You are on page 1of 25
THE EVOLUTION OF ENTREPRENEURSHIP THEORY
THE EVOLUTION OF ENTREPRENEURSHIP
THEORY

Definition of an entrepreneur :

  • Richard Cantillon (1755)

    • From a French word

    • “An entrepreneur is a person who undertakes to do a job”

  • In Malaysia the term “usahawan” is used for entrepreneur.

  • THE EVOLUTION OF ENTREPRENEURSHIP THEORY
    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.

    THE EVOLUTION OF ENTREPRENEURSHIP THEORY
    THE EVOLUTION OF ENTREPRENEURSHIP
    THEORY
    Adam Smith (1776)
    Adam Smith (1776)

    An entrepreneur is a person who acts as agent in transforming demand into supply.

    Jean Babtiste Say (1803)
    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 Joseph Aloysius Schumpeter (1934)
    THE EVOLUTION OF ENTREPRENEURSHIP
    THEORY
    Joseph Aloysius Schumpeter (1934)

    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.

    Alfred Marshall (1936)
    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
    THE EVOLUTION OF ENTREPRENEURSHIP
    THEORY
    Ibnu Khaldun (Abdul Rahman Mohamed Khaldun)
    Ibnu Khaldun (Abdul Rahman Mohamed
    Khaldun)

    The entrepreneur is seen as a knowledgeable individual and is instrumental in the development of a city-state where enterprise will emerge.

    David McClelland
    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 ENTREPRENEURSHIP

    It is more than mere creation of business Entrepreneurship is a process of innovation and new
    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.

    DEFINITION OF ENTREPRENEURSHIP

    Functional definition of entrepreneurs offers the following definition: Entrepreneurs are individuals who actively form or lead
    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.

    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:

    a. Innovative creation of opportunity

    Example: Portable phones linked to faxes and laptop will turns cars, train, and airport terminal into offices.

    THE IMPORTANCE OF ENTREPRENEURSHIP TO MALAYSIAN ECONOMY

    • b. Entrepreneurship not only affect our lives through innovation but represent the working future for many of us due to lays off by large organization and shrinking of job opportunities for graduates.

    • c. Entrepreneurship is synonymous to creation of new venture and small businesses. SMIs have been important contributors to local economic growth.

    THE IMPORTANCE OF ENTREPRENEURSHIP TO MALAYSIAN ECONOMY

    • d. The entrepreneurial SMIs provide services that the large corporation has neglected or lack of economy of scale for the large corporation to serve.

    • e. 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.

    ISLAMIC ENTREPRENEURSHIP

    1.Entrepreneurship

    is

    an

    integral

    parts

    of

    Islamic religion. 2.By virtue of human nature

    the Moslem

    , entrepreneurs are khalifahand have the

    reponsibilities 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”

    ISLAMIC ENTREPRENEURSHIP

    • 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 (rezeki) can be found in business.

    • 6. 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.

    ISLAMIC ENTREPRENEURSHIP

    7.

    Guiding

    Principles

    of

    Islamic

    Entrepreneurship is by the al-Quran

    8.

    and al-Hadith Entrepreneurial

    Ethics

    based

    on

    exemplary

    conducts

    of

    Muhammad S.A.W

    Prophet

    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 .

    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 ibadahand be a khalifah. Muslim entrepreneur should search for God‟s blessings

    above all other factors. A Muslim

    entrepreneur perform business

    not

    solely for profit, but above all, to fulfill the fardhu kifayah.

    MOTIVATION

    Most entrepreneurs have the desire to achieve successful business venture. The successful path and means for
    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

    SUCCESS FORMULA BY AL-QURTUBI

    Halal •livelihood that are in accordance to what is being outlined by Allah SWT and syariah.
    Halal
    •livelihood that are in accordance to
    what is
    being outlined by Allah SWT and syariah.
    Qanaah
    •be pleased and thankful with one’s earning
    Taufiq
    •Asking for the blessing of Allah in proportion to
    one’s expectation
    Sa’adah
    •Spiritual happiness
    Jannah
    •Worldly success should act as the bridge to the
    ultimate success in the life hereafter (paradise).

    SEVEN STEPS TOWARDS A SUCCESS IN

    LIFE ACCORDING TO IMAM AL-GHAZALI

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

    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
    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

    ISLAMIC ENTREPRENEURSHIP MODEL

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

    ISLAMIC ECONOMIC SYSTEM

    Islamic Entrepreneurship should be in the framework of Islamic Economic

    System

    and

    establishing

    System

    the

    should

    Islamic

    assist

    in

    Economic

    GUIDING PRINCIPLES OF ISLAMIC

    ENTREPRENEURSHIP

    • Guidelines

    for

    Islamic

    Entrepreneurship

    activities

    are

    and

    business

    wide

    and

    comprehensive and Al-Hadith

    based

    on

    Al-Quran

    MUSLIM ENTREPRENEURSHIP

    ETHICS

    To prevent laziness To eradicate fear To search for legitimate ventures To avoid forbidden sources of
    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

    THE ETHICAL BEHAVIOR OF MUSLIM

    ENTREPRENEURSHIP

    To avoid malicious behavior
    To avoid
    malicious
    behavior
    To pay alms (zakat)
    To pay alms
    (zakat)
    To avoid squandering
    To avoid
    squandering
    Trustworthy
    Trustworthy
    Tawakkal
    Tawakkal
    Patience
    Patience
    To avoid stinginess
    To avoid
    stinginess
    To pray consistently
    To pray
    consistently
    Qana’ah
    Qana’ah