•BPME1013 :

INTRODUCTION TO
ENTREPRENEURSHIP
Prepared & Lecture by Dr.Maliani
Mohamad
CHAPTER 1
Introduction To
Entrepreneurship
 Understand the history and origins of entrepreneurship from the
Understand
Understand various scope.

Understand the importance of entrepreneurial activity in our daily

Understand
Understand lives

OBJECTIVES Provide
Provide
Provide definition of who is regarded as entrepreneurs with specific
features

Understand the definition of entrepreneurs and entrepreneurship from

Understand
Understand different perspectives and well-known business leaders.

Provide definition of who is regarded as entrepreneurs in accordance

Provide
Provide with Islamic perspective.
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WHAT IS
ENTREPRENEUR
? What is an entrepreneur? - YouTube
ENTREPRENEUR & ENTREPRENEURSHIP

• Entrepreneurs and entrepreneurship are among the terms that are often publicize
by people since ancient times.
• The term was brought to the meaning or definition based on various areas or
understanding by the individual.
• In terms of management thoughts, it is more focused on management science and
decision making.
• The World Bank began to introduce entrepreneurship as a major boost for the economies
of developing countries.
• Contribution to national income.
• Creating a new business but also increase employment opportunities leading to the
creation of the modern discovery of resources, technology and innovation.
CONCEPT OF
ENTREPRENEURSHIP
None of the standard and universal definition of
entrepreneurship.

Derived from the French language, entreprendre,

meaning assume duties or attempt.

The word entrepreneur is popular among the

Malaysian society is in the middle of the 1970s

Entrepreneurs are individuals who are develop a

enterprise and the businessman is a person who run
a business.
Generally, entrepreneurs can be defined as a person who
operates a business that is successful with a profit motive in
addition to adopting a strategic practices to succeed
• Richard Cantillon, an economist from France mixed
Irish considered by Schumpeter (1934) as the first who
introduce the concept of entrepreneurship.
• Individuals who purchase or inherit an existing
business with the intention of expanding it (Hull,
Bosley & Udel ,1980).
• A person who organizes & manages a business
undertaking, assuming the risk for the sake of profit.
(Webster’s Dictionary)

• Entrepreneurs are people who have the ability to see &

evaluate business opportunities, to gather the necessary
resources & take advantage of them, and to initiate
appropriate action to ensure success (Meredith, Nelson
& Neck,1982)
• Sexton and Bowman-Upton (1991):

The process of identifying market opportunities, develop the resources to achieve its objectives and
further action needs to exploit resources for personal gain in the long term.
• Kao (1995)

A process of creating something new (creative) and different (innovative) for the purpose of creating
wealth for individuals and add value to the community and the entrepreneurs are people who through
the process of wealth creation and value added through the incubation of ideas, coordinating resources
and implement.
• Coulter (2000)

A process in which individuals or groups of individuals to use the efforts and intermediaries to look for
opportunities to create value and growth through meeting the needs and requirements. It should be
through innovative and unique no matter what source control is used. Entrepreneur is someone who
creates and operates an active business.
• Hisrich and Peters (2002)

The process of creating something new added value and business needs and time, assuming the
financial, and social risks as well as receiving awards in the form of money and personal satisfaction
and independence. While entrepreneurs are inventors who revolutionized by the discovery of the source
of the latest trend or a new outlet, new industrial organization or acquisition of certain innovative
activities

• Kuratko and Hodgetts (2004)

The process of innovation and new business creation through the four dimensions such as
individual, organization, environment and processes supported by a network of co-government,
and educational institutions.
 CHARACTERISTICS IN
ENTREPRENEURSHIP DEFINITION
ENTREPRENEURS

• Motivation
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 Joseph A. Schumpeter (1934)
• Innovation as one of entrepreneurial characteristics. Innovation means
modification, activities or effort that leads to new discovery.
• Entrepreneur is an innovator, making sure that economy is vibrant.

THEORY AND • Entrepreneur contribute to economic development.

MODEL OF Alfred Marshall

• Entrepreneurship as an evolution process (business life cycle starting from
ENTREPRENEURSHI the beginning until the business stop it is operation).
P (BY ECONOMISTS) • How business emerge from small to big.

• Business ends when the founder passed away.

• To continue there is a need to have a successor or business will be taken

over by other entrepreneur.

BPME 1013 Introduction to Entrepreneurship Lecture by : Dr.Maliani Mohamad (5836)

 • Max Weber (1958)– ‘Protestant Ethic and the Spirit of Capitalism’
• Max Weber relates the element of religion as a foundation to succeed
in economic activities.

THEORY AND • Weber said that the success of Protestant people in economic
activities is because of the Protestant ethics.
MODEL OF
• Relates religion with success in economic activities.
ENTREPRENEURSHI
• Everett Hagen
P (BY SOCIOLOGIST)
• Proposes a theory- entrepreneurs exist among lower level class
people that are not satisfied within a community.
• Unsatisfied with the treatment that they received contribute to their
venture into economic activities.
• This study was based on research carried out in Japan, Columbia,
UK and Russia.

BPME 1013 Introduction to Entrepreneurship Lecture by : Dr.Maliani Mohamad (5836)

 • Gibb and Ritchie (1981):
• British academic scholar which introduce
entrepreneurship through the approach of social
development model.
THEORY AND MODEL OF • The role of socialization that push individual towards
ENTREPRENEURSHIP taking up entrepreneurship.
(ACCORDING TO
SOCIOLOGISTS) • (Interaction with entrepreneurs leads to entrepreneurial
start-ups.

BPME 1013 Introduction to Entrepreneurship Lecture by : Dr.Maliani Mohamad (5836)

 Heredity (Traits) Model (McClelland, Lynn & Schrage)
• Psychologists concentrate on the characteristics & personality of an
individual that form a business.
THEORY AND MODEL • Entrepreneurs are different from non-entrepreneurs.
OF • Among characteristics being associated with entrepreneurs are; taking
ENTREPRENEURSHIP initiative, able to plan, risk taker & opportunity seeker.
(ACCORDING TO THE McClelland (1961)
PSYCHOLOGIST) • Has identified the personality of “need for achievement” as an important
characteristic of an entrepreneur.
• McClelland (1961) ‘The Achieving Society’

• “Individuals that have high need for achievement tends to try hard to
achieve goals with their own effort. They are more incline to be an
entrepreneur”

BPME 1013 Introduction to Entrepreneurship Lecture by : Dr.Maliani Mohamad (5836)

• Early in 18th century, French Economist, Richard HISTORICAL
Cantillon, developed one of the early theory of an DEVELOPMENT OF
entrepreneur. ENTREPRENEURSHI
P
• His work ‘Essai sur la de commerce en general’
published in 1755; observed merchants, farmers,
craftsmen and other sole proprietors ‘ buy at a certain
price & sell at uncertain, therefore operating at a risk.
 • French Economist, Baudeau (1730-1790):
• A sense an entrepreneur as an innovator.
Entrepreneur as a person who invents, modify and
applies new techniques in order to reduce cost and
HISTORICAL raise profit. He also identified ability & intelligence
DEVELOPMENT OF as qualities needed to achieve success.
ENTREPRENEURSHI
P • Jean Baptiste Say (1767-1832)
• Entrepreneur must have judgement, perseverance
& knowledge, possess the art of supervision,
administration & problem solving skills, otherwise
venture would probably fail.
 • Schumpeter- entrepreneur’s role is to change
econ. status quo through innovation.
HISTORICAL • Innovation is the key to entrepreneurship,
DEVELOPMENT OF
ENTREPRENEURSHI • The key role of the entrepreneur’s is to bring
P innovation in the marketplace.
• In doing so, they create new demand, destroying
existing market & creating new ones.
 Innovation may result in:-
• The creation of a new product or alteration in its
HISTORICAL quality
DEVELOPMENT OF • The development of a new method of production
ENTREPRENEURSHI
P: SCHUMPETER • The opening of a new market
• The capturing of a new source of supply
• Formation of new biz organizations
 HISTORICAL • McClelland (1961):
DEVELOPMENT • The key to entrepreneurial behavior lies in
achievement motivation.
OF • The need to achieve is a drive to excel, to achieve
ENTREPRENEUR a goal in relation to a set of standards.
SHIP • A person endowed with a need to achieve, will
spend time considering how to do a job better or
how to accomplish something important to them
 HISTORICAL DEVELOPMENT OF ENT/SHIP

CHARACTERISTICS like situation where they like rapid feedback; avoid what they perceive to prefer to strive to achieve
can take personal be very easy or very target, which is challenging
OF HIGH responsibility to find a difficult task & is not beyond their
ACHIEVERS: solution; capabilities.
 • Rotter (1966):
• Introduced the notion ‘locus of control’.
HISTORICAL • Internal LOC: individuals who believes in
DEVELOPMENT OF themselves.
ENTREPRENEURSHI • External LOC: Fate, chance, events outside their
P control or powerful people has a dominating
influence over their lives.
 HISTORICAL • Peter Drucker (1964):
DEVELOPMENT OF • Entrepreneur as someone who maximizes
ENTREPRENEURSHIP opportunity. Ent/ship arises in response to what the
entrepreneur sees an untapped or untaken
opportunities.
• Underlined the importance of mgt and leadership,
and able to respond to change.
Schultz (1980): ( a pioneer of
human capital theory)
• In a dynamic economy, human
attitudes, behaviours, skills &
knowledge are important elements to
create wealth & good values. CONTINUE…
1982

1980

Carson
• Entrepreneur is someone who is good at
making decisions, good at utilising scarce
resources & not everyone can be entrepreneur.
• Entrepreneur must proficient in all aspects of
decision making.
• The possession of imagination and foresight as
an added ADVANTAGE.
 Kets de Vries (1996) :
• Entrepreneur as creator of risk than a taker,
since he often use someone else’s capital.
• However, even if the entrepreneur does not
bear most of financial risk in business, at an
CONTINUE…. early stage exposed to a considerable amount
of social and psychological risks (when the
risk of failure is high at start-up stage).

Bolton & Thompson: See entrepreneur as an

individual who habitually creates & innovates to
build s/thing of values from opportunity he has
identified.
 ENTREPRENEURSHIP EDUCATION IN MALAYSIA

• The role of government and private agencies in the advancement of education and entrepreneurship training in
formal schools, colleges and universities.
• In Malaysia in particular, interest to policy makers in providing small and medium enterprises (SMEs) has
increased since the establishment of the Ministry of Entrepreneur and Cooperative Development (MECD),
Ministry of Science, Technology and Innovation (MOSTI), Majlis Amanah Rakyat (MARA), Ministry of
Youth and Sports , Production Association of Malaysia (FMM), Malaysia Business Council (DPM), SIRIM,
Entrepreneur capital Nasional Berhad (PUNB), Bank Pembangunan Malaysia and various other parties.
• Cultivate entrepreneurship is through the introduction of entrepreneurship programs at both levels of schools
and universities.
• Many universities have been offering courses on entrepreneurship or small and medium businesses.

BPME 1013 Introduction to Entrepreneurship Lecture by : Dr.Maliani Mohamad (5836)

 ENTREPRENEURSHIP EDUCATION IN MALAYSIA

• To promote effective entrepreneurship education at institutions of higher education, several

challenges need to be implemented.
1. Encourage entrepreneurs or small and medium businesses in the entrepreneurial process in educational
institutions to become role models and provide opportunities for students and lecturers to see the real
situation.  
2. Provide opportunities for lecturers and staff involved in entrepreneurship, making mistakes, through
experiments, given the time and schedule flexibility and creates an uncertain situation (uncertainty).
3. Establish a mechanism for students who have no entrepreneurial background to assist entrepreneurs or
small and medium businesses around the place of learning for action learning.

BPME 1013 Introduction to Entrepreneurship Lecture by : Dr.Maliani Mohamad (5836)

 ENTREPRENEURSHIP EDUCATION IN MALAYSIA
4. Encouraging learning environment that is less rigid structure as well as use of
informal channels of communication.
5. Establish a higher education institution that provides awards to students and
lecturers by the decision, creativity and individual initiative.

BPME 1013 Introduction to Entrepreneurship Lecture by : Dr.Maliani Mohamad (5836)

ENTREPRENEURSHIP FROM ISLAMIC
PERSPECTIVES:
• Definition
• Entrepreneurship can be defined as “any business activities carried out by
the individual in order to produce product or services in accordance to
syariah (Islamic law)”
• The concept of syumul (integrated; achieving success in this world as well
as achieving success thereafter).
• Business activity is also a religious activity. This means entrepreneurship
is not separated or isolated from the life thereafter (akhirat) where people
will be judged rewarded or punished.
• Therefore, entrepreneurship falls within the system of Islam (Islamic faith,
law, moral & ethics).
 ENTREPRENEURSHIP FROM
ISLAMIC PERSPECTIVES
• Islam encourages entrepreneurship activities as the way to derive an
income.
• Prophet Muhammad (saw) mentioned that 9/10 of sources of rezeki
(incomes) can be derived or generated from business activities.
• With good intention, entrepreneurial activity is considered as an IBADAT,
will be rewarded by Allah because business activities generate incomes
that can be used by entrepreneur himself & his family.
• By offering products or services to the community (customers), an
entrepreneur is also considered to fulfill a fardhu kifayah (fulfilling one’s
obligations to the community)
 AN ENTREPRENEURIAL AS A BRANCH OF JIHAD
AND AMAL SOLEH
• Considered as jihad fi sabilillah.
• Through entrepreneurship, entrepreneurs has opportunity to increase good
deeds. Among the things that can be deemed as good deeds in the field of
entrepreneurship are:
1. Creating products that can be enjoyed long lives so hereditary. For instance,
the creation of vehicles, machinery and equipment
2. Market products more efficiently and at full effectiveness, and cost by
facilitating the extension of benefits to as many users as possible. For
instance, retail outlets and supermarkets.
3. Generate employment and livelihood to its members and their dependents.
4. Opportunities for career development and continuing to increase revenue
for those involved.

BPME 1013 Introduction to Entrepreneurship Lecture by : Dr.Maliani Mohamad (5836)

 AN ENTREPRENEURIAL AS A BRANCH OF
JIHAD AND AMAL SOLEH
5. Improving quality of life so life becomes more perfect.
6. Strengthen the social and economic status and enhance the dignity of their race,
religion and country.
7. Strengthen national economy.
8. Build Khairun Ummah..

BPME 1013 Introduction to Entrepreneurship Lecture by : Dr.Maliani Mohamad (5836)

 GUIDELINES OF ENTREPRENEURSHIP IN THE
ISLAMIC
1) Doing what he was told
Entrepreneurs still have to perform the obligatory practices such as prayer,
fasting and so forth. Despite the busy in business, the practice must not be
abandoned.
2. Avoiding what is prohibited  
The practice is forbidden by Islam such as riba and gharar be avoided because
these practices cause harm and oppress others.
3. Applying the properties of good
• Someone who wants to make the entrepreneurial nature of worship should adopt
"attributes" and away from nature "mazmumah" in all matters.
4. Planning and business strategy
• Entrepreneurs must have a thorough strategic planning and a strategy that is not
contrary to the principles of Islam.
BPME 1013 Introduction to Entrepreneurship Lecture by : Dr.Maliani Mohamad (5836)
 GUIDELINES OF ENTREPRENEURSHIP IN THE
ISLAMIC
5. Understand the tenets of business
• Entrepreneurs need to equip themselves with knowledge relating to
muamalah law for entrepreneurial activity is carried out not in conflict with
the muamalah rules of Islam.

BPME 1013 Introduction to Entrepreneurship Lecture by : Dr.Maliani Mohamad (5836)

 CONCLUSION

• The concept of entrepreneur and entrepreneurship to bring a definition and

a very broad perspective.
• The concept of entrepreneurship and entrepreneurs are a vast field of
interpretation according to different perspectives and views of business
leaders.

BPME 1013 Introduction to Entrepreneurship Lecture by : Dr.Maliani Mohamad (5836)

THANK YOU!
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