KAM1061 ENTREPRENEURSHIP 1

NOR HAFEZ BIN MOKHTARUDDIN 017-6010261 hafez_m@hotmail.com

OBJECTIVES
By the end of this course, you should be able to; Identify why entrepreneurship is important Develop a vision to become an entrepreneur Identify entrepreneurial opportunity and transform it into a basic business plan 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 TO ENTREPRENEURSHIP

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

 Adam Smith (1776) an entrepreneur is a person who acts as agents 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 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 give added value. Joseph Aloysius Schumpeter (1934) an entrepreneur is an innovator

 Alfred Marshall (1936) the process of entrepreneurship of business development is incremental or evolutionary. It evolves from sole proprietorship to a public company 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, 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

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

Definitions of Entrepreneurship
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

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 Sri Iskandar

Has been identified and selected to be new town around 1980s The earliest building is NAVY Communication Station follow by SMKA Sultan Azlan Shah(86), Taman Maju (88), Industrial Area (88), Vocational School (92), USM(85), UiTM(93) etc Now become new administration centre for Perak Tengah and new business area Well developed and in high demand

Myths of Entrepreneurship
1. 2. 3. 4. 5. 6. 7. 8. Entrepreneurs are doers not thinkers Entrepreneurs are born not made Entrepreneurs are always inventors Entrepreneurs are academic and social misfits Entrepreneurs must fit the profile All entrepreneurs need is money All entrepreneurs need is luck Entrepreneurs seeks success but experience high failure rates 9. Entrepreneurs are extreme risk takers (gamblers)

1. Seeking feedback 2. High level of energy 3. Team building 4. Ability to set vision 5. Tolerance for failure 6. Drive to achieve (self starter) 7. Skilled at organising 8. Creative and innovative 9. Independent 10.Opportunity orientation 11.High degree of commitment 12.Initiative and responsibility

Characteristics of Entrepreneurs

Differences between..
Businessman Engages in business activities for the purpose of profit to support his living and family Low risk taker Follows others and invests only in tested and proven markets

Manager Very conscious of rules and taboos in an organisation Sensitive to the future and willing to postpone rewards Has a powerful need for acceptance Able to identify problems in any course of action Make detailed plans

Entrepreneur Starts the venture, assumes leadership and expands the venture to fulfill personal goals and attain self accomplishment Starting from moderate risk taker Take calculated risks Views rules only as guidelines Concept of the future based on personal goals. Low threshold for frustration Prone to action and seems impulsive

CHAPTER 2
DEVELOPING ENTREPRENEURIAL 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)

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 Mind Mapping Forced Analogy

DO IT

How to Generate Creative Ideas

1. Brainstorming Is the most common and powerful techniques used to hatch ideas. The ideal number of group members is between 4 to 7 2. Forced Analogy Forcing can help to develop new insights as well as new alternatives. It is a very useful and fun filled techniques of generating ideas

3. DO IT D - define problem O - open minded and apply creative technique I - identify best solution T - transform

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 5. Nominal group The use of the groups is to generate ideas and evaluate solutions face to face in non threatening group.

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
1. Invention The act of creating a new product, service and process that is totally novel or untried 2. Extension The extension or addition to existing product lines, services and processes 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.

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 2. New knowledge concept It can be obtained through reading, attending seminars or conferences or discussions among the professionals

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 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.

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

The Importance
1. To ensure an organisations survival The future business depends on the ability of the organisation to create new products or services 2.To explore new markets A creative and innovative entrepreneur will always think of conquering a new market by introducing new products or services

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