Chapter 2-Nature of Entrepreneurs by Noreffendy
Transcript of Chapter 2-Nature of Entrepreneurs by Noreffendy
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BASIC ENTREPRENEURSHIP
Chapter 2 :Nature of Entrepreneurs
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2.0 Nature & Development
Stems from FrenchMeans between-taker or go
between
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2.0 Nature & Development
Middle Ages :Actor and person in charge of
large scale production projects
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2.0 Nature & Development
17th century :Person bearing risks of
profit(loss) in fixed-price
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2.0 Nature & Development
1755 : Richard Cantillon(Economist) :Person bearing risks is different
from on supplying capital
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2.0 Nature & Development
1803 :Jean Baptiste
Say-separated profits of entrepreneur from profits of
capital
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2.0 Nature & Development
1876 :Francis Walker :
Distinguished between those who supplied funds and received interest and those who received profit from
managerial capabilities
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2.0 Nature & Development
1934 :Joseph Schumpeter :
Entrepreneur is an innovator and develops untried technology
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2.0 Nature & Development
1961 :David McClelland:
Entrepreneur is an energetic, moderate risk-taker
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2.0 Nature & Development
1964:Peter Drucker:
Entrepreneur maximizes opportunities
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2.0 Nature & Development
1975:Albert Shapero:
Entrepreneur takes initiative, organizes some social and economic mechanisms
and accepts risks of failure
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2.0 Nature & Development
1980:Karl Vesper:
Entrepreneur seen differently by economics, psychologists, business
persons and politician
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2.0 Nature & Development
1983:Gifford Pinchot:
Intrapreneur is an entrepreneur within an established organization
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2.0 Nature & Development
1985:Robert Hisrich:
Entrepreneurship is the process of creating something different with value by devoting the
necessary time and effort, assuming the accompanying financial, psychological, and
social risks, and receiving the resulting rewards of monetary and personal satisfaction and
independence
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2.0 Nature & Development
In almost all of the definitions of entrepreneurship, there is agreement that
we are talking about a kind of behavior that includes:
1. Initiative taking2. The organizing & reorganizing of social and
economic mechanisms to turn resources and situations to practical account,
3. The acceptance of risk or failure.
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2.0 Nature & Development
Entrepreneur :Individual who takes risks and
starts something new
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2.0 Nature & Development
Entrepreneur :A person who destroys the existing economic
order by introducing new products and services, creating new form of organization or by
exploiting new raw materials.This destruction can be done through forming a new business or by working within an existing
business.
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This definition stresses FOUR(4) basic aspects of being an entrepreneur that are :
1st, Entrepreneurship involves the creation process;
2nd, Entrepreneurship requires the devotion of the necessary time and effort;
3rd, Assuming the necessary risks;4th, Rewards of being an entrepreneur
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2.1 Nature and Development-In Malaysia Entrepreneurship – Started ever
since the state of Malacca interacting with foreign traders.
British colonization practiced ‘divide and rule’ system Malays – administration and
agriculture Chinese – mining and business Indians – rubber plantations
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2.1 Nature and Development-In Malaysia After independence(1957), Malaysian
government realizes the importance of entrepreneurship to individuals, society and the nation’s prosperity.
Support : National Economic Policy(1971-1990) National Development Policy(1990-2000) Vision 2020 Ministry of Entrepreneurship
Development(1995)->Ministry of Entrepreneurship Development and Cooperation
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2.2 Entrepreneurship developments among
adults
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2.2.1 Male Entrepreneur Characteristics
Motivation Make Things Happen, Role In Corp. Not Important, Desire To Be In Control
Departure Point Dissatisfied With Present Job, Sidelines, Discharged/Laid-Off, Acquisition Opportunity
Fund Sources Personal Assets/Savings, Bank, Investors, Family/Friends Loans
Occupational Background
Experience, Recognized Specialist, Competent In Business Functions
Personality Opinionated/Persuasive, Goal-Oriented, Innovative/Idealistic, Self-Confident, Energetic
Background Age = 25-35, Father Self-Employed, College-Educated, Firstborn Child
Support Groups Friends, Professional Acquaintances (Lawyers, Accountants), Associates, Spouse
Business Started Manufacturing/Construction
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2.2.2 Female Entrepreneur Characteristics
Motivation Accomplishment Of Goal, Do It Alone
Departure Point Job Frustration, Recognition Of Opportunity, Change In Personal Circumstance
Fund Sources Personal Assets/Savings, Personal Loans
Occupational Background
Experience, Mid-Management/Administrative Experience, Service Occupation
Personality Flexible/Tolerant, Goal-Oriented, Creative & Realistic, Self-Confident, Energetic, Social
Background Age = 35-45, Father Self-Employed, College Educated (Liberal Arts), Firstborn Child
Support Groups Friends, Spouse, Family, Women’s Prof. Groups, Trade Associations
Business Started Service-Related
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2.3 ENTREPRENEURIAL 2.3 ENTREPRENEURIAL MOTIVATIONMOTIVATION
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2.3 Entrepreneurial Motivation
• What make people responsive to opportunity?
• What drive them to entrepreneurship?• Answering these question entail the
examination of entrepreneurial motivation• Motivation is defined as a drive that
cause a person to take some goal oriented action.
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• Motivational theories are based on the idea that behavior is essentially purposeful and directed towards the attainment of certain goal.
• Thus entrepreneurial motivation is viewed as the willingness of an entrepreneur to sustain his or her entrepreneurial behavior.
Entrepreneurial Motivation
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Motivation theorists have pointed out that at least three general categories of social motives as important determinant of human behavior:•The need for achievement (n Ach)•The need for Power (n Pow)•The need for affiliation (n Aff)
Entrepreneurial Motivation
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The need for achievement (n Ach) Achievement motive - drive to do well, strive for
excellence and overcome challenges and obstacles in the pursuit of goal.
The need for Power (n Pow) Power motive - drive to control, influence and to
have impact on others and change the situations.
The need for affiliation (n Aff) Affiliation motive - drive to establish, maintain or
renew affective relationship with others.
Entrepreneurial Motivation
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All three motives may exist together in a person
But one usually more dominant than the other motives for most of the individual’s actions.
Entrepreneurial Motivation
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High need for achievement (high n Ach)
High need for achievement (high n Ach) has been identified as the critical motive that influence for most of venture creation and entrepreneurship.
Individual with high need for achievement found in most good business founder.
Need for achievement also known as urge to improve.
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High need for power (high n Pow)
Individual with High need for power (high n Pow) normally seek position of leadership.
They potentially to be good managers, executive or supervisors.
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High need for affiliation (n Aff)
High need for affiliation (n Aff) has mostly been associated with individual whose desire in life is to establish, maintain or renew affective relationship with others.
They potentially to be good social workers As an entrepreneur the need for affiliation
to certain extent may contribute to the drive for maintaining effective business networking.
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1. Drive to achieve
• Internally driven self starter with strong desire to:
• To compete with others• To excel with self imposed standard• To pursue and attain challenging goal
2.3.1 Common characteristics associated with achievement oriented entrepreneurs
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2. Calculated risk taking High achiever tend to take moderated or
calculated risk Examining the situation and
determine how to increase the chance of winning a business situation
They make their effort to get the odds in their favor
They do not take unnecessary risks
Common characteristics associated with achievement oriented entrepreneurs
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3. Internal locus of control• They belief that success or failure is
determined by their own effort.• They belief in themselves• They do not belief that success or failure of
their ventures were determined by fate or luck• This behavior is consistent with self
confidence and desire to take personal responsibility
Common characteristics associated with achievement oriented entrepreneurs
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4. Tolerance for failure High achievers take failure as a learning
experience. Do not easily become disappointed, distress
or discouraged by any setback or difficulties faced in the mist of business competition.
Many successful entrepreneurs belief that they learn more from their earlier failure than from their earlier success.
Common characteristics associated with achievement oriented entrepreneurs
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5. Seeking Feedback• They have strong desire to actively
seek and used feed back to know how well they are doing and how to improve their performance.
• Most successful entrepreneurs are quick learners
Common characteristics associated with achievement oriented entrepreneurs
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6. Integrity and reliability• Integrity and reliability help to build
and sustain trust and confidence• This helps to endure the relationship
between entrepreneurs, partners, customers, suppliers and stakeholders.
Common characteristics associated with achievement oriented entrepreneurs