ENT300 Chapter 1 - Introduction to Entrepreneurship PDF

CHAPTER 1 INTRODUCTION TO ENTREPRENEURSHIP  Learning Outcomes 1. Explain Entrepreneur: Definition and concept 2. Explain Entrepreneurship: Definition and concept 3. Describe the various types of entrepreneurship 4. Define Small and Medium Enterprises (SMEs) and its import...

CHAPTER 1 INTRODUCTION TO ENTREPRENEURSHIP  Learning Outcomes 1. Explain Entrepreneur: Definition and concept 2. Explain Entrepreneurship: Definition and concept 3. Describe the various types of entrepreneurship 4. Define Small and Medium Enterprises (SMEs) and its importance to entrepreneurship  INTRODUCTION ❑ Entrepreneurship is important for any developed or developing country. ❑ Entrepreneurship has been observed to have contributed to the renewal process that may influence and redefine market economies. ❑ Acts as an essential mechanism for the economic growth and upward mobility of society.  Definition And Concept Of Entrepreneur ❑ A person who is able to explore the entrepreneur’s environment, identify attractive opportunities to be exploited, organize resources and implement action to maximize those opportunities (Barringer & Ireland, 2012; Hisrich, Peters, & Shepherd, 2010) ❑The entrepreneur does not necessarily associate with launching and managing an enterprise, but they may also be involved in large and established business organizations as well as in government establishments  Why Become An Entrepreneur? ❑Being a boss ❑Financial reward ❑Examine own ideas  Definition And Concept Of Entrepreneurship ❑The term entrepreneur refers to a person, while entrepreneurship is the process of creating innovative enterprise. ❑Entrepreneurship is more than the mere creation of a new business. ❑Entrepreneurship involves the innovative manner of conducting a business and a change in the process of managing a business.  Author Definition Kuratko and Hodgetts The practice of organising, managing and ability of predicting the risks of a (2004) business The ability of an individual to see a business opportunity, to gather the Koontz and Fulmer resources needed to take advantage of the opportunity, and to embark in (1984) a business, taking the risk of failure in order to attain profit Entrepreneurship is the dimensions for innovation, investment, and Leff (1979) development in new markets, products, and techniques The foundation of innovative economic organisation for the purpose of Dollinger (2008) profit making or business growth under the condition of uncertainty  Types Of Entrepreneurship 1. Corporate Entrepreneurship or Intrapreneurship 2. Technology Entrepreneurship 3. Social Entrepreneurship  Corporate Entrepreneurship or Intrapreneurship ❑The basic principle of Corporate Entrepreneurship is the amalgamation of entrepreneurial thinking into corporate structure. ❑Corporate entrepreneurship activities can be internally or externally oriented. ❑Internal activities involve the improvement made on the internal market; expand on innovative staff services or production processes within a large business.  Technology Entrepreneurship ❑Technology entrepreneurship is defined as a form of entrepreneurship and business initiative that focuses on technology-intensive business opportunities. ❑The opportunity exploited in technology entrepreneurship is in the form of new products, processes or technologies. ❑Technology entrepreneurship is based on revolutionary breakthroughs in technology or technological development. ❑ The new opportunity may target the existing market or develop a new one.  Social Entrepreneurship ❑ Develop in private, public and non-profit organizations since the last few years. ❑ Non-profit organization is facing high demands in order to improve sustainability and effectiveness in the weakening resources in the firm. ❑ Developing as an innovative approach to dealing with complicated social needs.  Small And Medium Enterprises (SMEs) Category Small Enterprise Medium Enterprise Manufacturing Sales turnover from RM300,000 to Sales turnover from RM15 mil to not less than RM15mil OR employees exceeding RM50 mil OR employees from 5 to less than 75 from 75 to not exceeding 200 Services and Sales turnover from RM300,000 to Sales turnover from RM3 mil to not Other Sectors less than RM3 mil OR employees exceeding RM20 mil OR employees from 5 to less than 30 from 30 to not exceeding 75 Source: SME Corporation Malaysia  The Importance of Entrepreneurship ❑Entrepreneurship plays a significant role in the Malaysian economy and development - mechanisms and policies that include funding, physical infrastructure and business advisory services. ❑Innovative creation of opportunity. ❑Represents the working future for many of us due to the layoffs by large organizations and the shrinking of job opportunities for graduates.  Islamic Entrepreneurship Islamic entrepreneurship stands on these eight (8) principles of thought: 1. Integral part of religion 2. Human Nature 3. Motivation 4. Ibadah 5. Position of entrepreneurship and business in Islam 4. Ibadah – business activity is part of ibadah or “good deed” 5. 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. 6.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. 7.Guiding Principles of Islamic Entrepreneurship is by the al-Quran and al-Hadith 8.Entrepreneurial Ethics based on exemplary conducts of Prophet Muhammad S.A.W  1. Integral Part Of The Religion ❑ Islam is a complete way of life. ❑ No separation between business and religion. ❑ Entrepreneurship culture and guiding principles based on Al-Quran and Hadith to guide business operation. 2. Human Nature (Fitrah of human being) ❑ Must firstly be a Muslim, then an entrepreneur. ❑ Muslim entrepreneurs are “khalifah” (successor) ❑ Responsibility to develop prosperity and see business as part of “ibadah” (good deeds). ❑ Search for God’s blessings above all other factors. ❑ Perform business not solely for profit, but above all, to fulfill the ‘fardhu kifayah’. 3. Motivation ❑ Most entrepreneurs have the desire to achieve successful business venture. ❑ The successful path and means for achieving success for Muslim entrepreneurs are unique. ❑ Success in Islam is not merely measured by the end result, but also the means and ways of achieving them. Success Formula (Al-Qurtubi) ❑ Halal - livelihood that is in accordance with what is being outlined by Allah SWT and Syariah. ❑ Qanaah – be pleased and thankful with one’s earning ❑ Taufiq - Asking for the blessing of Allah in proportion to one’s expectation ❑ Sa’adah - Spiritual happiness ❑ Jannah - Worldly success should act as the bridge to the ultimate success in life hereafter (paradise). Success In Life (Imam Al-Ghazali) ❑ Level of Knowledge ❑ Level of Taubat or repentence ❑ Level of Temptation ❑ Level of Obstacles ❑ Level of Motivation ❑ Level of Handicap ❑ Level of Praise and Thankfulness 4. Ibadah ❑ Business is part of ibadah through the fulfillment of fardhu kifayah. 5. Position Of Business & Entrepreneur ❑ Entrepreneurship and business in highly encouraged in amongst the ummah in Islam. ❑ All business processes and procedures must be aligned with what has been prescribed by Al-Quran and Hadith. ❑ Islamic wealth model signifies the proper way to seek Allah’s forgiveness and blessings. 6. Islamic Economic System ❑ Operate within the domain of Islamic economic system and acts as the vehicle towards global acceptance. ❑ Vision that focuses within the domain of Islamic economic system that covers multiple aspects such as strategy, organisation, human resources, finance and marketing. ❑ Drive to acquire Islamic entrepreneurial traits in order to become entrepreneurs who are Syariah compliant. 7. Principle – Al-Quran & Hadith ❑ Guidelines for Islamic Entrepreneurship and business activities are wide and comprehensive based on Al- Quran and Al-Hadith. 8. Entrepreneurial Ethics ❑ Practices Muslim entrepreneurship ethics. ❑ Exemplary conduct of Prophet Muhammad S.A.W.  Muslim Entrepreneurship Ethics In getting those rewards, ethical values should be in place: ✓ To prevent laziness ✓ To search for halal/legitimate ventures ✓ To avoid forbidden sources of income and property ✓ To show gratitude and thankfulness of whatever has been acquired ✓ To grow and develop capital and profit ✓ To diversify business ventures ✓ To avoid greediness  Ethical behavior of Muslim entrepreneurship ✓To pray consistently ✓ To avoid malicious behaviour ✓ To avoid squandering ✓ To avoid stinginess ✓ To pay alms (zakat) ✓ Trustworthy ✓Tawakkal ✓ Patience ✓ Qana’ah  Good Muslim Entrepreneurs – Exemplary conduct ❑ Business is secondary when being called for other form of crusade ❑ Avoid using influence for self-interest ❑ Afraid of accumulated wealth ❑ Leadership qualities in all aspects ❑ Practice moderate way of life  SUMMARY Entrepreneurship is the process, ability and action of an entrepreneur to react in a business, while an entrepreneur is an individual who establishes and manages a business for the principal purpose of growth and profit. Entrepreneurship involves initiating changes through creativity and innovation in the production, whereas management involves the ongoing coordination of the production process. There are many benefits of entrepreneurship There are eight principles of thought according to Islamic entrepreneurship.