KAM1061

ENTREPRENEURSHIP 1

NOR HAFEZ BIN MOKHTARUDDIN

011-18527309
hafez_m@hotmail.com

OBJECTIVES
By the end of this course, you should be able to;
1. Identify why entrepreneurship is important
2. Develop a vision to become an entrepreneur
3. Identify entrepreneurial opportunity and
transform it into a basic business plan
4. Making decision to become a young
entrepreneur for a better future life

Entrepreneur! Why..?

Employed - self employed

Financial and time freedom
Health, wealth and legacy
High - low no risk business
High low less capital business
Stock no stock business
Work hard - work smart principle

CHAPTER 1
INTRODUCTION OF

LEARNING OUTCOMES
1. Explain the evolution and concepts of
entrepreneurship
2. Discuss three importance of
entrepreneurship
3. Identify the myths of entrepreneurship
4. Discuss entrepreneurship development in
Malaysia

The Evolution of Entrepreneurship

The word entrepreneur is derived from the
French word, entreprendre meaning to
undertake Richard Cantillon (1755)
Entrepreneurs are individuals who actively form
or lead businesses and nurture them for growth
and prosperity
Entrepreneurship is a process of creating and
expanding businesses that collectively form a
force for national development and societal
prosperity

Researchers
Adam Smith
(1776)
Jean Babtiste Say
(1803)
John Stuart Mill
(1848)

Details
an entrepreneur is a person who acts as
agents in transforming demand into supply
an entrepreneur is a person who shifts
resources from an area of low productivity to
high productivity
an entrepreneur is a prime mover in the
private enterprise. The entrepreneur is the
fourth factor of production after land, labor
and capital

Researchers
Carl Menger
(1871)

Details
the entrepreneur acts as an economic agent
who transforms resources into products and
services. The entrepreneur transforms and
give added value.
Joseph Aloysius an entrepreneur is an innovator
Schumpeter
(1934)
Alfred Marshall the process of entrepreneurship of business
(1936)
development is incremental or evolutionary. It
evolves from sole proprietorship to a public
company

Researchers
Ibnu Khaldun
(Abdul Rahman
Mohamed
Khaldun)
David
McClelland,

Details
the entrepreneur is seen as a knowledgeable
individual and is instrumental in the
development of a city state where enterprise
will emerge
the entrepreneur is a person with high need
for achievement, this need for achievement is
directly related to the process of
entrepreneurship

 In Malaysia the term usahawan is used for

entrepreneur

Definitions of

Histrich and Peter (1998)

is the dynamic process of creating incremental
wealth

Kuratko and Hodgetts (2004)

is a dynamic process of vision, change and
creation. It requires an application of energy and
passion towards the creation and implementation
of new ideas and creative solutions

4 Basic Aspects
Involves the creation process that is creating
something new value
Requires the devotion of necessary time and
effort
Assuming necessary risks
Involve the reward (money & satisfaction)

 Kuratko and Hodgetts (2004) suggested that

there are 4 major dimensions involve in the
process of innovation and new venture
creation;
1. Individuals
2. Organisational
3. Environmental
4. Process

Definition of

Scarborough and Zimmer (1998)

is a person who creates a new business in the
face of uncertainty for the purpose of
achieving profit and growth by identifying
opportunities and assembling the necessary
resources to capitalise on them

Kuratko and Hodgetts (2004)

one who undertakes to organise, manage
and assume the risks of a business
a catalyst for economic changes who uses
purposeful searching, careful planning and
sound judgement when carrying out the
entrepreneurial process

THE IMPORTANCE OF ENTREPRENEURSHIP

1. It is a catalyst for economic change and
growth
2. Produce new products and services to fulfill
human needs through its creativity and
innovation process
3. It helps to improve the lives of millions of
people through the new products and
services they bring to the market

Bandar Baru Seri Iskandar

MYTHS OF ENTREPRENEURSHIP
Entrepreneurs seeks success but experience high failure rates

Entrepreneurs are academic and social misfits

All entrepreneurs need is money
All entrepreneurs need is luck
Entrepreneurs are extreme risk takers (gamblers)
Entrepreneurs must fit the profile
Entrepreneurs are born not made
Entrepreneurs are doers not thinkers
Entrepreneurs are always inventors

DEVELOPMENT OF ENTREPRENEURSHIP IN
MALAYSIA
Existed before Kesultanan Melayu Melaka
Malacca was known around by China, India,
Arab etc
British introduce the divide and rule in
Malaya
New Economic Policy, National Development
Policy, Vision 2020 was introduced to
encourage and support entrepreneurship
development in Malaysia

 The establishment of Ministry of

Entrepreneurship Development and
Cooperation boost the entrepreneur activities
in Malaysia (formerly BPU, MARA)
Promoting a lot of carnival, campaign, festival
etc
Collaboration with IPTA and IPTS, government
agencies etc
Promoting Keusahawanan Kerjaya Pilihan

CHAPTER 2
IDENTIFYING
ENTREPRENEURIAL
CHARACTERISTICS

LEARNING OUTCOMES
1. Identify characteristics of successful
entrepreneurs
2. Evaluate entrepreneurial inclination potential
using the entrepreneur self assessment test
3. Describe at least three differences between
businessman, managers and entrepreneurs

Characteristics
Seeking feedback
High level of energy

Explanations
Actively seek and use feedback to improve
their venture performance
Need to cope with the extraordinary
workload and the stressful demands

Team building

Have highly qualified and well motivated

teams that help handle the ventures growth
and development

Ability to set vision

Entrepreneurs know what they want to

achieve
Entrepreneurs do not become disappointed,
discouraged,, or depressed by failures
Entrepreneurs are self starters who internally
have a strong desire to compete, excel,
pursue and attain challenging goals

Tolerance for failure

Drive to achieve (self

starter)

Characteristics
Creative and
innovative
Independent
Opportunity
orientation
High degree of
commitment
Initiative and
responsibility
Skilled at organising

Explanations
Very important elements to gain a competitive
advantage and can produce unique goods and
services for customers
Like to accomplish tasks in their own way
Entrepreneurs have a well defined sense of
searching for opportunities
The commitment helps entrepreneurs to
overcome business threatening mistakes and
obstacles
Willing to put themselves in situations where
they are personally responsible for the success
or failure of the venture
Able to organise their resources in an effective
way so as to transform visions into reality

SELF ASSESSMENT FOR

ENTREPRENEURS
Many instruments developed to assess and
measure the potential inclination towards
entrepreneurship in individuals
The purpose is to get insights on the
entrepreneurial potential in individuals
Anyone has the potential to become an
entrepreneur
Robinson, Stimpson, Huefner and Hunt (1991)

DIFFERENCES BETWEEN..
Small Businessman

Entrepreneur

Engages in business activities Starts the venture, assumes

for the purpose of profit to
leadership and expands the
support his living and family venture to fulfill personal
goals and attain self
accomplishment
Low risk taker
Starting from moderate risk
taker

Follows others and invests

only in tested and proven
markets

Take calculated risks in any

opportunities

Conventional Manager
Very conscious of rules and
taboos in an organisation

Entrepreneur
Views rules only as
guidelines

Sensitive to the future and

willing to postpone rewards

Concept of the future based

on personal goals.

Has a powerful need for

acceptance

Low threshold for frustration

Able to identify problems in

any course of action

Impatient with discussions

and theories.

Make detailed plans

Action!!!

CHAPTER 3
DEVELOPING
ENTREPRENEURIAL
CREATIVITY AND
INNOVATION

LEARNING OUTCOMES
1. Define the concepts of creativity and
innovation
2. Explain the four main phases in the creative
process
3. Explain five creativity technique
4. Describe four basic types of innovation
5. Discuss the barriers to creativity and
innovation

What is Creativity?
Creativity involves the development of
uniques and novel responses to problems and
opportunities
the abilities to produce work that is novel,
high in quality and appropriate
-Sternberg, Kaufman and Pretz(2002)

PROCESS OF CREATIVITY
Ideas evolve from the creative process where
imaginative individual will imagine, inculcate
and develop an idea into a form and then
implement it for benefit
Kuratko and Hodgetts (2004) suggested that
there are 4 main phases/steps in the creative
process;

Knowledge Accumulation

Incubation

Idea

Evaluation And Implementation

BARRIERS TO CREATIVITY
Personal Beliefs

Fear Of Criticism

Over
Management

Stress

Barriers to Creativity
1. Personal beliefs
We belief that we are not creative

2. Fear of criticism
Some are afraid that people will say that their
ideas are crazy, foolish and impractical

3. Over management
Workers burdened with assignments, schedules
and demands for quick production have
hampered workers from thinking creatively
4. Stress
Not only a distraction that drains ones energy
that could be used creatively but it is also bad for
the health

HOW TO GENERATE CREATIVE IDEAS

Brainstorming
Nominal
Group

Forced
Analogy

Mind
Mapping

DO IT

1. Brainstorming
Is the most common and powerful
techniques used to hatch ideas.
The ideal number of group members is
between 4 to 7
4 rules by Willian (2000) are;

The more ideas, the better

All ideas are acceptable, no matter how
wild or crazy they might be
Use other group members ideas to
come up with even more ideas
Criticism or evaluation of ideas is not
allowed

2. Forced Analogy
Forcing can help to develop new insights as
well as new alternatives.
Very useful and fun filled techniques of
generating ideas
Finding the relationship between almost
everything and gain new solutions
Example; giving date line, high commission,

3. DO IT
D - define problem
O - open minded and apply creative technique
(generate as many ideas/solutions as
possible)
I - identify best solution
T transform (implementation)

4. Mind mapping
This technique allows one to use pictures
and/or word phrases to organise and develop
thoughts in a non-linear fashion.
It helps people to see a problem and its
solution
Example; Use during brainstorming, taking
note, refreshing memory etc

5. Nominal group
The use of the groups is to generate ideas
and evaluate solutions face to face in non
threatening group.
Members writing down as many ideas as
possible silently
Members will discuss the ideas and vote
privately to rank ideas

CHARACTERISTICS OF CREATIVE
INDIVIDUALS
Humble and proud
Passionate about work and
objectively
Dare to try new things
Open minded and willing to accepts
criticism
High self control
Goal directed, deliberate and
considerate in making decision
Willing to take calculated risks

INNOVATION
Creativity is a pre condition to innovation
Is believed to the key to sustainable success
for many organisation
Kinicki and Williams (2003), finding ways to deliver
new or better goods or services
Chell (2001), innovation is deemed as the creation
of something new in the marketplace that alters the
supply demand equation

Types of
innovation
Invention

Duplication

Extension

Synthesis

Types of Innovation
4 basic types of innovation as suggested by
Kuratko and Hodgetts (2004)
1. Invention
The act of creating a new product, service
and process that is totally novel or untried
Example; Proton Saga, Modenas, Synthium

2. Extension
The extension or addition to existing product
lines, services and processes
Example; Bosch, Samsung, Daewoo,

Home
appliances

Vehicle

Heavy
machinery

3. Duplication
Process of replication of existing product,
service or process.
It does not mean simply copying, but adding
new features or improving competitiveness
of the product, service or process.
Example; Viva, MyVi

4. Synthesis
Process of combining separate parts or
elements into a new whole formulation or
application by considering several ideas or
items that already exists
Example; smart phone, hybrid car,
internet

camera

gps

PERODUA (M) SDN BHD

Sources Of Innovation
Unexpected Event
New Knowledge
Concept
Changes Of
Demographics
Process Needs

Sources of Innovation
1. Unexpected events
Entrepreneur frequently notice that they get
ideas from something that is out of their
expectations
Example;

2. New knowledge concept

It can be obtained through reading, attending
seminars or conferences or discussions
among the professionals
Example; LED or LCD television, LED
advertising board, use of NGV in car, green
technology house

3. Changes of demographics
Changes of demographic characteristics in
age, educational levels, income and types of
employment have been a main source of
innovation for entrepreneurs
Example; fashion, superbikes, hair styles, car,
house,

4. Process needs
Process needs exist within the process of
business, an industry or a service. It perfects
a process which already exists, replaces a link
that is weak, redesigns an existing process
and so on.
Example;

Barriers to Innovation
Organisation does not encourage innovation

Insufficient resources
Traditional behaviour management
Fear of trying
Fear of change
Improper motivation
Fear of failure
Self image block
Fear of making mistakes

THE IMPORTANCE
To ensure an organisations
survival
To explore new markets

To exploit natural resources

1. To ensure an organisations survival

The future business depends on the ability of
the organisation to create new products or
services
Example; Harley Davidson, Honda, Petronas,
Proton, Toyota, Nissan,

2. To explore new markets

A creative and innovative entrepreneur will
always think of conquering a new market by
introducing new products or services
Example; Nokia, Samsung, Acer, eBook,
Toyota, Jeep, Hummer2

3. To exploit natural resources

Entrepreneurs should ensure that they can get
these benefits by exploiting the wealth of
resources without causing harm to the
environment
Example; furniture made from teak woods,
charcoal from mangroove tree, etc

STRATEGIES TO ENCOURAGE
CREATIVITY AND INNOVATION
Recognise Our Own Ability
Change Our Perception
Change The Organisational
Culture
Dare To Fail