/ agreed period of time which helps to avoid overworking.
• Ensures easy access to loans. This is because the lender is assured of regular source of money for repaying the loan.
• Delegation of work is possible. This is because there are people to refer to especially the juniors to help in handling some responsibilities hence facilitating business continuity.
• Promotes effective planning by the employee. This is because the employee is certain of the amount of pay and when it is paid.
• Promotes high productivity and efficiency of a worker. This is because employees are given specific tasks or duties leading to high output of better quality in a given period of time due to specialisation.
• There are chances of on job training. This is because some employers offer training facilities to their employees which enables them to acquire relevant skills hence becoming more productive and efficient

Demerits/ disadvantages/ costs of paid employment

y There is fixed rate of payment. This is because a worker is paid agreed salary or wage regardless of the extra effort put or extra output realised.

y Promotes exploitation of employees. This is because workers sometimes are forced to work for longer hours without extra pay or they are under paid.

• There is low level of job security for a worker. This is because a worker can be dismissed at any time especially in the private sector when appointment letters/employment contracts are not offered.
• It limits creativity and innovation of the workers. This is because workers are always given strict instructions and orders by the employer regarding job description.
• Limits decision making power by the employee. This is because a worker is required to consult the employer before implementing any idea.

y Difficult to delegate work. This is because employees are always closely monitored and supervised hence hard to delegate duties without consulting the employer/ top management.

Sample questions;

1. la) Differentiate between self-employment and wage employment (04 marks),
2. b) Examine/ explain/ discuss the merits and demerits of self-employment in Uganda. (16

marks).

2a)     What is meant by the term wage employment? (04 marks)

1. b) Discuss the benefits of wage employment in Uganda (16 marks)

3a)     Account for the popularity of self employment in your country. (10 marks)

(Give merits of self employment.)

1. Why is self employment preferred to paid employment? (10 marks)

(This is a comparative question which requires one to give the merits of self-employment counter- argued with the demerits of paid employment but strictly presented in the same paragraph using unlike/ compared to / other than etc. in between the two statements.)

e-g

• In self employment, there is assured job security because one is the boss of him/her self

unlike in paid employment where there is limited/no job insecurity especially in        the

private sector where appointment letters are not offered.

• Self employment encourages hard work because the self employed enjoys all the financial benefits unlike in paid employment where an employee is not encouraged to work very hard because he is only given salary.

1. How can self-employment be promoted in Uganda?

Differences between an entrepreneur, an intrapreneur and an enterprising person

• An entrepreneur

An entrepreneur is a person who organises, operates and assumes risks for a business venture.

OR

An entrepreneur is a person who produces new and better goods and services with the view of selling them to customers to make a profit.

OR

An entrepreneur is a person who conceptualises, implements, maintains and expands business in the face of risks and uncertainties.

OR

An entrepreneur is a person who scans the economic, social and natural environment for opportunities in a business, mobilises the necessary resources, undertakes production, assumes business risks and receives financial reward.

Functions/ roles/ responsibilities of an entrepreneur y Identifying opportunities in an entrepreneurial environment which opportunities are exploited in order to receive financial rewards.

• Under taking or carrying out calculated/ moderate risks in relation to the business i.e. bearing risks by committing resources into an activity/ activities surrounded by uncertainty.
• Mobilising the necessary resources for the business venture like capital, labor, machinery, land etc.
• Planning and implementing the various activities necessary to start and operate a successful business.
• Involving in creative and innovative activities so as to provide new/ improved goods/ services.

y Receiving of financial / social rewards from the business operations e.g. receiving of profits.

^ Involving in decision making with an aim of influencing the activities of the business in order to achieve the desired targets.

• Marketing of the goods/ services provided by the business. It involves carrying out activities in a business to ensure that the needs of the customers are satisfied and the entrepreneur is able to realise reasonable profits.
• Networking with other entrepreneurs, business organizations/ associations, governments etc. to create a wider market/ support.
• Maintaining of good relations with various stake holders like employees, customers etc. Types of entrepreneurs in business
• Innovative entrepreneurs. These are entrepreneurs who introduce new things in business and in most cases they are business/ market leaders. They can introduce new goods, new methods of production, discover new market etc.

r- Imitative entrepreneurs. These are entrepreneurs who simply copy/ adapt successful innovations by innovative entrepreneurs.

• Drone entrepreneurs. Are those entrepreneurs who are not willing to adapt new innovations even at the cost of receiving reduced returns or benefits because they are satisfied with their current state of business operation.
• Social entrepreneurs. Are those entrepreneurs who identify social problems and come up with innovative solutions.
• Trading entrepreneurs. Are those entrepreneurs that engage in buying and selling of goods/ services in order to make profits.
• Manufacturing entrepreneurs. Are those entrepreneurs who change / transform the raw materials into finished goods or services.

Qn; Identify any four (4) types of entrepreneurs in business (04 marks)

Characteristics/ features/ attributes/ traits of successful entrepreneurs

The following are entrepreneurial qualities/ personal entrepreneurial characteristics of succcssful entrepreneurs.

• Successful entrepreneurs have the ability to work for long hours to make the business succeed. E.g. working from 5:00 am up to midnight every day.
• Self confident Successful entrepreneurs believe in themselves and in their abilities to achieve the set targets of the business.
• Goal-oriented. Successful entrepreneurs set realistic or achievable medium/ long term targets and work with determination to achieve them.
• Successful entrepreneurs do not give up so easily when faced with challenges.
• Willing to listen. Successful entrepreneurs always pay maximum attention to the views/ advice of other people in order to implement good ones for the success of the business.
• Risk takers. Successful entrepreneurs are willing to take chances with hope of succeeding and getting bigger rewards.
• Successful entrepreneurs are always dedicated in everything they do to ensure success of the business. This is because they dedicate more time and resources to the business activities.
• Build for the future/Future oriented. Successful entrepreneurs work steadily to grow and reach their future targets.

• Profit oriented. Successful entrepreneurs have strong interest and direction towards generating profits i.e. they aim at generating profits in business ventures.
• Cope with failure. Successful entrepreneurs are able to recognise their mistakes and failures hence use them as learning areas/ experience to find out new opportunities.
• Cope with uncertainty. Successful entrepreneurs are able to live with unclear situations/ circumstances relating to their businesses without allowing stress to overcome them.
• Build on strengths. Successful entrepreneurs base their work on their potentials/ abilities to ensure success of the business.
• Set own standards. Successful entrepreneurs set performance requirements/ levels to be achieved / followed and work hard to reach/achieve them.
• Demonstrate initiative. Successful entrepreneurs always take a lead in doing things or solving problems.
• Respond to feedback. Successful entrepreneurs always want to know how they are performing/ progressing by getting responses/ opinions/ advice from others.
• Creative and innovative. Successful entrepreneurs have the ability to develop new ideas which eventually they turn/ convert into new goods/ services that satisfy the needs of the customers.
• Successful entrepreneurs are always willing to embrace change in a positive attitude than resisting it.
• Opportunity seeking. Successful entrepreneurs have the ability to see/identify chances in any situation.
• Information seeking. Successful entrepreneurs are always looking out for information that affects the business.
• An intrapreneur (corporate entrepreneur)

An intrapreneur is a person who focuses on creativity and innovation in order to transform an

idea into a profitable venture by operating within an organisational environment.

OR

An intrapreneur is a person who works in an existing business and is able to create new goods

and services to ensure profits for the business

Roles/ activities/ functions of an intrapreneur

• Working in an existing business by using his/her creativity and innovative skills to make

profits for the business.

‘r Working as a hired manager for the business.

• Identifying new goods/ services/ opportunities for the existing business.
• Organising and controlling resources like capital, machinery, labour to make profits for the

existing business.

• Enjoying benefits of an existing business like earning salary and other fringe benefits.

Characteristics/qualities/attributes/traits of an intrapreneur

• Risk taker.
• Creative and innovative.
• Passionate i.e. he/she loves the work ass gned to him/her to do.
• Flexible/ adaptable.
• Self confidence.
• Resourceful i.e. being knowledgeable at )utthejob.
• An enterprising person

This is a person who takes on an imaginative and risky project to produce/ market goods / services with a view of earning income/ profit.

OR

An enterprising person is someone who takes an initiative to start something new after identifying an opportunity.

Qualities/characteristics/ features/attributes of an enterprising person

>	Hardworking.
>	Demonstrates initiative.
>	Self confident.
>	Builds for the future.
>	Goal oriented.
>	Creative and innovative.
>	Builds on strengths.
>	Risk taker.
‘p	Committed.
	Persistent.

Sample/revision question;

1    (a) Distinguish between an entrepreneur and an intrapreneur (04 marks)

• Discuss the characteristics of a successful entrepreneur in your Uganda.

(16 marks)

E.g. Hard working. A successful………..

• Under what circumstances/ conditions/ situations/ instances may an entrepreneur succeed in a business venture?

Approach: All answers must start with either when, if or in case e.g.

• When an entrepreneur is hard working.

Entrepreneurial competences

Competence is the ability of an individual to do something/ a job properly i.e. ability that enables an individual to do his/ her job well.

There are three major competences for successful entrepreneurship which include.

• Traits

Knowledge; Is a set or body of information stored by a person / an individual which may be recalled at an appropriate time to enable him/ her do what is needed to achieve the intended purpose.

Examples of knowledge needed by entrepreneurs in business

• Information about the market for goods/ services.
• Information about the customers in terms of their age bracket, gender/ sex, tastes and

preferences.

• Information relating to a business opportunity identified after carrying out market research.
• Information about the production process.
• Information about the competitors e.g. the competitors’ strengths, weaknesses,

opportunities etc.

• Information about the sources of capital that can be exploited e.g. borrowing, personal savings.
• Information about government policies on businesses e.g. taxation policies.

Skill;this is the ability to apply knowledge to perform a specific business activity which can be

acquired through training or practice.

There are two broad types of skills which include;

• Managerial/ management skills.
• Technical skills.
• Managerial/ management skills

These are abilities to make business decisions and lead/ guide subordinates in a business to do

specific activities/ tasks.

Examples of managerial skills/ entrepreneurial skills

• Marketing/ selling skills. These are abilities to identify or anticipate and satisfy the needs of the customers effectively and profitably.
• Creativity and innovation skills. These are abilities to come up with innovative/ new solutions that address the identified customers’ needs.
• Planning skills. These are abilities to determine the targets of the organisation (goals/ objectives) and then formulate policies and programs for achieving them.
• Time management skills. These are the abilities to use time productively/ profitably by doing important activities/ tasks in time.
• Financial management skills. These are abilities that enable an individual to obtain, control and ensure effective or proper use of money/ funds in a business.
• Leadership skills. These are abilities to inspire/ influence other people to work in specific ways to ensure success of the business.
• Communication skills. These are abilities that enable a person to convey the message/ communication effectively to express ideas/ opinions/ feelings.
• Purchasing skills. These are abilities that enable a person to identify and buy good quality goods/ services at affordable prices.
• Skills of coping with change. These arc abilities that enable a person to quickly understand change, accept change and take positive actions to handle change.
• Negotiation skills. These are abilities that enable a person to understand a given situation / issue to be discussed hence able to persuade another party during the bargaining process.
• Risk management skills. These arc abilities that enable an individual to carry out tasks/ activities that involve potential loss or success in order to gain rewards.
• Human resource management skills. These are abilities that enable a person/ manager to work well with other people or employees to achieve the desired objectives of the business.
• Technical skills: These are abilities acquired through practice and learning to perform specific tasks.

Examples of technical skills include;

• Computer skills.

r- Building skills.

• Sewing skills.

r- Painting skills.

r Carpentry and joinery skills.

• Engineering skills.
• Drawing skills.

>     Numerous skills.>     Team work skills. Traits; Are unique or peculiar qualities/characteristics that describe an individual’s behaviour e.g. confidence, laziness, shyness, aggressiveness etc. (i) Distinguish between skill and knowledge in entrepreneurship (02 marks). ii) Mention any two management skills of a successful entrepreneur (02 marks) iii) Identify any four (4) competencies that should be displayed by an applicant during an interview. > (Self) confidence. > Ability to control emotions. > Creativity and innovation. > Relaxed. > The required academic qualification. » Smartness. Vr’ Respect for others and property. > Effective time management. Concentration. > Good communication. > Knowledge about job requirements Skill of coping with change Change is giving an object/ a situation a completely different form/ appearance. OR

Change refers to making a complete difference in an idea/ situation/ object/ business/ group of people for a specific purpose.

Types/forms of change in business

There are basically three types of change in a business which include the following;

1. Developmental change.
2. Transitional change.

• Transformational change.

Developmental change: This is a type / form of change that involves making improvement to a business. It involves making improvements on existing /current processes/ methods, performance standards etc. that do not reach the required standards.

Developmental change is carried out in a business to ensure that the business remains competitive in the market.

Developmental change is good to a business because it is less opposed by the employees because it does not stress them.

Examples of developmental change in a business include;

• Training of workers
• Conflict resolution.
• Transitional change

It is a type/ form of change that involves replacing of the existing processes or procedures/ aspects with what is totally new to the business e.g. creation/ introduction of new products, creation of new policies etc.

Transitional change is more challenging compared to developmental change because it makes the future of a business/ an organization uncertain / unpredictable to the current employees.

Implications/ effects/ consequences/ costs of transitional change

Causes stress among the employees as they try to adjust to new procedure/ processes.

It creates uncertainty among the employees concerning the future of the organization hence a threat to job security.

It is costly/ expensive to an enterprise/ entrepreneur because it may require training/ re-training of the employees.

Solutions/ remedies to implications of transitional change

^ Sensitizing/ educating employees about the new processes/ procedures involved in production/ operation.

• Involving/ consulting employees whenever change is to be made in an enterprise.
• Promoting job security. This involves providing assurance to the employees that they are to continue with their jobs to reduce/ minimize the feeling of job insecurity.
• Training employees/ retraining them to equip them with relevant skills to cope up with change.

(i) Transformational change

This is a type or form of change that involves drastic/ radical introduction of new methods/ procedures in an enterprise.

In this type of change; all the old methods; systems/ procedures etc. are abandoned so that the new ones are introduced.

Transformational change may involve both developmental change and transitional change. This means that, it involves making improvement to the current business as well as replacing existing procedures or processes with what is new.

Transformational change is very challenging as it requires management to clearly explain the reasons for adopting it in order to minimise/ rcduce resistance from the employees.

Factors that bring about change in a business (factors that influence /affect/ determine change in a business)

• Change in the level of efficiency. An entrepreneur in need of success uses techniques of operation that result into better use of time and other resources hence minimal wastage than using techniques of operation that result into more wastage.
• Change in environmental factor. A business usually undertakes or adapts operation measures that reduce environmental pollution than operation measures that result into high pollution of the environment.

‘r- Social change/ change in social environment. An entrepreneur makes necessary

changes in the business in order to meet the changing needs of the society e.g. increasing the levels of output to meet the increasing population in the area than using strategies that do not cope with community change.

• Change in the level of competition. An entrepreneur facing many rivals makes positive changes in the business like quality improvement etc. in order to remain competitive in the market than adopting measures/ strategies that don not help in overcoming competition.
• Change in technology. An entrepreneur adapts/ uses better/ new methods of production to produce better quality products instead of using methods that do not result into better/ high quality goods/ services.
• Change of entrepreneur’s desire. A successful entrepreneur in business adapts positive mental attitude to create favourable/ suitable conditions for workers so as to achieve the desired targets than having negative mental attitude that limits effective performance or progress of the employees.
• Change in external factors. An entrepreneur makes necessary changes in his/ her business in order to cope up with globalisation e.g. expansion in foreign markets than adapting changes in business that do not match the external changes/ globalization.
• Change in government laws/ policies towards business. An entrepreneur makes necessary changes in business in order to comply with the government laws/ regulations than resisting the government laws/ regulations regarding business operations.
• Change in managerial personnel. An entrepreneur tends to employ competent/ well trained managers/ administrators so as to improve business performance than employing less skilled/ incompetent managers or administrators who cannot improve business performance.

Factors that limit entrepreneurs from adopting change in business

y Limited capital.

• Limited raw materials.
• Limited skilled labour.
• Low level of technology.

r- Limited /small market.

• Uncertainties/natural calamities.

‘r Unfavourable government regulations/laws on businesses.

• High rate of labour turnover.
• Resistance from employees.

Benefits/ importance/ relevance/ significance / rewards/ positive effects of change in a business

• Leads to adoption of new technology. This promotes efficiency in production hence more output is produced of better quality.

y Helps to respond to customers’ needs. Change in an enterprise leads to production of a variety of new products in order to meet the needs/ requirements of the customers that keep on changing with time.

• Promotes creativity and innovation. Change enables a business/ an entrepreneur to come up with new ways or ideas that lead to production of new products or identification of new markets etc.

r Promotes skill development/provides growth opportunities. This is through either training or retraining of the employees in order to cope up with change(s).

y Promotes exploitation of idle resources. Adoption of new/ improved technology

enables an entrepreneur to effectively utilise the available resources hence production of more output of goods/ services.

• Promotes team work. Change in an organisation fosters/ promotes unity among the workers due to continuous consultations hence increase in the volume of goods and services produced/provided
• Reduces labour cost. Change in technology that involves use/ adoption of improved methods of production lead to low demand for workers which minimises expenses associated with labour e.g. accommodation.
• Determines the direction of the economy. Change enables an entrepreneur to cope up with changing circumstances of the economy that affect business operations e.g. increasing demand for goods and services may require an entrepreneur/ businesses to expand the production capacity.
• Improves employees’ confidence. This is especially when their ideas/ contributions to change work successfully.

Demerits/ disadvantages/ dangers/ costs of change to a business

• Increases the complexity of the production methods. This is due to use/ adoption of advanced technology in an enterprise.
• It is costly to implement change. Implementing change involves high expenditure in terms of training/ retraining of the workers to cope up with change(s).
• It limits creativity and innovation. This is because it brings about over reliance on computers/ information technology and decision support systems.
• Promotes geographical relocation of industries and workers. Some changes in the organisation tend to force the shifting of the business/ workers from one area/ location to another which leads to loss of market, loss of customers etc. since it causes inconveniences.
• Promotes technological unemployment. Due to change/ improvement in technology, demand for workers tends to reduce or workers tend to be displaced leading to unemployment problem.
• Increases labour turn over. This is due to resistance to change(s) by some workers which makes the business unpopular.
• It leads to bad image/ reputation of the business. Change that leads to downsizing (reduction in the number of workers) always creates negative responses/ resistance from the affected workers/ employees.

Reasons why people resist change in an enterprise

• It benefits some people while it hurts others. Change sometimes benefits specific people only hence those who are not expecting to benefit from it tend to resist the change.
• It is costly/fear of sacrifice. Many changes in an enterprise tend to require either initial financial investment/ short term economic hardships before enjoying long term benefits, hence people resist change due to high costs needed for its implementation.
• Inadequate time and effort. People resist change in an enterprise because for effective implementation, it requires enough time for preparation/ consultation.
• Fear of uncertainty. Some people resist change in an enterprise because they do not know how it will affect them.
• Limited self confidence. People resist change in an enterprise because they do not believe in themselves in handling/ managing change.
• Pride and stubbornness. Some people resist change in an enterprise because they feel that they must be the only ones to introduce or initiate change(s).
• Some people/employees tend to resist change in an enterprise in case they feel that change may be a burden to them.
• Using unacceptable methods to bring change. People tend to resist change in an enterprise incase the methods or strategies employed to have change are considered inappropriate by employees
• Lack of interest among the stake holders. Change becomes difficult in an enterprise where by the major decision makers are not supporting change.

Indicators of resistance to change in an organisation/ enterprise

• Low efficiency/ productivity by the work force i.e. production of low output and of low quality.

y Complaints/ grievances about payments by the workers especially when the work load increases/ when they have changed from one section to another.

• Expression/ feeling of frustration by employees/ workers.
• Low level of morale/aspiration by employees or workers.
• Increased absenteeism by most of the employees/ workers in an enterprise without the permission of the top management.
• Aggression against management by employees/ subordinates e.g. minimising the managers, commenting negatively etc.

Ways/measure/strategies of overcoming/ managing resistance to change

• Carrying out only changes that are necessary for the business/ that can ensure good employer-employee relations.
• Involving those who resist change in the change process itself.

P- Conducting research/ carrying out research on the most appropriate ways of introducing new changes in the business.

• Educating the workers/ managers about the need for the change and training them so that they acquire the necessary skills needed for change.
• Giving/ providing explanation to employees about change. This involves adopting an effective communication system whereby employees/ mangers are informed in advance about the likely changes.

P- Employing dictatorship style of management. This is whereby top management uses excessive authority and status to enforce change.

Building support networks. This is where by management persuades/ induces some employees in an enterprise to be positive about any change(s).

• Providing/ offering incentives/ rewards. This is whereby managers and workers are given / promised rewards to motivate them to accept change
• Ensuring proper timing. This involves introducing change at appropriate or convenient time

Steps/stages/ process/ procedures involved in coping with change

1. Understanding the problems/ situations causing the changes that may affect the business in order to develop appropriate strategies of handling change.
2. Defining the problem: it involves establishing of basis for taking action due to change identified in the enterprise.
3. Collecting relevant information for decision making in order to handle the problem/ in order to exploit the opportunity available.
4. Analysing the cause of the problem/ situation by carrying out research.
5. Finding/ developing possible alternative/ solutions and listing them down.
6. Evaluating and selecting the best alternative/solution(s) from the list of alternatives.
7. Implementing the best solution and follow up. This step involves putting into action the best solution identified to ensure that the problem is solved.

Sample/revision questions;

1(a) Differentiate between developmental change and transformational change. (04 marks)

(b) Explain the significance of change in an enterprise (16 marks)

2(a) Explain the need/ rationale/ purpose of adopting change in an enterprise.

OR

Why do businesses/ entrepreneurs respond positively to change/ adopt change in an enterprise? (10 marks)

(It requires reasons and all answers must begin with (To/in order/so as to. and answers are got from merits of change) for example – To adopt new technology,

1. Examine the factors that may bring change in an enterprise/ account for the factors that

cause change in an enterprise (10 marks). (All points must involve the word change)

3a)      Assess/ examine the effects/ impact/ implication/ consequences of change in an

enterprise (10 marks)

Approach: Give positive and negative effects/ impact but separate them.

1. How can change be fostered in an enterprise? (10 marks)
2. Explain the factors that limit entrepreneurs from adopting change in business.

Question for Paper 2;

You are operating a large bakery in your home area. Prepare guidelines for coping with change in an enterprise.

NB: In paper 2, questions that involve policy / guidelines/ principles/ rules/ regulations/ instructions/ terms and conditions, the following should be observed.

1. Use shall.
2. Do not personalise i.e. No use of ours, my, we, I etc.

• Be specific where possible i.e. bring out why/ how/when/what etc

Concept of creativity

Creativity is the ability to come up with new innovative solutions to human or customer needs and to market them.

OR

Creativity is the process of generating a new/ useful idea that meets customers’ or human needs. Creativity therefore involves the ability to produce work that is unique and appropriate. Characteristics/ features/ traits/ attributes of creative people/ entrepreneurs

• Creative people always want to do things in a unique or in a new way.

r* Independent. Creative people act/ behave from their own points of view and attitude

1. they do not rely on other people to make decisions.

• Creative people are always willing to change to new/better options.
• Passionate about their work. Creative people usually choose to do what they enjoy/ what they like most.
• Divergent thinkers. Creative people think differently from other people.
• Creative people are able to adjust in most cases to all situations.
• Creative people are open and are capable of responding quickly to their environment in order to come up with new things/ ideas that meet the available needs.
• Creative people generally have high intelligence.
• Creative people are capable of transforming new ideas into real goods and services.
• Risk takers. Creative people are willing to carryout tasks/ activities with uncertain outcomes.

Characteristics/features/traits of non-creative people/entrepreneurs

P Negative thinkers. Non-creative people are not able to think positively about any problem. This means that they find it difficult to see or identify opportunities out of the problems/ challenges faced.

>■ They are timid to put forward new ideas. Non-creative people always fear to try new things in an environment.

P- Lack of self-confidence. Non-creative people in most cases do not believe in themselves.

P Conformists. Non-creative people love to strictly follow rules and regulations to guide them

P- Very self-critical. Non creative people tend to have personal bias about themselves.

• Non creative people arc always not willing to change to new options/ strategies.
• Non divergent thinkers. Non creative people are not able to think in many directions/ ways.
• Logical thinkers. Non creative people tend to use too much reasoning when handling a

situation/ problem at hand.

• They are not inspired. Non creative people are not self motivated/ driven even when

faced with a new idea.

Stages/ steps of the creative process

1. Preparing to get a solution. This stage involves collecting information, analysing the information collected and generating possible solutions to the problem at hand.
2. Investigating / investigation. The stage involves developing a solid/ clear understating of the problem at hand.
3. The stage involves establishing the similarities and differences in the information collected and analysed.
4. This stage involves allowing the mind to continue thinking about the problem and the possible solutions/ alternatives.
5. This is the stage of the creative process where one allows the mind to relax from the deep thinking.
6. Verification / evaluation. This stage involves testing the ideas, alternative solutions etc. and where possible applying them before selecting the most suitable solution.
7. This stage involves transforming/ converting the idea into reality i.e. putting into action the solutions/ ideas identified.

Question for paper 2;

1. 1. You are operating a bakery project in an urban centre where the demand for bakery products is high. Prepare a programme/plan to be followed by employees to improve the creative ability.

NICE BAKERY LTD P.O. BOX 739 MUKONO 0772739739PROGRAMME TO BE FOLLOWED BY EMPLOYEES TO IMPROVE CREATIVE ABILITY.
DATE/DAY	ACTIVITY	PERSON IN CHARGE	REMARKS
Use current dates	–        Preparing to get a solution.-        Investigation. –        Transformation. –        Incubation. –        Illumination	Givetitle/name
Prepared by: j s Approved by:Signature: ……………  Signature:…………………………………………………………. KATAMBA SIMON Name:………………………………………………………………… ENTREPRENEUR Title: ……………………………………………………………………

NB: P’or programmes/ schedules/ adverts (product/job advert). Any phrase used like prepare/ design / draft/ draw etc. requires a student to fill in /provide the information apart from remarks and approved by.

Importance/ benefits/ relevance/ significance/ merits/ rewards/ positive effects/ impact of creativity in business

y Helps to promote the goods and services of the business. Through creativity,

entrepreneurs/ marketing experts discover/ identify/ employ new ways of informing the customers about the business products.

• Increases productivity. Creativity in business leads to mass production especially when workers come up with better production methods.
• Promotes the development of new and original ideas. This is by using the existing ideas to make improvements which result into new goods/ services.
• Leads to improvement in the quality of goods/ services. Creativity promotes product updates which eventually increase the business sales.
• Promotes proper use of limited resources. Creativity enables workers to develop/ employ cost effective methods of production.
• Encourages better team work in business. Creativity promotes unity among workers through brainstorming in order to come up with alternative solutions to the problem.
• Helps in building self-confidence/self-motivation. This is by allowing each employee in a business to come up with new ideas towards solving business problems.
• Leads to innovations in a business. Through creativity, the new ideas of workers are transformed/ converted into new goods/ services.
• Helps in solving everyday problems in business. Through creativity in an enterprise, entrepreneurs and workers are able to come up with innovative solutions or strategics to the problems that arise in an enterprise.

Obstacles/ barriers/ limitations/ constraints/ hindrances to creativity in business

• Negative/Biased thinking by an individual makes it difficult to come up with new ideas/ strategies.
• Fear of failure. This makes it difficult for an individual to try new things.
• Limited quality thinking time. This makes it hard for a person to develop creative thinking.
• Over conformances with rules and regulations. This makes it difficult for an individual to think beyond the existing situation which limits the creative ability.
• Applying too much knowledge to a Applying a lot of reasoning to a problem/ a situation slows down the creative ability of an individual because of having a possibility of many alternative solutions.

Making assumptions. Having a misconception about a given situation which is not tested for accuracy limits the creative ability of an individual e.g. assuming that failures of a business are due to witchcraft.

r Limited/ inadequate self-confidence. This limits the creative ability because in most cases one develops a belief that he/she is not capable of being creative.

r- Being over specialised. This limits the creative ability because of limited experience/ abilities/ skills to try new things.

r Feeling comfortable with the prevailing condition. This limits the creative ability of an individual because he/she tends to be satisfied/ contented with the current/ prevailing conditions hence unable to try new things.

r Fearing to make mistakes. This limits an individual from trying new things/ strategies for fear of making errors.

• Limited funds. This makes it difficult to carryout research to come up with creative strategies/ solutions.
• Unfavourable/ poor working conditions. This limits the concentration of workers/ people from thinking about creative ideas or strategies.
• Extreme delays in decision making. This makes it difficult to develop creative ability because of extending to take action to address a problem at hand.
• Failing to employ creative people. This leads to low morale for other people to develop creative ability.

Techniques/ measures/ strategies/ ways of developing/ promoting/ enhancing/fostering creativity of the workers

• Thinking beyond the existing problems/ situations so as to become creative i.e. thinking beyond the invisible framework.
• Recognising when assumptions are being made in the business and challenging them where necessary so as to get more new ideas.
• Transferring technology from one field/ area to another to solve a problem/ to handle the situation at hand.
• Developing ideas from more than one source and then selecting the best idea to use.

r- Writing down useful ideas that apparently drop into one’s mind so that they are not lost/ forgotten easily.

• Being open and prepared to use unpredictable events to one’s advantage by developing achievable/ realistic solutions to a problem.
• Suspending/ avoiding negative judgments against ideas so as to encourage the creative thinking.
• Taking advantage of unpredictable events so as to develop appropriate and achievable solution to the problem by selecting the best alternative.

y Making strange things familiar and familiar things strange in order to generate/ develop new ideas hence fostering creativity.

• Learning to make connections/ sense with ideas/ points that appear irrelevant/ useless in order to develop something new.
• Setting/ putting aside quality thinking time in order to develop new innovative solutions to a problem.
• Knowing when to temporarily leave a problem when an immediate solution cannot be found with the hope of getting a solution later.
• 1 laving a willing mind to learn at all times in order to develop a creative ability.

Sample questions;

1. la) Discuss the obstacles to creativity in business. (10 marks)
2. b) Describe the techniques for fostering creative ability among the workers in an

(10 marks)

2a) What are the attributes of creative people in an enterprise? (06 marks) b)    Explain the rewards of creativity to the business (14 marks)

3a)       Distinguish between creativity and change as used in entrepreneurship (04    marks)

1. b) Describe the stages of creative process. (16 marks)

Question for paper 2;

You are operating a bakery project in your home area. Draft guidelines for improving the creative ability of your employees.

NB: In paper 2, questions involving guidelines/ policies/ principles/ regulations/rules/ terms and conditions/ code of conduct/ instructions.

1. Use shall.
2. Do not personalise the statements No use of I, we, my, us etc.
3. Be specific where possible i.e. bring out why/ how/when/what e.g.

• Employees/ workers shall think beyond the existing problems/ situations so as to become creative.

-Workers shall recognise when assumptions are being made and challenging where necessary so as to get more ideas.

Innovation

Innovation is a process or a way of transforming or changing the resources of an enterprise

through the creativity of people into new resources/ wealth.

OR

Innovation is a process of transforming/ translating an idea into a good/ service that creates

value.

Types/ forms of innovation

• Business model innovation. This is a type / form of innovation which involves changing the way business is done in terms of creating/ capturing value e.g. MTN introducing payment of utilities or school fees through mobile money, broadcasting movies translated into a local language by Bukedde TV etc.
• Marketing innovation. This is a type of innovation which involves development of new marketing methods with improvements in product design, product promotion and pricing e.g. e -marketing.

^ Product innovation. This is a type of innovation that involves introduction of a new good/ service to the market.

• Service innovation. This is a type of innovation that involves the introduction of a new service by a business that is better than the previous service(s).
• Organisational innovation. This is a type of innovation that involves creation of new business structures, practices and models e.g. having a new better organisational chart.
• Process innovation. This is a type of innovation that involves the implementation of new / significantly improved production/ delivery methods for the business products.
• Supply chain innovation. This is one that involves making improvements in the sourcing of required inputs from the suppliers and the delivery of the output to the customers.
• Financial innovation. This is the type of innovation that involves the development of new financial products/ services by a business.

Importance/ benefits/ significance/rewards of innovation in business

• Improves productivity. Innovation increases output in an enterprise due to creation of new and more efficient production methods.
• Leads to improvements in the quality of goods and services. This is through adoption/ use of better production methods.
• Leads to product diversification. Through product innovation, businesses/ entrepreneurs are able to provide a variety of products to customers which widen their choices.
• Improves service delivery. This is by making it faster through service innovations leading to better customer satisfaction.
• Leads to creativity in a business. This is by the business ensuring employee motivation so that they are able to come up with new / innovative ideas
• Increases the profits of a business. This is by providing / offering better quality products that attract more customers hence commanding higher prices.
• Increases job satisfaction. Through innovations, workers become contented especially when they are involved in developing new ideas which eventually reduce labour turnover.
• Leads to more added value or it offer improvement in the business. This is through establishing a unique selling position that enables a business to stay ahead of competition.
• Helps to promote the products of the business. This is through adopting product innovations that help to handle / remove customers’ complaints.
• Leads to better management of competition/Helps the business to overcome competition. This is by coming up with new and better products than those of the rivals.
• Helps a business to develop new marketing methods with improvements in product design / promotions/ pricing.
• Enables the business to respond to customers’ needs. This is through developing new products by reviewing the needs of the customers.

Disadvantages/demerits/costs/negative effects of innovation in business

• Increases labour turnover. This is because of the continuous innovations that some workers may fail to cope up with.

V- Leads to exhaustion/ depletion of resources. This is due to over exploitation of resources resulting from innovations in technology.

• Increases unemployment. This is due to the collapse of inefficient businesses that fail to carryout innovations effectively.
• Leads to duplication of products. This is because successful innovations tend to be copied by other businesses hence resource wastage.
• Reduces the morale/ self esteem of the entrepreneur. This is especially when planned innovations in business fail to bring the expected / desired results.
• Raises/ increases the costs of production. This is because more funds tend to be injected into market research.

Sources of innovations in business

Innovations usually occur/ take place in response to a problem/ in response to an opportunity

that arises within the business/ from outside the business.

There are two sources of innovation i.e. (i) Internal sources.

(i) External sources.

Internal sources of innovation in business

Internal sources of innovations involve responses to a problem/to an opportunity within the

enterprise/ an organisation.

Examples of internal sources

‘r-       Unexpected occurrences. Sudden happenings like failure, success, shortages, losses,

accidents etc. tend to be recognised by an entrepreneur as possible business opportunities hence can be turned into innovative opportunities

• Process needs (filling a process need). This involves identifying weaknesses/ loopholes in a given process and eventually correcting such weaknesses/ loopholes by making improvements hence innovation.
• Changes in an enterprise. The continuous changes that take place in an industry/ market give room for innovations to match the changes.
• This is a gap between what is expected to be there and the reality which can be a good innovative opportunity(divergence between ideal and real situations)

External sources of innovation

They involve responses to a problem/ to an opportunity arising from outside the enterprise.

Examples of external sources of innovation

• Demographic change. Changes that take place in relation to population like population size, age composition, sex composition etc. provide sources of innovative opportunities for innovators e.g. increase in population size increases the demand for the business product(s) hence need for innovations that lead to greater output.
• Changes in perception. Changes in people’s understanding, beliefs and attitude affect the kind of products they buy/require hence need for innovative ideas to match with the shifts in perception.
• New knowledge. Introduction / emergence of new technologies/ knowledge motivate entrepreneurs to exploit such knowledge or technologies to produce/provide the new products/ services.

Qualities/ characteristics/ features/ attributes/ traits of innovators

P Compelling vision. Innovators are able to foresee where the business will be in the future hence doing everything required to reach / achieve the expected targets.

P Opportunity oriented. Innovators are able to look for new opportunities in an entrepreneurial environment even where others see only problems or challenges.

P Self-disciplined. Innovators sacrifice and work hard to achieve the desired results hence prioritise time thereby carrying out important tasks first.

P Passionate about everything they do / believe. Innovators have great love/ desire for what they do/ carryout hence they always try to develop new products that ensure customers’ satisfaction.

P Inner directed. Innovators are self-motivated i.e. they are guided by values/ standards within themselves that inspire them to create new ideas hence production of better goods/ services.

P Extra- ordinarily persistent. Innovators have the ability to continue doing something until they achieve the intended targets.

P Trend spotters. Innovators have the ability to identify / spot something new and its social benefits hence able to make improvements in the good / service provided.

P They associate with positive people. Innovators surround themselves/ work together with people that have positive mental attitudes towards creating something new/unique.

P Creative. Innovators are able to develop new ideas which eventually they turn into improved goods/ services that provide more satisfaction to the customers.

Ways/strategies/ controls of promoting/ encouraging/ fostering/ enhancing innovations in

business

• Expecting change. This inspires individuals/ workers to be creative by always looking out for new ideas.
• Implementing new rules in an enterprise. This enables one to go beyond the existing

or normal standards in order to remain competitive in the market.

• Developing innovative strategies. This involves developing new ways to transform/ change resources into improved products/ services.
• Recognising innovators. This involves rewarding/ identifying people who have made improvements in the transformation of the resources in the enterprise into new/ improved products e.g. giving certificates of recognition.
• Avoiding barriers to innovations. This involves preventing obstacles/ limitations that

may interfere with the development of new ideas/ strategies.

• Being fast in implementing new ideas. This helps to make/provide improved goods/ services to avoid being copied by the competitors.
• Thinking globally. This involves having wider applications in order to fit the international level / exploit the opportunities available.
• Thinking like an entrepreneur. This involves taking initiatives to organise, operate and assume risks for the business venture.
• Being always a learner. This involves promoting continuous discoveries and consultationsihence being well-informed about the market conditions.
• Training workers. This involves equipping workers in an enterprise with innovative techniques / methods/ skills to ensure increased efficiency and productivity.
• Measuring performance indicators. This involves assessing or analysing the progress/ performance such that appropriate strategies are developed to ensure future success of the business which increases the innovation.

Factors/ qualities that make small businesses more successful in using/ adapting innovations than large businesses

• Small businesses are willing to try /attempt new approaches or methods to improve on their performance to ensure success of the business compared to big/ large businesses.
• Small businesses understand customers’ needs, identify new opportunities and tend to handle / fix problems quickly and efficiently because of their close contact with the customers.
• Small businesses quickly implement new business practices and adapt to changing market conditions because they are flexible in nature.

Small businesses are able to operate with limited resources i.e. they are able to allocate their scarce resources efficiently on new ideas than the large businesses.

P- Small businesses are able to carry out experiments and improvise compared to large businesses which in most cases suffer big or high risks.

• Small businesses mainly rely on strong local social networks to access/ share information needed to develop innovative ideas compared to large businesses which operate under closed systems.

Sample questions;

1. la) Describe the various types of innovation in entrepreneurship (10 marks),
2. b) Describe the characteristics of innovative people in your country (10 marks).

2a)      Explain the sources of innovations to an organisation (06 marks)

1. b) Explain the need / rationale/ purpose/ objectives/ reasons for undertaking innovations in

an enterprise (14 marks).

OR

Why should business / entrepreneurs promote/ encourage innovations? (Start the responses with To/In order /So as to and points are derived from merits of innovation) 3a) Explain the qualities that make small businesses more successful in using innovations

than large businesses. (06 marks) b)   Suggest ways of promoting innovations in an enterprise (14 marks).

Paper 2 question;You are operating a bakery project in your home town. Present guidelines for enhancing innovation in your business. UNIQUE BAKERY LTD P.O.BOX 100, MUKONO 0772100100 GUIDELINES FOR ENHANCING INNOVATION IN BUSINESS 1. Change shall be expected and eventually accepted which makes workers always alert. 2. The bakery business shall implement new rules. 3. The bakery business shall develop innovative/ new strategies. 4. Barriers to innovation shall be avoided in the bakery business. 5. The bakery business shall be fast in implementing the customers’ needs. 6. Workers of the bakery business shall think like entrepreneurs. 7. Performance indicators shall be measured in the bakery business.

Entrepreneurial motivation

This is the strong desire, impulse, determination (dedication) and drive of individuals to accomplish a specific / particular business goal.

Entrepreneurial motivation results from the desire to accomplish some psychological needs like recognition, responsibility, esteem and participation.

Elements/ classical concepts of entrepreneurial education

• Unconscious motive. It refers to tastes, biases/ attitudes which strongly influence behaviour but cannot be accounted for.
• Power motive. It refers to the ability to require others to behave in ways that are suitable to one’s purpose/ intensions
• Competence/ Achievement motive. It refers to the interest in being able to make things happen in society.
• Affdiation motive. It refers to the desire to be with other people regardless of any achievement or benefit but to ensure that the company is achieved/ gained.

Limitations/ barriers/ obstacles/ hindrances/ constraints to entrepreneurial motivation

• Conservative people. People with negative attitudes do not inspire other people to excel.
• Negative social-cultural beliefs in society. Some social-cultural practices/ values act as barriers to entrepreneurial development e.g. the belief that women cannot be successful entrepreneurs, the belief that girls are source of wealth etc.
• Unfavourable political systems. These discourage individual freedom and development of private enterprises hence limiting entrepreneurial activities.
• Unfavourable economic environment. Unfavorable economic atmosphere in terms of unfavourable policies like high taxes, high rates of inflation etc. discourage potential entrepreneurs because of the high costs of operating business activities.

y Under-developed infrastructure. Poorly developed physical infrastructures, economic infrastructures or social infrastructures limit entrepreneurial activities which limit entrepreneurial motivation.

• Unfavourable psychological factors. Factors like insecurity, high need for affiliation etc. limit development of positive mental attitudes which limit entrepreneurial motivation. i.
• Inadequate number of role models. Limited number of successful entrepreneurs to inspire others to carryout entrepreneurial activities limits entrepreneurial motivation.
• Inadequate educational training. This limits business knowledge and experience which discourages entrepreneurial development.
• Limited market opportunities. Inadequate business/market opportunities existing in the entrepreneurial environment limit productivity and hard work hence limiting entrepreneurial motivation.
• Limited entrepreneurial experience. This limits creativity in business management or causes low confidence hence hindering entrepreneurial motivation.

Achievement motivation

This is the strong/ intense desire to excel and do something unique to achieve/ attain satisfaction.

Behavioral characteristics/ qualities associated with strong need for achievement (indicators of achievement motivation)

• Taking personal responsibility for the outcomc i.e. being accountable for the success/ failure of the business.

‘y Analysing/ scanning the environment to create opportunities for achievement of the business targets instead of relying merely on chance.

• Taking/ seeking help from business experts/consultants rather than from friends/ relatives to overcome personal limitations/ external obstacles.

y Getting/ deriving maximum satisfaction from achievement itself and less satisfaction from other factors like recognition, money.

• Learning from feedback in order to establish appropriate actions/ measures/ strategies that can be taken to achieve the set targets.
• Formulating targets especially goals which stretch or stimulate one’s abilities and efforts/ those that encourage creativity and innovations hence challenging but achievable.

y Experiencing positive feelings of joy and satisfaction after achieving challenging targets and disappointment but not self-condemnation for failure.

y Predicting possibilities of success and failure hence developing appropriate strategies to overcome the obstacles/ minimize occurrence of failure but increase the chance of success.

y Formulating always concrete goals that are achievable in a given period of time given the available resources.

y Setting moderate goals i.e. setting goals that are not impossible or too difficult to achieve but at the same time not too easy to achieve.

y Developing a strong, internal commitment/ involvement with the goals set.

Benefits/ advantages/ significance/ merits/ relevance of achievement motivation

y Increases self-confidence of an individual who has achieved success/ set targets.

• It enables the entrepreneurs to scan/ analyse the environment actively to plan on how to attain success/ to exploit available opportunities.

y Enables the entrepreneur to produce high performance especially after achieving success which improves productivity and efficiency in the enterprise.

• Achievement motivation inspires an entrepreneur to take carefully calculated risks that have high chances of success.

y Ensures better/ effective utilisation of the available resources hence minimizing resource wastage.

• Promotes goal setting which inspires the entrepreneurs to work hard to achieve the set goals/targets.

Motivation

1 his is the process of stimulating oneself/ someone to put in more effort towards the attainment of the desired targets.

The motivational process

The process of motivation involves the felt need, goal oriented behaviour and need satisfaction.

(2)

behaviour

1. Felt need

It involves determining what one wants to be motivated to do / accomplish.

2. Goal oriented behavior

Are activities/ things people need to do to remain motivated/ inspired.

3. Need satisfaction

It involves removing distractions/ obstacles so that one remains motivated.

Challenges of motivation

• Leads to setting of goals that are too low to ensure success /achievement. This is due to fear of failure.
• Leads to setting/ fixing of goals that are too high and difficult to achieve given the available resources due to too much anxiety.
• It causes thinking of only weaknesses and problems in the environment instead of utilising one’s strengths and available opportunities.

It is associated with constant pressure and stress in order to achieve the set targets/goals. y It leads to high fear of failure because it is connected with high anxiety regarding performance.

Positive mental attitude

Refers to the positive feeling and beliefs that largely determine how an individual perceives him/ her-self towards intended actions.

Factors that help entrepreneurs develop positive mental attitudes.

• Treating/ taking each experience as an opportunity to learn from positively.

P Involving in positive activities i.e. involving in productive activities that help to achieve the set targets like brainstorming to get possible solutions to solve given problems.

• Having work objectives that are specific, measurable, inspiring, achievable and have a positive impact.
• Networking regularly with the successful entrepreneurs in order to develop their thinking, mannerism/ characteristics etc.
• Identifying successful entrepreneurs to be role models and mentors which help an individual to get guidance from them hence ensuring success in business.
• Avoiding negative ideas/ thinking especially by avoiding negative talks, avoiding people with negative views or comments.
• Being results oriented at all times by looking at specific problems, making appropriate decisions and taking action to solve the problems.
• Taking advantage of every opportunity existing in the entrepreneurial environment to achieve the desired targets/goals.
• Treating all opportunities as having possibilities of success or achievement in the entrepreneurial environment.

P- Having faith  i.e. having self-belief hence utilising one’s potential and abilities to   achieve

success.

Sample questions;

1. la) Distinguish between entrepreneurial motivation and achievement motivation.

(04 marks)

1. b) Examine the factors that limit entrepreneurial motivation in Uganda.

OR

Explain the obstacles to accomplishment of entrepreneur’s goals. (16 marks)

2a) Describe the process of creativity in entrepreneurship.                        (04 marks)

1. b) What factors help to develop a positive mental attitude among entrepreneurs in business?

(16 marks)

Risk taking

A risk is a possibility of suffering harm, loss or damage.

OR

A risk is an event that may cause a loss/harm/ damage or may cause success to a person/ business.

A business risk refers to a factor that may have a negative impact/effect on the profitability or

success of a business.

A risk situation refers to an event that has two or more possibilities that may cause potential loss/ success. It occurs when a choice is required between two or more alternatives whose potential outcomes are not known and must be subjectively evaluated Factors considered when choosing a risky alternative

• How attractive the alternative is.
• The extent to which the risk taker is prepared to accept the potential loss.
• The relative probabilities of success and failure.
• The degree to which one’s own effort can increase the chances of success and reduce failure.

Types/ forms of risks

• Low risks/ minimal risks: These are risks that earn low profits to the business. Low

risks are less likely to happen and even when they happen, they can be managed by      the

entrepreneur.

• Moderate risks: These are risks that can be forecast or predicted, calculated and managed by the entrepreneur. This means that an entrepreneur can easily anticipate such risks hence put appropriate measures in place to avoid or minimize them e.g. fire outbreak, loss of profits, bad debts.

y    High risks: These are risks whose chances of happening are very high and yet the

entrepreneur has little control over them.

Incase high risks occur, they may cause serious damage to the business and the chances of recovering the resources invested are very low.

Profits from high risks are usually very high.

Common examples of risks faced by the business

y Bad debts: This risk arises due to debtors failing to pay their debts within the specified credit period.

• Loss of cash in transit: This arises when money is lost when it is being moved from the business to the bank and vice versa.

y Accidents: Accidents at the work place may be caused by lack of protective equipment like gumboots, gloves etc.

y Fire outbreak: This may be caused by poor electrical wiring like short circuits

• Theft and burglary: This is caused by employees who are not trust worthy/ by intruders.

y Loss of profits: This arises due to increasing production/ operating costs.

y Decline in market share: This is due to unfavourable changes in demand or unfavourable changes in customers’ tastes and preferences.

• Embezzlement of funds by employees: This is caused by dishonest employees who misuse the business funds.
• Bad weather or natural hazards: This is due to floods, drought, and landslides that cause damage / loss to the business.

y Machinery breakdown: This arises due to failure to service business machinery effectively / regularly hence it causes losses to the business.

y Uncertainty of supply of inputs. Unreliable supply of inputs/ raw materials by the suppliers to the business disorganizes the production activities hence a possibility of a potential loss.

y Loss of goods in transit: This is caused by robberies along the roads and inside the business.

Ways/ measures/strategies/ techniques of minimizing risks in a business

• Selling business products strictly on cash basis hence minimising the cases of bad debts OR minimizing credit sales by only offering credit facilities to loyal and trustworthy customers.

y Insuring the business: This involves undertaking appropriate insurance policies e.g. cash in transit policy.

• Minimising accidents by use of protective equipment like helmets, gumboots etc.
• Installing the safety devices and training workers on how to use them e.g. fire extinguishers.

r* Tightening/ improving security by use of security guards, installing CC I V cameras.

y Minimising costs e.g. employing few but committed workers, making labour work for longer hours etc. in order to increase profits

• Providing products according to tastes and preferences of the customers hence able to have competitive advantage.
• Ensuring proper accountability of funds i.e. ensuring proper record keeping hence minimising loss of funds e.g. putting in place payment vouchers.
• Ensuring proper maintenance or servicing of the machines as recommended by the technicians.
• Managing competition through fair pricing of goods and services, quality improvement etc.
• Identifying other sources of supplies that are cheaper/ friendly and supplying high quality inputs.

Steps/ procedures/ stages/ process for analysing a risk situation

A risk situation is an event that has two/ more possibilities that may cause either potential loss or potential success.

The following are steps followed by the entrepreneur/ decision maker to determine the probability of occurrence of the risk so as to take appropriate action to manage it.

• Assessing the risk. This step involves establishing whether there is a potential risk / not involved in the situation.
• Determining goals and objectives. It involves determining whether the goals and objectives of the business are in line with the risk to be undertaken in order to select the appropriate/ suitable alternatives available.
• Determining/ clarifying alternatives. It involves surveying the various alternatives/options available and establishing the costs involved.

‘y Gathering information and weighing the various alternatives. This step involves collecting relevant information about various alternatives/ options e.g. marketing information, the future demand of the products, the level of competition etc. in order to make realistic assessment of the risk involved

• Minimising the risks. This step involves realistic assessment on how best to control/ reduce the risks while maximising the benefits.

k Planning and implementing the best alternative identified. The step involves making a timetable/ action plan for implementation of the best alternative selected / identified.

Questions for paper 2

1. You are operating a business involved in clay products in your home area. Design a programme/plan for minimising the risk situation in your (Programme for minimising risks).

BLESSED CLAYS LTD P.O. BOX 100 MUKONO 0700100100PROGRAMME FOR ANALYSING RISK SITUATION
DATE	ACTIVITY	PERSON IN CHARGE	REMARKS
USECURRENT DATES	–      Assessing the risk-      Determining the goals/ objectives. –      Determining the various alternatives available. –      Gathering the information and weighing the various alternatives. –      Minimising risks. –      Planning and implementing the best alternative(s).	GIVETITLE/NAME
Prepared by: okello marion APPROVED BY: SIGNATUREOKELLO MARION NAME: GENERAL MANAGER TITLE:

2. Prepare guidelines for minimising risks in your project.

NB: The questions in paper 2 involving guidelines/ policy/ principles/ terms and conditions/ rules/ regulations/ instructions/ code of conduct etc. Approach:

• Use “shall”

-Do not personalise the presentation i.e. do not use; I, we, us and ours.

• Be specific i.e. bring out why/when/how/what etc.

BLESSED CLAYS LTD P.O. BOX 100 MUKONO 0700100100 GUIDELINES FOR MINIMISING RISKS

• Clay products shall be sold only on cash basis.
• The clay business shall take up insurance policy / the business shall be insured against risks.
• Appropriate protective equipment like gumboots, gloves shall be used.
• Fire extinguishers shall be acquired and put in place and workers trained on how to use them.

Factors that affect/ determine/ influence risk assessment (factors to consider when assessing/ analysing business risks)

• Availability of market for goods/services (market size/ Adequate /large market for the goods/ services the business produces/ sells involves less risks compared to a small /limited market of the business products

>• Size and power of the competitors/the level of competition. Large and powerful competitors lead to higher risks in a business compared to small and weak competitors.

• Cost of insurance. Entrepreneurs prefer risks with lower insurance costs than those risks with higher insurance costs.
• Quality and reliability of business products. Dealing in high quality and reliable products lead to low business risks compared to low quality products that expose the business to high risks.
• The technology risks (Technological risksj. Use of appropriate technology by the business leads to low business risks than using inappropriate/ new technology.

y Predictability/sensitivity of demand for the product(s). Product whose demand is easy to predict results in low business risks compared to product with unpredictable demand.

• Initial investment cost. High investment costs for a business lead to higher business risks than low investment costs.
• Availability of inputs/ raw materials. (Access to raw materials,). Easy access by a business to affordable good quality inputs/ raw materials exposes the business to low business risks than difficult access to inputs by a business that exposes it to higher risks.
• Government legislation/ regulation and control of business (availability of incentives). Strict government legislation and control of business results into low business risks than limited government legislation and control of the business.
• The time required to generate profits. A product that takes a business a shorter time to make profits leads to low business risks compared to one that takes a longer time to make profits.
• Seasonal demand. Commodities that are demanded seasonally have higher risks especially when a season expires/ comes to an end than those commodities that are demanded frequently/ regularly by the customers.
• Skills and experience of Business in line with one’s skills is less risky compared to the business which is not in line with one’s skills/ experience.
• Viability/ profitability of business idea. A more viable business idea has lower risks compared to unviable /unprofitable business idea.
• Reliability and honesty of the people involved in the business. A business that involves very honest and reliable people/ employees is less risky compared to a business that involves dishonest and unreliable people/ employees.
• Exclusiveness of the design for the product to be produced. Products with unique designs involve low business risks for an entrepreneur than products with common designs.
• Availability of support services. Presence of support services like banks, insurance etc. involve low risks while absence of support services involve high risks

Terms used in risk management

• Risk avoidance; it involves taking measures to prevent/ avoid a risk from taking place e.g. to avoid risks on accidents, don’t drive under the influence of alcohol.
• Risk reduction; it involves taking measures to minimise the costs/ effects of the likely risks.
• Risk anticipation; it refers to forecasting the likely risk(s) that could happen.
• Risk transfer; is the shifting of the burden/ responsibility of a risk to another party/ person e.g. taking up insurance policy.

Sample question;

la)	Distinguish between risk transfer and risk avoidance (4 marks)
b)	Explain the factors that an entrepreneur should consider when assessing business risks.
	(16 marks)
c)	Describe the steps involved when analysing a risk situation. (6 marks)
–	(use “ing”)
– ‘	follow the order
d)	Explain the strategics for minimising risks in a business. (14 mks)
	Approach ;( use “ing”) e.g.
■	Insuring the business.

Negotiation skills

Refer to abilities possessed by an individual that enable him/her carry out effective bargaining with another party to achieve/ reach an agreement.

Negotiation: This refers to the process of bargaining that results into an agreement OR

It refers to the process of bargaining between two/more parties on one/more issues of interest in order to reach an agreement.

Characteristics/features/ traits of negotiation process

• There are two/more parties involved/present in any negotiation.
• There is an expectation of outcome/results by the parties involved in the negotiation process.
• The parties to negotiation believe that the outcome in the negotiation process will be satisfactory.
• The parties to any negotiation must understand the process of negotiation.
• The parties involved in negotiation expect to give and take.

Principles/ laws/ rules of negotiation

You do not have to be right to settle. This emphasizes that a negotiator should not allow the actions of another party to distract him/her from the key issue being negotiated.

In the process of negotiation, emotions arising from the feeling that one is right have no place since if one is only interested in being right, negotiation is likely to fail.

2. Look to the future. A negotiator needs to concentrate on the current issues being negotiated instead of focusing on the past.
3. Focus on the goal. Parties involved in negotiation need to concentrate on the target of negotiation henfee should avoid personal emotions e.g. anger, envy, excitement etc. which makes one to lose focus.
4. Set the tone and look the part. A negotiator needs to set the right mood/ environment for negotiation. This is by dressing professionally, carrying the right requirements, opening the negotiation using positive words etc.
5. Be prepared and do your research. The principle requires the negotiator to be ready for the negotiation process especially by finding out the interest of the other party, compare with his/her own so as to reach an agreement easily.
6. Know what you want and what the other side wants. A negotiator needs to specify what he/she wants from the negotiation, know what the other party wants in exchange in order to establish how to reach a compromise.
7. Always have a plan B. A negotiator needs to identify back up plan i.e. an option to resort to once the initial offer/plan is rejected by the other party.

Guidelines to successful negotiation

The following are strategies/ methods/ keys used to ensure successful negotiations in business.

• Plan and prepare well before starting the negotiation and ensure use of a clear negotiation strategy.
• The outcomes of negotiation should be win-win for both parties i.e. no party should win at the expense of another.

r Both parties to negotiation should feel satisfied with the negotiation results agreed upon.

• Being flexible in demands during the negotiation in order to reach an agreement easily. y Use the negotiation style of the other party to achieve positive outcomes.

y Avoiding becoming emotional during negotiations.

• Ask relevant questions and be a good listener during the negotiation. y State what you need in the negotiation and the reason why you need it.

y Be sensitive to the other party’s requirements/ concerns before and during negotiation. y Use appropriate communication skills during negotiation.

Challenges faced by entrepreneurs when carrying out business negotiations (reasons why

negotiations fail in business).

y Time pressure. Limited time sometimes forces parties involved in negotiation to try to hurry the negotiation process hence leading to making of agreements that regrettable.

• Influence of another decision maker. Sometimes, parties/ people involved in negotiation find themselves negotiating with people that are not final decision makers making it difficult to reach an agreement easily.

y Delay tactics. This creates pressure especially on the affected party in order to reach a quick agreement.

y Last minute wavering. This involves one party to negotiation making last minute changes when an agreement is about to be reached by making new demands. r Making an early concession. This is whereby a negotiator makes/suggests a final offer/ position in advance and also expects another party to take the same position/ offer. y Aggressive behaviour. This is whereby a negotiator may decide to make funny/ sarcastic/abusive comments or ensures threatening appearance to scare the other party making it difficult to reach an agreement. y Linking logic. Some negotiators apply a lot of reasoning in order to confuse the other party to negotiation through assumption that being correct in one item/thing implies being correct in others during negotiation, but this is not always so.

• Price only negotiation. This limits the possibility of reaching a compromise becausc the parties involved in negotiation tend to pay too much attention on price while ignoring other benefits of negotiation like building a good relationship, creating a good reputation etc.
• Letting positions override interests. This limits effective negotiations because parties involved in negotiations tend to have wrong focus based on status of individuals instead of addressing/focusing on individual interests hence blaming each other during the negotiation process.
• Neglecting the other party’s problems. This makes it difficult to ensure effective negotiations because of one party failing to understand/solve issues of concern of the other party by concentrating on personal interests.
• Limited negotiation skills. Inadequate skills necessary for successful negotiations limit parties to reach an agreement easily.
• External interference. External intervention especially by influential stake holders makes the negotiation process difficult due to delays /bureaucracy involved.

Ways/measures/strategies to manage /overcome challenges faced in negotiation.

• Taking adequate time to analyse and understand carefully issues involved/required in negotiation.
• Demanding strictly to negotiate with a person who has authority to make the final decision.
• Postponing/rescheduling the negotiation once delayed tactics are being used to influence the negotiation.
• Insisting that parties to negotiation clearly state what they want from the negotiation and must stick to it right from the start of the negotiation.
• Adopting the win-win approach of negotiation so that all parties benefit from negotiation/using the negotiation style of the other party to achieve the positive results.
• Keeping emotions in control during negotiations so as to minimise aggressive behaviour by any party to the negotiation.
• Undertaking negotiation training to develop appropriate skills that enable parties involved in negotiation to easily reach an agreement.
• Focusing on the interest of all the parties involved in negotiation and not on positions in order to establish an acceptable solution.

y Being sensitive to the requirements/problems/concerns of the other party to negotiation by asking appropriate/relevant questions.

• Preparing well for negotiation by having in place all the requirements for effective negotiation.

The negotiation process

The following steps/stages are involved in negotiation.

1. Preparing for negotiation. This stage involves all the activities that are carried out by a negotiator before the actual negotiation takes place e.g. establishing the business needs, carrying out research about the other party to negotiation, identifying the negotiation strategies to be employed etc.
2. Opening the negotiation. This step involves starting the actual negotiation positively.

• Exchanging information/views. This stage involves the negotiator making clear suggestion that may meet the interest of all parties involved in negotiation.

1. Bargaining towards a win-win outcome. This stage involves each party making specific stand on what he/she wants in order to find areas of compromise.
2. Reaching an agreement. This stage involves all parties accepting/arriving at a final compromise acceptable to all the parties hence signing the necessary documents.
3. Implementing of the agreement. This stage involves each party performing what was agreed upon at the end of the negotiation.

Question for paper 2;

You are operating a large bookshop in your home town. Design a programme/plan for preparing for negotiation._______________

BLESSED BOOKSHOP P.O.BOX 73 9 MUKONO 0778739739PROGRAMME/PLAN FOR PREPARING FOR NEGOTIATION
Date	Activity	Person incharge/respo nsible	Remarks/comment s
	Establishing / defining the business needs.	Agiga Grace.
	Carrying out research to understand the needs/ requirements of the other party.	Osio Brian
	Identifying the negotiation strategies to be employed.	Amara Peter.
	Identifying the negotiation tactics to use during negotiation e.g. choosing a chief negotiator.	Agiga Grace
	Selecting the venue/site for negotiation.	Ikara Brian.
Designed by: ajambo annet Approved by: Signature: AJAMBO ANNET Name: GENERAL MANAGER. Title:

Personal attributes/characteristics/ features of a good negotiator

y Integrity. A good negotiator should be honest and trust worthy to enable him/her to follow rules and keep agreements made with other parties to negotiation.

• A good negotiator has the ability to understand the other party’s point of view.
• A good negotiator has the ability to remain calm and endure the prevailing state of affairs in negotiation instead of being rushed to make decisions by the other party.
• Self assurance. A good negotiator has no doubt in him/her- self and in his/her negotiation abilities.

r- Self-confidence. A good negotiator has a feeling of trust/positive believe in his/her abi 1 ities/qualities/personal judgment to overcome the challenges in negotiation.

• A good negotiator has the ability to sustain negotiation physically and mentally for a long period of time so as to reach an agreement.
• A good negotiator has the ability to think creatively about a situation/ problem hence handle or solve it in a clever way.
• A good negotiator is always persistent and sticks with something even when the going gets tough.
• Good communicator. A good negotiator has the ability to use clear and appropriate words as well as body language to express his/her ideas during any negotiations.
• Good listener. A good negotiator has the ability to pay attention to the other party with an open mind so as to plan what to speak / reply

Negotiation skills

These refer to abilities possessed by an individual that enable him/her to carry out effective

bargaining with another party to reach an agreement.

Negotiation skills exhibited by the entrepreneurs in business include the following;

• Clarity in communications. This involves communicating effectively i.e. using clear and concise words plus positive body language during negotiation hence able to provide appropriate feedback.
• Sticking to objectives and avoid personalising situations. This involves concentrating on the specific targets of negotiation (specific objectives and goals). This can be achieved by negotiating considering the interests of all parties involved in negotiation.
• Controlling of emotions. This involves having the ability to keep emotions in control during negotiation. It involves regulating anger, excitement, fear etc. by negotiating in a composed way.
• Showing anger occasionally but not losing temper. This can be achieved by negotiating in a composed way.
• Being flexible. This involves having the ability to adjust the original position to deal with the prevailing situation.
• Being innovative and creative. This is the ability to undertake new strategies to ensure win-win situation.

Ways/ tactics of negotiating with customers

A negotiation tactic refers to a short term specific activities/action steps aimed at achieving

specific objectives.

The negotiation tactics with the customers/used to attract the customers include: –

• Communicating frequently with the customers using appropriate media.
• Offering customers rewards especially those that are loyal to the business e.g. gifts.
• Holding/organising special events that involve the customers to enable the workers of the business/enterprise interact with them.
• Ensuring that the negotiation is a two-way communication with the customers like giving them prompt feedback.
• Improving customer service/care of the business by employing well trained and dedicated workers to handle customer complaints.
• Visiting individual customers at their premises/work places to physically find out how the product(s) they purchased are doing.
• Launching multi-cultural programmes in the marketing activities e.g. advertising using various languages.
• Extending social responsibility to the customers like involving in the community cleaning programmes.
• Keeping all the promises and agreements/contracts made with the various customers of the business.
• Keeping emotions under control when negotiating with the customers in order to maintain the focus of negotiation.
• Being flexible when negotiating with customers in order to accommodate their issues /views.

r Being patient during the process of negotiation with the customers.

• Asking relevant questions and being a good listener during negotiations with any customers.

r Negotiating for win-win outcomes with the customer so that both the business and customer benefit from negotiation.

r Opening any negotiations with the customer on a positive note in order to promote good relations.

Ways/basic rules to follow when negotiating with employees/workers.

• Balancing both the strengths and weaknesses of the negotiation approaches and then selecting /using the most appropriate one for communicating the required information.
• Listening actively to what the employee says in order to understand the idea/ problems and eventually giving an appropriate response to him/ her.
• Making concessions (agreement)/ compromises together with the worker in order to have win-win solution from negotiations.
• Putting everything negotiated with the worker in writing once an agreement has been reached.

‘r Controlling emotions during negotiations with the employees so as to ensure effective/ successful negotiations.

• Always be positive when negotiating with the employees of the business.

Salary negotiation tactics with employees

• Set a ceiling; this involves fixing the maximum amount that the business is able to pay the workers considering the expected profits, salaries paid by rival businesses etc.
• Set a floor; this involves fixing the lowest amount that the business is able to pay as salary basing on the prevailing salary rates on the market.
• Determine the mode/method of salary payment that provides adequate motivation to the workers e.g. paying them per hour, per month, according to the amount of work done etc.
• Make the salary offer attractive when negotiating a salary with the workers so as to attract skilled/talented workers.
• Avoid legal battles with workers by negotiating payments with them that comply with the legal payment standards.
• Be sensitive to the workers’ personal needs before negotiating a salary offer for each worker to make each worker contented with the agreed salary.

r- Put in writing salary agreements reached with each worker, showing the basic pay, fringe benefits etc.

Sample/revision question;

1 a) Describe the negotiation skills in business (06 marks)

1. b) Explain the ways in which the employers/ entrepreneurs negotiate with the following; –
2. Customers (08 marks)
3. Employees (06 marks)

The need for entrepreneurship development for the economy is quite obvious

Characteristics / features /traits /attributes of entrepreneurship

• Risk taking: entrepreneurship involves taking risks in order to create and implement new business ideas.
• Profit potential: entrepreneurship is undertaken by an entrepreneur with the view of getting a reward or a return.
• Gap filling: entrepreneurship involves identifying human need(s) and taking appropriate actions to meet the need(s)
• Organising function: entrepreneurship brings together factors of production/ resources like land, labour, capital etc. for a productive use.
• Concerned with innovation: entrepreneurship involves continuous discoveries for new business ideas in order to provide new goods or services demanded/ required in the community.

The role/ contribution/ responsibilities of entrepreneurship in economic development

• Creating employment opportunities: This is through entrepreneurs identifying and starting profitable business opportunities that lead to creation of job opportunities for labour.
• Promoting creativity and innovation: This is through entrepreneurs coming up with new business ideas which they eventually turn into new goods and services hence successful businesses.
• Promoting small enterprises. This is because they can be started with little capital hence income generation.

y Facilitating utilisation of locally available resources. This is by

encouraging/promoting use of appropriate technology hence effective exploitation of would be idle resources.

• Reducing regional imbalances in development. This is by promoting or undertaking income generating activities in various parts of the country OR by setting up business enterprises in various parts of the country.

>• Developing an entrepreneurial culture: This is by encouraging people in a country to take advantage of opportunities existing in the environment.

• Generating or increasing government revenue: This is through taxing businesses and incomes of the workers.
• Promoting linkages. This is through establishment of new businesses which either provide raw materials or market for the already established business.
• Promoting international trade: This is through establishment of businesses that produce goods and services for exportation hence promoting trading activities with other countries.
• Developing entrepreneurship skills: Phis is through training to equip members of the community with business knowledge experience.
• Developing of infrastructure: Entrepreneurship promotes development of infrastructural facilities like roads to enable easy access of raw materials and market centre.
• Reducing dependence on other countries: This is by encouraging production of goods and services domestically that used to be imported from other countries hence reducing reliance on foreign goods.

y Encouraging savings; This is by encouraging people to put a side part of their income in order to accumulate funds for investment.

• Increasing/widening consumers’ choices. This is by providing a variety of goods and services to the public by entrepreneurs.
• Providing market for products: This is through entrepreneurs buying inputs or products from the members of the community.
• Preventing rural urban migration: This is through entrepreneurs establishing business enterprises both in rural and urban areas.
• Facilitating technological development: This is through increased innovations, inventions and creativity in order to produce high quality and quantity goods and services.
• Promoting industrialisation. This is by establishing many industries or business enterprises in various parts of the country.

Barriers/ limitations/ obstacles/ constraints/ hindrances to entrepreneurship growth

Barriers to entrepreneurship refer to factors that limit or hinder its growth/ development.

The following are the barriers to entrepreneurship development;

y Limited capital/finance: This limits effective business operations or expansion hence limiting the development of entrepreneurship.

• Limited number of role models: This limit individual inspiration or motivation to undertake business ventures in society.
• Unfavourable government policy on business/entrepreneurship: This increases the costs involved in business which discourages the potential entrepreneurs from undertaking entrepreneurial activities because of low profits expected hence limiting entrepreneurship development.
• Narrow/ small market for goods and services. This leads to low sales and low profits

hence limiting the growth of entrepreneurship.

• Low level of technology: This leads to low level of efficiency in entrepreneurial activities which limits entrepreneurship development.

y         Political instability: This creates fear among the potential entrepreneurs about safety of

life and property which limits entrepreneurial activities and investment hence low levels of entrepreneurship development.

• Underdeveloped infrastructure: This leads to increased costs of production or investment making it difficult for entrepreneurs to access raw materials and market areas.

y         High rate of inflation: This increases the production/ operation/ investment costs in

terms of labour costs, transport costs, raw materials costs etc. hence low profits realised by the entrepreneurs which limits the development of entrepreneurship.

y         High population growth rate: This leads to high dependency burden which limits

savings and capital accumulation hence limited funds available for entrepreneurs to undertake entrepreneurial activities.

y         Limited raw materials: Inadequate supply of business inputs disorganises/interrupts

production of goods and services which limits business activities hence limiting entrepreneurship development.

• Shortage of skilled manpower/limited labour skills: This lowers labour productivity or efficiency hence low amount of goods and services produced limiting entrepreneurship development.
• Poor land tenure system: This limits access to land by potential investors or entrepreneurs which limits investment activities hence low level of entrepreneurship development
• High interest rate on loans: This discourages the potential entrepreneurs from borrowing to start /maintain/expand entrepreneurial activities which limit the entrepreneurship development.
• Low level of savings: Limited savings lead to low capital accumulation hence limited funds available for undertaking investment or entrepreneurial activities.
• Inadequate support services: limited business support services like insurance, communication, transport etc. make it difficult for entrepreneurs to coordinate entrepreneurial or business activities which limit the development of entrepreneurship. Ways/ measures/ techniques/ strategies of promoting/ encouraging/ enhancing /fostering development of entrepreneurship
• Providing initial capital/affordable loans to individuals/ groups of people like the

youth. This avails them with funds to start businesses in different parts of the country.

• Recognising successful entrepreneurs/ role models. This inspires/ motivates other people to carryout business activities e.g. giving certificate of recognition.

y Providing tax/investment incentives. This helps to reduce the costs of production e.g. tax holidays, tax exemptions etc. hence high production levels and eventually high entrepreneurship development.

• Widening the market. This leads to high sales and high profits hence high production levels and eventually high entrepreneurship development.
• Improving technology/cncouraging the development and use of appropriate technology. This leads to high level of efficiency in production/ resource exploitation hence high quality and quantity goods produced or services provided thereby promoting entrepreneurship development.
• Improving the political climate. This helps to create confidence among the potential entrepreneurs about safety of life and property hence increase in the level of entrepreneurial activities.
• Improving infrastructure. This leads to reduced cost of production which facilitates the movement of inputs and final products hence high production levels which promotes development of entrepreneurship.
• Controlling inflation. This helps entrepreneurs to carryout effective planning during the production of goods and services because the costs involved tend to be stabilised.
• Controlling population growth rate. This enables families/people to save more money for undertaking investment/entrepreneurial activities.
• Identifying/ looking for reliable suppliers of raw materials that are affordable. This helps to ensure continuous production of goods and services hence promoting entrepreneurship development.
• Introducing/undertaking educational reforms. This helps to equip individuals with practical/relevant skills for starting income generating projects.
• Lowering/ reducing the interest -ate on borrowed funds/money: this encourages/enables potential entrepreneurs to borrow from financial institutions and other financiers for starting or expanding income generating activities.
• Formulating/ strengthening bodies/ organisations that support entrepreneurship like Enterprise Uganda, URA etc. This helps in promoting/coordinating entrepreneurial activities in the country hence promoting entrepreneurship.

^ Developing an entrepreneurial culture. 1 his encourages people in a given area/society to take advantage of the opportunities existing in the entrepreneurial environment.

• Undertaking land reform policies. This helps the potential investors or entrepreneurs to access land for establishment of enterprises/ for expansion of business activities.
• Encouraging creativity and innovation. This helps people/entrepreneurs to develop innovative solutions/ strategies to meet the needs of the customers.
• Liberalising the economy. This leads to reduction in costs of carrying out business which allows many people to participate in entrepreneurial or business activities.

>■ Promoting gender partnership. This enables men entrepreneurs to work harmoniously/together with the women entrepreneurs as joint partners hence eliminating threats of victimisation/exploitation.

• Encouraging privatisation of public enterprises. This promotes efficiency among the entrepreneurs thereby increasing production hence high entrepreneurship development.

Sample/revision questions;

1 a)    Explain the role / contribution / responsibilities of entrepreneurship in economic

development of Uganda, b)                Discuss the importance/ benefits of entrepreneurship in economic development in                                                                                                                  your

country.

2a)        Describe the barriers to development of entrepreneurship in Uganda.

1. What measures are being taken by the government of Uganda to develop entrepreneurship?
2. Explain factors that influence/ determine/affect the development of entrepreneurship in

Uganda.

• Availability of capital. Limited capital limits the development of entrepreneurship while adequate capital promotes the development of entrepreneurship.
• Level/state of technology. Low level of technology limits the development of entrepreneurship while high level of technology promotes development of entrepreneurship.
• Political climate. Poor political climate limits development of entrepreneurship while stable political climate promotes the development of entrepreneurship.

Entrepreneurial culture

This is a culture that encourages the whole population to take advantage of opportunities existing in the environment.

Entrepreneurial culture involves collective values, benefits and principles followed by members of business/ community that support entrepreneurship.

Reasons/ objectives/ need/ purpose/ rationale/aims for promoting or encouraging or enhancing or fostering entrepreneurial culture

y To encourage/inspire individuals to be business or opportunity oriented in nature. y To increase customer satisfaction which enables the business to attract new customers and maintain the old ones.

y To encourage individuals to be in contact or to network with various familiar successful role models in business.

• To encourage individuals to embrace opportunities identified to practice entrepreneurial competences like knowledge, skills and traits.
• To help individuals to acquire formal/informal managerial knowledge and practices in business.
• To increase/ improve the productivity/ efficiency of the workers in an enterprise.
• To reduce labour turnover in the business due to high employee motivation and loyalty.
• To improve the creativity of the employees because they learn to think beyond the existing standards to get new solutions to problems.
• To get support from various financial, technical and professional institutions hence support the development of entrepreneurship.
• To encourage workers/individuals to build capacity/ability for living with uncertainty.

Question;

1 (i) What is meant by entrepreneurial culture? (01 marks)

• Give any three objectives for promoting entrepreneurial culture in Uganda (03 marks)
• Mention any three benefits of promoting entrepreneurial culture in business.

E.g. encourages workers to build capacity for living with uncertainty.

Entrepreneurship as a career option

A career refers to an occupation or work that an individual does to earn a living.

OR

A career refers to a person’s progression through a series of jobs over his/her life span.

OR

A career refers to a continuous, ever evolving and expanding opportunity for personal as well as

business growth and development.

Examples of careers in Uganda include;

Teaching                                 –          Engineering

Designing                                –          Nursing

Acting                         –          Sports etc.

Accounting

Business /entrepreneurship career refers to a person’s involvement in long term business for

the purpose of making profits.

Factors to consider when selecting/ choosing / determining a career

r’ Personal interest/ passion. A person normally selects a career he/she prefers/likes than one he/she does not like.

• Level of job security. A person usually selects a career that offers/ensures high job security.
• Level of demand for the career in the job market. A person normally selects/ prefers a career that is on high demand in the job market than one with low demand in the job market.
• The level of job satisfaction. An individual usually prefers a career that gives or ensures high job satisfaction in terms of good working conditions than one that gives low job satisfaction.
• Family influence. An individual selects a career that is favoured /liked by the family members than one disliked by them.
• Talent and ability of an individual. A person normally selects a career that is in line with his/her natural abilities or one in which he/she has the ability to perform the tasks involved.
• Government policy towards different careers. An individual prefers selecting careers favoured/supported/promoted by the government policy in terms of providing job

opportunities e.g. careers in the field of science/ business/ information technology compared to those less favoured by the government e.g. in the field of Arts.

• The influence of the role model. A person selects a career he/she has been attracted to by a role model than one without an attraction factor.
• Job advancement prospects. A person normally selects a career that has high chances of promotion than one with limited chances of promotion.
• Level of income earned in the career/income benefits from the career. A person usually prefers career options that give higher level of income to those that give lower income.
• The influence of the religion. A person prefers selecting a career that does not interfere with his/her religious beliefs/ norms/ values compared to those careers that interfere with religious beliefs/norms/values.

Question;

1. la) Distinguish between a career and a business career. (04 marks)
2. Explain the factors to consider when selecting a career in your country. (16 marks) Section A question: Mention any four factors that should be considered when selecting a career in Uganda. (No need for explanations, just mention the points) e.g.

Job security.

The concept of self employment

Self employment is one where an individual works for him/herself in his/her occupation/ enterprise to earn income for a living.

OR

Self employment is where an individual or a person starts his or her own income generating activities or business enterprise(s) to earn profit.

OR

Self employment refers to a person’s fulltime involvement in his/ her own income generating activities started using personally or externally sourced resources.

Benefits/ merits/ rewards/ advantages/ relevance of self employment (benefits of being an entrepreneur)

• Encourages hard work and commitment. Self employment inspires an individual to put in more efforts to ensure success of the business activities to enable him/her enjoy the financial benefits.

y Ensures (high) job security. Self employment promotes job security because the self employed is the boss of himself/herself.

• Enables realisation of unlimited income. In self employment, income is not fixed hence one is able to realise as much as possible income depending on his/her efforts.
• Creates a network of friends. Self employment enables an entrepreneur to be in contact with a number of people like suppliers, customers and employees who are helpful in times of need.
• Leads to easy decision making. This is because there is no need to consult anyone/many people to exploit the identified opportunities.

y Leads to creation of employment opportunities. This is due to various activities

undertaken by the entrepreneur leading to demand for workers hence improvement in the standards of living.

• Promotes creativity and innovation. Self employment enables an individual to develop new ideas which are transformed into new products hence realisation of reasonable profits.

y Increases self confidence/ self esteem. This is because the self employed does things independently.

• Promotes respect and recognition in society. This is because of providing goods/services needed or it is because of creating employment opportunities for the people in the community or it is because the self employed has something to show that he/she is successful in society.

y Helps to reduce interference from other people. Self employment gives a person freedom to work without supervision/ interference because one is inspired to do what brings success in his/ her business.

• Enables an entrepreneur to give appropriate guidance and support to other people who want to be self employed. This is possible basing on his/ her experience in business.

^ Gives an opportunity for one to lead others. This is because the self employed is able to give orders or instructions like directing the workers to do specific activities in the business.

Demerits/ disadvantages/costs/challenges of self-employment

• Involves long and irregular working schedule or time. This is because the entrepreneur works beyond normal working time in order to ensure business success.
• Leads to unstable incomes/earnings. This is because incomes keeping on increasing and decreasing depending on the performance of the business making planning by the entrepreneur difficult.
• Involves broad responsibilities. This is because self employment is associated with many activities or tasks especially at initial stages of the business or it is because there is no specialisation and it is difficult to delegate duties.
• Makes future uncertain. This is because the self employed may not be assured of the monthly earnings.
• It is difficult to delegate duties / This is because the self employed has broad responsibilities and finds him or herself doing a lot of things.
• Absence of fringe benefits. There are no additional or extra benefits like medical allowance, transport allowance etc. especially for the owner because of being the boss.
• Causes tension and stress to the entrepreneur. This is because the risks in the business are suffered by entrepreneur alone.
• Leads to payment of high taxes/high tax burden which reduce the profits of an entrepreneur. This is possible especially when the entrepreneur carries out business activities on a large scale.

y Reduces the quality of life of an entrepreneur. This is because the entrepreneur is forced to work beyond normal working time to ensure business success due to broad responsibilities.

• There is limited time for leisure and other social activities. This is because the entrepreneur spends more time working in the business to ensure its success.

Paid/wage employment

This is one where a person takes up a job in return for a salary or wage paid on a periodic basis.

OR

Paid employment is when a person works for other: and carries out specific duties in return for

salary or wage.

OR

Paid employment is a form of employment where one is working for an individual or an organisation or government in return for a wage / salary paid on a periodic basis for specific assignments given by the employer.

Advantages/ merits/ benefits/relevance/rewards of paid employment

• Enables realisation of stable/steady income. This is due to regular payment of salary/ wage by the employer which makes planning easier by the employee.
• There are specific responsibilities in paid employment. This is because each employee is allocated particular duties/tasks which make him/her well organised and efficient.

y Ensures job security for a worker. This is because some jobs are permanent and pensionable especially government jobs, and this makes a worker be confident of his/her continuity in employment.

• Leads to en joyment of fringe benefits. This is because employees receive additional / extra benefits like free accommodation, food allowance, medical allowance etc. hence improvement in the standards of living.
• Minimum risks are faced. This is because workers face limited uncertainties since they do not own the business enterprise.
• Provides/ensures favourable hours of work. This is because employees work for specific/ agreed period of time which helps to avoid overworking.
• Ensures easy access to loans. This is because the lender is assured of regular source of money for repaying the loan.
• Delegation of work is possible. This is because there are people to refer to especially the juniors to help in handling some responsibilities hence facilitating business continuity.
• Promotes effective planning by the employee. This is because the employee is certain of the amount of pay and when it is paid.
• Promotes high productivity and efficiency of a worker. This is because employees are given specific tasks or duties leading to high output of better quality in a given period of time due to specialisation.
• There are chances of on job training. This is because some employers offer training facilities to their employees which enables them to acquire relevant skills hence becoming more productive and efficient

Demerits/ disadvantages/ costs of paid employment

y There is fixed rate of payment. This is because a worker is paid agreed salary or wage regardless of the extra effort put or extra output realised.

y Promotes exploitation of employees. This is because workers sometimes are forced to work for longer hours without extra pay or they are under paid.

• There is low level of job security for a worker. This is because a worker can be dismissed at any time especially in the private sector when appointment letters/employment contracts are not offered.
• It limits creativity and innovation of the workers. This is because workers are always given strict instructions and orders by the employer regarding job description.
• Limits decision making power by the employee. This is because a worker is required to consult the employer before implementing any idea.

y Difficult to delegate work. This is because employees are always closely monitored and supervised hence hard to delegate duties without consulting the employer/ top management.

Sample questions;

1. la) Differentiate between self-employment and wage employment (04 marks),
2. b) Examine/ explain/ discuss the merits and demerits of self-employment in Uganda. (16

marks).

2a)     What is meant by the term wage employment? (04 marks)

1. b) Discuss the benefits of wage employment in Uganda (16 marks)

3a)     Account for the popularity of self employment in your country. (10 marks)

(Give merits of self employment.)

1. Why is self employment preferred to paid employment? (10 marks)

(This is a comparative question which requires one to give the merits of self-employment counter- argued with the demerits of paid employment but strictly presented in the same paragraph using unlike/ compared to / other than etc. in between the two statements.)

e-g

• In self employment, there is assured job security because one is the boss of him/her self

unlike in paid employment where there is limited/no job insecurity especially in        the

private sector where appointment letters are not offered.

• Self employment encourages hard work because the self employed enjoys all the financial benefits unlike in paid employment where an employee is not encouraged to work very hard because he is only given salary.

1. How can self-employment be promoted in Uganda?

Differences between an entrepreneur, an intrapreneur and an enterprising person

• An entrepreneur

An entrepreneur is a person who organises, operates and assumes risks for a business venture.

OR

An entrepreneur is a person who produces new and better goods and services with the view of selling them to customers to make a profit.

OR

An entrepreneur is a person who conceptualises, implements, maintains and expands business in the face of risks and uncertainties.

OR

An entrepreneur is a person who scans the economic, social and natural environment for opportunities in a business, mobilises the necessary resources, undertakes production, assumes business risks and receives financial reward.

Functions/ roles/ responsibilities of an entrepreneur y Identifying opportunities in an entrepreneurial environment which opportunities are exploited in order to receive financial rewards.

• Under taking or carrying out calculated/ moderate risks in relation to the business i.e. bearing risks by committing resources into an activity/ activities surrounded by uncertainty.
• Mobilising the necessary resources for the business venture like capital, labor, machinery, land etc.
• Planning and implementing the various activities necessary to start and operate a successful business.
• Involving in creative and innovative activities so as to provide new/ improved goods/ services.

y Receiving of financial / social rewards from the business operations e.g. receiving of profits.

^ Involving in decision making with an aim of influencing the activities of the business in order to achieve the desired targets.

• Marketing of the goods/ services provided by the business. It involves carrying out activities in a business to ensure that the needs of the customers are satisfied and the entrepreneur is able to realise reasonable profits.
• Networking with other entrepreneurs, business organizations/ associations, governments etc. to create a wider market/ support.
• Maintaining of good relations with various stake holders like employees, customers etc. Types of entrepreneurs in business
• Innovative entrepreneurs. These are entrepreneurs who introduce new things in business and in most cases they are business/ market leaders. They can introduce new goods, new methods of production, discover new market etc.

r- Imitative entrepreneurs. These are entrepreneurs who simply copy/ adapt successful innovations by innovative entrepreneurs.

• Drone entrepreneurs. Are those entrepreneurs who are not willing to adapt new innovations even at the cost of receiving reduced returns or benefits because they are satisfied with their current state of business operation.
• Social entrepreneurs. Are those entrepreneurs who identify social problems and come up with innovative solutions.
• Trading entrepreneurs. Are those entrepreneurs that engage in buying and selling of goods/ services in order to make profits.
• Manufacturing entrepreneurs. Are those entrepreneurs who change / transform the raw materials into finished goods or services.

Qn; Identify any four (4) types of entrepreneurs in business (04 marks)

Characteristics/ features/ attributes/ traits of successful entrepreneurs

The following are entrepreneurial qualities/ personal entrepreneurial characteristics of succcssful entrepreneurs.

• Successful entrepreneurs have the ability to work for long hours to make the business succeed. E.g. working from 5:00 am up to midnight every day.
• Self confident Successful entrepreneurs believe in themselves and in their abilities to achieve the set targets of the business.
• Goal-oriented. Successful entrepreneurs set realistic or achievable medium/ long term targets and work with determination to achieve them.
• Successful entrepreneurs do not give up so easily when faced with challenges.
• Willing to listen. Successful entrepreneurs always pay maximum attention to the views/ advice of other people in order to implement good ones for the success of the business.
• Risk takers. Successful entrepreneurs are willing to take chances with hope of succeeding and getting bigger rewards.
• Successful entrepreneurs are always dedicated in everything they do to ensure success of the business. This is because they dedicate more time and resources to the business activities.
• Build for the future/Future oriented. Successful entrepreneurs work steadily to grow and reach their future targets.

• Profit oriented. Successful entrepreneurs have strong interest and direction towards generating profits i.e. they aim at generating profits in business ventures.
• Cope with failure. Successful entrepreneurs are able to recognise their mistakes and failures hence use them as learning areas/ experience to find out new opportunities.
• Cope with uncertainty. Successful entrepreneurs are able to live with unclear situations/ circumstances relating to their businesses without allowing stress to overcome them.
• Build on strengths. Successful entrepreneurs base their work on their potentials/ abilities to ensure success of the business.
• Set own standards. Successful entrepreneurs set performance requirements/ levels to be achieved / followed and work hard to reach/achieve them.
• Demonstrate initiative. Successful entrepreneurs always take a lead in doing things or solving problems.
• Respond to feedback. Successful entrepreneurs always want to know how they are performing/ progressing by getting responses/ opinions/ advice from others.
• Creative and innovative. Successful entrepreneurs have the ability to develop new ideas which eventually they turn/ convert into new goods/ services that satisfy the needs of the customers.
• Successful entrepreneurs are always willing to embrace change in a positive attitude than resisting it.
• Opportunity seeking. Successful entrepreneurs have the ability to see/identify chances in any situation.
• Information seeking. Successful entrepreneurs are always looking out for information that affects the business.
• An intrapreneur (corporate entrepreneur)

An intrapreneur is a person who focuses on creativity and innovation in order to transform an

idea into a profitable venture by operating within an organisational environment.

OR

An intrapreneur is a person who works in an existing business and is able to create new goods

and services to ensure profits for the business

Roles/ activities/ functions of an intrapreneur

• Working in an existing business by using his/her creativity and innovative skills to make

profits for the business.

‘r Working as a hired manager for the business.

• Identifying new goods/ services/ opportunities for the existing business.
• Organising and controlling resources like capital, machinery, labour to make profits for the

existing business.

• Enjoying benefits of an existing business like earning salary and other fringe benefits.

Characteristics/qualities/attributes/traits of an intrapreneur

• Risk taker.
• Creative and innovative.
• Passionate i.e. he/she loves the work ass gned to him/her to do.
• Flexible/ adaptable.
• Self confidence.
• Resourceful i.e. being knowledgeable at )utthejob.
• An enterprising person

This is a person who takes on an imaginative and risky project to produce/ market goods / services with a view of earning income/ profit.

OR

An enterprising person is someone who takes an initiative to start something new after identifying an opportunity.

Qualities/characteristics/ features/attributes of an enterprising person

>	Hardworking.
>	Demonstrates initiative.
>	Self confident.
>	Builds for the future.
>	Goal oriented.
>	Creative and innovative.
>	Builds on strengths.
>	Risk taker.
‘p	Committed.
	Persistent.

Sample/revision question;

1    (a) Distinguish between an entrepreneur and an intrapreneur (04 marks)

• Discuss the characteristics of a successful entrepreneur in your Uganda.

(16 marks)

E.g. Hard working. A successful………..

• Under what circumstances/ conditions/ situations/ instances may an entrepreneur succeed in a business venture?

Approach: All answers must start with either when, if or in case e.g.

• When an entrepreneur is hard working.

Entrepreneurial competences

Competence is the ability of an individual to do something/ a job properly i.e. ability that enables an individual to do his/ her job well.

There are three major competences for successful entrepreneurship which include.

• Traits

Knowledge; Is a set or body of information stored by a person / an individual which may be recalled at an appropriate time to enable him/ her do what is needed to achieve the intended purpose.

Examples of knowledge needed by entrepreneurs in business

• Information about the market for goods/ services.
• Information about the customers in terms of their age bracket, gender/ sex, tastes and

preferences.

• Information relating to a business opportunity identified after carrying out market research.
• Information about the production process.
• Information about the competitors e.g. the competitors’ strengths, weaknesses,

opportunities etc.

• Information about the sources of capital that can be exploited e.g. borrowing, personal savings.
• Information about government policies on businesses e.g. taxation policies.

Skill;this is the ability to apply knowledge to perform a specific business activity which can be

acquired through training or practice.

There are two broad types of skills which include;

• Managerial/ management skills.
• Technical skills.
• Managerial/ management skills

These are abilities to make business decisions and lead/ guide subordinates in a business to do

specific activities/ tasks.

Examples of managerial skills/ entrepreneurial skills

• Marketing/ selling skills. These are abilities to identify or anticipate and satisfy the needs of the customers effectively and profitably.
• Creativity and innovation skills. These are abilities to come up with innovative/ new solutions that address the identified customers’ needs.
• Planning skills. These are abilities to determine the targets of the organisation (goals/ objectives) and then formulate policies and programs for achieving them.
• Time management skills. These are the abilities to use time productively/ profitably by doing important activities/ tasks in time.
• Financial management skills. These are abilities that enable an individual to obtain, control and ensure effective or proper use of money/ funds in a business.
• Leadership skills. These are abilities to inspire/ influence other people to work in specific ways to ensure success of the business.
• Communication skills. These are abilities that enable a person to convey the message/ communication effectively to express ideas/ opinions/ feelings.
• Purchasing skills. These are abilities that enable a person to identify and buy good quality goods/ services at affordable prices.
• Skills of coping with change. These arc abilities that enable a person to quickly understand change, accept change and take positive actions to handle change.
• Negotiation skills. These are abilities that enable a person to understand a given situation / issue to be discussed hence able to persuade another party during the bargaining process.
• Risk management skills. These arc abilities that enable an individual to carry out tasks/ activities that involve potential loss or success in order to gain rewards.
• Human resource management skills. These are abilities that enable a person/ manager to work well with other people or employees to achieve the desired objectives of the business.
• Technical skills: These are abilities acquired through practice and learning to perform specific tasks.

Examples of technical skills include;

• Computer skills.

r- Building skills.

• Sewing skills.

r- Painting skills.

r Carpentry and joinery skills.

• Engineering skills.
• Drawing skills.

>     Numerous skills.>     Team work skills. Traits; Are unique or peculiar qualities/characteristics that describe an individual’s behaviour e.g. confidence, laziness, shyness, aggressiveness etc. (i) Distinguish between skill and knowledge in entrepreneurship (02 marks). ii) Mention any two management skills of a successful entrepreneur (02 marks) iii) Identify any four (4) competencies that should be displayed by an applicant during an interview. > (Self) confidence. > Ability to control emotions. > Creativity and innovation. > Relaxed. > The required academic qualification. » Smartness. Vr’ Respect for others and property. > Effective time management. Concentration. > Good communication. > Knowledge about job requirements Skill of coping with change Change is giving an object/ a situation a completely different form/ appearance. OR

Change refers to making a complete difference in an idea/ situation/ object/ business/ group of people for a specific purpose.

Types/forms of change in business

There are basically three types of change in a business which include the following;

1. Developmental change.
2. Transitional change.

• Transformational change.

Developmental change: This is a type / form of change that involves making improvement to a business. It involves making improvements on existing /current processes/ methods, performance standards etc. that do not reach the required standards.

Developmental change is carried out in a business to ensure that the business remains competitive in the market.

Developmental change is good to a business because it is less opposed by the employees because it does not stress them.

Examples of developmental change in a business include;

• Training of workers
• Conflict resolution.
• Transitional change

It is a type/ form of change that involves replacing of the existing processes or procedures/ aspects with what is totally new to the business e.g. creation/ introduction of new products, creation of new policies etc.

Transitional change is more challenging compared to developmental change because it makes the future of a business/ an organization uncertain / unpredictable to the current employees.

Implications/ effects/ consequences/ costs of transitional change

Causes stress among the employees as they try to adjust to new procedure/ processes.

It creates uncertainty among the employees concerning the future of the organization hence a threat to job security.

It is costly/ expensive to an enterprise/ entrepreneur because it may require training/ re-training of the employees.

Solutions/ remedies to implications of transitional change

^ Sensitizing/ educating employees about the new processes/ procedures involved in production/ operation.

• Involving/ consulting employees whenever change is to be made in an enterprise.
• Promoting job security. This involves providing assurance to the employees that they are to continue with their jobs to reduce/ minimize the feeling of job insecurity.
• Training employees/ retraining them to equip them with relevant skills to cope up with change.

(i) Transformational change

This is a type or form of change that involves drastic/ radical introduction of new methods/ procedures in an enterprise.

In this type of change; all the old methods; systems/ procedures etc. are abandoned so that the new ones are introduced.

Transformational change may involve both developmental change and transitional change. This means that, it involves making improvement to the current business as well as replacing existing procedures or processes with what is new.

Transformational change is very challenging as it requires management to clearly explain the reasons for adopting it in order to minimise/ rcduce resistance from the employees.

Factors that bring about change in a business (factors that influence /affect/ determine change in a business)

• Change in the level of efficiency. An entrepreneur in need of success uses techniques of operation that result into better use of time and other resources hence minimal wastage than using techniques of operation that result into more wastage.
• Change in environmental factor. A business usually undertakes or adapts operation measures that reduce environmental pollution than operation measures that result into high pollution of the environment.

‘r- Social change/ change in social environment. An entrepreneur makes necessary

changes in the business in order to meet the changing needs of the society e.g. increasing the levels of output to meet the increasing population in the area than using strategies that do not cope with community change.

• Change in the level of competition. An entrepreneur facing many rivals makes positive changes in the business like quality improvement etc. in order to remain competitive in the market than adopting measures/ strategies that don not help in overcoming competition.
• Change in technology. An entrepreneur adapts/ uses better/ new methods of production to produce better quality products instead of using methods that do not result into better/ high quality goods/ services.
• Change of entrepreneur’s desire. A successful entrepreneur in business adapts positive mental attitude to create favourable/ suitable conditions for workers so as to achieve the desired targets than having negative mental attitude that limits effective performance or progress of the employees.
• Change in external factors. An entrepreneur makes necessary changes in his/ her business in order to cope up with globalisation e.g. expansion in foreign markets than adapting changes in business that do not match the external changes/ globalization.
• Change in government laws/ policies towards business. An entrepreneur makes necessary changes in business in order to comply with the government laws/ regulations than resisting the government laws/ regulations regarding business operations.
• Change in managerial personnel. An entrepreneur tends to employ competent/ well trained managers/ administrators so as to improve business performance than employing less skilled/ incompetent managers or administrators who cannot improve business performance.

Factors that limit entrepreneurs from adopting change in business

y Limited capital.

• Limited raw materials.
• Limited skilled labour.
• Low level of technology.

r- Limited /small market.

• Uncertainties/natural calamities.

‘r Unfavourable government regulations/laws on businesses.

• High rate of labour turnover.
• Resistance from employees.

Benefits/ importance/ relevance/ significance / rewards/ positive effects of change in a business

• Leads to adoption of new technology. This promotes efficiency in production hence more output is produced of better quality.

y Helps to respond to customers’ needs. Change in an enterprise leads to production of a variety of new products in order to meet the needs/ requirements of the customers that keep on changing with time.

• Promotes creativity and innovation. Change enables a business/ an entrepreneur to come up with new ways or ideas that lead to production of new products or identification of new markets etc.

r Promotes skill development/provides growth opportunities. This is through either training or retraining of the employees in order to cope up with change(s).

y Promotes exploitation of idle resources. Adoption of new/ improved technology

enables an entrepreneur to effectively utilise the available resources hence production of more output of goods/ services.

• Promotes team work. Change in an organisation fosters/ promotes unity among the workers due to continuous consultations hence increase in the volume of goods and services produced/provided
• Reduces labour cost. Change in technology that involves use/ adoption of improved methods of production lead to low demand for workers which minimises expenses associated with labour e.g. accommodation.
• Determines the direction of the economy. Change enables an entrepreneur to cope up with changing circumstances of the economy that affect business operations e.g. increasing demand for goods and services may require an entrepreneur/ businesses to expand the production capacity.
• Improves employees’ confidence. This is especially when their ideas/ contributions to change work successfully.

Demerits/ disadvantages/ dangers/ costs of change to a business

• Increases the complexity of the production methods. This is due to use/ adoption of advanced technology in an enterprise.
• It is costly to implement change. Implementing change involves high expenditure in terms of training/ retraining of the workers to cope up with change(s).
• It limits creativity and innovation. This is because it brings about over reliance on computers/ information technology and decision support systems.
• Promotes geographical relocation of industries and workers. Some changes in the organisation tend to force the shifting of the business/ workers from one area/ location to another which leads to loss of market, loss of customers etc. since it causes inconveniences.
• Promotes technological unemployment. Due to change/ improvement in technology, demand for workers tends to reduce or workers tend to be displaced leading to unemployment problem.
• Increases labour turn over. This is due to resistance to change(s) by some workers which makes the business unpopular.
• It leads to bad image/ reputation of the business. Change that leads to downsizing (reduction in the number of workers) always creates negative responses/ resistance from the affected workers/ employees.

Reasons why people resist change in an enterprise

• It benefits some people while it hurts others. Change sometimes benefits specific people only hence those who are not expecting to benefit from it tend to resist the change.
• It is costly/fear of sacrifice. Many changes in an enterprise tend to require either initial financial investment/ short term economic hardships before enjoying long term benefits, hence people resist change due to high costs needed for its implementation.
• Inadequate time and effort. People resist change in an enterprise because for effective implementation, it requires enough time for preparation/ consultation.
• Fear of uncertainty. Some people resist change in an enterprise because they do not know how it will affect them.
• Limited self confidence. People resist change in an enterprise because they do not believe in themselves in handling/ managing change.
• Pride and stubbornness. Some people resist change in an enterprise because they feel that they must be the only ones to introduce or initiate change(s).
• Some people/employees tend to resist change in an enterprise in case they feel that change may be a burden to them.
• Using unacceptable methods to bring change. People tend to resist change in an enterprise incase the methods or strategies employed to have change are considered inappropriate by employees
• Lack of interest among the stake holders. Change becomes difficult in an enterprise where by the major decision makers are not supporting change.

Indicators of resistance to change in an organisation/ enterprise

• Low efficiency/ productivity by the work force i.e. production of low output and of low quality.

y Complaints/ grievances about payments by the workers especially when the work load increases/ when they have changed from one section to another.

• Expression/ feeling of frustration by employees/ workers.
• Low level of morale/aspiration by employees or workers.
• Increased absenteeism by most of the employees/ workers in an enterprise without the permission of the top management.
• Aggression against management by employees/ subordinates e.g. minimising the managers, commenting negatively etc.

Ways/measure/strategies of overcoming/ managing resistance to change

• Carrying out only changes that are necessary for the business/ that can ensure good employer-employee relations.
• Involving those who resist change in the change process itself.

P- Conducting research/ carrying out research on the most appropriate ways of introducing new changes in the business.

• Educating the workers/ managers about the need for the change and training them so that they acquire the necessary skills needed for change.
• Giving/ providing explanation to employees about change. This involves adopting an effective communication system whereby employees/ mangers are informed in advance about the likely changes.

P- Employing dictatorship style of management. This is whereby top management uses excessive authority and status to enforce change.

Building support networks. This is where by management persuades/ induces some employees in an enterprise to be positive about any change(s).

• Providing/ offering incentives/ rewards. This is whereby managers and workers are given / promised rewards to motivate them to accept change
• Ensuring proper timing. This involves introducing change at appropriate or convenient time

Steps/stages/ process/ procedures involved in coping with change

1. Understanding the problems/ situations causing the changes that may affect the business in order to develop appropriate strategies of handling change.
2. Defining the problem: it involves establishing of basis for taking action due to change identified in the enterprise.
3. Collecting relevant information for decision making in order to handle the problem/ in order to exploit the opportunity available.
4. Analysing the cause of the problem/ situation by carrying out research.
5. Finding/ developing possible alternative/ solutions and listing them down.
6. Evaluating and selecting the best alternative/solution(s) from the list of alternatives.
7. Implementing the best solution and follow up. This step involves putting into action the best solution identified to ensure that the problem is solved.

Sample/revision questions;

1(a) Differentiate between developmental change and transformational change. (04 marks)

(b) Explain the significance of change in an enterprise (16 marks)

2(a) Explain the need/ rationale/ purpose of adopting change in an enterprise.

OR

Why do businesses/ entrepreneurs respond positively to change/ adopt change in an enterprise? (10 marks)

(It requires reasons and all answers must begin with (To/in order/so as to. and answers are got from merits of change) for example – To adopt new technology,

1. Examine the factors that may bring change in an enterprise/ account for the factors that

cause change in an enterprise (10 marks). (All points must involve the word change)

3a)      Assess/ examine the effects/ impact/ implication/ consequences of change in an

enterprise (10 marks)

Approach: Give positive and negative effects/ impact but separate them.

1. How can change be fostered in an enterprise? (10 marks)
2. Explain the factors that limit entrepreneurs from adopting change in business.

Question for Paper 2;

You are operating a large bakery in your home area. Prepare guidelines for coping with change in an enterprise.

NB: In paper 2, questions that involve policy / guidelines/ principles/ rules/ regulations/ instructions/ terms and conditions, the following should be observed.

1. Use shall.
2. Do not personalise i.e. No use of ours, my, we, I etc.

• Be specific where possible i.e. bring out why/ how/when/what etc

Concept of creativity

Creativity is the ability to come up with new innovative solutions to human or customer needs and to market them.

OR

Creativity is the process of generating a new/ useful idea that meets customers’ or human needs. Creativity therefore involves the ability to produce work that is unique and appropriate. Characteristics/ features/ traits/ attributes of creative people/ entrepreneurs

• Creative people always want to do things in a unique or in a new way.

r* Independent. Creative people act/ behave from their own points of view and attitude

1. they do not rely on other people to make decisions.

• Creative people are always willing to change to new/better options.
• Passionate about their work. Creative people usually choose to do what they enjoy/ what they like most.
• Divergent thinkers. Creative people think differently from other people.
• Creative people are able to adjust in most cases to all situations.
• Creative people are open and are capable of responding quickly to their environment in order to come up with new things/ ideas that meet the available needs.
• Creative people generally have high intelligence.
• Creative people are capable of transforming new ideas into real goods and services.
• Risk takers. Creative people are willing to carryout tasks/ activities with uncertain outcomes.

Characteristics/features/traits of non-creative people/entrepreneurs

P Negative thinkers. Non-creative people are not able to think positively about any problem. This means that they find it difficult to see or identify opportunities out of the problems/ challenges faced.

>■ They are timid to put forward new ideas. Non-creative people always fear to try new things in an environment.

P- Lack of self-confidence. Non-creative people in most cases do not believe in themselves.

P Conformists. Non-creative people love to strictly follow rules and regulations to guide them

P- Very self-critical. Non creative people tend to have personal bias about themselves.

• Non creative people arc always not willing to change to new options/ strategies.
• Non divergent thinkers. Non creative people are not able to think in many directions/ ways.
• Logical thinkers. Non creative people tend to use too much reasoning when handling a

situation/ problem at hand.

• They are not inspired. Non creative people are not self motivated/ driven even when

faced with a new idea.

Stages/ steps of the creative process

1. Preparing to get a solution. This stage involves collecting information, analysing the information collected and generating possible solutions to the problem at hand.
2. Investigating / investigation. The stage involves developing a solid/ clear understating of the problem at hand.
3. The stage involves establishing the similarities and differences in the information collected and analysed.
4. This stage involves allowing the mind to continue thinking about the problem and the possible solutions/ alternatives.
5. This is the stage of the creative process where one allows the mind to relax from the deep thinking.
6. Verification / evaluation. This stage involves testing the ideas, alternative solutions etc. and where possible applying them before selecting the most suitable solution.
7. This stage involves transforming/ converting the idea into reality i.e. putting into action the solutions/ ideas identified.

Question for paper 2;

1. 1. You are operating a bakery project in an urban centre where the demand for bakery products is high. Prepare a programme/plan to be followed by employees to improve the creative ability.

NICE BAKERY LTD P.O. BOX 739 MUKONO 0772739739PROGRAMME TO BE FOLLOWED BY EMPLOYEES TO IMPROVE CREATIVE ABILITY.
DATE/DAY	ACTIVITY	PERSON IN CHARGE	REMARKS
Use current dates	–        Preparing to get a solution.-        Investigation. –        Transformation. –        Incubation. –        Illumination	Givetitle/name
Prepared by: j s Approved by:Signature: ……………  Signature:…………………………………………………………. KATAMBA SIMON Name:………………………………………………………………… ENTREPRENEUR Title: ……………………………………………………………………

NB: P’or programmes/ schedules/ adverts (product/job advert). Any phrase used like prepare/ design / draft/ draw etc. requires a student to fill in /provide the information apart from remarks and approved by.

Importance/ benefits/ relevance/ significance/ merits/ rewards/ positive effects/ impact of creativity in business

y Helps to promote the goods and services of the business. Through creativity,

entrepreneurs/ marketing experts discover/ identify/ employ new ways of informing the customers about the business products.

• Increases productivity. Creativity in business leads to mass production especially when workers come up with better production methods.
• Promotes the development of new and original ideas. This is by using the existing ideas to make improvements which result into new goods/ services.
• Leads to improvement in the quality of goods/ services. Creativity promotes product updates which eventually increase the business sales.
• Promotes proper use of limited resources. Creativity enables workers to develop/ employ cost effective methods of production.
• Encourages better team work in business. Creativity promotes unity among workers through brainstorming in order to come up with alternative solutions to the problem.
• Helps in building self-confidence/self-motivation. This is by allowing each employee in a business to come up with new ideas towards solving business problems.
• Leads to innovations in a business. Through creativity, the new ideas of workers are transformed/ converted into new goods/ services.
• Helps in solving everyday problems in business. Through creativity in an enterprise, entrepreneurs and workers are able to come up with innovative solutions or strategics to the problems that arise in an enterprise.

Obstacles/ barriers/ limitations/ constraints/ hindrances to creativity in business

• Negative/Biased thinking by an individual makes it difficult to come up with new ideas/ strategies.
• Fear of failure. This makes it difficult for an individual to try new things.
• Limited quality thinking time. This makes it hard for a person to develop creative thinking.
• Over conformances with rules and regulations. This makes it difficult for an individual to think beyond the existing situation which limits the creative ability.
• Applying too much knowledge to a Applying a lot of reasoning to a problem/ a situation slows down the creative ability of an individual because of having a possibility of many alternative solutions.

Making assumptions. Having a misconception about a given situation which is not tested for accuracy limits the creative ability of an individual e.g. assuming that failures of a business are due to witchcraft.

r Limited/ inadequate self-confidence. This limits the creative ability because in most cases one develops a belief that he/she is not capable of being creative.

r- Being over specialised. This limits the creative ability because of limited experience/ abilities/ skills to try new things.

r Feeling comfortable with the prevailing condition. This limits the creative ability of an individual because he/she tends to be satisfied/ contented with the current/ prevailing conditions hence unable to try new things.

r Fearing to make mistakes. This limits an individual from trying new things/ strategies for fear of making errors.

• Limited funds. This makes it difficult to carryout research to come up with creative strategies/ solutions.
• Unfavourable/ poor working conditions. This limits the concentration of workers/ people from thinking about creative ideas or strategies.
• Extreme delays in decision making. This makes it difficult to develop creative ability because of extending to take action to address a problem at hand.
• Failing to employ creative people. This leads to low morale for other people to develop creative ability.

Techniques/ measures/ strategies/ ways of developing/ promoting/ enhancing/fostering creativity of the workers

• Thinking beyond the existing problems/ situations so as to become creative i.e. thinking beyond the invisible framework.
• Recognising when assumptions are being made in the business and challenging them where necessary so as to get more new ideas.
• Transferring technology from one field/ area to another to solve a problem/ to handle the situation at hand.
• Developing ideas from more than one source and then selecting the best idea to use.

r- Writing down useful ideas that apparently drop into one’s mind so that they are not lost/ forgotten easily.

• Being open and prepared to use unpredictable events to one’s advantage by developing achievable/ realistic solutions to a problem.
• Suspending/ avoiding negative judgments against ideas so as to encourage the creative thinking.
• Taking advantage of unpredictable events so as to develop appropriate and achievable solution to the problem by selecting the best alternative.

y Making strange things familiar and familiar things strange in order to generate/ develop new ideas hence fostering creativity.

• Learning to make connections/ sense with ideas/ points that appear irrelevant/ useless in order to develop something new.
• Setting/ putting aside quality thinking time in order to develop new innovative solutions to a problem.
• Knowing when to temporarily leave a problem when an immediate solution cannot be found with the hope of getting a solution later.
• 1 laving a willing mind to learn at all times in order to develop a creative ability.

Sample questions;

1. la) Discuss the obstacles to creativity in business. (10 marks)
2. b) Describe the techniques for fostering creative ability among the workers in an

(10 marks)

2a) What are the attributes of creative people in an enterprise? (06 marks) b)    Explain the rewards of creativity to the business (14 marks)

3a)       Distinguish between creativity and change as used in entrepreneurship (04    marks)

1. b) Describe the stages of creative process. (16 marks)

Question for paper 2;

You are operating a bakery project in your home area. Draft guidelines for improving the creative ability of your employees.

NB: In paper 2, questions involving guidelines/ policies/ principles/ regulations/rules/ terms and conditions/ code of conduct/ instructions.

1. Use shall.
2. Do not personalise the statements No use of I, we, my, us etc.
3. Be specific where possible i.e. bring out why/ how/when/what e.g.

• Employees/ workers shall think beyond the existing problems/ situations so as to become creative.

-Workers shall recognise when assumptions are being made and challenging where necessary so as to get more ideas.

Innovation

Innovation is a process or a way of transforming or changing the resources of an enterprise

through the creativity of people into new resources/ wealth.

OR

Innovation is a process of transforming/ translating an idea into a good/ service that creates

value.

Types/ forms of innovation

• Business model innovation. This is a type / form of innovation which involves changing the way business is done in terms of creating/ capturing value e.g. MTN introducing payment of utilities or school fees through mobile money, broadcasting movies translated into a local language by Bukedde TV etc.
• Marketing innovation. This is a type of innovation which involves development of new marketing methods with improvements in product design, product promotion and pricing e.g. e -marketing.

^ Product innovation. This is a type of innovation that involves introduction of a new good/ service to the market.

• Service innovation. This is a type of innovation that involves the introduction of a new service by a business that is better than the previous service(s).
• Organisational innovation. This is a type of innovation that involves creation of new business structures, practices and models e.g. having a new better organisational chart.
• Process innovation. This is a type of innovation that involves the implementation of new / significantly improved production/ delivery methods for the business products.
• Supply chain innovation. This is one that involves making improvements in the sourcing of required inputs from the suppliers and the delivery of the output to the customers.
• Financial innovation. This is the type of innovation that involves the development of new financial products/ services by a business.

Importance/ benefits/ significance/rewards of innovation in business

• Improves productivity. Innovation increases output in an enterprise due to creation of new and more efficient production methods.
• Leads to improvements in the quality of goods and services. This is through adoption/ use of better production methods.
• Leads to product diversification. Through product innovation, businesses/ entrepreneurs are able to provide a variety of products to customers which widen their choices.
• Improves service delivery. This is by making it faster through service innovations leading to better customer satisfaction.
• Leads to creativity in a business. This is by the business ensuring employee motivation so that they are able to come up with new / innovative ideas
• Increases the profits of a business. This is by providing / offering better quality products that attract more customers hence commanding higher prices.
• Increases job satisfaction. Through innovations, workers become contented especially when they are involved in developing new ideas which eventually reduce labour turnover.
• Leads to more added value or it offer improvement in the business. This is through establishing a unique selling position that enables a business to stay ahead of competition.
• Helps to promote the products of the business. This is through adopting product innovations that help to handle / remove customers’ complaints.
• Leads to better management of competition/Helps the business to overcome competition. This is by coming up with new and better products than those of the rivals.
• Helps a business to develop new marketing methods with improvements in product design / promotions/ pricing.
• Enables the business to respond to customers’ needs. This is through developing new products by reviewing the needs of the customers.

Disadvantages/demerits/costs/negative effects of innovation in business

• Increases labour turnover. This is because of the continuous innovations that some workers may fail to cope up with.

V- Leads to exhaustion/ depletion of resources. This is due to over exploitation of resources resulting from innovations in technology.

• Increases unemployment. This is due to the collapse of inefficient businesses that fail to carryout innovations effectively.
• Leads to duplication of products. This is because successful innovations tend to be copied by other businesses hence resource wastage.
• Reduces the morale/ self esteem of the entrepreneur. This is especially when planned innovations in business fail to bring the expected / desired results.
• Raises/ increases the costs of production. This is because more funds tend to be injected into market research.

Sources of innovations in business

Innovations usually occur/ take place in response to a problem/ in response to an opportunity

that arises within the business/ from outside the business.

There are two sources of innovation i.e. (i) Internal sources.

(i) External sources.

Internal sources of innovation in business

Internal sources of innovations involve responses to a problem/to an opportunity within the

enterprise/ an organisation.

Examples of internal sources

‘r-       Unexpected occurrences. Sudden happenings like failure, success, shortages, losses,

accidents etc. tend to be recognised by an entrepreneur as possible business opportunities hence can be turned into innovative opportunities

• Process needs (filling a process need). This involves identifying weaknesses/ loopholes in a given process and eventually correcting such weaknesses/ loopholes by making improvements hence innovation.
• Changes in an enterprise. The continuous changes that take place in an industry/ market give room for innovations to match the changes.
• This is a gap between what is expected to be there and the reality which can be a good innovative opportunity(divergence between ideal and real situations)

External sources of innovation

They involve responses to a problem/ to an opportunity arising from outside the enterprise.

Examples of external sources of innovation

• Demographic change. Changes that take place in relation to population like population size, age composition, sex composition etc. provide sources of innovative opportunities for innovators e.g. increase in population size increases the demand for the business product(s) hence need for innovations that lead to greater output.
• Changes in perception. Changes in people’s understanding, beliefs and attitude affect the kind of products they buy/require hence need for innovative ideas to match with the shifts in perception.
• New knowledge. Introduction / emergence of new technologies/ knowledge motivate entrepreneurs to exploit such knowledge or technologies to produce/provide the new products/ services.

Qualities/ characteristics/ features/ attributes/ traits of innovators

P Compelling vision. Innovators are able to foresee where the business will be in the future hence doing everything required to reach / achieve the expected targets.

P Opportunity oriented. Innovators are able to look for new opportunities in an entrepreneurial environment even where others see only problems or challenges.

P Self-disciplined. Innovators sacrifice and work hard to achieve the desired results hence prioritise time thereby carrying out important tasks first.

P Passionate about everything they do / believe. Innovators have great love/ desire for what they do/ carryout hence they always try to develop new products that ensure customers’ satisfaction.

P Inner directed. Innovators are self-motivated i.e. they are guided by values/ standards within themselves that inspire them to create new ideas hence production of better goods/ services.

P Extra- ordinarily persistent. Innovators have the ability to continue doing something until they achieve the intended targets.

P Trend spotters. Innovators have the ability to identify / spot something new and its social benefits hence able to make improvements in the good / service provided.

P They associate with positive people. Innovators surround themselves/ work together with people that have positive mental attitudes towards creating something new/unique.

P Creative. Innovators are able to develop new ideas which eventually they turn into improved goods/ services that provide more satisfaction to the customers.

Ways/strategies/ controls of promoting/ encouraging/ fostering/ enhancing innovations in

business

• Expecting change. This inspires individuals/ workers to be creative by always looking out for new ideas.
• Implementing new rules in an enterprise. This enables one to go beyond the existing

or normal standards in order to remain competitive in the market.

• Developing innovative strategies. This involves developing new ways to transform/ change resources into improved products/ services.
• Recognising innovators. This involves rewarding/ identifying people who have made improvements in the transformation of the resources in the enterprise into new/ improved products e.g. giving certificates of recognition.
• Avoiding barriers to innovations. This involves preventing obstacles/ limitations that

may interfere with the development of new ideas/ strategies.

• Being fast in implementing new ideas. This helps to make/provide improved goods/ services to avoid being copied by the competitors.
• Thinking globally. This involves having wider applications in order to fit the international level / exploit the opportunities available.
• Thinking like an entrepreneur. This involves taking initiatives to organise, operate and assume risks for the business venture.
• Being always a learner. This involves promoting continuous discoveries and consultationsihence being well-informed about the market conditions.
• Training workers. This involves equipping workers in an enterprise with innovative techniques / methods/ skills to ensure increased efficiency and productivity.
• Measuring performance indicators. This involves assessing or analysing the progress/ performance such that appropriate strategies are developed to ensure future success of the business which increases the innovation.

Factors/ qualities that make small businesses more successful in using/ adapting innovations than large businesses

• Small businesses are willing to try /attempt new approaches or methods to improve on their performance to ensure success of the business compared to big/ large businesses.
• Small businesses understand customers’ needs, identify new opportunities and tend to handle / fix problems quickly and efficiently because of their close contact with the customers.
• Small businesses quickly implement new business practices and adapt to changing market conditions because they are flexible in nature.

Small businesses are able to operate with limited resources i.e. they are able to allocate their scarce resources efficiently on new ideas than the large businesses.

P- Small businesses are able to carry out experiments and improvise compared to large businesses which in most cases suffer big or high risks.

• Small businesses mainly rely on strong local social networks to access/ share information needed to develop innovative ideas compared to large businesses which operate under closed systems.

Sample questions;

1. la) Describe the various types of innovation in entrepreneurship (10 marks),
2. b) Describe the characteristics of innovative people in your country (10 marks).

2a)      Explain the sources of innovations to an organisation (06 marks)

1. b) Explain the need / rationale/ purpose/ objectives/ reasons for undertaking innovations in

an enterprise (14 marks).

OR

Why should business / entrepreneurs promote/ encourage innovations? (Start the responses with To/In order /So as to and points are derived from merits of innovation) 3a) Explain the qualities that make small businesses more successful in using innovations

than large businesses. (06 marks) b)   Suggest ways of promoting innovations in an enterprise (14 marks).

Paper 2 question;You are operating a bakery project in your home town. Present guidelines for enhancing innovation in your business. UNIQUE BAKERY LTD P.O.BOX 100, MUKONO 0772100100 GUIDELINES FOR ENHANCING INNOVATION IN BUSINESS 1. Change shall be expected and eventually accepted which makes workers always alert. 2. The bakery business shall implement new rules. 3. The bakery business shall develop innovative/ new strategies. 4. Barriers to innovation shall be avoided in the bakery business. 5. The bakery business shall be fast in implementing the customers’ needs. 6. Workers of the bakery business shall think like entrepreneurs. 7. Performance indicators shall be measured in the bakery business.

Entrepreneurial motivation

This is the strong desire, impulse, determination (dedication) and drive of individuals to accomplish a specific / particular business goal.

Entrepreneurial motivation results from the desire to accomplish some psychological needs like recognition, responsibility, esteem and participation.

Elements/ classical concepts of entrepreneurial education

• Unconscious motive. It refers to tastes, biases/ attitudes which strongly influence behaviour but cannot be accounted for.
• Power motive. It refers to the ability to require others to behave in ways that are suitable to one’s purpose/ intensions
• Competence/ Achievement motive. It refers to the interest in being able to make things happen in society.
• Affdiation motive. It refers to the desire to be with other people regardless of any achievement or benefit but to ensure that the company is achieved/ gained.

Limitations/ barriers/ obstacles/ hindrances/ constraints to entrepreneurial motivation

• Conservative people. People with negative attitudes do not inspire other people to excel.
• Negative social-cultural beliefs in society. Some social-cultural practices/ values act as barriers to entrepreneurial development e.g. the belief that women cannot be successful entrepreneurs, the belief that girls are source of wealth etc.
• Unfavourable political systems. These discourage individual freedom and development of private enterprises hence limiting entrepreneurial activities.
• Unfavourable economic environment. Unfavorable economic atmosphere in terms of unfavourable policies like high taxes, high rates of inflation etc. discourage potential entrepreneurs because of the high costs of operating business activities.

y Under-developed infrastructure. Poorly developed physical infrastructures, economic infrastructures or social infrastructures limit entrepreneurial activities which limit entrepreneurial motivation.

• Unfavourable psychological factors. Factors like insecurity, high need for affiliation etc. limit development of positive mental attitudes which limit entrepreneurial motivation. i.
• Inadequate number of role models. Limited number of successful entrepreneurs to inspire others to carryout entrepreneurial activities limits entrepreneurial motivation.
• Inadequate educational training. This limits business knowledge and experience which discourages entrepreneurial development.
• Limited market opportunities. Inadequate business/market opportunities existing in the entrepreneurial environment limit productivity and hard work hence limiting entrepreneurial motivation.
• Limited entrepreneurial experience. This limits creativity in business management or causes low confidence hence hindering entrepreneurial motivation.

Achievement motivation

This is the strong/ intense desire to excel and do something unique to achieve/ attain satisfaction.

Behavioral characteristics/ qualities associated with strong need for achievement (indicators of achievement motivation)

• Taking personal responsibility for the outcomc i.e. being accountable for the success/ failure of the business.

‘y Analysing/ scanning the environment to create opportunities for achievement of the business targets instead of relying merely on chance.

• Taking/ seeking help from business experts/consultants rather than from friends/ relatives to overcome personal limitations/ external obstacles.

y Getting/ deriving maximum satisfaction from achievement itself and less satisfaction from other factors like recognition, money.

• Learning from feedback in order to establish appropriate actions/ measures/ strategies that can be taken to achieve the set targets.
• Formulating targets especially goals which stretch or stimulate one’s abilities and efforts/ those that encourage creativity and innovations hence challenging but achievable.

y Experiencing positive feelings of joy and satisfaction after achieving challenging targets and disappointment but not self-condemnation for failure.

y Predicting possibilities of success and failure hence developing appropriate strategies to overcome the obstacles/ minimize occurrence of failure but increase the chance of success.

y Formulating always concrete goals that are achievable in a given period of time given the available resources.

y Setting moderate goals i.e. setting goals that are not impossible or too difficult to achieve but at the same time not too easy to achieve.

y Developing a strong, internal commitment/ involvement with the goals set.

Benefits/ advantages/ significance/ merits/ relevance of achievement motivation

y Increases self-confidence of an individual who has achieved success/ set targets.

• It enables the entrepreneurs to scan/ analyse the environment actively to plan on how to attain success/ to exploit available opportunities.

y Enables the entrepreneur to produce high performance especially after achieving success which improves productivity and efficiency in the enterprise.

• Achievement motivation inspires an entrepreneur to take carefully calculated risks that have high chances of success.

y Ensures better/ effective utilisation of the available resources hence minimizing resource wastage.

• Promotes goal setting which inspires the entrepreneurs to work hard to achieve the set goals/targets.

Motivation

1 his is the process of stimulating oneself/ someone to put in more effort towards the attainment of the desired targets.

The motivational process

The process of motivation involves the felt need, goal oriented behaviour and need satisfaction.

(2)

behaviour

1. Felt need

It involves determining what one wants to be motivated to do / accomplish.

2. Goal oriented behavior

Are activities/ things people need to do to remain motivated/ inspired.

3. Need satisfaction

It involves removing distractions/ obstacles so that one remains motivated.

Challenges of motivation

• Leads to setting of goals that are too low to ensure success /achievement. This is due to fear of failure.
• Leads to setting/ fixing of goals that are too high and difficult to achieve given the available resources due to too much anxiety.
• It causes thinking of only weaknesses and problems in the environment instead of utilising one’s strengths and available opportunities.

It is associated with constant pressure and stress in order to achieve the set targets/goals. y It leads to high fear of failure because it is connected with high anxiety regarding performance.

Positive mental attitude

Refers to the positive feeling and beliefs that largely determine how an individual perceives him/ her-self towards intended actions.

Factors that help entrepreneurs develop positive mental attitudes.

• Treating/ taking each experience as an opportunity to learn from positively.

P Involving in positive activities i.e. involving in productive activities that help to achieve the set targets like brainstorming to get possible solutions to solve given problems.

• Having work objectives that are specific, measurable, inspiring, achievable and have a positive impact.
• Networking regularly with the successful entrepreneurs in order to develop their thinking, mannerism/ characteristics etc.
• Identifying successful entrepreneurs to be role models and mentors which help an individual to get guidance from them hence ensuring success in business.
• Avoiding negative ideas/ thinking especially by avoiding negative talks, avoiding people with negative views or comments.
• Being results oriented at all times by looking at specific problems, making appropriate decisions and taking action to solve the problems.
• Taking advantage of every opportunity existing in the entrepreneurial environment to achieve the desired targets/goals.
• Treating all opportunities as having possibilities of success or achievement in the entrepreneurial environment.

P- Having faith  i.e. having self-belief hence utilising one’s potential and abilities to   achieve

success.

Sample questions;

1. la) Distinguish between entrepreneurial motivation and achievement motivation.

(04 marks)

1. b) Examine the factors that limit entrepreneurial motivation in Uganda.

OR

Explain the obstacles to accomplishment of entrepreneur’s goals. (16 marks)

2a) Describe the process of creativity in entrepreneurship.                        (04 marks)

1. b) What factors help to develop a positive mental attitude among entrepreneurs in business?

(16 marks)

Risk taking

A risk is a possibility of suffering harm, loss or damage.

OR

A risk is an event that may cause a loss/harm/ damage or may cause success to a person/ business.

A business risk refers to a factor that may have a negative impact/effect on the profitability or

success of a business.

A risk situation refers to an event that has two or more possibilities that may cause potential loss/ success. It occurs when a choice is required between two or more alternatives whose potential outcomes are not known and must be subjectively evaluated Factors considered when choosing a risky alternative

• How attractive the alternative is.
• The extent to which the risk taker is prepared to accept the potential loss.
• The relative probabilities of success and failure.
• The degree to which one’s own effort can increase the chances of success and reduce failure.

Types/ forms of risks

• Low risks/ minimal risks: These are risks that earn low profits to the business. Low

risks are less likely to happen and even when they happen, they can be managed by      the

entrepreneur.

• Moderate risks: These are risks that can be forecast or predicted, calculated and managed by the entrepreneur. This means that an entrepreneur can easily anticipate such risks hence put appropriate measures in place to avoid or minimize them e.g. fire outbreak, loss of profits, bad debts.

y    High risks: These are risks whose chances of happening are very high and yet the

entrepreneur has little control over them.

Incase high risks occur, they may cause serious damage to the business and the chances of recovering the resources invested are very low.

Profits from high risks are usually very high.

Common examples of risks faced by the business

y Bad debts: This risk arises due to debtors failing to pay their debts within the specified credit period.

• Loss of cash in transit: This arises when money is lost when it is being moved from the business to the bank and vice versa.

y Accidents: Accidents at the work place may be caused by lack of protective equipment like gumboots, gloves etc.

y Fire outbreak: This may be caused by poor electrical wiring like short circuits

• Theft and burglary: This is caused by employees who are not trust worthy/ by intruders.

y Loss of profits: This arises due to increasing production/ operating costs.

y Decline in market share: This is due to unfavourable changes in demand or unfavourable changes in customers’ tastes and preferences.

• Embezzlement of funds by employees: This is caused by dishonest employees who misuse the business funds.
• Bad weather or natural hazards: This is due to floods, drought, and landslides that cause damage / loss to the business.

y Machinery breakdown: This arises due to failure to service business machinery effectively / regularly hence it causes losses to the business.

y Uncertainty of supply of inputs. Unreliable supply of inputs/ raw materials by the suppliers to the business disorganizes the production activities hence a possibility of a potential loss.

y Loss of goods in transit: This is caused by robberies along the roads and inside the business.

Ways/ measures/strategies/ techniques of minimizing risks in a business

• Selling business products strictly on cash basis hence minimising the cases of bad debts OR minimizing credit sales by only offering credit facilities to loyal and trustworthy customers.

y Insuring the business: This involves undertaking appropriate insurance policies e.g. cash in transit policy.

• Minimising accidents by use of protective equipment like helmets, gumboots etc.
• Installing the safety devices and training workers on how to use them e.g. fire extinguishers.

r* Tightening/ improving security by use of security guards, installing CC I V cameras.

y Minimising costs e.g. employing few but committed workers, making labour work for longer hours etc. in order to increase profits

• Providing products according to tastes and preferences of the customers hence able to have competitive advantage.
• Ensuring proper accountability of funds i.e. ensuring proper record keeping hence minimising loss of funds e.g. putting in place payment vouchers.
• Ensuring proper maintenance or servicing of the machines as recommended by the technicians.
• Managing competition through fair pricing of goods and services, quality improvement etc.
• Identifying other sources of supplies that are cheaper/ friendly and supplying high quality inputs.

Steps/ procedures/ stages/ process for analysing a risk situation

A risk situation is an event that has two/ more possibilities that may cause either potential loss or potential success.

The following are steps followed by the entrepreneur/ decision maker to determine the probability of occurrence of the risk so as to take appropriate action to manage it.

• Assessing the risk. This step involves establishing whether there is a potential risk / not involved in the situation.
• Determining goals and objectives. It involves determining whether the goals and objectives of the business are in line with the risk to be undertaken in order to select the appropriate/ suitable alternatives available.
• Determining/ clarifying alternatives. It involves surveying the various alternatives/options available and establishing the costs involved.

‘y Gathering information and weighing the various alternatives. This step involves collecting relevant information about various alternatives/ options e.g. marketing information, the future demand of the products, the level of competition etc. in order to make realistic assessment of the risk involved

• Minimising the risks. This step involves realistic assessment on how best to control/ reduce the risks while maximising the benefits.

k Planning and implementing the best alternative identified. The step involves making a timetable/ action plan for implementation of the best alternative selected / identified.

Questions for paper 2

1. You are operating a business involved in clay products in your home area. Design a programme/plan for minimising the risk situation in your (Programme for minimising risks).

BLESSED CLAYS LTD P.O. BOX 100 MUKONO 0700100100PROGRAMME FOR ANALYSING RISK SITUATION
DATE	ACTIVITY	PERSON IN CHARGE	REMARKS
USECURRENT DATES	–      Assessing the risk-      Determining the goals/ objectives. –      Determining the various alternatives available. –      Gathering the information and weighing the various alternatives. –      Minimising risks. –      Planning and implementing the best alternative(s).	GIVETITLE/NAME
Prepared by: okello marion APPROVED BY: SIGNATUREOKELLO MARION NAME: GENERAL MANAGER TITLE:

2. Prepare guidelines for minimising risks in your project.

NB: The questions in paper 2 involving guidelines/ policy/ principles/ terms and conditions/ rules/ regulations/ instructions/ code of conduct etc. Approach:

• Use “shall”

-Do not personalise the presentation i.e. do not use; I, we, us and ours.

• Be specific i.e. bring out why/when/how/what etc.

BLESSED CLAYS LTD P.O. BOX 100 MUKONO 0700100100 GUIDELINES FOR MINIMISING RISKS

• Clay products shall be sold only on cash basis.
• The clay business shall take up insurance policy / the business shall be insured against risks.
• Appropriate protective equipment like gumboots, gloves shall be used.
• Fire extinguishers shall be acquired and put in place and workers trained on how to use them.

Factors that affect/ determine/ influence risk assessment (factors to consider when assessing/ analysing business risks)

• Availability of market for goods/services (market size/ Adequate /large market for the goods/ services the business produces/ sells involves less risks compared to a small /limited market of the business products

>• Size and power of the competitors/the level of competition. Large and powerful competitors lead to higher risks in a business compared to small and weak competitors.

• Cost of insurance. Entrepreneurs prefer risks with lower insurance costs than those risks with higher insurance costs.
• Quality and reliability of business products. Dealing in high quality and reliable products lead to low business risks compared to low quality products that expose the business to high risks.
• The technology risks (Technological risksj. Use of appropriate technology by the business leads to low business risks than using inappropriate/ new technology.

y Predictability/sensitivity of demand for the product(s). Product whose demand is easy to predict results in low business risks compared to product with unpredictable demand.

• Initial investment cost. High investment costs for a business lead to higher business risks than low investment costs.
• Availability of inputs/ raw materials. (Access to raw materials,). Easy access by a business to affordable good quality inputs/ raw materials exposes the business to low business risks than difficult access to inputs by a business that exposes it to higher risks.
• Government legislation/ regulation and control of business (availability of incentives). Strict government legislation and control of business results into low business risks than limited government legislation and control of the business.
• The time required to generate profits. A product that takes a business a shorter time to make profits leads to low business risks compared to one that takes a longer time to make profits.
• Seasonal demand. Commodities that are demanded seasonally have higher risks especially when a season expires/ comes to an end than those commodities that are demanded frequently/ regularly by the customers.
• Skills and experience of Business in line with one’s skills is less risky compared to the business which is not in line with one’s skills/ experience.
• Viability/ profitability of business idea. A more viable business idea has lower risks compared to unviable /unprofitable business idea.
• Reliability and honesty of the people involved in the business. A business that involves very honest and reliable people/ employees is less risky compared to a business that involves dishonest and unreliable people/ employees.
• Exclusiveness of the design for the product to be produced. Products with unique designs involve low business risks for an entrepreneur than products with common designs.
• Availability of support services. Presence of support services like banks, insurance etc. involve low risks while absence of support services involve high risks

Terms used in risk management

• Risk avoidance; it involves taking measures to prevent/ avoid a risk from taking place e.g. to avoid risks on accidents, don’t drive under the influence of alcohol.
• Risk reduction; it involves taking measures to minimise the costs/ effects of the likely risks.
• Risk anticipation; it refers to forecasting the likely risk(s) that could happen.
• Risk transfer; is the shifting of the burden/ responsibility of a risk to another party/ person e.g. taking up insurance policy.

Sample question;

la)	Distinguish between risk transfer and risk avoidance (4 marks)
b)	Explain the factors that an entrepreneur should consider when assessing business risks.
	(16 marks)
c)	Describe the steps involved when analysing a risk situation. (6 marks)
–	(use “ing”)
– ‘	follow the order
d)	Explain the strategics for minimising risks in a business. (14 mks)
	Approach ;( use “ing”) e.g.
■	Insuring the business.

Negotiation skills

Refer to abilities possessed by an individual that enable him/her carry out effective bargaining with another party to achieve/ reach an agreement.

Negotiation: This refers to the process of bargaining that results into an agreement OR

It refers to the process of bargaining between two/more parties on one/more issues of interest in order to reach an agreement.

Characteristics/features/ traits of negotiation process

• There are two/more parties involved/present in any negotiation.
• There is an expectation of outcome/results by the parties involved in the negotiation process.
• The parties to negotiation believe that the outcome in the negotiation process will be satisfactory.
• The parties to any negotiation must understand the process of negotiation.
• The parties involved in negotiation expect to give and take.

Principles/ laws/ rules of negotiation

You do not have to be right to settle. This emphasizes that a negotiator should not allow the actions of another party to distract him/her from the key issue being negotiated.

In the process of negotiation, emotions arising from the feeling that one is right have no place since if one is only interested in being right, negotiation is likely to fail.

2. Look to the future. A negotiator needs to concentrate on the current issues being negotiated instead of focusing on the past.
3. Focus on the goal. Parties involved in negotiation need to concentrate on the target of negotiation henfee should avoid personal emotions e.g. anger, envy, excitement etc. which makes one to lose focus.
4. Set the tone and look the part. A negotiator needs to set the right mood/ environment for negotiation. This is by dressing professionally, carrying the right requirements, opening the negotiation using positive words etc.
5. Be prepared and do your research. The principle requires the negotiator to be ready for the negotiation process especially by finding out the interest of the other party, compare with his/her own so as to reach an agreement easily.
6. Know what you want and what the other side wants. A negotiator needs to specify what he/she wants from the negotiation, know what the other party wants in exchange in order to establish how to reach a compromise.
7. Always have a plan B. A negotiator needs to identify back up plan i.e. an option to resort to once the initial offer/plan is rejected by the other party.

Guidelines to successful negotiation

The following are strategies/ methods/ keys used to ensure successful negotiations in business.

• Plan and prepare well before starting the negotiation and ensure use of a clear negotiation strategy.
• The outcomes of negotiation should be win-win for both parties i.e. no party should win at the expense of another.

r Both parties to negotiation should feel satisfied with the negotiation results agreed upon.

• Being flexible in demands during the negotiation in order to reach an agreement easily. y Use the negotiation style of the other party to achieve positive outcomes.

y Avoiding becoming emotional during negotiations.

• Ask relevant questions and be a good listener during the negotiation. y State what you need in the negotiation and the reason why you need it.

y Be sensitive to the other party’s requirements/ concerns before and during negotiation. y Use appropriate communication skills during negotiation.

Challenges faced by entrepreneurs when carrying out business negotiations (reasons why

negotiations fail in business).

y Time pressure. Limited time sometimes forces parties involved in negotiation to try to hurry the negotiation process hence leading to making of agreements that regrettable.

• Influence of another decision maker. Sometimes, parties/ people involved in negotiation find themselves negotiating with people that are not final decision makers making it difficult to reach an agreement easily.

y Delay tactics. This creates pressure especially on the affected party in order to reach a quick agreement.

y Last minute wavering. This involves one party to negotiation making last minute changes when an agreement is about to be reached by making new demands. r Making an early concession. This is whereby a negotiator makes/suggests a final offer/ position in advance and also expects another party to take the same position/ offer. y Aggressive behaviour. This is whereby a negotiator may decide to make funny/ sarcastic/abusive comments or ensures threatening appearance to scare the other party making it difficult to reach an agreement. y Linking logic. Some negotiators apply a lot of reasoning in order to confuse the other party to negotiation through assumption that being correct in one item/thing implies being correct in others during negotiation, but this is not always so.

• Price only negotiation. This limits the possibility of reaching a compromise becausc the parties involved in negotiation tend to pay too much attention on price while ignoring other benefits of negotiation like building a good relationship, creating a good reputation etc.
• Letting positions override interests. This limits effective negotiations because parties involved in negotiations tend to have wrong focus based on status of individuals instead of addressing/focusing on individual interests hence blaming each other during the negotiation process.
• Neglecting the other party’s problems. This makes it difficult to ensure effective negotiations because of one party failing to understand/solve issues of concern of the other party by concentrating on personal interests.
• Limited negotiation skills. Inadequate skills necessary for successful negotiations limit parties to reach an agreement easily.
• External interference. External intervention especially by influential stake holders makes the negotiation process difficult due to delays /bureaucracy involved.

Ways/measures/strategies to manage /overcome challenges faced in negotiation.

• Taking adequate time to analyse and understand carefully issues involved/required in negotiation.
• Demanding strictly to negotiate with a person who has authority to make the final decision.
• Postponing/rescheduling the negotiation once delayed tactics are being used to influence the negotiation.
• Insisting that parties to negotiation clearly state what they want from the negotiation and must stick to it right from the start of the negotiation.
• Adopting the win-win approach of negotiation so that all parties benefit from negotiation/using the negotiation style of the other party to achieve the positive results.
• Keeping emotions in control during negotiations so as to minimise aggressive behaviour by any party to the negotiation.
• Undertaking negotiation training to develop appropriate skills that enable parties involved in negotiation to easily reach an agreement.
• Focusing on the interest of all the parties involved in negotiation and not on positions in order to establish an acceptable solution.

y Being sensitive to the requirements/problems/concerns of the other party to negotiation by asking appropriate/relevant questions.

• Preparing well for negotiation by having in place all the requirements for effective negotiation.

The negotiation process

The following steps/stages are involved in negotiation.

1. Preparing for negotiation. This stage involves all the activities that are carried out by a negotiator before the actual negotiation takes place e.g. establishing the business needs, carrying out research about the other party to negotiation, identifying the negotiation strategies to be employed etc.
2. Opening the negotiation. This step involves starting the actual negotiation positively.

• Exchanging information/views. This stage involves the negotiator making clear suggestion that may meet the interest of all parties involved in negotiation.

1. Bargaining towards a win-win outcome. This stage involves each party making specific stand on what he/she wants in order to find areas of compromise.
2. Reaching an agreement. This stage involves all parties accepting/arriving at a final compromise acceptable to all the parties hence signing the necessary documents.
3. Implementing of the agreement. This stage involves each party performing what was agreed upon at the end of the negotiation.

Question for paper 2;

You are operating a large bookshop in your home town. Design a programme/plan for preparing for negotiation._______________

BLESSED BOOKSHOP P.O.BOX 73 9 MUKONO 0778739739PROGRAMME/PLAN FOR PREPARING FOR NEGOTIATION
Date	Activity	Person incharge/respo nsible	Remarks/comment s
	Establishing / defining the business needs.	Agiga Grace.
	Carrying out research to understand the needs/ requirements of the other party.	Osio Brian
	Identifying the negotiation strategies to be employed.	Amara Peter.
	Identifying the negotiation tactics to use during negotiation e.g. choosing a chief negotiator.	Agiga Grace
	Selecting the venue/site for negotiation.	Ikara Brian.
Designed by: ajambo annet Approved by: Signature: AJAMBO ANNET Name: GENERAL MANAGER. Title:

Personal attributes/characteristics/ features of a good negotiator

y Integrity. A good negotiator should be honest and trust worthy to enable him/her to follow rules and keep agreements made with other parties to negotiation.

• A good negotiator has the ability to understand the other party’s point of view.
• A good negotiator has the ability to remain calm and endure the prevailing state of affairs in negotiation instead of being rushed to make decisions by the other party.
• Self assurance. A good negotiator has no doubt in him/her- self and in his/her negotiation abilities.

r- Self-confidence. A good negotiator has a feeling of trust/positive believe in his/her abi 1 ities/qualities/personal judgment to overcome the challenges in negotiation.

• A good negotiator has the ability to sustain negotiation physically and mentally for a long period of time so as to reach an agreement.
• A good negotiator has the ability to think creatively about a situation/ problem hence handle or solve it in a clever way.
• A good negotiator is always persistent and sticks with something even when the going gets tough.
• Good communicator. A good negotiator has the ability to use clear and appropriate words as well as body language to express his/her ideas during any negotiations.
• Good listener. A good negotiator has the ability to pay attention to the other party with an open mind so as to plan what to speak / reply

Negotiation skills

These refer to abilities possessed by an individual that enable him/her to carry out effective

bargaining with another party to reach an agreement.

Negotiation skills exhibited by the entrepreneurs in business include the following;

• Clarity in communications. This involves communicating effectively i.e. using clear and concise words plus positive body language during negotiation hence able to provide appropriate feedback.
• Sticking to objectives and avoid personalising situations. This involves concentrating on the specific targets of negotiation (specific objectives and goals). This can be achieved by negotiating considering the interests of all parties involved in negotiation.
• Controlling of emotions. This involves having the ability to keep emotions in control during negotiation. It involves regulating anger, excitement, fear etc. by negotiating in a composed way.
• Showing anger occasionally but not losing temper. This can be achieved by negotiating in a composed way.
• Being flexible. This involves having the ability to adjust the original position to deal with the prevailing situation.
• Being innovative and creative. This is the ability to undertake new strategies to ensure win-win situation.

Ways/ tactics of negotiating with customers

A negotiation tactic refers to a short term specific activities/action steps aimed at achieving

specific objectives.

The negotiation tactics with the customers/used to attract the customers include: –

• Communicating frequently with the customers using appropriate media.
• Offering customers rewards especially those that are loyal to the business e.g. gifts.
• Holding/organising special events that involve the customers to enable the workers of the business/enterprise interact with them.
• Ensuring that the negotiation is a two-way communication with the customers like giving them prompt feedback.
• Improving customer service/care of the business by employing well trained and dedicated workers to handle customer complaints.
• Visiting individual customers at their premises/work places to physically find out how the product(s) they purchased are doing.
• Launching multi-cultural programmes in the marketing activities e.g. advertising using various languages.
• Extending social responsibility to the customers like involving in the community cleaning programmes.
• Keeping all the promises and agreements/contracts made with the various customers of the business.
• Keeping emotions under control when negotiating with the customers in order to maintain the focus of negotiation.
• Being flexible when negotiating with customers in order to accommodate their issues /views.

r Being patient during the process of negotiation with the customers.

• Asking relevant questions and being a good listener during negotiations with any customers.

r Negotiating for win-win outcomes with the customer so that both the business and customer benefit from negotiation.

r Opening any negotiations with the customer on a positive note in order to promote good relations.

Ways/basic rules to follow when negotiating with employees/workers.

• Balancing both the strengths and weaknesses of the negotiation approaches and then selecting /using the most appropriate one for communicating the required information.
• Listening actively to what the employee says in order to understand the idea/ problems and eventually giving an appropriate response to him/ her.
• Making concessions (agreement)/ compromises together with the worker in order to have win-win solution from negotiations.
• Putting everything negotiated with the worker in writing once an agreement has been reached.

‘r Controlling emotions during negotiations with the employees so as to ensure effective/ successful negotiations.

• Always be positive when negotiating with the employees of the business.

Salary negotiation tactics with employees

• Set a ceiling; this involves fixing the maximum amount that the business is able to pay the workers considering the expected profits, salaries paid by rival businesses etc.
• Set a floor; this involves fixing the lowest amount that the business is able to pay as salary basing on the prevailing salary rates on the market.
• Determine the mode/method of salary payment that provides adequate motivation to the workers e.g. paying them per hour, per month, according to the amount of work done etc.
• Make the salary offer attractive when negotiating a salary with the workers so as to attract skilled/talented workers.
• Avoid legal battles with workers by negotiating payments with them that comply with the legal payment standards.
• Be sensitive to the workers’ personal needs before negotiating a salary offer for each worker to make each worker contented with the agreed salary.

r- Put in writing salary agreements reached with each worker, showing the basic pay, fringe benefits etc.

Sample/revision question;

1 a) Describe the negotiation skills in business (06 marks)

1. b) Explain the ways in which the employers/ entrepreneurs negotiate with the following; –
2. Customers (08 marks)
3. Employees (06 marks)

The need for entrepreneurship development for the economy is quite obvious

Factors promoting / facilitating entrepreneurship in Uganda.