ENT300 Module01- Modified

ENT/ETR300 – FUNDAMENTALS OF ENTREPRENEURSHIP

THEORIES & CONCPET OF ENTREPRENEURSHIP

THEORIES & CONCEPT THEORIES & CONCEPT OF OF ENTREPRENEURSHIPENTREPRENEURSHIPAssoc. Prof. Dr Nawawi B Mohd JanDato’ Dr. Adnan Alias



THEORIES & CONCEPTS OF THEORIES & CONCEPTS OF ENTREPRENEURSHIPENTREPRENEURSHIP

Session Objectives Session Objectives

At the end of the session, youAt the end of the session, you are able are able toto::

understand the various theories and understand the various theories and concepts on entrepreneurshipconcepts on entrepreneurship

have a deeper understanding of the have a deeper understanding of the discipline of entrepreneurshipdiscipline of entrepreneurship



An entrepreneur is a person who undertakes to do a job – An entrepreneur is a person who undertakes to do a job – Richard Cantillon (1755).Richard Cantillon (1755).

USAHAWANUSAHAWAN

DEFINITION

An entrepreneur is a person who acts as agent in transforming An entrepreneur is a person who acts as agent in transforming demand into supply - demand into supply - Adam Smith (1776)Adam Smith (1776)

An entrepreneur is a person who shifts resources from an areaAn entrepreneur is a person who shifts resources from an area of low productivity to high productivity)of low productivity to high productivity) - Jean Babtiste Say (1803)Jean Babtiste Say (1803)



An entrepreneur is a prime mover in the private enterprise.An entrepreneur is a prime mover in the private enterprise.

The entrepreneur is the fourth factor of The entrepreneur is the fourth factor of

production after land ,labor and capital.- production after land ,labor and capital.- John Stuart Mill (1848)John Stuart Mill (1848)

The entrepreneur acts as an economic agent who transforms resources The entrepreneur acts as an economic agent who transforms resources

into products and services.into products and services.

The entrepreneur transforms and gives added value.The entrepreneur transforms and gives added value. - Carl Menger (1871)Carl Menger (1871)

DEFINITION

An entrepreneur is an innovator. An entrepreneur is an innovator.

The economy moves through leaps and bounds and the prime moverThe economy moves through leaps and bounds and the prime mover

is the entrepreneur through the process of creative destruction. is the entrepreneur through the process of creative destruction.

- Joseph Aloysius Schumpeter (1934)- Joseph Aloysius Schumpeter (1934)



The entrepreneur is seen as a knowledgeable individual and is instrumental in The entrepreneur is seen as a knowledgeable individual and is instrumental in the development of a the development of a

city-state where enterprise will emergecity-state where enterprise will emerge..- - Ibnu Khaldun (Abdul Rahman Mohamed Khaldun)Ibnu Khaldun (Abdul Rahman Mohamed Khaldun)

DEFINITION

The entrepreneur is a person with a high need for achievement. The entrepreneur is a person with a high need for achievement. This need for achievementThis need for achievement

is directly related to the process of entrepreneurship is directly related to the process of entrepreneurship - - David McClellandDavid McClelland



THE EVOLUTION OF THE EVOLUTION OF ENTREPRENEURSHIP THEORYENTREPRENEURSHIP THEORY

Definition of Entrepreneurship:Definition of Entrepreneurship: Entrepreneurship involves not only the Entrepreneurship involves not only the

process that leads to the setting up of a process that leads to the setting up of a business entity but also the expansion business entity but also the expansion and development of an on going and development of an on going concern.The study of entrepreneurship concern.The study of entrepreneurship is concerned with the entrepreneurial is concerned with the entrepreneurial behavior, the dynamics of business set behavior, the dynamics of business set up and expansion and development.up and expansion and development.



DEFINITION OF ENTREPRENEURSHIPDEFINITION OF ENTREPRENEURSHIP

It is more than mere creation of businessIt is more than mere creation of business Entrepreneurship is a process of innovation Entrepreneurship is a process of innovation

and new venture creation through four major and new venture creation through four major dimensions – individual, organizational, dimensions – individual, organizational, environmental and process.environmental and process.

The entrepreneurship process is aided by The entrepreneurship process is aided by collaborative networks in government, collaborative networks in government, education and institutionseducation and institutions. .



CONCLUSION OF THE DEFINITIONSCONCLUSION OF THE DEFINITIONS

Functional definition of entrepreneurs Functional definition of entrepreneurs offers the following definition:offers the following definition:

Entrepreneurs are individuals who actively Entrepreneurs are individuals who actively form or lead their own business and form or lead their own business and nurture them for growth and prosperity.nurture them for growth and prosperity.



THE IMPORTANCE OF ENTREPRENEURSHIP THE IMPORTANCE OF ENTREPRENEURSHIP TO MALAYSIAN ECONOMYTO MALAYSIAN ECONOMY

1.1. Entreprenuership is the symbol of business Entreprenuership is the symbol of business steadfastness and achievement. Entrepreneurial steadfastness and achievement. Entrepreneurial revolution is critical to economic growth. revolution is critical to economic growth. Entrepreneurship may affect our future in many Entrepreneurship may affect our future in many ways:ways:



a.a. Innovative creation of opportunityInnovative creation of opportunity



THE IMPORTANCE OF ENTREPRENEURSHIP TO THE IMPORTANCE OF ENTREPRENEURSHIP TO MALAYSIAN ECONOMYMALAYSIAN ECONOMY

d.d. EmploEmploymentyment Opportunitie Opportunitiess



Entrepreneurship is synonymous to creation of new Entrepreneurship is synonymous to creation of new venture and small businesses. SMIs have been venture and small businesses. SMIs have been important contributors to local economic growthimportant contributors to local economic growth. .



-- The entrepreneurial SMIs provide services that The entrepreneurial SMIs provide services that the large corporation has neglected or lack of the large corporation has neglected or lack of economy of scale for the large corporation to economy of scale for the large corporation to serve.serve.

-- Contribution of SMIs to Malaysian Economy - Contribution of SMIs to Malaysian Economy -

In Malaysia the SMIs employed 90% of the In Malaysia the SMIs employed 90% of the total total labor force in manufacturing sector and labor force in manufacturing sector and contributed to about 26% of total value added in contributed to about 26% of total value added in

the sector.the sector.

THE IMPORTANCE OF ENTREPRENEURSHIP TO THE IMPORTANCE OF ENTREPRENEURSHIP TO MALAYSIAN ECONOMYMALAYSIAN ECONOMY



ISLAMIC ENTREPRENEURSHIP

ISLAMIC ENTREPRENEURSHIP FOCUS ON EIGHT PRINCIPLES OF THOUGHTS :-

1.Entrepreneurship is an integral parts of Islamic religion.2.By virtue of human nature , the Moslem entrepreneurs

are ‘khalifah’ and have the responsibilities develop prosperity and sees business as part of ibadah or good deed.

3.Motivation – success in Islam is not merely measured by the end result but also the way and means of achieving them.

4.Ibadah – business activity is part of ibadah or “good deed”



5.5. Position of Entrepreneurship and business in Islam Position of Entrepreneurship and business in Islam – Islam encouraged its ummah to venture into – Islam encouraged its ummah to venture into business . Prophet Muhammad S.A.W expounded business . Prophet Muhammad S.A.W expounded that 9 out 10 source of rizque (reski) can be found in that 9 out 10 source of rizque (reski) can be found in business.business.

6.6. Islamic Economic System - Islamic Islamic Economic System - Islamic Entrepreneurship should operate within the domain Entrepreneurship should operate within the domain of Islamic Economic system and act as the vehicle of Islamic Economic system and act as the vehicle towards global acceptance of Islamic Economic towards global acceptance of Islamic Economic System.System.




7.7. Guiding Principles of Islamic Entrepreneurship is by Guiding Principles of Islamic Entrepreneurship is by the al-Quran and al-Hadiththe al-Quran and al-Hadith

8.8. Entrepreneurial Ethics based on exemplary Entrepreneurial Ethics based on exemplary conducts of Prophet Muhammad S.A.Wconducts of Prophet Muhammad S.A.W




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 .



HUMAN NATURE HUMAN NATURE (The fitrah of human being)(The fitrah of human being)

By virtue of the human nature, the person must By virtue of the human nature, the person must firstly be a Muslim, then an entrepreneur. He firstly be a Muslim, then an entrepreneur. He has the responsibility to perform has the responsibility to perform ‘ibadah’‘ibadah’ and be and be a a ‘khalifah’‘khalifah’. Muslim entrepreneur should search . Muslim entrepreneur should search for God’s blessings above all other factors. A for God’s blessings above all other factors. A Muslim entrepreneur perform business not Muslim entrepreneur perform business not solely for profit, but above all, to fulfill the solely for profit, but above all, to fulfill the ‘fardhu kifayah’‘fardhu kifayah’..



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 BY AL-QURTUBI

• Halal – livelihood that are in accordance to 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 the life hereafter (paradise).



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

SEVEN STEPS TOWARDS A SUCCESS IN LIFE ACCORDING TO IMAM AL-GHAZALI



POSSESSION OF WEALTH IS ALLOWED BASED ON THE FOLLOWING PRINCIPLES:-

• Allah s.w.t is the absolute owner of wealth

• Allah created wealth in abundance and sufficient for all

• Wealth is created for mankind• Wealth is entrusted to mankind



IBADAH

In Islam, involving in business is part of ibadah through the fulfilment of fardhu kifayah (Tanggungjawab Semua).



POSITION OF BUSINESS AND ENTREPRENEUR

ISLAMIC ENTREPRENEURSHIP MODEL

Islam Proposed(Business Venture)

Allah Prepared(Facilities)

Islam Outlined

(Rules and Regulation)

Allah Promised(Reward)

EXAMPLE

EXAMPLE



ISLAMIC ECONOMIC SYSTEM

Islamic Entrepreneurship should be in the framework of Islamic Economic System and should

assist in establishing the Islamic Economic System



GUIDING PRINCIPLES OF ISLAMIC ENTREPRENEURSHIP

Guidelines for Islamic Entrepreneurship and business

activities are wide and comprehensive based on Al-

Quran and Al-Hadith.



MUSLIM ENTREPRENEURSHIP ETHICS

To prevent laziness To eradicate fear To search for 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



THE ETHICAL BEHAVIOR OF MUSLIM ENTREPRENEURSHIP

To avoid malicious behavior To avoid squandering To avoid stinginess To pay alms (zakat) Trustworthy To pray consistently Tawakkal Patience Qana’ah



EXEMPLARY CONDUCTS OF GOOD MUSLIM ENTREPRENEURS DURING THE PROPHET

MUHAMMAD S.A.W REIGN

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



END OF MODULE 1

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ENT300 Module01- Modified