Chapter 1
Introduction to entrepreneur and entrepreneurship
Who is an entrepreneur?• Entrepreneur stems from the French word
entreprendre which refers to individuals who undertake the risk of new ventures.
• Richard Cantillon, a French economist asserted that an entrepreneur invests, transforms and makes profit / loss.
• Adam Smith widened the scope to include the task of forming an organisation for commercial purposes and the extra qualities of the entrepreneur (ability to foresee potential through changes in the economy and to act on the demand).
Who is an entrepreneur?
• French economist, Jean Baptiste Say: the entrepreneur was said to influence society by forming enterprises and in turn influenced by society to recognise needs and to fulfill them through skill management resources.
• British economist, John Stuart Mill: entrepreneurs as one of the factors of production (land, labour, capital and entrepreneur).
The evolution concept of entrepreneurship
• Joseph Schumpeter introduced the concept of creative destruction.
• Creative destruction sees the destruction of usual ways of doing things by the introduction of new improved ways.
The Economic Questions
• What should be produced?• When will it be produced?• How will it be produced?• Who will produce it?• Who gets to have what is produced?
An economy is a country’s financial structure. It is the system that produces and distributes wealth.
Entrepreneurship development in Malaysia
• Entrepreneurship has existed in Malaysia since the interaction of Malacca with foreign traders.
• When the British colonized in Malay Peninsular, they practiced the ‘divide and rule’ system :Malays – engaged in administration and agricultureChinese – engaged in mining and businessIndians – engaged in rubber plantations
Entrepreneurship development in Malaysia
• After independence, the Malaysian government has been focusing on the field of entrepreneurship until today
• A specific body to manage and promote the growth of entrepreneurship is the Ministry of Entrepreneurship Development and Co-operation.
• Others:• The New Economic Policy(1971-1990)• The National Development Policy (1990 –
2000)• Vision 2020
Why Be an Entrepreneur?
• Control over time• Fulfillment• Creation/Ownership• Control over Compensation
-salary-wage-dividend-commission
• Control over Working Conditions
The importance of entrepreneurship• Micro aspectsMicro aspects::
• Sources of new ideas and change: • New and value added ideas & products
• Transforming ideas and opportunities into profitable businesses
• Macro aspectsMacro aspects::• Creating wealth & promoting wealth distribution• Catalyst for economic change and growth• Creating job opportunities• Developing supporting industries• Providing wider choices of technologically up to date products• Utilising resources more efficiently• Expanding family business that can be inherited and expanded• Role model for society
Characteristics of Successful Entrepreneurs
Initiative &
ResponsibilitySeeking
Feedback
Creative and
Innovative
High
Commitment
Opportunity
Orientation
Moderate
Risk Taker
Confidence &
Optimistic
Internal
Locus of Control-they control their
destinies
Flexibility
IndependentSkilled at
Organising
Drive to
Achieve
Tolerance
to Failure
Ability to
set Vision
Team
Building
High
Energy
Businessmen vs EntrepreneursBusinessmen vs Entrepreneurs
Small Businessman Entrepreneur
Engages in business to support living & family
Starts the ventures, assume leadership & expand it to fulfill personal goals n self-accomplishment
Low risk taker Moderate risk taker
Follows others and invests only in tested and proven mkts
Takes calculated risk
Managers Vs EntrepreneursManagers Vs Entrepreneurs
Managers EntrepreneursPrimary Motives promotion & other
traditional rewardsIndependence, opportunity to create & money
Time Orientation Short-term: meetings, quota, budgets
Survival and achieving; 5 to 10 yrs growth of business
Activity Delegates and supervises more than direct involvement
Direct involvement
Risk Careful Moderate risk takerStatus Concerned about status
symbolsNot concerned about status symbols
Failure & Mistake Tries to avoid mistakes & surprises
Deals with mistakes and failures
Decisions Usually agrees with those in upper management
Follows dream with decisions
Who serves Others Self and customersFamily history Family members worked for
large organisationsEntrepreneurial small business, professional
Relationship with others
Hierarchy as basis relationship
Transactions and deal making as basic relationship