CHAPTER OBJECTIVE

Understand the history and origins of entrepreneurship from the various scope. Understand the definition of entrepreneurs and entrepreneurship from different perspectives and well-known business leaders. Understand the importance of entrepreneurial activity in our daily lives Provide definition of who is regarded as entrepreneurs with specific features Provide definition of who is regarded as entrepreneurs in accordance with Islamic perspective.

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

Introduction
Entrepreneurs and entrepreneurship are among the terms that are often publicize by people since ancient times. The term was brought to the meaning or definition based on various areas or understanding by the individual.

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

IMPORTANCE OF ENTREPRENEURSHIP AND ENTREPRENEURIAL

In terms of management thoughts, it is more focused on management science and decision making. The World Bank began to introduce entrepreneurship as a major boost for the economies of developing countries. Contribution to national income. Creating a new business but also increase employment opportunities leading to the creation of the modern discovery of resources, technology and innovation.

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

ENTREPREPRENEURIAL CONCEPT
None of the standard and universal definition of entrepreneurship. Derived from the French language, entreprendre, meaning assume duties or attempt. The word entrepreneur is popular among the Malaysian society is in the middle of the 1970s. Entrepreneurs are individuals who are develop a enterprise and the businessman is a person who run a business. Generally, entrepreneurs can be defined as a person who operates a business that is successful with a profit motive in addition to adopting a strategic practices to succeed

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

ENTREPREPRENEURIAL CONCEPT
Richard Cantillon, an economist from France mixed Irish considered by Schumpeter (1934) as the first who introduce the concept of entrepreneurship. A person who organizes & manages a business undertaking, assuming the risk for the sake of profit. (Websters Dictionary) Individuals who purchase or inherit an existing business with the intention of expanding it (Hull, Bosley & Udel ,1980). Entrepreneurs are people who have the ability to see & evaluate business opportunities, to gather the necessary resources & take advantage of them, and to initiate appropriate action to ensure success (Meredith, Nelson & Neck,1982)

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

ENTREPREPRENEURIAL CONCEPT
Sexton and Bowman-Upton (1991): The process of identifying market opportunities, develop the resources to achieve its objectives and further action needs to exploit resources for personal gain in the long term.
Kao (1995) A process of creating something new (creative) and different (innovative) for the purpose of creating wealth for individuals and add value to the community and the entrepreneurs are people who through the process of wealth creation and value added through the incubation of ideas, coordinating resources and implement.

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

ENTREPREPRENEURIAL CONCEPT
Coulter (2000) A process in which individuals or groups of individuals to use the efforts and intermediaries to look for opportunities to create value and growth through meeting the needs and requirements. It should be through innovative and unique no matter what source control is used. Entrepreneur is someone who creates and operates an active business. Hisrich and Peters (2002) The process of creating something new added value and business needs and time, assuming the financial, and social risks as well as receiving awards in the form of money and personal satisfaction and independence. While entrepreneurs are inventors who revolutionized by the discovery of the source of the latest trend or a new outlet, new industrial organization or acquisition of certain innovative activities

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

ENTREPREPRENEURIAL CONCEPT

Kuratko and Hodgetts (2004) The process of innovation and new business creation through the four dimensions such as individual, organization, environment and processes supported by a network of cogovernment, and educational institutions.

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

Characteristics in entrepreneurship definition

Process Uniqueness Entrepreneur

E/ship definition

Development

Innovation

Profit/non-profit

Value creation

Organisation creation

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

Theory and Model of Entrepreneurship (by economists)

Joseph A. Schumpeter (1934) Innovation as one of entrepreneurial characteristics. Innovation means modification, activities or effort that leads to new discovery. Entrepreneur is an innovator, making sure that economy is vibrant. Entrepreneur contribute to economic development. Alfred Marshall Entrepreneurship as an evolution process (business life cycle starting from the beginning until the business stop it is operation). How business emerge from small to big. Business ends when the founder passed away. To continue there is a need to have a successor or business will be taken over by other entrepreneur.

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

 Max Weber (1958) Protestant Ethic and the Spirit of Capitalism Max Weber relates the element of religion as a foundation to succeed in economic activities. Weber said that the success of Protestant people in economic activities is because of the Protestant ethics. Relates religion with success in economic activities. Everett Hagen Proposes a theory- entrepreneurs exist among lower level class people Theory and Model of Entrepreneurship (According to that are not satisfied within a community. sociologists) Unsatisfied with the treatment that they received contribute to their venture into economic activities. This study was based on research carried out in Japan, Columbia, UK and Russia.

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

 Gibb and Ritchie (1981): British academic scholar which introduce entrepreneurship through the approach of social development model. The role of socialization that push individual towards taking up entrepreneurship. (Interaction with entrepreneurs leads to entrepreneurial start-ups.

Theory and Model of Entrepreneurship (According to sociologists)

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

Theory and Model of Entrepreneurship (According to the psychologist)

Heredity (Traits) Model (McClelland, Lynn & Schrage) Psychologists concentrate on the characteristics & personality of an individual that form a business. Entrepreneurs are different from non-entrepreneurs. Among characteristics being associated with entrepreneurs are; taking initiative, able to plan, risk taker & opportunity seeker. McClelland (1961) Has identified the personality of need for achievement as an important characteristic of an entrepreneur. McClelland (1961) The Achieving Society Individuals that have high need for achievement tends to try hard to achieve goals with their own effort. They are more incline to be an entrepreneur

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

Historical Development of Entrepreneurship

Early in 18th century, French Economist, Richard Cantillon, developed one of the early theory of an entrepreneur. His work Essai sur la de commerce en general published in 1755; observed merchants, farmers, craftsmen and other sole proprietors buy at a certain price & sell at uncertain, therefore operating at a risk.

Historical Development of Entrepreneurship

French Economist, Baudeau (1730-1790):

A sense an entrepreneur as an innovator. Entrepreneur as a person who invents, modify and applies new techniques in order to reduce cost and raise profit. He also identified ability & intelligence as qualities needed to achieve success.
Jean Baptiste Say (1767-1832)

Entrepreneur must have judgement, perseverance & knowledge, possess the art of supervision, administration & problem solving skills, otherwise venture would probably fail.

Historical Development of Entrepreneurship

Schumpeter- entrepreneurs role is to change econ. status quo through innovation. Innovation is the key to entrepreneurship, The key role of the entrepreneurs is to bring innovation in the marketplace. In doing so, they create new demand, destroying existing market & creating new ones.

Historical Development of Entrepreneurship: Schumpeter

Innovation may result in: The creation of a new product or alteration in its quality The development of a new method of production The opening of a new market The capturing of a new source of supply Formation of new biz organizations

Historical Development of Entrepreneurship

McClelland (1961):
The key to entrepreneurial behavior lies in achievement motivation. The need to achieve is a drive to excel, to achieve a goal in relation to a set of standards. A person endowed with a need to achieve, will spend time considering how to do a job better or how to accomplish something important to them

Historical Development of Ent/ship

Characteristics of high achievers:
Like situation where they can take personal responsibility to find a solution; Like rapid feedback; Avoid what they perceive to be very easy or very difficult task Prefer to strive to achieve target, which is challenging &

is not beyond their capabilities.

Historical Development of Entrepreneurship

Rotter (1966):
Introduced the notion locus of control. Internal LOC: individuals who believes in themselves. External LOC: Fate, chance, events outside their control or powerful people has a dominating influence over their lives.

Historical Development of Entrepreneurship

Peter Drucker (1964):
Entrepreneur as someone who maximizes opportunity. Ent/ship arises in response to what the entrepreneur sees an untapped or untaken opportunities. Underlined the importance of mgt and leadership, and able to respond to change.

Continue
Schultz (1980): ( a pioneer of human capital theory)
In a dynamic economy, human attitudes, behaviours, skills & knowledge are important elements to create wealth & good values.

Carson (1982):
Entrepreneur is someone who is good at making decisions, good at utilising scarce resources & not everyone can be entrepreneur. Entrepreneur must proficient in all aspects of decision making. The possession of imagination and foresight as an added ADVANTAGE.

Continue.
Kets de Vries (1996) : Entrepreneur as creator of risk than a taker, since he often use someone elses capital. However, even if the entrepreneur does not bear most of financial risk in business, at an early stage exposed to a considerable amount of social and psychological risks (when the risk of failure is high at start-up stage). Bolton & Thompson: See entrepreneur as an individual who habitually creates & innovates to build s/thing of values from opportunity he has identified.

Entrepreneurship Education in Malaysia

The role of government and private agencies in the advancement of education and entrepreneurship training in formal schools, colleges and universities. In Malaysia in particular, interest to policy makers in providing small and medium enterprises (SMEs) has increased since the establishment of the Ministry of Entrepreneur and Cooperative Development (MECD), Ministry of Science, Technology and Innovation (MOSTI), Majlis Amanah Rakyat (MARA), Ministry of Youth and Sports , Production Association of Malaysia (FMM), Malaysia Business Council (DPM), SIRIM, Entrepreneur capital Nasional Berhad (PUNB), Bank Pembangunan Malaysia and various other parties. Cultivate entrepreneurship is through the introduction of entrepreneurship programs at both levels of schools and universities. Many universities have been offering courses on entrepreneurship or small and medium businesses.
BPME 1013 BASIC ENTREPRENEURSHIP PREPARED BY: MATHIVANNAN JAGANATHAN

Entrepreneurship Education in Malaysia

To promote effective entrepreneurship education at institutions of higher education, several challenges need to be implemented. 1. Encourage entrepreneurs or small and medium businesses in the entrepreneurial process in educational institutions to become role models and provide opportunities for students and lecturers to see the real situation. 2. Provide opportunities for lecturers and staff involved in entrepreneurship, making mistakes, through experiments, given the time and schedule flexibility and creates an uncertain situation (uncertainty). 3. Establish a mechanism for students who have no entrepreneurial background to assist entrepreneurs or small and medium businesses around the place of learning for action learning.

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

Entrepreneurship Education in Malaysia

4. Encouraging learning environment that is less rigid structure as well as use of informal channels of communication. 5. Establish a higher education institution that provides awards to students and lecturers by the decision, creativity and individual initiative.

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

Entrepreneurship from Islamic Perspectives:

Definition Entrepreneurship can be defined as any business activities carried out by the individual in order to produce product or services in accordance to syariah (Islamic law) The concept of syumul (integrated; achieving success in this world as well as achieving success thereafter). Business activity is also a religious activity. This means entrepreneurship is not separated or isolated from the life thereafter (akhirat) where people will be judged rewarded or punished. Therefore, entrepreneurship falls within the system of Islam (Islamic faith, law, moral & ethics).

Entrepreneurship from Islamic Perspectives

Islam encourages entrepreneurship activities as the way to derive an income. Prophet Muhammad (saw) mentioned that 9/10 of sources of rezeki (incomes) can be derived or generated from business activities. With good intention, entrepreneurial activity is considered as an IBADAT, will be rewarded by Allah because business activities generate incomes that can be used by entrepreneur himself & his family. By offering products or services to the community (customers), an entrepreneur is also considered to fulfill a fardhu kifayah (fulfilling ones obligations to the community)

An entrepreneurial as a branch of Jihad and Amal Soleh

Considered as jihad fi sabilillah. Through entrepreneurship, entrepreneurs has opportunity to increase good deeds. Among the things that can be deemed as good deeds in the field of entrepreneurship are:
1. Creating products that can be enjoyed long lives so hereditary. For instance, the creation of vehicles, machinery and equipment 2. Market products more efficiently and at full effectiveness, and cost by facilitating the extension of benefits to as many users as possible. For instance, retail outlets and supermarkets. 3. Generate employment and livelihood to its members and their dependents. 4. Opportunities for career development and continuing to increase revenue for those involved.
BPME 1013 BASIC ENTREPRENEURSHIP PREPARED BY: MATHIVANNAN JAGANATHAN

An entrepreneurial as a branch of Jihad and Amal Soleh

5. Improving quality of life so life becomes more perfect. 6. Strengthen the social and economic status and enhance the dignity of their race, religion and country. 7. Strengthen national economy. 8. Build Khairun Ummah..

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

Guidelines of Entrepreneurship in the Islamic

1) Doing what he was told Entrepreneurs still have to perform the obligatory practices such as prayer, fasting and so forth. Despite the busy in business, the practice must not be abandoned. 2. Avoiding what is prohibited The practice is forbidden by Islam such as riba and gharar be avoided because these practices cause harm and oppress others. 3. Applying the properties of good Someone who wants to make the entrepreneurial nature of worship should adopt "attributes" and away from nature "mahmudah" in all matters. 4. Planning and business strategy Entrepreneurs must have a thorough strategic planning and a strategy that is not contrary to the principles of Islam.

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

Guidelines of Entrepreneurship in the Islamic

5. Understand the tenets of business

Entrepreneurs need to equip themselves with knowledge relating to muamalah law for entrepreneurial activity is carried out not in conflict with the muamalah rules of Islam.

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN

Conclusion

The concept of entrepreneur and entrepreneurship to bring a definition and a very broad perspective. The concept of entrepreneurship and entrepreneurs are a vast field of interpretation according to different perspectives and views of business leaders.

BPME 1013 BASIC ENTREPRENEURSHIP

PREPARED BY: MATHIVANNAN JAGANATHAN