This document provides an introduction to entrepreneurship by defining key terms and concepts. It begins by exploring definitions of entrepreneurs from various scholars, focusing on Richard Cantillon, Adam Smith, Jean Baptiste Say, and Joseph Schumpeter. It then examines the personal characteristics of entrepreneurs, including the need for achievement, internal locus of control, and risk-taking propensity as identified by Brockhaus. The document also outlines different types of entrepreneurship such as social, corporate, and franchise entrepreneurship. It concludes by describing the four steps of the entrepreneurial process.
2. Who is an Entrepreneur?
Can be defined from:
i) Functional approach based on what an entrepreneur does
or
ii) Indicative approach based on the characteristics and
attributes.
• Depending on how an entrepreneur is defined, he can be
different persons wearing different hats.
3. Definition of an Entrepreneur
• Richard Cantillon introduced the word ‘entreprende’ in his
essay ‘Essai sur la nature du commerce’ in 1755.
- A French word = ‘to do something’ (Swedberg, 2000) or ‘to
undertake the risk of new ventures’ (Kuratko & Hodgetts, 2001).
4. Definition of an Entrepreneur
SCHOLAR DEFINITION
Adam Smith (1776) - Widened the definition scope to include the task of forming an
organization for commercial purposes.
- Described the dynamism of the personality of an ‘enterpriser’ such as
the ability to foresee potential through changes in the economy and to
take advantage of the opportunities created.
Jean Babtiste Say (1803) Individuals with certain competencies who can influence society by
forming enterprises and likewise were influenced by society to recognize
needs and fulfil them through skillful management of resources.
5. Definition of an Entrepreneur
SCHOLAR DEFINITION
Joseph Schumpeter
(1934)
- An entrepreneur is a sociologically distinct individual who is a
creative and resourceful innovator as well as an agent of change.
- Believed entrepreneurship plays a crucial role in triggering economic
development:
i) Introduction of a new product or
ii) Introduction of a new method of production,
iii) The opening of a new market or
iv) Finding of a new source of the inputs supply or
v) The establishment of a new organization
- Argues that a person is an entrepreneur only when he/she actually
carries out new combinations but loses that character as soon as
he/she has built up his/her business and settles down to run it.
6. Definition of an Entrepreneur
European Commission (2005)
An individual’s ability to turn ideas into action. It includes creativity,
innovation and risk taking, as well as the ability to plan and manage
projects in order to achieve objectives.
This supports everyone in day-to-day life at home and in society, makes
employees more aware of the context of their work and better able to
seize opportunities, and provides a foundation for entrepreneurs
establishing a social or commercial activity
7. What Entrepreneurs Do?
Assemble and then integrate all the resources needed –the
money, the people, the business model, the strategy—needed
to transform an invention or an idea into a viable business
8. Personal Characteristics of an Entrepreneur
Brockhaus (1982) identified 3 attributes that are consistently
associated with entrepreneurial behaviour:
i) The need for achievement,
ii) The internal locus of control and
iii) A risk-taking propensity.
9. The 3 Attributes of an Entrepreneur
(Brockhaus, 1982)
Attributes of an Entrepreneur
1) Need for Achievement Doing something better over others and/or the individual’s earlier
accomplishment (Hansemark, 2003)
Individuals who score highly on the need for achievement would have
a strong desire for success and are consequently more likely to
behave entrepreneurially (Othman, Ghazali & Ong, 2005).
2) Internal Locus of Control A belief or disbelief that one can control or influence the environment
in which one is found.
Individuals with internal locus of control believe that they can make
things happen as they are able to control and influence the
environment around them. In contrast, individuals with external locus
of control do not believe they can do this.
10. The 3 Attributes of an Entrepreneur
(Brockhaus, 1982)
Attributes of an Entrepreneur
3) Risk-taking propensity Individuals with higher propensities for risk-taking are believed to
be more likely to be involved in entrepreneurial activities (Cantillon,
1755; Knight, 1921).
Empirical evidence also supports the view that risk-taking
propensity serves as one of the attributes which influences
entrepreneurial success and performance (Beugelsdijk &
Noorderhaven, 2005)
11. Personal Entrepreneurial Competencies (PEC)
In 1985, McClelland with McBer & Co, had developed a
measuring instrument to measure the personal entrepreneurial
competencies (PEC) or inclinations among successful
entrepreneurs in Malawi, India and Ecuador.
12. Personal Entrepreneurial Competencies (PEC)
13 PECs Explanation
1) Initiative - Does things before being asked or forced to by events
- Acts to extend the business into new areas, products, or services
2) Sees and Acts on Opportunities - Sees and acts on opportunities (business, educational, or personal
growth)
- Seizes unusual opportunities to obtain financing, equipment, land,
work space, or assistance
3) Persistence Takes repeated action to overcome obstacles that get In the way of
reaching goals
4) Information Seeking Takes action on one’s own to get information to help reach objectives
or clarify problems
5) Concern for High Quality of
Work
Acts to do things that meet or beat existing standards of excellence
13. Personal Entrepreneurial Competencies (PEC)
13 PECs Explanation
6) Commitment to Work Contract Places the highest priority on getting a job completed
7) Efficiency Orientation Finds ways to do things faster or with fewer resources or at a lower
cost
8) Systematic Planning Develops and uses logical, step-by step plans to reach goals
9) Problem Solving Identifies new and potentially unique ideas to reach goals
10) Self-Confidence Has a strong belief in self and own abilities
11) Assertiveness Confronts problems and issues with others directly
12) Persuasion Successfully convince & persuades others
13) Use of Influence Strategies Uses a variety of strategies to affect others
(Acts to develop business contacts, uses influential people as agents
to accomplish own objectives)
14. Types of Entrepreneurship
Types of
Entrepreneurship
Corporate
Entrepreneurship Coorperative
Entrepreneurship
Social
Entrepreneurship
Digital
Entrepreneurship
Conventional
Entrepreneurship
(Private / Independent)
Franchise
Entrepreneurship
Public Sector
Entrepreneurship
15. Cooperative Entrepreneurship
Are formed to serve specific economic goals of its members –
farmers, fishermen, teachers, policemen, soldiers, government
servants.
In Malaysia, it’s registered under the Malaysian Co-operative
Societies Commission Act (Amendment) Act 2014 (Act 1470),
supervised by Malaysian Co-operative Societies Commission.
16. Corporate Entrepreneurship/Intrapreneurship
Corporate entrepreneurship refers to the entrepreneurial activities carried
out within large corporations.
Large companies have to continually expand and diversify their
entrepreneurial activities in order to sustain its existence by creating new
products or services to their customers.
E.g. Konusuke Matsushita, founder of Matsushita Electric Company
encouraged his executives ‘to think like an entrepreneur, not a hired
hand’; creation of Panasonic
17. Conventional Entrepreneurship
(Private or Independent)
Refers to the entrepreneurial activities of private or independent firms where the entrepreneurship
process is most prevalent.
The entrepreneurship process begins with:
1) Identification of business opportunity
2) Setting-up of the business entity
3) Growing the business to a higher level
4) Planning for the harvest’ strategy
The majority of the small and medium-sized enterprises in this country belong to this kind of
entrepreneurship.
Independent entrepreneurship contributes to the nation’s economy in terms of providing jobs and value
added initiatives.
18. Public Sector Entrepreneurship
• Refers to entrepreneurial activities carried out by government-linked companies
(GLCs) or state-owned enterprises.
• The majority of these companies were formed as part of the nation’s privatization
programme which aimed at providing more efficient services to the people.
• State-owned enterprises such as the SEDCs are engaged in certain entrepreneurial
activities through joint-ventures, equity participation as well as management buyouts.
• They are also entrusted with the task of entrepreneurship development in their
respective states.
• E.g. Khazanah Nasional Berhad
19.
20. Social Entrepreneurship
Bill Drayton (1998)
A model for bringing social change in a society by those individuals
who combine the pragmatic, results and profit-oriented methods of a
business entrepreneur with the goals of a social reformer.
Social entrepreneurs are socially conscious individuals who can apply
innovative business models to address society’s various socio-
economic problems (education, health care, economic development,
the environment, the arts) previously overlooked by business,
governmental and non-governmental organizations (NGOs).
21. Social Entrepreneurship
The process involves recognition of a social problem and the
application of the entrepreneurial approach to organize, create
and manage a venture to achieve the social objectives or social
ROI (return on investment).
E.g. Economic based social entrepreneurship project:
Grahmeen Bank in Bangladesh’s objective: to provide easy and
cheap credit to poor women who are involved in micro business.
22. 2017:
Working with pepper farmer to convert into organic
pepper farming
2019:
First batch of chemical & pesticides-free
peppercorns. The price for our farmer’s
peppercorns per/kg is now 100% higher.
23.
24. WHAT WE
DO
We create market access for indigenous smallholder
farmers from Sabah & Sarawak.
25. Digital Entrepreneurship
• Lean business – operate from home
• Flexibility in working hours; part time or full time
• Timeless access, i.e. 24 hours a day, 7 days a week
• Borderless access, i.e. opportunities to manage business from
anywhere in the world
• Rapid & wide recognition with low advertising cost
• No formal college/university education is needed
26. Nur Iman Safiyah
Mohammed
Shahree
Started selling soft toys online at 11.
At 13, she expanded the business
to selling shawls. 4 months after
that, the business skyrocketed & at
13 years old, she launched her very
own line called ‘Baluna Bawal’.
Upon its 1st month, she sold 500
items. The following month, she had
an order for more than 1,000 pieces
27. Franchise Entrepreneurship
• Consists of the franchisor who is the original owner, and the
franchisee, who is the local owner who will run the franchise.
• Franchisee must run business according to standard
operating procedures (SOP) outlined by franchisor.
• Will pay franchisor franchise fees and a royalty commission
based on monthly sales.
• E.g. KFC, Starbucks, McDonalds, Tiger Sugar, Subway.
28. Types of Entrepreneurs
Other Types of Entrepreneurs
Lifestyle Entrepreneurs Venture into field of business they are passionate about, something that
they love and at the same time achieve greater freedom through working
for themselves rather than solely for profit.
(Usually combine their personal interests and talents and the need to
earn a living and probably create wealth along the way)
Infopreneurs Refers to those who utilize information as a commodity for sale.
- Sell information to those who want to use the information as a business
strategy or simply for marketing and promotional activities. E.g. Google
Necessity Entrepreneurs Start entrepreneurship activities not by their own choice. Majority of them
are involved in starting up their own businesses out of necessity.
Technopreneurs Refers to entrepreneurial persons who are technology savvy and earn a
fortune using their expertise in the respective technologies.
E.g. Steve Jobs, Bill Gates, Mark Zuckerberg
29. The Entrepreneurial Process Consists of 4
Steps
Step 1: Deciding to become an entrepreneur.
Step 2: Developing successful business ideas.
Step 3: Moving from an idea to an entrepreneurial firm.
Step 4: Managing and growing the entrepreneurial firm.
