CHAPTER 1

INTRODUCTION TO
ENTREPRENEURSHIP

Entrepreneurship
1.1 Explain about entrepreneurship
Define the concept of entrepreneur
and entrepreneurship
Differentiate between Businessman and
Entrepreneurs
Explain the roles and social responsibilities of
entrepreneur

Entrepreneurship
1.2 Understand the personal
traits/behaviours
associated with successful entrepreneurial
performance
Discuss the competencies of
entrepreneurship
Discuss on successful entrepreneurs in
Malaysia

Entrepreneurship
1.3 Understand E- Business
Define E- Business
State the importance of e-business to
entrepreneur
Distinguish the advantages and
disedvantages of e-business
Identify online marketing communication:
- Direct Email Marketing
- Online Catalogue
- Public Relations

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.

THE EVOLUTION OF
ENTREPRENEURSHIP THEORY
Adam Smith (1776) - An entrepreneur is a

person who acts as agent in transforming

demand into supply.
Jean Babtiste Say (1803) - An entrepreneur is a
person who shifts resources from an area of low
productivity to high productivity.

THE EVOLUTION OF
ENTREPRENEURSHIP THEORY
John Stuart Mill (1848) - An entrepreneur

is a prime mover in the private

enterprise.The entrepreneur is the fourth
factor of production after land ,labor and
capital.
Carl Menger (1871) - The entrepreneur
acts as an economic agent who
transforms resources into products and
services.The entrepreneur transforms
and gives added value.

THE EVOLUTION OF
ENTREPRENEURSHIP THEORY
Alfred Marshall (1936) - The

process of entrepreneurship or
business development is
incremental or evolutionary . It
evolves from sole proprietorship to
a public company.

THE EVOLUTION OF
ENTREPRENEURSHIP THEORY
Ibnu Khaldun (Abdul Rahman

Mohamed Khaldun) - The

entrepreneur is seen as a
knowledgeable individual and is
instrumental in the development of a
city-state.

David McClelland - The entrepreneur

is a person with a high need for

achievement. This need for
achievement is directly related to the
process of entrepreneurship.

DEFINITION OF ENTREPRENEUR
The word entrepreneur is derived from the French

word entreprendre which means 'to undertake or to

try'.[Richard Cantallion 1775]
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 nonprofitable outcome.

DEFINITION OF ENTREPRENEUR

An enterpreneur 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)

DEFINITION OF 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.

 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

Differences between an enterpreneur

and a small businessman
Time
Nature of job
Decision making
Effort and commitment
Risk taker
Goal

SMALL BUSINESSMAN VS ENTERPRENEUR

1. TIME
Small Business

Entrepreneur

Spending time buying and

selling product. (Limited
time)

Unlimited time-studying
how to satisfy client and
always come out with
ideas on ways to improve
his products

SMALL BUSINESSMAN VS ENTERPRENEUR

2. NATURE OF JOB
Small Business

Entrepreneur

faces competition as
ordinary challenges

the competitive market is a

challenge that needs to be
thoroughly in order to
survive in an industry.

SMALL BUSINESSMAN VS ENTERPRENEUR

3.DECISION MAKING
Small Business

Entrepreneur

Follow the decision

made by others and
invests only in a tested
and proven market

make on decisions and use

his creativity in producing and
creating innovative products
and services that can
penetrate a market which has
not been tested before.

SMALL BUSINESSMAN VS ENTERPRENEUR

4. EFFORT & COMMITMENT

Small Business

Entrepreneur

is not attracted to
changes and
technological
breakthrough

always keep himself updated

with current and future
technological development to
further increase his creativity
and productivity.

The Roles &Social Responsibilities of Entrepreneur

When you become entrepreneurs ..are you still

responsible to our community and to our country?

In our desire to maximize profits, are we going to
cheat our customers, exploit our employees, and
dump our wastes into the air, water and land? Many
of our workers are underpaid. Our environment is
being destroyed or polluted.
Discuss the roles of entrepreneur
towards Customers, Society/community,
Suppliers, Staff, Competitors &
Country

The Roles and Social Responsibilities of

Entrepreneur toward:
Customers - sell quality products at fair price.
Society/community- job creation and environmental

observation.
Suppliers- be fair with his suppliers by paying them
on time as agreed upon
Staff- promote the welfare of his employees
Competitors- observe business ethics with his
competitors
Country- must pay the correct amount of taxes to the
government

COMPETENCIES OF
ENTERPRENEURS

1.Personal
initiative
2. Seize
opportunities

9.Creative Problem
Solving

3.Endurance
4.Information-seeker

10.Self

5.High work
quality
6.Commitment towards work

8. Systematic
Planning

Confidence

11.Assertion

12.Persuasion

COMPETENCIES OF ENTERPRENEURS

1.Personal initiative
An Ent who has strong personal

initiative is able to act immediately on

available opportunities and choose
best strategy when he faces a
problem.
Initiative allows an Ent to be alert
and proactive.

COMPETENCIES OF ENTERPRENEURS

2. Seize Opportunities
Ent grabs or seize opportunities continuously to

make sure that his business sustains for a long

time in the industry.
focuses, identifies and exploits business
opportunities.
maximizes his thinking capacity by finding
solutions to probles faced by community.
Ent who is successful will be confident that
there is a business opportunity behind every
problem.

 In identifying current human needs,

he will take action to develop, modify,

adapt or adopt the existing products
to fulfil market demand.
The Ent increases his knowledge by
getting ideas from employees,
customers and competitors, reading
on related matters and identifying his
skills, capabilities and self potential.

COMPETENCIES OF ENTERPRENEURS
3. Endurance
has to face various barriers and problems

before achieving success.

Needs to have great strength and courage
within him.
Strong enough to face problems and barriers
courageously.
He would never give up accomplishing his
vision and tries to deal with barriers that
block his path to achieving success.
Faces various problems and risks :eg
increase in the cost of raw materials

COMPETENCIES OF ENTERPRENEURS

4. Information Seeker
A successful Ent is able to seek

information, that is he has done some

research to obtain information and received
feedback from customers in order to
provide a good product or service that can
gain customers satisfaction and
acceptance.
It is important for an Ent to make an
analysis on his market and business

 Ent-should have correct and up to

date information.
Info obtained will help him
enhance his experience and
improve his achievemEnt and
business performance.

COMPETENCIES OF
ENTERPRENEURS
5. High Work Quality
Ent always make comparison of his work quality

with those of others to make sure his products

are always better.
Ent makes sure that he is not only doing a job
but also doing it in the best way possible to
produce products of the best quality.
Ent can increase his reputation as well as his
business reputation-which are ways for him to
become successful.

 The continuous production of quality

products and services will determine

the customer's faithfulness,
commitmEnt and satisfactions.
Products of high quality will bring
profitable returns to an Ent as it
ensures the faith of customers
towards the products.

COMPETENCIES OF
6.Commitment
towards Work
ENTERPRENEURS
Agreements
a successful Ent devotes total commitment to the

venture.
this commitment help the Ent to rectify mistakes and
overcome obstacles which threaten business operations.
Ent. who has a high level of commitment towards work
agreements can be seen in :
his willingness to sacrifice his personal interest in order
to make the market successful
taking full resposibility in completing a task
his willingness to help his own staff to perform the job
and provide satisfaction to customers.

COMPETENCIES OF
ENTERPRENEURS
7. Efficient
Ent is orient towards efficiency and is always

findings ways to produce products with lower

cost or within a shorter time period.
Use business information and management
methods to improve his efficiency in
business, which help decrease wastage and
costs.

COMPETENCIES OF
ENTERPRENEURS
8. Systematic Planning
Planning is the most important aspect for an Ent in

arranging buss strategies to achieve buss goals.

Ent always focuses on the future and is sensitive
towards any change that occur. He will not be
greedy or slow in reacting when an oppor.
emerge. If the Ent does not have expertise in
making decisions, he will consider sourcing skilled
expertise from outside the company.
Ent practices time managemEnt in performing
syatematic planning of his business and then lead
to an increase in performance and achieving
business target.

 changes involving fixed capital based on five year

plan will bring damage to the company and its new

products as competition will grow in a long span.
This type of Ent would usually move towards :
making plans, taking forward steps, and dividing big
tasks into much simpler and smaller tasks.

- making evaluation and choosing the best

alternative for a spesific problem.
- taking a systematic and logical approach to
achieve business goals.

COMPETENCIES OF
ENTERPRENEURS
9. Creative Problem Solving
Ent has the capability of solving

problems in terms of searching for

smart steps to solve those problems
as well as looking and thinking of
innovative new ideas or creative
problem solving methods.

COMPETENCIES OF
ENTERPRENEURS
10. Self Confidence
Ent - confidence would help him

succeed in his venture.

Ent who has confidence in himself would
:
-believe in his skills and capabilities to
achieve what he desires.
Express the feeling of confidence
towards his capability in solving certain
tasks and challenges. He will be able to
stand firm and overcome the problem of
low self esteem when confronted with

- Be able to make decision without

hesitationor respond to challenges
- Read a lot and gather experience
in subjects outside his
specialization.

COMPETENCIES OF
ENTERPRENEURS
11. Assertion
Ent will be assertive in his actions.
He is brave to give ideas or opinions

to people and to take action when he

has to face defiance from others.

COMPETENCIES OF
ENTERPRENEURS
12. Persuasion
Ent is persuasive and will be able

to persuade his customers to buy

his products or services.
He has to persuade many people
who have an impact on his
business such as staff, customers,
suppliers and financial institutions.

COMPETENCIES OF
ENTERPRENEURS
13. Power and Authority
Ent will think of a strategy to influence customers

to buy his products or services without deceiving

them in order to reach his vision.
Ent is a leader and he will be able to influence his
staff and the industry that he is involved in to
make sure he achieves his vision.

E-BUSINESS
Information & communication tech.(ICT):

- set of inter-related components that are able

to collect, process, store & distribute
information
Input
Processing
Output
Input : Raw data in the orgn. /data & commands
received from userWhat are the examples of
input devices?
Processing : The act of transforming the raw
data into a meaningful form to the organization.
Output : Anything that is produced by input

E-BUSINESS Vs E-COMMERCE
The terms e-commerce and e-business are often

used interchangeably but what do these words

really mean?
e-business covers online transactions, but also
extends to all Internet based interactions with
business partners, suppliers and customers such
as: selling direct to consumers, manufacturers and
suppliers; monitoring and exchanging information;
and collaborative product design. These online
interactions are aimed at improving or
transforming business processes and efficiency. e-

E-BUSINESS
Online marketing communication:

Direct Email Marketing

Direct email marketing is a format for email-

based campaigns in which standalone

advertisements are sent to a targeted list of
recipients. The messages, which may be text or
HTML.

 Online marketing communication:

Online Catalogue
* Internet-based presentation of a set
of items available for purchase,
including description, price, and
ordering information- cyber catalog,
electronic catalog and web catalog.
*Lower costs (no paper, printing &
postage),24-hour accessibility, and
the ability to quickly change price and
product.
* Amazon.com - serving as a model for
on-line catalog marketers. In travel and
entertainment ticketing, entertainment
merchandise (books, magazines,
videos, music), grocery and drugstore
sales, computer software, and

 Online marketing

communication:

Public Relations is the

practice of managing the
flow of information
between an individual or
an organization and the
public