Introduction to

Entrepreneurship

Introduction to Entrepreneurship
Outline

1. The concept of entrepreneurshi

2. Theories and models of entrepreneurshi

3. The importance of entrepreneurship and entrepreneu

4. Entrepreneurship Development in Malaysi

5. Entrepreneurship in Islamic Perspectives

Introduction to Entrepreneurship
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The Concept of
Entrepreneurship

Entrepreneurship is the capacity and willingness

to start, organise, and run a business despite its
uncertainties.

Types of entrepreneurship

Social entrepreneurship Scalable startup entrepreneurship

Small business entrepreneurship

Large company entrepreneurship Innovation entrepreneurship

Introduction to Entrepreneurship
The Concept of
Entrepreneurship

Entrepreneur + Capital = Products + Customers = Business.

Introduction to Entrepreneurship
The Concept of Entrepreneurship

Types of entrepreneurship
1. Social entrepreneurship

Offer solutions to important social problems, which may include:

Addressing social Engaging with

inequality environmental
concerns

Supporting more
equitable
economic
development

Example:

An independent social enterprise This network connects the public

fighting education inequality in and corporate sponsors to NGOs. Introduction to Entrepreneurship
Malaysia.
The Concept of Entrepreneurship

Types of entrepreneurship
2. Scalable startup entrepreneurship

Focusing on innovative ideas that can expand the business and

generate as much profit as quickly as possible.

• Often favored by venture capitalists because they can quickly gain

a return on their investment.
• The focus is growth, key metrics for success may include gross
margins, customer retention and conversion rates.

Example:

Instagram is a popular photo- McDonald's franchise model,

sharing app. consistency, and innovation have
led to its success. They grew
quickly through franchising.
Introduction to Entrepreneurship

The Concept of Entrepreneurship

Types of entrepreneurship
3. Small business entrepreneurship

Owner focusing on creating and running their own business, either on

their own or with the help of family members.

• Typically aren't focused on rapid growth and expansion

• Instead of courting investors, owner may choose to get a business
loan for financing
• Has the potential to grow into large company entrepreneurship
when the company grows rapidly.

Example:

Cafe Family-owned restaurant, warung

Introduction to Entrepreneurship
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The Concept of Entrepreneurship

Types of entrepreneurship
4. Large company entrepreneurship

Some businesses grow over time, and large company

entrepreneurship aims to grow an existing business model.

• Focuses on generating profits to support the business owner's

lifestyle and growth
• May acquire an existing company offering innovative services.

Example:

Google focuses on search engine Genting Group is one of Asia's best-

technology, online advertising, cloud managed multinationals with
computing, computer software, businesses in leisure & hospitality,
quantum computing, e-commerce, plantations, property, and life
AI, and consumer electronics. sciences & biotechnology.
Introduction to Entrepreneurship
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The Concept of Entrepreneurship

Types of entrepreneurship
5. Innovation entrepreneurship

Businesses with the intent of bringing completely new products or new

ideas to market.

• Invent new products, services, and solutions to improve their

customers' lives
• Often driven by a mission or vision for the world
• Focus on how their idea or product will change society
• Sometimes called disruptors as they can change the business
landscape in their industry or even create new technologies that
affect society.

Example:

WhatsApp is a cross-platform,
Airbnb is a homestay and freeware instant messaging and
experience marketplace online voice-over-IP service
(changing the accommodation (established the personal
industry) communications market) Introduction to Entrepreneurship
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Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Innovation theory
(founded by Joseph A. Schumpeter)

The assumptions are:

The entrepreneur is born with the desire to establish

his own industry.
He desires to do something new.
Takes pleasure in creativity and earning experiences of
skills for doing various tasks.

Main goal is to earn profits by searching for new raw

materials, sources, machinery, products, production
methods, workers, and consumer satisfaction.

Introduction to Entrepreneurship
Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Theory of need for achievement
(founded by McClelland)

The assumptions are:

Desire for high achievements, top performance, and

excellence develop entrepreneurial tendencies.
Entrepreneurs should be imaginative, think critically,
and create new combinations.
From the start, the person is taught to strive for
success and encouraged to become an entrepreneur.

Introduction to Entrepreneurship
 Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Theory of recover the withdrawal of status
(founded by Everet Hegen)

The assumptions are:

The creativity of any suffering minority group in society

is the main source of entrepreneurship.
If a group loses its reputation, they work hard to regain
it.

Withdrawal of status or reputation is caused by the

following conditions
• When a reputed group is forcefully displaced by another
group
• When a better group changes its views about its
subordinate group
• When a group starts living in some new society.

Introduction to Entrepreneurship
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Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Behaviour theory
(founded by John Kunkel)

A society's entrepreneurial development depends on its

economic and social goals.

Entrepreneurial development requires three types of

compositions:

Influencing demand composition can make people

more entrepreneurial.

Labor and labour market, production methods, training

opportunities, skills, etc. determine opportunity
competition.

Sources of income, traditions, aspirations, etc. affect

labour composition.

Introduction to Entrepreneurship
Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Entrepreneurial group theory
(founded by Frank W. Young)

The theory is based on the assumption that the expansion

of entrepreneurial activities is possible only by
entrepreneurial groups.

Reactivity is possible when three conditions are met:

When the group feels of low status.

When the group is not successful in reaching important

social machinery.

When the group has better institutional resources as

compared to other groups.

Introduction to Entrepreneurship
Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Social change theory
(founded by Max Weber)

The emergence and development of entrepreneurs depend

upon the ethical values system of society.

Assumptions:

Religion and ethics shape the entrepreneurial culture.

Spirit of capitalism encourages entrepreneurs to be

profitable.

The urge to acquire money and profits drives the

individuals to become entrepreneurs.

Introduction to Entrepreneurship
Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Cultural theory
(founded by B.F. Hauslin)

Industrial entrepreneurial development is possible only that

a society:

Where social procedures are unstable.

Alternatives of employment to persons are widely

available.

Encourages the personality development of

enterprising persons.

Introduction to Entrepreneurship
Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Cultural value theory
(founded by Kroken)

The Entrepreneur is an ideal personality for society.

Three factors influence an entrepreneur's success and

performance:

Entrepreneur’s own inclination towards his work and

profession.

Expectations of acceptance groups regarding the role

of the entrepreneur.

Functional requirements of the work.

Entrepreneurial development is linked to the environment.

Introduction to Entrepreneurship
Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Socio-cultural value theory
(founded by Stokes)

Sociocultural values are important during economic

transition.

Assumptions:

The physiological factors (competition, efforts for

continuous innovation, etc.) encourage economic
development by stimulating entrepreneurship.

Mental thinking creates entrepreneurial development

directions, but group generated value matrix attracts
entrepreneurs.

Introduction to Entrepreneurship
Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Economic theory
(founded by Pepuek and Cassis)

Assumptions:

Every society is physiologically motivated to increase

real income.

Economic motivations are sufficient conditions for

individual industrial entrepreneurship.

Individuals lack entrepreneurial response due to

market imperfections and policy decisions.

Individuals enter the industrial field to maximize economic

and market opportunities.

Introduction to Entrepreneurship
Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Entrepreneurial disposition theory
(founded by T.V.S. Rao)

These assumptions promote entrepreneurship and industry:

Entrepreneurial development requires courage.

Individual, physical, and orienting factors are important

for entrepreneurial establishments.

Dynamic motivation, long-term commitment, individual,

social, and physical sources, and political system are
entrepreneurial disposition factors.

Introduction to Entrepreneurship
Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Process of stage theory
(developed by Venkat Rao)

Entrepreneurship development is a process of five following

stages:

Simulation Identification of
entrepreneurial abilities and
capacities in the society

Follow up Promotion Development and

expansion of
entrepreneurs

Introduction to Entrepreneurship
Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Process of stage theory
(developed by Venkat Rao)

Entrepreneurship development is a process of five following

stages:

Simulation
• In this stage, entrepreneurs develop through
simulations
• Various policy announcements, particular growth
strategies, wide publicity, support institutions, and
entrepreneurial development programs are made
• All these help in simulating entrepreneurship.

Introduction to Entrepreneurship
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Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Process of stage theory
(developed by Venkat Rao)

Entrepreneurship development is a process of five following

stages:

Identification of entrepreneurial abilities and capacities

in the society
• At this stage identification of entrepreneurs is
carried out and advanced systems are adopted
• The entrepreneurs are directed toward
constructive activities
• The prospective Entrepreneur in various fields is
identified.

Introduction to Entrepreneurship
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Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Process of stage theory
(developed by Venkat Rao)

Entrepreneurship development is a process of five following

stages:

Development and expansion of entrepreneurs

• This stage includes vocational guidance,
management training, and technical training for
entrepreneurs
• Various policies and programs are organized for
the expansion of industrial activities.

Introduction to Entrepreneurship
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Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Process of stage theory
(developed by Venkat Rao)

Entrepreneurship development is a process of five following

stages:

Promotion
• At this stage, central labour organizations, state-
level organizations, research, testing, standards
organizations, etc. are established to expand
economic activities and promote entrepreneurship
• These organizations offer entrepreneurs
encouragement, help, facilities, and services.

Introduction to Entrepreneurship
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Theories and Models of Entrepreneurship

Theories of
entrepreneurship
Process of stage theory
(developed by Venkat Rao)

Entrepreneurship development is a process of five following

stages:

Follow up
• In the last stage, government programmes and
policies for entrepreneurial development are
monitored
• An entrepreneurial feedback system is introduced
for entrepreneurial expansion and development.

Introduction to Entrepreneurship
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Theories and Models of Entrepreneurship

Models of entrepreneurship

Kao's conceptual model

This model has four main aspects:

Entrepreneurial Personality (The Person

The overall success of a new venture depends on the
entrepreneur's skill, qualities, traits, and determination.

Entrepreneurial Task (The Task

It is a role played by an entrepreneur in an enterprise. The major
task of the entrepreneur is to recognize and exploit opportunities.

Entrepreneurial Environment (The Environment

It includes resources, infrastructure, competitive pressures, social
values, rules and regulations, stages of technology, etc.

Organizational Context (The Organization

Creative and entrepreneurial work happens there. Involves the
structure, rules, policies, culture, HR system, and communication
system.
Introduction to Entrepreneurship
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Theories and Models of Entrepreneurship

Models of entrepreneurship

Integrated model of entrepreneurship by Abdul Aziz

Mahmud

• Related to both internal and external elements of the

entrepreneurial environment
• Both internal and external elements of affect
entrepreneurship
• Entrepreneurial environment impacting entrepreneurial
behaviour
• Behaviour of an entrepreneur is affected by political,
organizational, economic, socio-cultural, and
psychological.

Introduction to Entrepreneurship
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Theories and Models of Entrepreneurship

Models of entrepreneurship

The process of venture creation

People with high entrepreneurial driv

• Set self-actualization goals for themselves
• Make the venture dominant in its market or industry.

People with medium entrepreneurial driv

• Set self-esteem goals for themselves
• Make the venture grow and become highly successful.

People with low entrepreneurial driv

• Set security goals for themselves
• Make the venture a small and stable income producer.

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The Importance of
Entrepreneurship and
Entrepreneur
1. Accelerate economic growth

• Entrepreneurs create new job opportunities by creating new

products and services
• Enhance production by utilizing the existing resources in the most
effective ways
• Help generate new wealth and add more to the national income.

Introduction to Entrepreneurship
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 The Importance of
Entrepreneurship and
Entrepreneur
2. Promote innovation

• Entrepreneurs bring new ventures, markets, products, and

technology through research and development (R&D).
• Entrepreneurs solve problems existing products and technology
cannot.
• Entrepreneurship can improve people's lives by creating new
products and services or innovating existing ones.

Introduction to Entrepreneurship

The Importance of
Entrepreneurship and
Entrepreneur
3. Promotes social changes

• Entrepreneurs change or break the tradition or cultures of society

and reduce the dependency on obsolete methods, systems, and
technologies.
• For example, no need to go out for food takeaway. Can order food
remotely and get it delivered
• Entrepreneurs introduce new technologies and systems that
change society
• These changes improve lifestyle, generosity, morale, and
economic choice
• Social changes affect national and global changes gradually.

Introduction to Entrepreneurship

The Importance of
Entrepreneurship and
Entrepreneur
4. Develop and improve existing entreprises

• Entrepreneurs create new products and ideas, but they also

impact existing businesses.
• Entrepreneurs think differently, so they can expand and develop
existing businesses.
• Modernizing production, implementing new technology in
distribution and marketing, and helping existing enterprises use
resources more efficiently are examples
• For example, Airbnb allows people to turn their homes into rental
homes without needing too many documents.

Introduction to Entrepreneurship

Entrepreneurship
Development in
Malaysia
The introduction of Malaysia's New Economic Policy (NEP)
in 1970, boosts entrepreneurship activities as the
government did much to support and protect the national
automotive industry.

• This led to multiple businesses dealing with auto parts

and other components
• The automotive industry in Malaysia led to new
businesses, improving the entrepreneurial scene.
• New businesses needed advanced technological know-
how, skills, and talent to grow and thrive
• State-led industrialization created new opportunities for
Malaysian entrepreneurs.

This effort by the Malaysian government is one of the main

reasons entrepreneurship is growing rapidly and attracting
foreign investors and entrepreneurs.
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Entrepreneurship Development in Malaysia

Social Entrepreneurship
Action Framework 2030

The Entrepreneur Development and Cooperatives Ministry

(KUSKOP) developed a framework to support social
enterprises' growth and competitiveness by increasing their
awareness, reach, capacity, and competency through
training on adapting to technology and digitalization, access
to finance, and markets.

Source
Access the booklet by going https://www.kuskop.gov.my/admin/files/med/image/portal/PDF/
to the link provided or scan SEMy2030/SEMy2030_Booklet_ENG.pdf
the QR code

Introduction to Entrepreneurship
Entrepreneurship Development in Malaysia

Current issues in
entrepreneurship in
Malaysia
Most countries have issues when it comes to digital
entrepreneurship, and Malaysia is no exception.

• Lack of entrepreneurial policies has led to bureaucracy

• The Malaysian market faces counterfeiting, *grey
markets, and the protection of intellectual property
rights.

*Grey market: Where products are sold legally, but without proper
permission or authorization from the original producer of the product.

Introduction to Entrepreneurship
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Entrepreneurship in Islamic
Perspectives
Entrepreneurship from an Islamic Perspective (EIP) is basically a
person's behaviour in getting opportunities through the optimization of
resources based on the Muslim work ethic (Shamsudin et al., 2010).

Characteristics of Islamic entrepreneurship:

Honesty Willingness Keep promises Orderly

to work hard administration

Always pray Pay zakat and Have a leadership

alms spirit Introduction to Entrepreneurship
Entrepreneurship in Islamic Perspectives

Business Success
The list of influences that make entrepreneurs successful:

Avoiding usury from usury cheating, persecuting, lying, betraying,

selling goods that are forbidden and others.

Increase thanks to God for all the gifts that He has bestowed.

Maintaining and maintaining prayer times.

Must be pious, zuhud, patient, tawadhu (humble), true, honest,

and mandate.

Paying alms and increasing alms.

Be fair and ihsan in muamalah. Intend with good intentions,

which is trying to stock the charities hereafter, do not intend to
boast, show off, riya, takabur.

Multiply remembrance of Allah during the trade.

Introduction to Entrepreneurship
Entrepreneurship in Islamic Perspectives

Business Success
The list of influences that make entrepreneurs successful:

Expenses should be less than income.

Spend money only according to the social status in the

community, and the rest is saved.

Buy what you need, not what you want.

Don't make it a habit to owe if it's not very important.

Have a special list of expenses and income.

Be attentive to what is purchased, its strength and beauty.

Introduction to Entrepreneurship