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Week1 - The Concept and Principles of Entrepreneurship

The document discusses the principles of Islamic entrepreneurship, which are: 1) Integration - Islam is a complete way of life that includes business and religion. 2) Human nature - Entrepreneurs must firstly be Muslim and fulfill their responsibility as 'khalifah' to perform 'ibadah'. 3) Motivation - Success is measured by righteous means, not just profits. Wealth must be earned and used as stipulated by Islam. The principles provide guidelines for Muslim entrepreneurs to operate businesses according to Islamic rules and regulations within the Islamic economic system, guided by the exemplary conduct of Prophet Muhammad.

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Chan Chun Chen
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3K views

Week1 - The Concept and Principles of Entrepreneurship

The document discusses the principles of Islamic entrepreneurship, which are: 1) Integration - Islam is a complete way of life that includes business and religion. 2) Human nature - Entrepreneurs must firstly be Muslim and fulfill their responsibility as 'khalifah' to perform 'ibadah'. 3) Motivation - Success is measured by righteous means, not just profits. Wealth must be earned and used as stipulated by Islam. The principles provide guidelines for Muslim entrepreneurs to operate businesses according to Islamic rules and regulations within the Islamic economic system, guided by the exemplary conduct of Prophet Muhammad.

Uploaded by

Chan Chun Chen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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UHAS 3012 / UHAK 1032

WEEK 1

Introduction to Entrepreneur and


Entrepreneurship
What is Entrepreneurship?
Origin of the Word “Entrepreneur”
 The word was originally used to describe people who
“take on the risk” between buyers and sellers or
“undertake” a task such as starting a new venture.

Difference Between an Inventor and an Entrepreneur


 An inventor creates something new.
 An entrepreneur puts together all the resources
needed—the money, the people, the strategy, and the
risk bearing ability to transform the invention into a
viable business.
What is Entrepreneurship?

 Entrepreneurship is the process by which individuals pursue


opportunities without regard to the resources they currently
control.

 The essence of entrepreneurial behavior is identifying


opportunities and putting useful ideas into practice.

 The set of tasks called for by this behavior can be


accomplished by either an individual or a group and typically
requires creativity, drive, and a willingness to take risks.
eBay Case
All these qualities were exemplified by
Pierre Omidyar, the founder of eBay.
Omidayar saw an opportunity to create a
marketplace where people could find each
other online, he risked his career by
quitting his job to work on eBay full time,
and he worked hard to build a profitable
company that delivers a creative and
useful service to its customers.

Pierre Omidyar
Founder of eBay
Entrepreneurs Add Value
to Scarce Resources
 All resources (wood, coal,
oil, etc.) that cost money
are “scarce.”

 Entrepreneurs add value to


scarce resources by shifting
them from areas of lower to
higher productivity.
The Economic Questions
An economy is a country’s financial
structure. It is the system that produces and
distributes wealth.

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?
Why Be an Entrepreneur?

Control over time Fulfillment


Creation / Ownership

Control over Compensation


Salary, Wage, Dividend & Control over Working Conditions
Commission
Costs and Benefits of Entrepreneurship

Costs Benefits
 Business failure  Independence
 Satisfaction
 Obstacles
 Financial Reward
 Loneliness  Self-Esteem
 Financial Insecurity  Contribution to Society
 Long Hours/Hard Work
Sources of Opportunity
 Use new technology to produce a new
product.

 Use an existing technology to produce a


new product.

 Use an existing technology to produce an


old product in a new way.

 Find a new source of (cheaper) resources.

 Develop a new market for an existing


product.
5 Roots of Opportunity
1. Problems
2. Changes
3. Inventions
4. Competition
5. Technological advances

Where others see problems, entrepreneurs recognize opportunities.


Use ‘SWOT’ to Evaluate Business
Ideas
2 Classes of Opportunities

1. External—generated by outside
circumstances noticed by the entrepreneur.
2. Internal—generated by an interest or
hobby of the entrepreneur.
7 Rules for Building a Successful Business

1. Recognize an opportunity
2. Evaluate it with critical thinking (SWOT)
3. Build a team
4. Write a business plan
5. Gather resources
6. Decide ownership
7. Create wealth
Respect Intellectual Property-Ethics
 Do not sell counterfeit knockoffs of popular
brands.

 Do not take graphics, music, or content


from the Web without permission.

 Know the source of goods you sell, to avoid


the risk of selling stolen property.
What Is a Business Plan?
 A document that you can use to start and operate your business.

 A document you can show investors and bankers to raise money


(capital) for your business.
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 agriculture
Chinese – engaged in mining and business
Indians – engaged in rubber plantations
Entrepreneurship development in
Malaysia
• After independence, the Malaysian government has been focusing on the field
of entrepreneurship until today.
• Several agencies established to manage and promote the growth of
entrepreneurship are SME Corp, TEKUN, MARA, PUNB, MTDC and etc.
• Others: The New Economic Policy (1971-1990), The National Development
Policy (1990 – 2000), Vision 2020
What is Islamic Entrepreneurship?
EIGHT PRINCIPLES OF ISLAMIC
ENTREPRENEURSHIP
1. Entrepreneurship is an integral part of Islam.

2. By virtue of human nature, the Muslim entrepreneurs are


'khalifah' and have the reponsibilities to 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”


EIGHT PRINCIPLES OF ISLAMIC
ENTREPRENEURSHIP
5. Islamic Economic System - Islamic entrepreneurship should operate
within the domain of the Islamic economic system and act as the
vehicle towards global acceptance of the Islamic economic system.

6. Position of Entrepreneurship & Business in Islam- encouraged to


venture into business. Prophet Muhammad (PBUH) expounded that 9
out 10 sources of sustenance are via business

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
SUMMARY: EIGHT PRINCIPLES

 Integration
 Human Nature
 Motivation
 Ibadah
 Position of Business and Entrepreneurship
 System
 Guidelines
 Exemplary Conducts
INTEGRATION
Islam is a complete way of life. There is no separation
between business and religion. Islam has its own
entrepreneurship culture.

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

The successful path and means for achieving


success for entrepreneurs are unique. Success in
Islam is not merely measured by the end result, but
also the means and ways of achieving them.

The pursuit of wealth must be accompanied by


intention, means, management and usage as
stipulated by Islam
The type of success according to
Al-Qurtubi

Halal (Rightful means of living)


Qanaah (Satisfying)
Taufiq (Guidance)
Sa’adah (Tranquility/Happy)
Jannah (Heaven)
Entrepreneurship as Ibadah
• Muslim entrepreneurs involvement in business is to fulfill
an obligation known as “fardhu kifayah”

• Fardhu kifayah~ Unless and until there is an entrepreneur


in a community, the entire community is deemed to be
sinful.

• Muslim entrepreneurs bear the responsibility to provide


goods and services primarily to the Muslim community
and to others
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


Islamic Economic System
 Islamic entrepreneurship is part of the framework of the
Islamic Economic System.
 Islamic economic system involves:
Islamic banking
Islamic insurance (Takaful)
Islamic capital markets
 Islamic economic system is based on Islamic
jurisprudence.
POSITION OF BUSINESS
AND ENTREPRENEUR
ISLAMIC ENTREPRENEURSHIP MODEL
Islam Proposed
(Business Venture)
E
E X
X Allah Prepared A
A (Facilities) M
M P
P L
L Islam Outlined E
E (Rules and Regulation)

Allah Promised
(Reward)
GUIDELINES

Guidelines for
Islamic
Entrepreneurship
activities are
wide and
comprehensive.
Entrepreneurial Ethics

Prevent laziness
Eradicate fear/shyness
Search for legitimate ventures
Avoid unlawful sources of income
Show gratitude and thankfulness
Grow and develop wealth
Diversify business ventures
Avoid greediness
Entrepreneurial Ethics
• Avoid malicious behavior
• Avoid squandering (elakkan membazir)
• Avoid stinginess (elakkan kedekut)
• Pay zakat and alms (sedekah)
• Be trustworthy
• Pray consistently
• Tawakkal
• Patience
• Qanaah
Exemplary Conducts of Muslim
Entrepreneurs
Business is secondary to the call of jihad
(crusade)
Never use power or influence for self-interest
Afraid of accumulated wealth
Leadership qualities in all aspects
Practice moderate way of life

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