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Ent300 Module01

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Ent300 Module01

  1. 1. THEORIES & CONCEPT OF ENTREPRENEURSHIP Assoc. Prof. Dr Nawawi B Mohd Jan Dato’ Dr. Adnan Alias
  2. 2. THEORIES & CONCEPTS OF ENTREPRENEURSHIP <ul><li>Session Objectives </li></ul><ul><li>At the end of the session, students should be able to: </li></ul><ul><li>understand the various theories and concepts on entrepreneurship </li></ul><ul><li>have a deeper understanding of the discipline of entrepreneurship </li></ul>
  3. 3. THE EVOLUTION OF ENTREPRENEURSHIP THEORY <ul><li>Definition of an Entrepreneur : </li></ul><ul><li>“ An entrepreneur is a person who undertakes to do a job ” Richard Cantillon (1755). The term entrepreneur is a French word first coined by Richard Cantillon. </li></ul><ul><li>In Malaysia the term “usahawan” is used for entrepreneur. </li></ul>
  4. 4. THE EVOLUTION OF ENTREPRENEURSHIP THEORY <ul><li>Definition of Entrepreneurship: </li></ul><ul><li>Entrepreneurship involves not only the process that leads to the setting up of a business entity but also the expansion and development of an on going concern.The study of entrepreneurship is concerned with the entrepreneurial behavior, the dynamics of business set up and expansion and development. </li></ul>
  5. 5. THE EVOLUTION OF ENTREPRENEURSHIP THEORY <ul><li>Adam Smith (1776) - An entrepreneur is a person who acts as agent in transforming demand into supply. </li></ul><ul><li>Jean Babtiste Say (1803) - An entrepreneur is a person who shifts resources from an area of low productivity to high productivity. </li></ul>
  6. 6. THE EVOLUTION OF ENTREPRENEURSHIP THEORY <ul><li>John Stuart Mill (1848) - An entrepreneur is a prime mover in the private enterprise.The entrepreneur is the fourth factor of production after land ,labor and capital. </li></ul><ul><li>Carl Menger (1871) - The entrepreneur acts as an economic agent who transforms resources into products and services.The entrepreneur transforms and gives added value. </li></ul>
  7. 7. THE EVOLUTION OF ENTREPRENEURSHIP THEORY <ul><li>Joseph Aloysius Schumpeter (1934) - An entrepreneur is an innovator. The economy moves through leaps and bounds and the prime mover is the entrepreneur through the process of creative destruction. </li></ul><ul><li>Alfred Marshall (1936) - The process of entrepreneurship or business development is incremental or evolutionary . It evolves from sole proprietorship to a public company. </li></ul>
  8. 8. THE EVOLUTION OF ENTREPRENEURSHIP THEORY <ul><li>Ibnu Khaldun (Abdul Rahman Mohamed Khaldun) - The entrepreneur is seen as a knowledgeable individual and is instrumental in the development of a city-state where enterprise will emerge. </li></ul><ul><li>David McClelland - The entrepreneur is a person with a high need for achievement. This need for achievement is directly related to the process of entrepreneurship. </li></ul>
  9. 9. DEFINITION OF ENTREPRENEURSHIP <ul><ul><li>It is more than mere creation of business </li></ul></ul><ul><ul><li>Entrepreneurship is a process of innovation and new venture creation through four major dimensions – individual, organizational, environmental and process. </li></ul></ul><ul><ul><li>The entrepreneurship process is aided by collaborative networks in government, education and institutions . </li></ul></ul>
  10. 10. DEFINITION OF ENTREPRENEURS <ul><li>Functional definition of entrepreneurs offers the following definition: </li></ul><ul><li>Entrepreneurs are individuals who actively form or lead their own business and nurture them for growth and prosperity. </li></ul>
  11. 11. THE IMPORTANCE OF ENTREPRENEURSHIP TO MALAYSIAN ECONOMY <ul><li>Entreprenuership is the symbol of business steadfastness and achievement. Entrepreneurial revolution is critical to economic growth. Entrepreneurship may affect our future in many ways: </li></ul><ul><ul><li>Innovative creation of opportunity </li></ul></ul><ul><ul><ul><li>Example: Portable phones linked to faxes and laptop will turns cars, train, and airport terminal into offices. </li></ul></ul></ul>
  12. 12. THE IMPORTANCE OF ENTREPRENEURSHIP TO MALAYSIAN ECONOMY <ul><ul><ul><li>Entrepreneurship not only affect our lives through innovation but represent the working future for many of us due to lays off by large organization and shrinking of job opportunities for graduates. </li></ul></ul></ul><ul><ul><ul><li>e. Entrepreneurship is synonymous to creation of new venture and small businesses. SMIs have been important contributors to local economic growth . </li></ul></ul></ul>
  13. 13. <ul><li>f. The entrepreneurial SMIs provide services that the large corporation has neglected or lack of economy of scale for the large corporation to serve. </li></ul><ul><li>g. Contribution of SMIs to Malaysian Economy - </li></ul><ul><li>In Malaysia the SMIs employed 90% of the total labor force in manufacturing sector and contributed to about 26% of total value added in the sector. </li></ul>THE IMPORTANCE OF ENTREPRENEURSHIP TO MALAYSIAN ECONOMY
  14. 14. ISLAMIC ENTREPRENEURSHIP <ul><li>ISLAMIC ENTREPRENEURSHIP FOCUS ON EIGHT PRINCIPLES OF THOUGHTS :- </li></ul><ul><li>Entrepreneurship is an integral parts of Islamic religion. </li></ul><ul><li>By virtue of human nature , the Moslem entrepreneurs are ‘khalifah’ and have the reponsibilities develop prosperity and sees business as part of ibadah or good deed. </li></ul><ul><li>Motivation – success in Islam is not merely measured by the end result but also the way and means of achieving them. </li></ul><ul><li>Ibadah – business activity is part of ibadah or “good deed” </li></ul>
  15. 15. <ul><li>Position of Entrepreneurship and business in Islam – Islam encouraged its ummah to venture into business . Prophet Muhammad S.A.W expounded that 9 out 10 source of rizque (reski) can be found in business. </li></ul><ul><li>Islamic Economic System - Islamic Entrepreneurship should operate within the domain of Islamic Economic system and act as the vehicle towards global acceptance of Islamic Economic System. </li></ul>ISLAMIC ENTREPRENEURSHIP
  16. 16. <ul><li>Guiding Principles of Islamic Entrepreneurship is by the al-Quran and al-Hadith </li></ul><ul><li>Entrepreneurial Ethics based on exemplary conducts of Prophet Muhammad S.A.W </li></ul>ISLAMIC ENTREPRENEURSHIP
  17. 17. ISLAMIC ENTREPRENEURSHIP AS AS INTEGRAL PART OF THE RELIGION Islam is a complete way of life. There is no separation between business and religion. Islam has its own entrepreneurship culture and guiding principles based on the Al-Quran and Hadith to guide business operation .
  18. 18. HUMAN NATURE (The fitrah of human being) By virtue of the human nature, the person must firstly be a Muslim, then an entrepreneur. He has the responsibility to perform ‘ibadah’ and be a ‘khalifah’ . Muslim entrepreneur should search for God’s blessings above all other factors. A Muslim entrepreneur perform business not solely for profit, but above all, to fulfill the ‘fardhu kifayah’ .
  19. 19. MOTIVATION <ul><li>Most entrepreneurs have the desire to achieve successful business venture. </li></ul><ul><li>The successful path and means for achieving success for Muslim entrepreneurs are unique. </li></ul><ul><li>Success in Islam is not merely measured by the end result, but also the means and ways of achieving them. </li></ul>
  20. 20. SUCCESS FORMULA BY AL-QURTUBI <ul><li>Halal – livelihood that are in accordance to what is being outlined by Allah SWT and syariah. </li></ul><ul><li>Qanaah – be pleased and thankful with one’s earning </li></ul><ul><li>Taufiq - Asking for the blessing of Allah in proportion to one’s expectation </li></ul><ul><li>Sa’adah- Spiritual happiness </li></ul><ul><li>Jannah – Worldly success should act as the bridge to the ultimate success in the life hereafter (paradise). </li></ul>
  21. 21. <ul><li>Level of Knowledge </li></ul><ul><li>Level of Taubat or repentence </li></ul><ul><li>Level of Temptation </li></ul><ul><li>Level of Obstacles </li></ul><ul><li>Level of Motivation </li></ul><ul><li>Level of Handicap </li></ul><ul><li>Level of Praise and Thankfulness </li></ul>SEVEN STEPS TOWARDS A SUCCESS IN LIFE ACCORDING TO IMAM AL-GHAZALI
  22. 22. POSSESSION OF WEALTH IS ALLOWED BASED ON THE FOLLOWING PRINCIPLES:- <ul><li>Allah s.w.t is the absolute owner of wealth </li></ul><ul><li>Allah created wealth in abundance and sufficient for all </li></ul><ul><li>Wealth is created for mankind </li></ul><ul><li>Wealth is entrusted to mankind </li></ul>
  23. 23. IBADAH In Islam, involving in business is part of ibadah through the fulfilment of fardhu kifayah.
  24. 24. POSITION OF BUSINESS AND ENTREPRENEUR ISLAMIC ENTREPRENEURSHIP MODEL Islam Proposed (Business Venture) Allah Prepared (Facilities) Islam Outlined (Rules and Regulation ) Allah Promised (Reward) E X A M P L E E X A M P L E
  25. 25. ISLAMIC ECONOMIC SYSTEM Islamic Entrepreneurship should be in the framework of Islamic Economic System and should assist in establishing the Islamic Economic System
  26. 26. GUIDING PRINCIPLES OF ISLAMIC ENTREPRENEURSHIP Guidelines for Islamic Entrepreneurship and business activities are wide and comprehensive based on Al-Quran and Al-Hadith.
  27. 27. MUSLIM ENTREPRENEURSHIP ETHICS <ul><li>To prevent laziness </li></ul><ul><li>To eradicate fear </li></ul><ul><li>To search for legitimate ventures </li></ul><ul><li>To avoid forbidden sources of income and property </li></ul><ul><li>To show gratitude and thankfulness of whatever has been acquired </li></ul><ul><li>To grow and develop capital and profit </li></ul><ul><li>To diversify business ventures </li></ul><ul><li>To avoid greediness </li></ul>
  28. 28. THE ETHICAL BEHAVIOR OF MUSLIM ENTREPRENEURSHIP <ul><li>To avoid malicious behavior </li></ul><ul><li>To avoid squandering </li></ul><ul><li>To avoid stinginess </li></ul><ul><li>To pay alms (zakat) </li></ul><ul><li>Trustworthy </li></ul><ul><li>To pray consistently </li></ul><ul><li>Tawakkal </li></ul><ul><li>Patience </li></ul><ul><li>Qana’ah </li></ul>
  29. 29. EXEMPLARY CONDUCTS OF GOOD MUSLIM ENTREPRENEURS DURING THE PROPHET MUHAMMAD S.A.W REIGN <ul><li>Business is secondary when being called for other form of crusade </li></ul><ul><li>Avoid using influence for self interest </li></ul><ul><li>Afraid of accumulated wealth </li></ul><ul><li>Leadership qualities in all aspects </li></ul><ul><li>Practice moderate way of life </li></ul>
  30. 30. END OF MODULE 1

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