ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIP

THEORIES & CONCPET OF ENTREPRENEURSHIP

THEORIES &
CONCEPT OF
ENTREPRENEURSHIP
Assoc. Prof. Dr Nawawi B Mohd Jan
Dato Dr. Adnan Alias

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THEORIES & CONCPET OF ENTREPRENEURSHIP

THEORIES & CONCEPTS OF

ENTREPRENEURSHIP
Session Objectives
At the end of the session, you are able
to:
understand the various theories and
concepts on entrepreneurship
have a deeper understanding of the
discipline of entrepreneurship

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THEORIES & CONCPET OF ENTREPRENEURSHIP

DEFINITION
An entrepreneur is a person who undertakes to do a job
Richard Cantillon (1755).
USAHAWAN
An entrepreneur is a person who acts as agent in transforming
demand into supply - Adam Smith (1776)
An entrepreneur is a person who shifts resources from an area
of low productivity to high productivity) - Jean Babtiste Say (1803)

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DEFINITION
An entrepreneur is a prime mover in the private enterprise.
The entrepreneur is the fourth factor of
production after land ,labor and capital.- John Stuart Mill (1848)
The entrepreneur acts as an economic agent who transforms resources
into products and services.
The entrepreneur transforms and gives added value. - Carl Menger (1871)
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.
- Joseph Aloysius Schumpeter (1934)

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DEFINITION
The entrepreneur is seen as a knowledgeable individual and is instrumental in
the development of a
city-state where enterprise will emerge.
- Ibnu Khaldun (Abdul Rahman Mohamed Khaldun)

The entrepreneur is a person with a high need for achievement.

This need for achievement
is directly related to the process of entrepreneurship
- David McClelland

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THEORIES & CONCPET OF ENTREPRENEURSHIP

THE EVOLUTION OF
ENTREPRENEURSHIP THEORY
Definition of 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.

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THEORIES & CONCPET OF ENTREPRENEURSHIP

DEFINITION OF ENTREPRENEURSHIP

It is more than mere creation of business

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.

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THEORIES & CONCPET OF ENTREPRENEURSHIP

CONCLUSION OF THE DEFINITIONS

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.

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THEORIES & CONCPET OF ENTREPRENEURSHIP

THE IMPORTANCE OF ENTREPRENEURSHIP

TO MALAYSIAN ECONOMY
1.

Entreprenuership is the symbol of business

steadfastness and achievement. Entrepreneurial
revolution is critical to economic growth.
Entrepreneurship may affect our future in many
ways:

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THEORIES & CONCPET OF ENTREPRENEURSHIP

a.

Innovative creation of opportunity

ENT/ETR300 FUNDAMENTALS OF ENTREPRENEURSHIP

THEORIES & CONCPET OF ENTREPRENEURSHIP

THE IMPORTANCE OF ENTREPRENEURSHIP TO

MALAYSIAN ECONOMY
d. Employment Opportunities

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THEORIES & CONCPET OF ENTREPRENEURSHIP

Entrepreneurship is synonymous to creation of new

venture and small businesses. SMIs have been
important contributors to local economic growth.

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THEORIES & CONCPET OF ENTREPRENEURSHIP

THE IMPORTANCE OF ENTREPRENEURSHIP TO

MALAYSIAN ECONOMY
-

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.

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THEORIES & CONCPET OF ENTREPRENEURSHIP

ISLAMIC ENTREPRENEURSHIP
ISLAMIC ENTREPRENEURSHIP FOCUS ON
EIGHT PRINCIPLES OF THOUGHTS :1.Entrepreneurship is an integral parts of Islamic religion.
2.By virtue of human nature , the Moslem entrepreneurs
are khalifah and have the responsibilities 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

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ISLAMIC ENTREPRENEURSHIP
5.

6.

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 (reski) can be found in
business.
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.

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ISLAMIC ENTREPRENEURSHIP
7.
8.

Guiding Principles of Islamic Entrepreneurship is by

the al-Quran and al-Hadith
Entrepreneurial Ethics based on exemplary
conducts of Prophet Muhammad S.A.W

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THEORIES & CONCPET OF ENTREPRENEURSHIP

ISLAMIC ENTREPRENEURSHIP AS 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 .

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THEORIES & CONCPET OF ENTREPRENEURSHIP

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 Gods blessings above all other factors. A
Muslim entrepreneur perform business not
solely for profit, but above all, to fulfill the
fardhu kifayah.

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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.

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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 ones
earning
Taufiq - Asking for the blessing of Allah in
proportion to ones expectation
Saadah- Spiritual happiness
Jannah Worldly success should act as the
bridge to the ultimate success in the life
hereafter (paradise).

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SEVEN STEPS TOWARDS A SUCCESS IN LIFE

ACCORDING TO IMAM AL-GHAZALI

Level of Knowledge
Level of Taubat or repentence
Level of Temptation
Level of Obstacles
Level of Motivation
Level of Handicap
Level of Praise and Thankfulness

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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

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THEORIES & CONCPET OF ENTREPRENEURSHIP

IBADAH
In Islam, involving in business
is part of ibadah through the
fulfilment of fardhu kifayah
(Tanggungjawab Semua).

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THEORIES & CONCPET OF ENTREPRENEURSHIP

POSITION OF BUSINESS AND ENTREPRENEUR

ISLAMIC ENTREPRENEURSHIP MODEL
E
X
A
M
P
L
E

Islam Proposed
(Business Venture)
Allah Prepared
(Facilities)
Islam Outlined
(Rules and Regulation)
Allah Promised
(Reward)

E
X
A
M
P
L
E

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THEORIES & CONCPET OF ENTREPRENEURSHIP

ISLAMIC ECONOMIC SYSTEM

Islamic Entrepreneurship should
be in the framework of Islamic
Economic System and should
assist in establishing the Islamic
Economic System

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THEORIES & CONCPET OF ENTREPRENEURSHIP

GUIDING PRINCIPLES OF ISLAMIC

ENTREPRENEURSHIP

Guidelines for Islamic

Entrepreneurship and business
activities are wide and
comprehensive based on AlQuran and Al-Hadith.

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THEORIES & CONCPET OF ENTREPRENEURSHIP

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

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THEORIES & CONCPET OF ENTREPRENEURSHIP

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

Qanaah

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THEORIES & CONCPET OF ENTREPRENEURSHIP

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

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THEORIES & CONCPET OF ENTREPRENEURSHIP

END OF MODULE 1