Central Philippine University- College of Business and Accountancy

CHAPTER 1

INTRODUCTION

Background of the Study

Iloilo City is undeniably booming with various businesses, both old and new in style
and ideas. Beach and inland resorts have been classic examples of businesses that take
advantage of what it offers. With the help of social media sharing and the creativity of
advertising, there is a noticeable Beach and Inland Resort Businesses propagation in
Iloilo. This study focuses on such.

Businessmen are investing millions in order to create an area which can serve as a
haven for rest and play. This current situation is evidenced by people taking the liberty to
share on social networking sites, blogs, and even word of mouth the different resorts they
have visited which includes a lot of newly opened ones and also including those that were
unheard of the majority of the local population before.

Central Philippine University- College of Business and Accountancy

This state, at the same time, is the desired situation because it undeniably rakes in
more income for the province of Iloilo.
However, it is still considered important that we know why these investors chose this
sort of business out of all the other booming ones (e.g. Food-related ventures, fashion
concerns) despite of the fact that it requires a much greater start-up capital. What have
they seen in these kinds of dealing? Why have they chosen Iloilo? Are they targeting only
locals of the said place, or are they in a quest to bring in outsiders and visitors because
they believe Iloilo is the next big thing?

Knowing the reasons behind all these questions will help us understand the potential
they see in Iloilo that other people might have neglected. It will give knowledge why
such a big risk is readily undertaken by these businessmen. It can enlighten others with
the advantages of such ventures, and give information on the things they first calculated
before deciding to release big capitals. It can even assist in the decisions of those that
were deliberating whether to create a business similar to this. One has to find the most
common factors and considerations, hence, this study.

Central Philippine University- College of Business and Accountancy

Objective

To determine the factors associated with the decision of business owners to put-up a
Beach and Inland Resort Business in Iloilo.

Statement of the Problem

This study specifically sought answer to the questions:

1. What kind of resort has each interviewee chosen to build?

a.

Beach

b. Inland

2. What town/ city of Iloilo has each interviewee chosen?

3. What factors has each interviewee considered before deciding to invest in

such venture?

Central Philippine University- College of Business and Accountancy

Theoretical Framework

The Expectancy Theory advocated by Vroom in 1964 was chosen as the basis of this
study. Victor Vroom, together with Edward Lawler and Lyman Porter hypothesized that
people will choose how to behave depending on the outcomes they expect as a result of
their behavior. Such theory is significant because it explains the motivations behind
decision making before people attempt to, start, join, get involved or do something.
In his Expectancy theory, he suggested that the process by which people decide their
behaviors is influenced by how likely they perceive those rewards to be. The theory
explains that individuals can be motivated towards goals if they believe that: there is a
positive correlation between efforts and performance, the outcome of a favorable
performance will result in a desirable reward, a reward from a performance will satisfy an
important need, and/or the outcome satisfies their need enough to make the effort
worthwhile (Wikipedia, 2015).
Expectancy Theory is based on three elements:
a. Expectancy

the belief that your effort will result in your

desired goal. This is based on your past experience, your self-confidence and
how difficult you think the goal is to achieve;

Central Philippine University- College of Business and Accountancy

b.

Instrumentality

the belief that you will receive a reward if you meet

performance expectations; and

c. Valence

the value you place on the reward.

When deciding among options, individuals select the option with the greatest
amount of motivational force . Expectancy and instrumentality are attitudes (cognitions),
whereas valence is rooted in an individuals value system. The motivation force behind
decision making is computed as:
Motivation Force = Expectancy x Instrumentality x Valence
As the theory implies, business owners are most motivated to start a business if
they believe that they will receive a desired reward if they hit an achievable target.

Conceptual Framework

This study attempted to determine the motivation behind the decisions of

Central Philippine University- College of Business and Accountancy

business owners to put up a Beach and Inland Resort in Iloilo. The conceptual framework
of this investigation looks into the personal and business factors why owners have chosen
such venture. The study also aimed to compile the most common reasons and/or factors
affecting businessmens decisions to put up a Beach and Inland Resort in the province of
Iloilo.

INDEPENDENT VARIABLE

DEPENDENT VARIABLE

Business Factors

Personal Factors

Province of Iloilo

Decision to put up
Beach or Inland Resort

Central Philippine University- College of Business and Accountancy

Hypothesis

This study hypothesized that the factors associated with the decision of business owners
to put up a beach and inland resort business in Iloilo are:
1. They see so much potential in the natural beauty Iloilo has,
2. The province of Iloilo (especially the city) is getting busier with time, and
people are in need of a near get away,
3. The risk of large capitalization is reasonable and acceptable because the
perceived profit is greater.

Scope and Limitations of the Study

The scope of this research is exclusive to the province of Iloilo. The time frame of
this research started from the rapid and obvious inflow of investment from outside
sources in the province, more specifically in its capital - Iloilo City. The time frame does

Central Philippine University- College of Business and Accountancy

not particularly determine the end of its applicability. It is fully dependent on whether the
same factors are still present and are still applicable in the future.

Definition of Terms
The following terms are here defined operationally for clearer understanding of the
study.
Factors. Any of the facts or circumstances which, taken together, constitute a result
or situation. (The New Websters Dictionary of the English Language, International
Edition)
Associated. To cause to participate in some cooperative capacity. (The New
Websters Dictionary of the English Language, International Edition)
Decision. The result of making up ones mind. (The New Websters Dictionary of the
English Language, International Edition)
Business owners. An individual who owns or operates a business. ( The Law
Dictionary 2nd Ed.)
Put-up. To build something or to be built. (Macmillan Dictionary)
Beach Resort. A seaside resort located on the coast where a beach is the primary
focus for tourists. (The New Websters Dictionary of the English Language, International

Central Philippine University- College of Business and Accountancy

Edition)
Inland Resort. A resort located within a town proper or city (The New Websters
Dictionary of the English Language, International Edition)
Resort. A place to which people go frequently or habitually for rest, pleasure, etc.
(The New Websters Dictionary of the English Language, International Edition)
Business. A commercial firm or enterprise. (The New Websters Dictionary of the
English Language, International Edition)
Iloilo. A major travel and heritage destination located in the Western Vsayas Region
occupying the southeast portion of the heart-shaped Panay Island. (exploreiloilo.com)
Iloilo City. The capital City of the Province of Iloilo ( Monografias de los pueblos de
la Isla de Pan-ay 2006)