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ENT/ETR300FUNDAMENTALS OF ENTREPRENEURSHIP

THEORIES & CONCPET OF ENTREPRENEURSHIP

THEORIES &

CONCEPT OFENTREPRENEURSHIP


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THEORIES & CONCEPTS OFENTREPRENEURSHIP

Session Objectives

At the end of the session, studentsshould be able to:

understand the various theories and

concepts on entrepreneurship have a deeper understanding of the

discipline of entrepreneurship


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THE EVOLUTION OF

ENTREPRENEURSHIP THEORY

Definition of an Entrepreneur :

An entrepreneur is a person whoundertakes to do a job RichardCantillon (1755). The term entrepreneuris a French word first coined by Richard

Cantillon. In Malaysia the term usahawan is

used for entrepreneur.


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THE EVOLUTION OF


Definition of Entrepreneurship:

Entrepreneurship involves not only theprocess that leads to the setting up of abusiness entity but also the expansionand development of an on going

concern.The study of entrepreneurshipis concerned with the entrepreneurialbehavior, the dynamics of business setup and expansion and development.


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THE EVOLUTION OF


Adam Smith (1776) - An entrepreneur is

a person who acts as agent intransforming demand into supply.

Jean Babtiste Say (1803) - An

entrepreneur is a person who shiftsresources from an area of low

productivity to high productivity.


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THE EVOLUTION OFENTREPRENEURSHIP 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 transformsresources into products and services.The

entrepreneur transforms and gives added

value.


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Joseph Aloysius Schumpeter (1934) - An

entrepreneur is an innovator. The economymoves through leaps and bounds and the

prime mover is the entrepreneur through the

process of creative destruction.

Alfred Marshall (1936) - The process ofentrepreneurship or business development is

incremental or evolutionary . It evolves from

sole proprietorship to a public company.


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Ibnu Khaldun (Abdul Rahman Mohamed

Khaldun) - The entrepreneur is seen as aknowledgeable individual and is instrumental

in the development of a city-state where

enterprise will emerge.

David McClelland - The entrepreneur is aperson with a high need for achievement.

This need for achievement is directly related

to the process of entrepreneurship.


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DEFINITION OF ENTREPRENEURSHIP

It is more than mere creation of business

Entrepreneurship is a process of innovationand new venture creation through four majordimensionsindividual, organizational,environmental and process.

The entrepreneurship process is aided bycollaborative networks in government,education and institutions.


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DEFINITION OF ENTREPRENEURS

Functional definition of entrepreneursoffers the following definition:

Entrepreneurs are individuals who

actively form or lead their own businessand nurture them for growth and

prosperity.


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THE IMPORTANCE OF ENTREPRENEURSHIP TOMALAYSIAN ECONOMY

1. Entreprenuership is the symbol of business

steadfastness and achievement. Entrepreneurialrevolution is critical to economic growth.

Entrepreneurship may affect our future in many

ways:

a. Innovative creation of opportunity

Example: Portable phones linked to faxes and

laptop will turns cars, train, and airport terminal

into offices.


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d. Entrepreneurship not only affect our livesthrough innovation but represent the working

future for many of us due to lays off by largeorganization and shrinking of job opportunitiesfor graduates.

e. Entrepreneurship is synonymous to creation of

new venture and small businesses. SMIs havebeen important contributors to local economicgrowth.


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ISLAMIC ENTREPRENEURSHIPISLAMIC 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 reponsibilities develop

prosperity and sees business as part of ibadah or good

deed.

3.Motivationsuccess in Islam is not merely measuredby the end result but also the way and means of

achieving them.

4.Ibadahbusiness activity is part of ibadah or good

deed


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5. 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.

6. Islamic Economic System - Islamic

Entrepreneurship should operate within the domain

of Islamic Economic system and act as the vehicletowards global acceptance of Islamic Economic

System.

ISLAMIC ENTREPRENEURSHIP


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7. Guiding Principles of Islamic Entrepreneurship is by

the al-Quran and al-Hadith

8. Entrepreneurial Ethics based on exemplaryconducts of Prophet Muhammad S.A.W

ISLAMIC ENTREPRENEURSHIP


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ISLAMIC ENTREPRENEURSHIP AS ASINTEGRAL PART OF THE RELIGION

Islam is a complete way of life. There is noseparation between business and religion.

Islam has its own entrepreneurship culture

and guiding principles based on the Al-Quran

and Hadith to guidebusiness operation .


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HUMAN NATURE

(The fitrah of human being)By virtue of the human nature, the person mustfirstly be a Muslim, then an entrepreneur. He

has the responsibility to perform ibadahand be

a khalifah. Muslim entrepreneur should search

for Gods blessings above all other factors. AMuslim entrepreneur perform business not

solely for profit, but above all, to fulfill the

fardhukifayah.


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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 merelymeasured 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 towhat is being outlined by Allah SWT and

syariah. Qanaahbe 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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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

SEVEN STEPS TOWARDS A SUCCESS IN LIFEACCORDING TO IMAM AL-GHAZALI


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POSSESSION OF WEALTH IS ALLOWED BASED

ON THE FOLLOWING PRINCIPLES:-

Allah s.w.t is the absolute owner ofwealth

Allah created wealth in

abundance and sufficient for all

Wealth is created for mankind Wealth is entrusted to mankind


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IBADAH

In Islam, involving in business ispart of ibadahthrough the

fulfilment of fardhu kifayah.


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POSITION OF BUSINESS AND ENTREPRENEURISLAMIC ENTREPRENEURSHIP MODEL

Islam Proposed

(Business Venture)

Allah Prepared

(Facilities)

Islam Outlined(Rules and Regulation)

Allah Promised

(Reward)

E

X

A

M

P

LE

EX

A

M

P

L

E


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ISLAMIC ECONOMIC SYSTEM

Islamic Entrepreneurship should

be in the framework of Islamic

Economic System and shouldassist in establishing the Islamic

Economic System


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GUIDING PRINCIPLES OF ISLAMIC

ENTREPRENEURSHIP

Guidelines for IslamicEntrepreneurship and business

activities are wide and

comprehensive based on Al-

Quran and Al-Hadith.


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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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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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EXEMPLARY CONDUCTS OF GOOD MUSLIMENTREPRENEURS DURING THE PROPHET

MUHAMMAD S.A.W REIGN

Business is secondary when being calledfor 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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END OF MODULE 1

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