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    Theories & Concept of Entrepreneurship ENT 300

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    1. Theories of entrepreneurship have evolved over time from early economists like Cantillon and Smith to modern thinkers. Early views focused on risk-taking and transforming resources, while later concepts emphasized innovation and opportunity recognition. 2. Islam promotes entrepreneurship as an integral part of the religion, with business seen as a form of worship. Muslim entrepreneurs should strive for lawful and ethical means in their pursuit of success and wealth. 3. Small and medium enterprises are important contributors to the Malaysian economy, employing most workers and adding significant value. Entrepreneurship promotes innovation, job creation, and economic growth.

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    Theories & Concept of Entrepreneurship ENT 300

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    1. Theories of entrepreneurship have evolved over time from early economists like Cantillon and Smith to modern thinkers. Early views focused on risk-taking and transforming resources, while later concepts emphasized innovation and opportunity recognition. 2. Islam promotes entrepreneurship as an integral part of the religion, with business seen as a form of worship. Muslim entrepreneurs should strive for lawful and ethical means in their pursuit of success and wealth. 3. Small and medium enterprises are important contributors to the Malaysian economy, employing most workers and adding significant value. Entrepreneurship promotes innovation, job creation, and economic growth.

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    1. Theories of entrepreneurship have evolved over time from early economists like Cantillon and Smith to modern thinkers. Early views focused on risk-taking and transforming resources, while later concepts emphasized innovation and opportunity recognition. 2. Islam promotes entrepreneurship as an integral part of the religion, with business seen as a form of worship. Muslim entrepreneurs should strive for lawful and ethical means in their pursuit of success and wealth. 3. Small and medium enterprises are important contributors to the Malaysian economy, employing most workers and adding significant value. Entrepreneurship promotes innovation, job creation, and economic growth.

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    58 views5 pages

    Theories & Concept of Entrepreneurship ENT 300

    Uploaded by

    nik achik
    1. Theories of entrepreneurship have evolved over time from early economists like Cantillon and Smith to modern thinkers. Early views focused on risk-taking and transforming resources, while later concepts emphasized innovation and opportunity recognition. 2. Islam promotes entrepreneurship as an integral part of the religion, with business seen as a form of worship. Muslim entrepreneurs should strive for lawful and ethical means in their pursuit of success and wealth. 3. Small and medium enterprises are important contributors to the Malaysian economy, employing most workers and adding significant value. Entrepreneurship promotes innovation, job creation, and economic growth.

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    THEORIES & CONCEPT OF ENTREPRENEURSHIP ENT 300

    EVOLUTION OF ENTREPRENEURSHIP THEORY

    1755 – Richard Cantilon (French economist)


    Entrepreneur - “enterprendre” ; individuals who undertake (the risk of new venture), who invest,
    transform & make profit/loss (bear the risks associated).

    1776 – Adam Smith (“Wealth of Nation”)


    An entrepreneur is a person who acts as agent in transforming demand into supply. The “enterpriser”,
    who forms an organization for commercial purposes. Extra qualities ; ability to foresee the potential
    through change in the economy and act on demand created.

    1803 – Jean Babtiste Say


    An entrepreneur is a person who shifts resources from an area of low productivity to high productivity.
    Who is influenced by society, to recognize needs and fulfill them through skillful management of
    resources.

    1848 – John Stuart Mill (British economist)


    An entrepreneur is a prime mover in the private enterprise. The fourth factor of production after land, labor
    and capital, and its function to assemble them.

    1871 – Carl Menger (Austrian economist, the “Principles of economic”)


    The entrepreneur acts as an economic agent who transforms resources into products and services. The
    entrepreneur transforms and gives added value.

    1934 – Joseph Aloysius Schumpeter (Austrian)


    An entrepreneur is an innovator. The economy moves through leaps and bounds and the prime mover is
    the entrepreneur through the process of creative destruction by introducing new improved ways.
    Challenge the existing norms via new resources & methods. New ways of doing things.

    1936 – Alfred Marshall


    The process of entrepreneurship or business development is incremental or evolutionary. It evolves from
    sole proprietorship to a public company

    1950’s : resurgence of interest in entrepreneurship


    Journal of “ Explorations in Entrepreneurial History”

    1957 – H.G. Evan


    View of post formation stage of the venture, where the entrepreneur determine type of business, size and
    target market. Manager’s role can be delegated, but not the entrepreneur’s.

    1970’s : emergence of entrepreneurship as a discipline

    1984 – Ronstadt
    Entrepreneurship is a dynamic process of creating incremental wealth. The entrepreneur must infuse
    value into products & services.

    1985 – David McClelland


    The entrepreneur is a person with a high need for achievement which is directly related to the process of
    entrepreneurship. Set 13 competencies (co-research with McBer & Co.) .

    1995 – R. Kao
    Extend of Ronstadt’s idea, stating business value as well as benefit to society

    Ibnu Khaldun (Abdul Rahman Mohamed Khaldun)


    The entrepreneur is seen as a knowledgeable individual and is instrumental in the development of a city-
    state where enterprise will emerge.

    2007119359 (BM 117) 1


    THEORIES & CONCEPT OF ENTREPRENEURSHIP ENT 300

    DEFINING ENTREPRENEUR

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


    In Malaysia the term “usahawan” is used for entrepreneur.
    Functional definition of entrepreneurs offers the following definition:
    Entrepreneurs are individuals who actively form or lead their own business and nurture them for growth
    and prosperity. Entrepreneurs are seen as agents of changes.
    Entrepreneurs are seldom satisfied with one opportunity exploited and eager to explore more.

    Differentiating (by functions) between Petty Traders, Entrepreneurs, Intrapreneurs & corporate entrepreneurs
    Functions Petty Entrepren Intrapren corporate
    Traders eurs eurs entrepreneurs
    Assuming ownership √ √ ◌ √
    Assuming √ √ √ √
    Leadership
    Assembling √ √ √ √
    resources
    Forming new √ √ √ √
    venture
    Expanding ◌ √ √ √
    opportunistically
    Self motivation Self- Self- Subservie Self-fulfillment &
    employme fulfillment nt to self-actualisation
    nt & & self- corporate
    family actualisati directive
    on

    DEFINING 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.
    The study of entrepreneurship is concerned with the entrepreneurial behavior, the dynamics of business
    set up and expansion and development.
    A process of creating & expanding business as a force for development & societal prosperity.
    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.
    Peter Drucker ; through entrepreneurship, resources are assembled for exploiting entrepreneurial
    opportunities, not for managing problems (management efficiency).
    Uniqueness of its ability to see, seek, seize opportunity and the courage to take (calculated) risks in
    transforming the opportunity into successful venture.

    THE IMPORTANCE OF ENTREPRENEURSHIP TO MALAYSIAN ECONOMY

    Entrepreneurship is the symbol of business steadfastness and achievement. Entrepreneurial revolution is


    critical to economic growth. Entrepreneurship may affect our future in many ways:
    • Innovative creation of opportunity. Example: Portable phones linked to faxes and laptop will turn cars,
    train, and airport terminal into offices.
    • Entrepreneurship not only affect our lives through innovation but represent the working future for many
    of us due to lays off by large organization and shrinking of job opportunities for graduates.
    • Entrepreneurship is synonymous to creation of new venture and small businesses. SMIs have been
    important contributors to local economic growth.

    2007119359 (BM 117) 2


    THEORIES & CONCEPT OF ENTREPRENEURSHIP ENT 300

    • The entrepreneurial SMIs provide services that the large corporation has neglected or lack of economy
    of scale for the large corporation to serve.
    • Contribution of SMIs to Malaysian Economy - In Malaysia the SMIs employed 90% of the total labor
    force in manufacturing sector and contributed to about 26% of total value added in the sector.

    ISLAMIC ENTREPRENEURSHIP FOCUS ON EIGHT PRINCIPLES OF THOUGHTS:-

    1.Entrepreneurship is an integral part of Islamic religion.


    2. By virtue of human nature, the Moslem entrepreneurs are ‘khalifah’ and have the responsibilities
    developed 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. Position of Entrepreneurship and business in Islam – Islam encouraged its ummah to venture into
    business. Prophet Muhammad S.A.W expounded that 9 out 10 source of rizque (rezeki) can be found
    in business.
    6.Islamic Economic System - Islamic Entrepreneurship should operate within the domain of Islamic
    Economic system and act as the vehicle towards global acceptance of Islamic Economic System.
    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

    ISLAMIC ENTREPRENEURSHIP 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 (The fitrah of human being)


    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 performs business not solely for profit, but above
    all, to fulfill the ‘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
    SEVEN STEPS TOWARDS A SUCCESS IN LIFE ACCORDING TO IMAM AL-GHAZALI
    o Level of Knowledge
    o Level of Taubat or repentance
    o Level of Temptation
    o Level of Obstacles
    o Level of Motivation
    o Level of Handicap
    o Level of Praise and Thankfulness

    2007119359 (BM 117) 3


    THEORIES & CONCEPT OF ENTREPRENEURSHIP ENT 300

    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 fulfillment of fardhu kifayah.

    POSITION OF BUSINESS AND ENTREPRENEUR

    ISLAMIC ENTREPRENEURSHIP MODEL

    Islam Proposed
    (Business Venture)
    E E
    X X
    A A
    M Allah Prepared
    (Facilities) M
    P P
    L L
    E Islam Outlined
    (Rules and Regulation) E

    Allah Promised (Reward)

    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

    2007119359 (BM 117) 4


    THEORIES & CONCEPT OF ENTREPRENEURSHIP ENT 300

    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

    2007119359 (BM 117) 5

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