THEORIES & CONCEPT

OF ENTREPRENEURSHIP

Pn Ima Shanaz Wahidin

Business and Management Department
UiTM Perak Branch
Tapah Campus
 SESSION OBJECTIVES
 Differentiate between entrepreneur & entrepreneurship

 Have an understanding of Islamic Entrepreneurship

 Demonstrate competencies of successful entrepreneur

 ENTREPRENEUR
 An entrepreneur is a person who undertakes to do a job
(Richard Cantillon, 1755).
 An entrepreneur is a person who acts as agent in
transforming demand into supply (Adam Smith, 1776).
 An entrepreneur is a person who shifts resources from an
area of low productivity to high productivity (Jean Babtiste
Say, 1803).
 An entrepreneur is a prime mover in the private enterprise.
The entrepreneur is the fourth factor of production after
land, labor and capital (John Stuart Mill, 1848).
 The entrepreneur acts as an economic agent who
transforms resources into products and services. The
entrepreneur transforms and gives added value (Carl
Menger, 1871).
 An entrepreneur is an innovator where the economy moves
through leaps and bounds and the prime mover is the
entrepreneur through the process of creative destruction
(Joseph Aloysius Schumpeter, 1934).
 The process of entrepreneurship or business development
is incremental or evolutionary . It evolves from sole
proprietorship to a public company (Alfred Marshall,1936).
 The entrepreneur is seen as a knowledgeable
individual and is instrumental in the development of a
city-state where enterprise will emerge (Ibnu Khaldun
(Abdul Rahman Mohamed Khaldun).
 The entrepreneur is a person with a high need for
achievement (David McClelland).
 Entrepreneurs are individuals who actively form or lead
their own business and nurture them for growth and
prosperity.
 ENTREPRENEURSHIP
 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.
 Entrepreneurship is a process of innovation and new
venture creation through four major dimensions
(individual, organizational, environmental and process).
 The entrepreneurship process is aided by collaborative
networks in government, education and institutions.
 IMPORTANCE OF
ENTREPRENEURSHIP
 The symbol of business steadfastness and achievement
where it is critical to economic growth.
 Create job opportunity due to lays off by large organization
and shrinking of job opportunities for graduates.
 Creation of new venture and small businesses to support
local economic growth.
 Provide services that the large corporation has neglected or
lack of economy of scale for the large corporation to serve.
 ISLAMIC ENTREPRENEURSHIP
PRINCIPLES OF THOUGHTS:
1. Entrepreneurship is an integral parts of Islamic 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.
2. The entrepreneurs are ‘khalifah’ and have the
responsibilities to develop prosperity and sees business
as part of ibadah or good deed.
3. Ibadah – business activity is part of ibadah or “good
deed”. One should search for God’s blessings above all
other factors where business not solely for profit, but
above all, to fulfill the ‘fardhu kifayah’.
4. Position of Entrepreneurship and business in Islam
where Islam encouraged its ummah to venture into
business. 9 out 10 source of rizque (reski) can be found
in business.
5. Islamic Economic System. Guiding Principles of Islamic
Entrepreneurship is by the al-Quran and al-Hadith.
6. Entrepreneurial Ethics based on exemplary conducts of
Prophet Muhammad S.A.W.
PERSONAL ENTREPRENEURIAL
COMPETENCIES (PECs)

Refers to the key characteristics that

should be possessed by successful
entrepreneurs in order to perform
entrepreneurial functions effectively
 Entrepreneurial Competencies
McClelland and McBer (1985)

1. Initiative
The entrepreneur should be able to take actions that go
beyond his job requirements and to act faster. He is always
ahead of others and able to become a leader in the field of
business.

Examples
▪ Does things before being asked or compelled by the
situation.
▪ Acts to extend the business into new areas, products or
services
 Entrepreneurial Competencies
McClelland and McBer (1985)

2. Sees and acts on opportunities

An entrepreneur always looks for and takes action on
opportunities.

Examples
▪ Sees and acts on new business opportunities
▪ Seizes unusual opportunities to obtain financing,
equipment, land, work space or assistance
 Entrepreneurial Competencies
McClelland and McBer (1985)

3. Persistence
An entrepreneur is able to make repeated efforts or to
take different actions to overcome an obstacle that get
in the way of reaching goals.

Examples
▪ Takes repeated or different actions to overcome an
obstacle
▪ Takes action in the face of a significant obstacle
 Entrepreneurial Competencies
McClelland and McBer (1985)
4. Information Seeking
An entrepreneur is able to take action on how to seek
information to help achieve business objectives or clarify
business problems.

Examples
▪ Does personal research on how to provide a product or service
▪ Consults experts or experienced persons to get relevant
information
▪ Seeks information or asks questions to clarify a client's or a
supplier's need
▪ Personally undertakes market research, analysis or investigation
▪ Uses contacts or information networks to obtain useful information
 Entrepreneurial Competencies
McClelland and McBer (1985)
5. Concern for High Quality of Work
An entrepreneur acts to do things that meet certain
standards of excellence which gives him greater
satisfaction.

Examples
▪ States a desire to produce or sell a top or better quality
product or service
▪ Compares own work or own company's work favorably
to that of others
 Entrepreneurial Competencies
McClelland and McBer (1985)
6. Commitment to Work Contract
An entrepreneur places the highest priority on getting a
job completed.

Examples
▪ Makes personal sacrifice or expends extraordinary effort
to complete a job
▪ Accepts full responsibility for problems in completing a
job for customers
▪ Pitches in with workers or works in their place to get the
job done
▪ Expresses a concern for satisfying the customer
 Entrepreneurial Competencies
McClelland and McBer (1985)

7. Efficiency Orientation
A successful entrepreneur always finds ways to do things
faster or with fewer resources or at a lower cost.

Examples
▪ Looks for or finds ways to do things faster or at less cost
▪ Uses information or business tools to improve efficiency
▪ Expresses concern about costs vs. benefits of some
improvement, change, or course of action
 Entrepreneurial Competencies
McClelland and McBer (1985)

8. Systematic Planning
An entrepreneur develops and uses logical, step-by-
step plans to reach goals.

Examples
▪ Plans by breaking a large task down into sub-tasks
▪ Develops plans that anticipate obstacles
▪ Evaluate alternatives
▪ Takes a logical and systematic approach to activities
 Entrepreneurial Competencies
McClelland and McBer (1985)

9. Problem Solving
Successful entrepreneur identifies new and potentially
unique ideas to achieve his goals.

Example
▪ Switches to an alternative strategy to reach a goal
▪ Generates new ideas or innovative solutions
 Entrepreneurial Competencies
McClelland and McBer (1985)

10.Self-Confidence
A successful entrepreneur has a strong belief in self
and own abilities.

Examples
▪ Expresses confidence in own ability to complete a task
or meet a challenge
▪ Sticks with own judgment in the face of opposition or
early lack of success
 Entrepreneurial Competencies
McClelland and McBer (1985)

11.Assertiveness
An entrepreneur confronts problems and issues with
others directly.

Examples
▪ Confronts problems with others directly
▪ Tells others what they have to do
▪ Reprimands or disciplines those failing to perform as
expected
 Entrepreneurial Competencies
McClelland and McBer (1985)
12.Persuasion
An entrepreneur can successfully persuade or influence
others for mobilizing resources, obtaining inputs, organizing
productions and selling his products or services.
Examples
▪ Convinces someone to buy a product or service
▪ Convinces someone to provide financing
▪ Convinces someone to do something else that he would like
that person to do
▪ Asserts own competence, reliability, or other personal or
company qualities
▪ Asserts strong confidence in own company's products or
services
 Entrepreneurial Competencies
McClelland and McBer (1985)

13.Use of Influence Strategies

An entrepreneur is able to make use of influential
people to reach his business goals.

Examples
▪ Acts to develop business contracts
▪ Uses influential people as agents to accomplish own
objectives
▪ Selectively limits the information given to others
▪ Uses a strategy to influence or persuade others