chapter 2-nature of entrepreneurs by noreffendy

BASIC ENTREPRENEURSHIP

Chapter 2 :Nature of Entrepreneurs

2.0 Nature & Development

Stems from FrenchMeans between-taker or go

between


Middle Ages :Actor and person in charge of

large scale production projects


17th century :Person bearing risks of

profit(loss) in fixed-price


1755 : Richard Cantillon(Economist) :Person bearing risks is different

from on supplying capital


1803 :Jean Baptiste

Say-separated profits of entrepreneur from profits of

capital


1876 :Francis Walker :

Distinguished between those who supplied funds and received interest and those who received profit from

managerial capabilities


1934 :Joseph Schumpeter :

Entrepreneur is an innovator and develops untried technology


1961 :David McClelland:

Entrepreneur is an energetic, moderate risk-taker


1964:Peter Drucker:

Entrepreneur maximizes opportunities


1975:Albert Shapero:

Entrepreneur takes initiative, organizes some social and economic mechanisms

and accepts risks of failure


1980:Karl Vesper:

Entrepreneur seen differently by economics, psychologists, business

persons and politician


1983:Gifford Pinchot:

Intrapreneur is an entrepreneur within an established organization


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


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.


Entrepreneur :Individual who takes risks and

starts something new


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.

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

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

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

2.2 Entrepreneurship developments among

adults

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

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

2.3 ENTREPRENEURIAL 2.3 ENTREPRENEURIAL MOTIVATIONMOTIVATION

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.

• 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

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)


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.


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.


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.

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.

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.

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

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

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


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.


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


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.


chapter 2-nature of entrepreneurs by noreffendy

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