CHAPTER 1

INTRODUCTION
TO
ENTREPRENEURSHIP
 Learning Outcomes
1. Explain Entrepreneur: Definition and concept

2. Explain Entrepreneurship: Definition and concept

3. Describe the various types of entrepreneurship

4. Define Small and Medium Enterprises (SMEs) and its

importance to entrepreneurship
 INTRODUCTION

❑ Entrepreneurship is important for any developed or

developing country.
❑ Entrepreneurship has been observed to have
contributed to the renewal process that may influence
and redefine market economies.
❑ Acts as an essential mechanism for the economic
growth and upward mobility of society.
 Definition And Concept Of Entrepreneur
❑ A person who is able to explore the entrepreneur’s
environment, identify attractive opportunities to be
exploited, organize resources and implement action to
maximize those opportunities (Barringer & Ireland,
2012; Hisrich, Peters, & Shepherd, 2010)
❑The entrepreneur does not necessarily associate with
launching and managing an enterprise, but they may
also be involved in large and established business
organizations as well as in government establishments
 Why Become An Entrepreneur?

❑Being a boss

❑Financial reward

❑Examine own ideas

 Definition And Concept Of
Entrepreneurship
❑The term entrepreneur refers to a person, while
entrepreneurship is the process of creating innovative
enterprise.
❑Entrepreneurship is more than the mere creation of a
new business.
❑Entrepreneurship involves the innovative manner of
conducting a business and a change in the process of
managing a business.
 Author Definition
Kuratko and Hodgetts The practice of organising, managing and ability of predicting the risks of a
(2004) business

The ability of an individual to see a business opportunity, to gather the

Koontz and Fulmer
resources needed to take advantage of the opportunity, and to embark in
(1984)
a business, taking the risk of failure in order to attain profit

Entrepreneurship is the dimensions for innovation, investment, and

Leff (1979)
development in new markets, products, and techniques

The foundation of innovative economic organisation for the purpose of

Dollinger (2008)
profit making or business growth under the condition of uncertainty
 Types Of Entrepreneurship

1. Corporate Entrepreneurship or Intrapreneurship

2. Technology Entrepreneurship

3. Social Entrepreneurship
 Corporate Entrepreneurship or
Intrapreneurship
❑The basic principle of Corporate Entrepreneurship is
the amalgamation of entrepreneurial thinking into
corporate structure.
❑Corporate entrepreneurship activities can be internally
or externally oriented.
❑Internal activities involve the improvement made on the
internal market; expand on innovative staff services or
production processes within a large business.
 Technology Entrepreneurship
❑Technology entrepreneurship is defined as a form of
entrepreneurship and business initiative that focuses on
technology-intensive business opportunities.
❑The opportunity exploited in technology entrepreneurship
is in the form of new products, processes or technologies.
❑Technology entrepreneurship is based on revolutionary
breakthroughs in technology or technological development.
❑ The new opportunity may target the existing market or
develop a new one.
 Social Entrepreneurship
❑ Develop in private, public and non-profit organizations
since the last few years.
❑ Non-profit organization is facing high demands in order
to improve sustainability and effectiveness in the
weakening resources in the firm.
❑ Developing as an innovative approach to dealing with
complicated social needs.
 Small And Medium Enterprises (SMEs)
Category Small Enterprise Medium Enterprise

Manufacturing Sales turnover from RM300,000 to Sales turnover from RM15 mil to not
less than RM15mil OR employees exceeding RM50 mil OR employees
from 5 to less than 75 from 75 to not exceeding 200

Services and Sales turnover from RM300,000 to Sales turnover from RM3 mil to not
Other Sectors less than RM3 mil OR employees exceeding RM20 mil OR employees
from 5 to less than 30 from 30 to not exceeding 75

Source: SME Corporation Malaysia

 The Importance of Entrepreneurship
❑Entrepreneurship plays a significant role in the
Malaysian economy and development - mechanisms
and policies that include funding, physical infrastructure
and business advisory services.
❑Innovative creation of opportunity.
❑Represents the working future for many of us due to
the layoffs by large organizations and the shrinking of
job opportunities for graduates.
 Islamic Entrepreneurship
Islamic entrepreneurship stands on these eight (8) principles
of thought:
1. Integral part of religion
2. Human Nature
3. Motivation
4. Ibadah
5. Position of entrepreneurship and business in Islam
4. Ibadah – business activity is part of ibadah or “good deed”
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 vehicle towards global
acceptance of Islamic Economic System.
7.Guiding Principles of Islamic Entrepreneurship is by the al-Quran and al-Hadith
8.Entrepreneurial Ethics based on exemplary conducts of Prophet Muhammad
S.A.W
 1. Integral Part Of The Religion
❑ Islam is a complete way of life.

❑ No separation between business and religion.

❑ Entrepreneurship culture and guiding principles based

on Al-Quran and Hadith to guide business operation.
2. Human Nature (Fitrah of human being)

❑ Must firstly be a Muslim, then an entrepreneur.

❑ Muslim entrepreneurs are “khalifah” (successor)
❑ Responsibility to develop prosperity and see business
as part of “ibadah” (good deeds).
❑ Search for God’s blessings above all other factors.
❑ Perform business not solely for profit, but above all, to
fulfill the ‘fardhu kifayah’.
3. 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 merely measured by the end
result, but also the means and ways of achieving them.
Success Formula (Al-Qurtubi)
❑ Halal - livelihood that is in accordance with 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 life hereafter (paradise).
Success In Life (Imam Al-Ghazali)
❑ 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
4. Ibadah

❑ Business is part of ibadah through the fulfillment of

fardhu kifayah.
5. Position Of Business & Entrepreneur
❑ Entrepreneurship and business in highly encouraged in
amongst the ummah in Islam.

❑ All business processes and procedures must be aligned

with what has been prescribed by Al-Quran and Hadith.

❑ Islamic wealth model signifies the proper way to seek

Allah’s forgiveness and blessings.
6. Islamic Economic System
❑ Operate within the domain of Islamic economic system
and acts as the vehicle towards global acceptance.
❑ Vision that focuses within the domain of Islamic
economic system that covers multiple aspects such as
strategy, organisation, human resources, finance and
marketing.
❑ Drive to acquire Islamic entrepreneurial traits in order
to become entrepreneurs who are Syariah compliant.
7. Principle – Al-Quran & Hadith

❑ Guidelines for Islamic Entrepreneurship and business

activities are wide and comprehensive based on Al-
Quran and Al-Hadith.
8. Entrepreneurial Ethics

❑ Practices Muslim entrepreneurship ethics.

❑ Exemplary conduct of Prophet Muhammad S.A.W.

 Muslim Entrepreneurship Ethics
In getting those rewards, ethical values should be in place:
✓ To prevent laziness
✓ To search for halal/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
 Ethical behavior of Muslim
entrepreneurship
✓To pray consistently
✓ To avoid malicious behaviour
✓ To avoid squandering
✓ To avoid stinginess
✓ To pay alms (zakat)
✓ Trustworthy
✓Tawakkal
✓ Patience
✓ Qana’ah
 Good Muslim Entrepreneurs – Exemplary
conduct

❑ Business is secondary when being called for other form

of crusade
❑ Avoid using influence for self-interest
❑ Afraid of accumulated wealth
❑ Leadership qualities in all aspects
❑ Practice moderate way of life
 SUMMARY
• Entrepreneurship is the process, ability and action of an
entrepreneur to react in a business, while an entrepreneur is an
individual who establishes and manages a business for the principal
purpose of growth and profit.
• Entrepreneurship involves initiating changes through creativity and
innovation in the production, whereas management involves the
ongoing coordination of the production process.
• There are many benefits of entrepreneurship
• There are eight principles of thought according to Islamic
entrepreneurship.