GIG1003/GXEX1412

Asas Pembudayaan Keusahawanan

TOPIC 1: THEORY OF
ENTREPRENEURSHIP
TOPIC 2: ENTREPRENEURIAL
COMPETENCIES
T I M E : 5 P M - 7 P M ( E V E RY T H U R S D AY )
L E C T U R E R : P UA N S I T I N O R I Z A N M U S TA P H A
V E N U E : D E WA N KU L I A H 3 ( D K 3 )
( FA KU LT I S A I N S )

GIG1003/GXEX1412
Asas Pembudayaan Keusahawanan

D E A R ST U D E N T S,
KI N D LY TA KE N O TE T H AT O N LY
S T U D E N T S I N YE A R 1 E N R OL LE D IN T H E
Y E A R 2 015 /201 6 SH O U LD B E
R E G IST E R E D U N D E R T H E C O D E G IG
1 003 .
A S F O R ST U D E N T S I N T H E 2 N D , 3R D
A N D 4T H Y EA R SH O U LD B E R E G IST E R E D
U N D E R T H E C OD E G X E X 141 2.
S T U D E N T S W H O H AV E R E GI ST E R E D
W R O N GLY, PL EA SE D R O P A N D RE GIS T ER
U N D E R T H E C OR R E C T C O U R SE C O D E .

Topic 1:Theory of
Entrepreneurship

Tan Sri Dr. Tony Fernandes

1) In 2001, Tony made his move from music industry into airlines by
snapping up AirAsia, then a troubled, state-owned airline of DRB-HICOM
that had run up large debts, for one ringgit.
2) Joint ventures have brought AirAsia (low-fare carrier) into the
Indonesia, Philippines, Thailand, Japan, India and Vietnam.
3) Other ventures - In 2010 Formula OneTeam Lotus Team Principal,
Founder of the Tune Group of companies, which hosts under its umbrella
Tune Hotels (budget hotels, including one located in central London), Tune
Talk (pre-paid mobile telephone) and Tune Money (insurance and finance).
4) Fernandes was also the major mover and key partner in the effort to
locate a campus of Britain's prestigious Epsom College in Malaysia.
5)According to Forbes magazine, he now has an estimated personal
wealth of around USD230M (45th richest man in Malaysia)

Topic 1:Theory of
Entrepreneurship

TAN SRI SYED MOKHTAR ALBUKHARY

Tan Sri Syed Mokhtar Al-Bukhary

Education - SPM
Started business as early as 19 years old;
Retails business (bought any unsold meat
from traders, repacked with ice and resell
them), rice trader and rice miller (joint
venture), privatization of port (Tanjung
Pelepas), motorway (East-Coast expressway)
etc.
Founded Yayasan al-Bukhary, known as one of
the 'Hero of Philanthropy Asia.
To date, has spent RM1.6B in charitable
project (welfare,education and cultural
initiatives) around the world.

Tan Sri Jeffrey Cheah

Tan Sri Jeffrey Cheah

Over 4 decades Jeffrey Cheah transformed his obscure tin-mining company
into the Sunway conglomerate, with interests in hotels, education, health
care and infrastructure.
Cheah set upSunway CollegeandMonash UniversitySunway Campus. These
institutions, along with Jeffrey Cheah School of Medicine and Health Sciences
and Sunway International School were later placed under the Jeffrey Cheah
Foundation which has not only given out scholarships worth more than RM80
million to date, but has reinvested all the profits from these institutions. The
profits serve to upgrade facilities and ensure students benefit from a higher
quality of education.
The avid philanthropist gave away $12 million in scholarships in 2015.
18TH richest man in Malaysia with accumulated wealth of USD865M.

Topic 1: Theory of
Entrepreneurship
Define: Entrepreneurship is the entrepreneurial process by the entrepreneur.
Importance of Entrepreneurship:
1)Entrepreneurs create businesses that hire people
Their businesses require a number of hands to help them translate their
vision into
reality. It all starts of with one persons vision that turns into a
shared vision for the rest
of his/her team.
2)Entrepreneurs pay taxes
The tax paid by entrepreneurs further contributes to the state income
that is used to
contribute to facilitating state services, i.e. Health Care.

Topic 1: Theory of
Entrepreneurship
Importance of Entrepreneurship
3)Entrepreneurs create demand for products which in turn creates jobs for
other businesses
Buying raw materials for their businesses will in return create other
businesses and more
jobs will be created as well.
4)Entrepreneurs introduce new technologies in the market
There is always a fresh angle and a new way of doing things /
providing services. They create new products and provide new services to
the market.

Topic 1: Theory of
Entrepreneurship
Importance of Entrepreneurship
5)Entrepreneurs stimulate the economy.
Entrepreneurs, through the jobs and businesses they create, are
vital to the GDP equation.
6)Entrepreneurs create demand for products which in turn creates jobs for
other businesses
Buying raw materials for their businesses will in return create other
businesses and more
jobs will be created as well.

Topic 1: Theory of
Entrepreneurship
Entrepreneurship:
Schumpeter (1930)- well known economist.
Entrepreneurship plays crucial role in triggering economic
development. Development
that may result in the introduction of a
new product/methods of production, the opening of a new market,
finding of a new source of input supply or the establishment of a new
organization (creativity and innovation).
(His economist theory has proven accurately over the years)

Topic 1: Theory of
Entrepreneurship
Entrepreneur:

French word
entreprender which
means to do
something
(Swedberg, 2001)
To undertakethe risk of new ventures (Kuratko & Hodgetts, 2001)
An agents with foresight and willingness to seize opportunities (Blaug, 2001)

Topic 1: Theory of
Entrepreneurship
Entrepreneur:
Frank Knight (1921)
An individual who are willing to bear the cost of uncertainty (risk taker).
In return for this willingness, the entrepreneur will be rewarded with profit.
Kirzner (1973)
An alert individual who responds to the opportunities that already exist
but which are yet
to be organized as businesses.

Topic 1: Theory of
Entrepreneurship
Entrepreneur:
Schumpeter (1930)
An individual who is creative and resourceful innovator and agent of
change.
Schumpeters entrepreneur will include both business people and
salaried managers who fulfil the function of entrepreneurship.

Topic 1: Theory of
Entrepreneurship
DIFFERENCES BETWEEN BUSINESSMAN AND ENTREPRENEUR
BUSINESSMAN

ENTREPRENEUR

Starts a business from an existing

idea or concept

Starts a business from his own

unique idea or concept

Has many business rivals

His business rival is himself

His business gives him a living

He gives life to his business

Traditional

Innovative and revolutionary

Stays safe

Risk taker

Topic 1: Theory of
Entrepreneurship
DIFFERENCES BETWEEN
BUSINESSMAN AND
ENTREPRENEUR

Topic 1: Theory of
Entrepreneurship
DIFFERENCES BETWEEN BUSINESSMAN AND ENTREPRENEUR
BUSINESSMAN

ENTREPRENEUR

Has an active income or profit

Has a passive income or profit

Market player

Market leader

Has not yet achieved financial

freedom

Has achieved financial freedom

Profit oriented

People (i.e., employee, customer,

public) oriented

Worried

Excited

Topic 2: Entrepreneurial
Competencies
The term "ENTREPRENEURIAL
COMPETENCIES" refers to the key
characteristics that should be possessed
by successful entrepreneurs in order to
perform entrepreneurial functions
effectively.

Topic 2: Entrepreneurial
Competencies
Why We Need to Identify Entrepreneurial Competencies:
1) Predict business formation and success within and across
culture (Mansfield,
McClelland, Spencer & Santiago, 1987).
2) An effective tool in predicting
entrepreneurial experience (Bird, 2002).

firm

performance

than

3) To successfully start, operate and ensure the survival of a new

business in the marketplace (Onstenk, 2003).

Topic 2: Entrepreneurial
Competencies
McClelland and McBer (1985) came up with 4-years project
(Entrepreneurship and Small Business Development Project) under the
grant of The United States Agency for International Development. The
project was to investigate the personal entrepreneurial
characteristics (PECs) that facilitate entrepreneurial success and to
use the resulting knowledge to create better ways to select and train
entrepreneurs in developing countries.
As a result, McClelland and McBer (1985) list down 13 entrepreneurial
competencies to measure the personal entrepreneurial competencies
(PEC)or inclinations among successful entrepreneurs in developing
countries.

Topic 2: Entrepreneurial
Competencies
McClelland and McBer
(1985) list down 13
entrepreneurial
competencies to
measure the personal
entrepreneurial
competencies (PEC)or
inclinations among
successful
entrepreneurs in
developing countries.

1) INITIATIVE

9) PROBLEM SOLVING
ABILITY

2) SEE AND ACT ON

OPPORTUNITIES

10) SELF-CONFIDENCE

3) PERSISTENCE

11) ASSERTIVENESS

4) INFORMATION SEEKING

12) PERSUASION

5) CONCERN FOR HIGH

QUALITY WORK

13) USE OF INFLUENCE

STRATEGIES

6) COMMITMENT TO WORK
CONTRACT
7) EFFICIENCY
ORIENTATION
8) SYSTEMATIC PLANNING

Topic 2: Entrepreneurial
Competencies
Instructions
Select one of the numbers below to indicate
how wellthe statement describes you:
5 = very well
1
4 = well
3 = somewhat
2 = Very little
2
1 = Not at all

Ilookforthingsthatneedtobe done.

------------

I try things that are very new and different from what I have
done before.

When faced with difficult problem, I spend a lot of time trying to

find a solution

-----------
------------

I take action without seeking information.

------------

I think of unusual solutions to problems.

------------

When trying something difficult or challenging, I feel confident

that I will succeed.

-------------

*Examples of questionaires from McClelland

3
and McBer (1985) from a total of 71
questionaires.

Topic 2: Entrepreneurial
Competencies
1) Initiative
The entrepreneur should be able to take actions that go beyond his job
requirements and to act faster. He is always ahead of others and able to
become a leader in the field of business.
Examples
Does things before being asked or compelled by the situation.
Acts to extend the business into new areas, products or services

Topic 2: Entrepreneurial
Competencies
2)Sees and acts on opportunities
An entrepreneur always looks for and takes action on opportunities.
Examples
Sees and acts on new business opportunities
Seizes unusual opportunities to obtain financing, equipment, land, work
space or assistance

Topic 2: Entrepreneurial
Competencies
3) Persistence
An entrepreneur is able to make repeated efforts or to take different actions
to overcome an obstacle that get in the way of reaching goals.
Examples
Takes repeated or different actions to overcome an obstacle
Takes action in the face of a significant obstacle

Topic 2: Entrepreneurial
Competencies
4) Information Seeking
An entrepreneur is able to take action on how to seek information to help achieve
business objectives or clarify business problems.
Examples
Does personal research on how to provide a product or service
Consults experts or experienced persons to get relevant information
Seeks information or asks questions to clarify a client's or a supplier's need
Personally undertakes market research, analysis or investigation
Uses contacts or information networks to obtain useful information

Topic 2: Entrepreneurial
Competencies
5) Concern for High Quality of Work
An entrepreneur acts to do things that meet certain standards of excellence
which gives him greater satisfaction.
Examples
States a desire to produce or sell a top or better quality product or service
Compares own work or own company's work favorably to that of others

Topic 2: Entrepreneurial
Competencies
6) Commitment to Work Contract
An entrepreneur places the highest priority on getting a job completed.
Examples
Makes personal sacrifice or expand extraordinary effort to complete a job
Accepts full responsibility for problems in completing a job for customers
Pitches in with workers or works in their place to get the job done
Expresses a concern for satisfying the customer

Topic 2: Entrepreneurial
Competencies
7) Efficiency Orientation
A successful entrepreneur always finds ways to do things faster or with fewer
resources or at a lower cost.
Examples
Looks for or finds ways to do things faster or at less cost
Uses information or business tools to improve efficiency
Expresses concern about costs vs. benefits of some improvement, change, or
course of action

Topic 2: Entrepreneurial
Competencies
8) Systematic Planning
An entrepreneur develops and uses logical, step-by-step plans to reach goals.
Examples
Plans by breaking a large task down into sub-tasks
Develops plans that anticipate obstacles
Evaluate alternatives
Takes a logical and systematic approach to activities

Topic 2: Entrepreneurial
Competencies
9) Problem Solving
Successful entrepreneur identifies new and potentially unique ideas to
achieve his goals.
Example
Switches to an alternative strategy to reach a goal
Generates new ideas or innovative solutions

Topic 2: Entrepreneurial
Competencies
10) Self-Confidence
A successful entrepreneur has a strong belief in self and own abilities.
Examples
Expresses confidence in own ability to complete a task or meet a challenge
Sticks with own judgment in the face of opposition or early lack of success

Topic 2: Entrepreneurial
Competencies
11) Assertiveness
An entrepreneur confronts problems and issues with others directly.
Examples
Confronts problems with others directly
Tells others what they have to do
Reprimands or disciplines those failing to perform as expected

Topic 2: Entrepreneurial
Competencies
12) Persuasion
An entrepreneur can successfully persuade or influence others for mobilizing
resources, obtaining inputs, organizing productions and selling his products
or services.
Examples
Convinces someone to buy a product or service
Convinces someone to provide financing
Convinces someone to do something else that he would like that person to do
Asserts own competence, reliability, or other personal or company qualities
Asserts strong confidence in own company's products or services

Topic 2: Entrepreneurial
Competencies
13) Use of Influence Strategies
An entrepreneur is able to make use of influential people to reach his
business goals.
Examples
Acts to develop business contracts
Uses influential people as agents to accomplish own objectives
Selectively limits the information given to others
Uses a strategy to influence or persuade others

Topic 2: Entrepreneurial
Competencies
Common characteristics/attributes associated with achievement oriented entrepreneurs
(Brockhaus,1982).
1) Internal locus of control.
-They belief that success or failure is determined by their own effort.
-They belief in themselves.
2)Risk-taking propensity.
- They do not belief that success or failure of their venture were determined by
fate or
luck.
- They have a high self-confident and high desire to take personal responsibility.
3)The need for achievement.
- Personal attribute associated with the expectation of doing something better over others
and/or the individuals earlier accomplishment (Hansemark,2003)