DPB2012 Lecture 1 - Introduction to Entrepreneurship
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The document serves as an introduction to entrepreneurship, detailing the definitions and distinctions between entrepreneurs and businessmen, competencies for success, and the roles entrepreneurs play in economic development. It outlines course objectives for students, various types of entrepreneurship—including lifestyle, side businesses, startups, and social entrepreneurs—and discusses theories pertaining to entrepreneurship from economic, psychological, sociological, and management perspectives. Additionally, it emphasizes the importance of personal traits for entrepreneurs and the entrepreneurial process of recognizing and acting on business opportunities.
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ENTREPRENEUR VS ENTREPRENEURSHIP
a common definition of an entrepreneur is someone who establishes a
new entity to offer a new or existing product or service into a new or existing
market, whether it is for a profitable or non-profitable outcome.
The word entrepreneur is
derived from the French word
entreprendre which means 'to
undertake or to try'.[Richard
Cantallion 1775].](https://image.slidesharecdn.com/lecture1-introductiontoentrepreneurship-181102040106/85/DPB2012-Lecture-1-Introduction-to-Entrepreneurship-9-320.jpg)
DPB2012 Lecture 1 - Introduction to Entrepreneurship
- 1. 1 INTRODUCTION TO ENTREPRENEURSHIP by Mohd Zaini Zainudin CHAPTER 1 DPB2012 – ENTREPRENEURSHIP POLYTECHNIC VERSION
- 2. LECTURER Hi Everyone, you are in Entrepreneurship DPB2012 class! Definition of an entrepreneur and entrepreneurship, differences between the concept of entrepreneur and businessman, the competency of successful entrepreneurship, the roles and social responsibilities of entrepreneur. INTRODUCTION
- 3. 3 CASE STUDY ANALYSIS SEE MORE ASSIGNMENT 1 Written report would be a case study that counts towards 10% of the final grade. Analysis Method : SWOT Analysis *INDIVIDUAL TASK.
- 4. TOPIC OUTLINES Upon completing this course, students should be able to : 1. Explain entrepreneurship. 2. Explain the competencies of entrepreneurship. 3. Define theories of entrepreneurship .
- 5. Upon completing this course, students should be able to : 1. Explain clearly the concept of entrepreneurship and process in developing effective business. (C2, LD1) COURSE LEARNING OUTCOMES
- 7. 7 INTRODUCTION TO ENTREPRENEURSHIP ENTREPRENEUR VS ENTREPRENEURSHIP
- 8. 8 INTRODUCTION TO ENTREPRENEURSHIP A society that has entrepreneurs is considered to be a successful society. This is because entrepreneurs are individuals who are creative, dynamic and innovative. They are willing to take risks and face unpredictable and uncertain challenges by using their creativity and will power. Entrepreneurs would develop and penetrate new business areas in order to stay competitive in the industry. Then, more products or services being offered to the society, which would enhance the society’s economic development.
- 9. 9 ENTREPRENEUR VS ENTREPRENEURSHIP a common definition of an entrepreneur is someone who establishes a new entity to offer a new or existing product or service into a new or existing market, whether it is for a profitable or non-profitable outcome. The word entrepreneur is derived from the French word entreprendre which means 'to undertake or to try'.[Richard Cantallion 1775].
- 10. 10 ENTREPRENEUR VS ENTREPRENEURSHIP An entrepreneur is an individual who is able to perceive an opportunity for a business and create an organization to develop and manage that business successfully. An entrepreneur is an individual who organizes, manages and assumes the risks of a business (Kuratko & Hodgetts,2001) In Malaysia the term “usahawan” is used for entrepreneur.
- 11. 11 ENTREPRENEUR VS ENTREPRENEURSHIP Entrepreneurship is the process of seeking businesses opportunities under conditions of risk. Entrepreneurship also refers to the process of creating something new of value by devoting the necessary time and effort, assuming the accompanying financial, physical and social risks and receiving the resulting rewards of monetary, personal satisfaction and indepedence.
- 12. 12 ENTREPRENEUR VS ENTREPRENEURSHIP According to Yep Putih, entrepreneurship is the ability, capability, and tendency to perform the following activities : i. Identify business opportunities. ii. Manage a business effort which brings profit to the enterpreneur and the public. iii. Obtain success and richness by fulfilling the society's needs. iv. Take calculated risks. v. Manage & utilize the factors of production to bring economical development and enhance social welfare. vi. Work hard and be prepared to make new changes that can increase production quantity and quality from time to time.
- 13. 13 ENTREPRENEUR VS ENTREPRENEURSHIP An individual’s preparedness to grab opportunities without considering the resources at hand (Stevenson, Roberts and Grousbeck). (Dollinger) defined entrepreneurship as the establishment of an economical firm that is innovative, profit oriented, willing to take risks, and face uncertainties in the environment. As a conclusion, entrepreneurship benefits the entrepreneur, the economy and the society. It is a process that creates and manages a business to achieve the entrepreneur’s desired goals.
- 14. 14 ENTREPRENEUR VS ENTREPRENEURSHIP In 1970s, after the New Economic Policy (NEP), then entrepreneur was widely used in Malaysia. Common definition, “someone who establishes a new entity to offer a new or existing product/service into a new or existing market, whether it is for a profitable or a non-profitable outcome. An entrepreneur is an individual who is able to perceive an opportunity for a business and create an organization to develop and manage that business successfully. He is able to identify and seize the opportunity and bring in the necessary resources such as finance, workforce, and raw materials to develop and market the products or services. He takes proper action that is imaginative, creative, and innovative”.
- 15. 15 ENTREPRENEUR VS ENTREPRENEURSHIP ENTREPRENEUR Someone who undertakes the risk associated with creating, organising, and owning a business. ENTREPRENEURSHIP The recognition of an opportunity to create value, and the process of acting on this opportunity. ENTREPRENEURIAL PROCESS • Idea Generation • Idea Validation • Idea Implementation
- 16. 16 ENTREPRENEUR VS ENTREPRENEURSHIP Person. Process. Organizer. Organization. Innovator. Innovation. Risk-bearer. Risk-bearing. Motivator. Motivation. Visualiser. Vision.
- 17. 17 INTRODUCTION TO ENTREPRENEURSHIP DIFFERENTIATE ENTREPRENEUR AND BUSINESSMAN
- 18. 18 DIFFERENTIATE ENTREPRENEUR AND BUSINESSMAN Time Unlimited Limited Nature of job Flexible Rigid in adapting to changes Decision making Makes own decision Follows decision made by others Effort and commitment Continuous Low Risk taker Moderate Low Goal Maximize s self potential by utilizing available opportunities Solely for profit maximization
- 19. 19 INTRODUCTION TO ENTREPRENEURSHIP 4 QUADRANT OF CASH FLOW FOR FINANCIAL FREEDOM
- 20. 20 4 QUADRANT OF CASH FLOW FOR FINANCIAL FREEDOM According to Kiyosaki, “The Cashflow Quadrant is about the four different types of people who make up the world of business, who they are and what makes individuals in each quadrant unique.”
- 21. 21 4 QUADRANT OF CASH FLOW FOR FINANCIAL FREEDOM Employee You work for someone. (i.e. teacher, nurse, legal assistant) Self-Employed You work for yourself. (i.e. plumber, photographer, web designer) Business Owner People work for you. (i.e. restaurant franchise owner, landscaping company) Investor Money works for you. (i.e. Investing money in your friend’s business, buying properties)
- 22. 22 INTRODUCTION TO ENTREPRENEURSHIP EVOLUTION OF ENTREPRENEURSHIP
- 23. 23 EVOLUTION OF ENTREPRENEURSHIP : HUNTING STAGE The primary stage of the evolution of the economic life of man was hunting stage. Wants were limited and very few in numbers. The family members themselves satisfied problems of food, clothing and shelter. Producers were the consumers also. Robinson Crusoe, living in the deserted island, satisfying his own requirements had no knowledge of business. People in some parts of Africa and India still lead this type of life. In this stage problems of production and distribution were not complexed since wants were simple and limited.
- 24. 24 EVOLUTION OF ENTREPRENEURSHIP : PASTORAL STAGE With the progress of mankind gradually mental understanding developed and people started realizing that instead of killing animals, they should breed and rear them. Thus cattle breeding encouraged the use of milk, and they had to think in terms of grazing areas for their cattle. The surplus milk, meat and other related products were spared of exchange. This stage can be termed as the first stage of economic development and the beginning of commerce.
- 25. 25 EVOLUTION OF ENTREPRENEURSHIP : INDUSTRIAL REVOLUTION STAGE
- 26. 26 EVOLUTION OF ENTREPRENEURSHIP : MEDIA STAGE
- 27. 27 EVOLUTION OF ENTREPRENEURSHIP : PRESENT INDUSTRIAL STAGE
- 28. 28 EVOLUTION OF ENTREPRENEURSHIP : PRESENT INDUSTRIAL STAGE
- 29. 29 INTRODUCTION TO ENTREPRENEURSHIP SOCIAL REPONSIBILITIES
- 30. 30 SOCIAL REPONSIBILITIES # Customers # Society/community # Suppliers # Staff # Competitors # Country
- 31. 31 INTRODUCTION TO ENTREPRENEURSHIP PERSONAL TRAITS OF AN ENTREPRENEUR
- 32. 32 PERSONAL TRAITS OF AN ENTREPRENEUR # Integrity # Conceptual Thinking # Risk taking # Networking # Strategic Thinking
- 33. 33 PERSONAL TRAITS OF AN ENTREPRENEUR # Personal initiative # Seize opportunities # Endurance # Information-seeker # High work quality # Commitment towards work agreements # Efficient # Systematic-planning # Creative problem solving # Self-confidence # Assertion # Persuasion # Power and authority
- 34. 34 INTRODUCTION TO ENTREPRENEURSHIP THEORY OF ENTREPRENEURSHIP
- 35. 35 THEORY OF ENTREPRENEURSHIP : ECONOMIC PERSPECTIVE An Entrepreneur through the contributions and roles played in economic development such as allocating resources efficiently, creating job opportunities, and pioneering innovations.
- 36. 36 THEORY OF ENTREPRENEURSHIP : ECONOMIC PERSPECTIVE Richard Cantillon (1755) : Entrepreneurs as an important group in the society and key economic player in developing national economy. Adam Smith (1776) : An entrepreneur is a person who acts as agent in transforming demand into supply Alfred Marshall (1976) : The process of entrepreneurship or business development is incremental or evolutionary . It evolves from sole proprietorship to a public company. Jean Baptiste Say(1803) : Proposed that profits from entrepreneurship were separate from profits of capital ownership. Joseph Schumpeter (1934) : Described the entrepreneur as someone who is an innovator and someone who “creatively destructs”.
- 37. 37 THEORY OF ENTREPRENEURSHIP : PSYCHOLOGICAL PERSPECTIVE An entrepreneur through the behaviours and personality traits possessed by successful individuals.
- 38. 38 THEORY OF ENTREPRENEURSHIP : PSYCHOLOGICAL PERSPECTIVE McClelland (1951) : Concluded that a high need for achievement drives people become entrepreneurs. Julian rotter (1954) : An entrepreneurs tend to have a strong internal locus of control and strongly believe in their own ability to control.
- 39. 39 THEORY OF ENTREPRENEURSHIP : SOCIOLOGICAL PERSPECTIVE Entrepreneurs as a generation or a group which adopts entrepreneurship as a career to improve the status.
- 40. 40 THEORY OF ENTREPRENEURSHIP : SOCIOLOGICAL PERSPECTIVE Ibnu Khaldun (Abdul Rahman Mohamed Khaldun) (1406) : The entrepreneur is seen as a knowledgeable individual and is instrumental in the development of a city-state where enterprise will emerge. Max Weeber (1917) : An Entrepreneur as the beholder of an ‘instrumental rationality’. Everet Hagen (1957) : An entrepreneurs emerge from a low-income group that is not satisfied with the inequalities and disappointing services they receive from society.
- 41. 41 THEORY OF ENTREPRENEURSHIP : MANAGEMENT PERSPECTIVE An entrepreneur as a strategic manager who strives to ensure the business gains profit and expands.
- 42. 42 THEORY OF ENTREPRENEURSHIP : MANAGEMENT PERSPECTIVE Peter f. drucker (1985) : Described the entrepreneur as someone who maximizes opportunity and always searches for change.
- 43. 43 INTRODUCTION TO ENTREPRENEURSHIP TYPES OF ENTREPRENEURSHIP
- 44. 44 TYPES OF ENTREPRENEURSHIP # Lifestyle entrepreneurs # Side businesses # Startup founders # Social entrepreneurs We’re going to talk about the different types of businesses. What suits you best?
- 45. 45 TYPES OF ENTREPRENEURSHIP • A lifestyle entrepreneur is someone who will start a business with the explicit goal of making a certain amount of money that will enable them to live a certain lifestyle. • They’re mainly focused on keeping a certain quality of life and a certain level of wealth.
- 46. 46 TYPES OF ENTREPRENEURSHIP • They don’t need a huge business. They focus on what they need in order to live a certain lifestyle. • They focus on businesses that have a high ratio of Work : Revenue. • Spend as little time, earn as much as possible.
- 47. 47 TYPES OF ENTREPRENEURSHIP • “The 4-hour Work Week” -Tim Ferriss. • He calls the lifestyle business a “muse“. • You need a lot of things in life to be happy, and it's hard to tackle all your needs when you don’t have money. • A “muse” is something that takes away that money aspect and gives you the resources you need in order to focus on other things.
- 48. 48 TYPES OF ENTREPRENEURSHIP • Lifestyle entrepreneurs are not interested in brand new markets, but not in too saturated markets either. • They are ok with spending a lot of time in the beginning, to get started, but if it takes too long to start earning money, it defeats the purpose. EXAMPLE : Udemy instructor, Airbnb host, drop-shipping, white labelling(OEM).
- 49. 49 TYPES OF ENTREPRENEURSHIP • Side businesses are something you pursue in order to make some extra income. • These entrepreneurs are also employees.
- 50. 50 TYPES OF ENTREPRENEURSHIP • Look for things that don’t require a lot of time commitment. • Think about something people need that you can supply. • There's little risk, but also little return. • Working online is a good idea. • You can do this on top of other platforms, for example, providing a service for Udemy users. EXAMPLE : Etsy, Fiverr, Ebay, Mudah.my, Carousell.
- 51. 51 TYPES OF ENTREPRENEURSHIP • They're called “founders” because they founded a company and took all the risk. • Startups are generally big ideas and ambitions. • Paul Graham (ycombinator): "A startup is any business that's designed to grow as fast as possible."
- 52. 52 TYPES OF ENTREPRENEURSHIP • Startup = Big idea + Big ambition + Big risk + Potential big reward. • Startups require 100% of the effort. • You have to devote everything you have towards it. • They're very risky, but the potential reward could be worth it. • A startup is exciting and challenging, and it can make a lot of money.
- 53. 53 TYPES OF ENTREPRENEURSHIP • Social entrepreneurship: Starting a business that makes profit but it's focused on producing benefits for the common good of everyone. • They have similar goals with non-profit organizations.
- 54. 54 TYPES OF ENTREPRENEURSHIP • Social entrepreneurs are trying to deliver value to the community in different ways: -donating money -building a system that benefits other people and then they reinvest the money EXAMPLE : Beras Faiza in BERSAMAMU slot at TV3. • “Beras Faiza“: A corporation that recognizes that you have to make profit, but you also have to deliver some value to the community. • Non-profits are constantly trying to get more money to keep doing their charity actions. • When you donate to these companies, most of the money go to keep the company functioning.
- 57. 57