2016 DFE3613 Chapter 2 types of entrepreneurship

All Rights ReservedFundamentals of Entrepreneurship
© Oxford Fajar Sdn. Bhd. (008974-T), 2013 1– 1

CHAPTER 2
TYPES OF
ENTREPRENEURSHIP

Objectives
The objectives of this chapter are to:
 disseminate and intensify knowledge on the different types of
entrepreneurship and entrepreneurs
 differentiate the differences based on entrepreneurial
activities as well as the functions assumed by the
entrepreneurs

Learning Outcomes
At the end of this chapter, students should be able to:
 classify the types of entrepreneurship and entrepreneurs into
proper context without any difficulty
 differentiate and articulate the different types of
entrepreneurship and entrepreneurs that exist in the current
entrepreneurship literature
 explain the differentiating factors based on the respective
entrepreneurial activities and functions of the entrepreneurs.

Introduction
 Entrepreneurial activities in the form of producing goods and
services for human needs, selling, trading or exchanging of
goods were in existence since time immemorial.
 Presently, entrepreneurship development is recognized as an
important catalyst that can spur economic growth and
prosperity especially in the countries that practise free market
economy.

Introduction (cont.)
 Entrepreneurship by definition is a process of identifying the
opportunity, converting the opportunity into marketable
products or services using creative and innovative means
and through the process creates value and wealth to the
society.
 Entrepreneurs are individuals who undertake entrepreneurial
process.

Entrepreneurship versus
Entrepreneur
 Entrepreneurship refers to an entrepreneurial process while
entrepreneur is the individual that executes the process.
 Entrepreneurship entity or groupings can be categorized
based on the type of entrepreneurial activities being carried
out.
 The entrepreneurship process may comprise several
entrepreneurial activities which might differ from one
organization to the other.
 Types of entrepreneurs are best described in terms of their
motives and their functions as entrepreneurs.

Types of Entrepreneurship

Corporate Entrepreneurship
 Corporate entrepreneurship refers to the entrepreneurial
activities carried out in large corporations.
 Large companies have to continually expand and diversify
their entrepreneurial activities in order to sustain its existence
by creating new products or services to their customers.

Corporate Entrepreneurship
(cont.)
 The introduction of entrepreneurial culture and process can
be seen as an effort to
– instigate renewal or innovation in the organization (Sharma &
Chrisman, 1999)
– explore research
– take calculated risks and invest in new promising areas
– create a working environment that can tolerate experimentation,
uncertainty, risk and failures

Private or Independent
Entrepreneurship
 Private or independent entrepreneurship refers to:
– the entrepreneurial activities of private or independent firms where
the entrepreneurship process is most prevalent
 The entrepreneurship process begins with
– the identification of business opportunity
– setting-up of the business entity
– growing the business to a higher level
– ‘planning for the harvest’ strategy

 The majority of the small and medium-sized enterprises in
this country belong to this kind of entrepreneurship.
 Independent entrepreneurship contributes to the nation’s
economy in terms of providing jobs and value added
initiatives.
Private or Independent
Entrepreneurship (cont.)

Intrapreneurship
 Intrapreneurship can be defined as:
– an innovative corporate management strategy that encourages
employees within an organization to create new product ideas—
if employees’ ideas are approved, management will finance
research and development of the product while sharing an
equitable partnership arrangement with the employee
 Intrapreneurship scheme allows and encourages
entrepreneurial activities within the corporation or institution

Social Entrepreneurship
 Social entrepreneurship refers to the entrepreneurial activities
carried out by social enterprises, NGOs and charitable
organizations.
 The process involves recognition of a social problem and the
application of the entrepreneurial approach to organize, create
and manage a venture to achieve the social objectives or social
ROI (return on investment).
 Example of economic based social entrepreneurship project is
the Grahmeen Bank in Bangladesh whose objective is to provide
easy and cheap credit to poor women who are involved in micro
business.

 Other examples of societies and clubs are Students in Free
Enterprise (SIFE), Society for the World Wild Life Protection
(WWF), Society for welfare and aid for unfortunate groups
like orphans, Palestinians, aborigines, urban and rural poor
 There are also societies formed to cater to specific interests
like the Malaysian Nature Society, Environmental Protection
Society of Malaysia and Amnesty International for protection
of human rights.
Social Entrepreneurship (cont.)

Public Sector Entrepreneurship
 Public sector entrepreneurship refers to entrepreneurial activities
carried out by government-linked companies (GLCs) or state-
owned enterprises.
 The majority of these companies were formed as part of the
nation’s privatization programme which aimed at providing more
efficient services to the people.
 State-owned enterprises such as the SEDCs are engaged in
certain entrepreneurial activities through joint-ventures, equity
participation as well as management buyouts.
 They are also entrusted with the task of entrepreneurship
development in their respective states.

Academic Entrepreneurship
 Entrepreneurial activities in academic and research institutions
mainly involve:
– research and development of new products, processes, systems,
materials, etc. with the objectives that these innovations will lead to
intellectual property rights (e.g. patents, copyright, trademark) and its
commercialization through outright sale of IPs, technology licensing
or through creation of new ventures.

Other Variants of Entrepreneurship
 There are also other variants of entrepreneurship such as
– gender entrepreneurship
– political entrepreneurship
– ethnic and sectarian entrepreneurship
– agriculture and technology entrepreneurship, etc.
 Gender entrepreneurship refers to entrepreneurial activities that
are carried out by women or any entrepreneurship programme
targeted to this particular group.

 Ethnic entrepreneurship refers to entrepreneurial activities
carried out by the various ethnic groups in the country. Studies
in this area of entrepreneurship focus on whether certain ethnic
group is more entrepreneurial than the others and the factors
contributing to that phenomenon.
 Political entrepreneurship refers to entrepreneurial activities
carried out by various enterprises that are created by political
parties as vehicles to source funds for the political parties.
 Agriculture entrepreneurship and technology entrepreneurship
are terms used to refer entrepreneurial activities in agriculture
and technology respectively.
Other Variants of Entrepreneurship

Types of Entrepreneurs
 The classification on types of entrepreneurship is based upon
the entrepreneurial activities carried out in each type of
organization; categorization of entrepreneurs is based upon
the functions and roles of the entrepreneurs in their
respective organizations.

Corporate Entrepreneurs
 Corporate entrepreneurs are those who managed large
corporation usually public listed companies. Corporate
entrepreneurs typically hold the position of Chief Executive
Officer or Managing Director and they are either employed or
own shares in those corporations.
 In this sense, corporate entrepreneurs are known as
‘intrapreneurs’ because they assume the exact role of
entrepreneurs in managing the organizations. In most cases
corporate entrepreneurs are professionals.

Independent Entrepreneurs
 Considered as the pure type of entrepreneur, independent
entrepreneurs own and manage their own companies.
 They invest and take risk upon any decision made and thus
have complete control of the organization.
 This type of entrepreneurs generally exist in most SMEs in
the country.

Social Entrepreneurs
 This type of entrepreneurs exist in social organizations or
enterprises to achieve their social objectives and to sustain
their organisation as an on going concern.
 They function exactly as corporate entrepreneurs where they
adopt entrepreneurship principles in managing their
organizations.
 Social entrepreneurs are more concerned with achieving the
social ROI rather than the financial ROI.

Public Entrepreneurs
 These entrepreneurs are found in public sector organizations
including government-linked companies and state-owned
enterprises.
 Public entrepreneurs function exactly as corporate
entrepreneurs—applying the same entrepreneurship
principles in managing organizations or companies.
 Sometimes they are also known as ‘intrapreneurs’ since they
usually do not own the companies.

Academic Entrepreneurs
 Academic entrepreneurs exist in most institutions of higher
learning as well as in research and development
organizations.
 They are usually involved in entrepreneurial activities that
lead to the innovation and commercialization of R & D
products or processes.

Other Variants of Entrepreneurs
 Other variants of entrepreneurs include:
– serial entrepreneurs
– lifestyle entrepreneurs
– nascent entrepreneurs
– necessity entrepreneurs
– technopreneurs
– agripreneurs
– Infoprenuers
– edupreneurs

Serial Entrepreneurs
 Serial entrepreneurs refer to those who continuously start
new ventures and sell off the ventures at a later stage.
 This type of entrepreneur typically possesses a higher level
of entrepreneurial characteristics and assumes a higher level
of risk.
 However, he/she is usually handsomely rewarded from the
sale of successful ventures.

Lifestyle Entrepreneurs
 These entrepreneurs usually start new ventures out of their
passion rather than solely for profit.
 They usually combine their personal interests and talents
and the need to earn a living and probably create wealth
along the way.

 Lifestyle entrepreneurs develop and grow their businesses in
order to make a sustainable living in the field of business they
are passionate about.
 Most of them are self-employed and enjoy doing something that
they love and at the same time achieve greater freedom through
working for themselves.
Lifestyle Entrepreneurs

Nascent Entrepreneurs
 Nascent entrepreneurs refer to those who aspire to take up
entrepreneurship as a career option. Nascent entrepreneurs
have yet to incorporate their own businesses but all
preparations have been undertaken.
 They usually have prepared business plans, seek financial
assistance, undertaken market research and have registered
their businesses with the authorities.

Necessity Entrepreneurs
 These entrepreneurs are involved in entrepreneurship
activities not by their own choice. Majority of them are
involved in starting up their own businesses out of necessity.
 They usually start their businesses as micro enterprises and
some of them manage to develop and grow the businesses
and become very successful.

Technopreneurs
 Technopreneurs refers to entrepreneurial persons who are
technology savvy and earn a fortune using their expertise in the
respective technologies.
 Famous names like Steve Job, Michael Dell, Bill Gates and
others are examples of successful technopreneurs in the
information technology based industries.

 The development of new technology in high growth areas like
– information technology,
– hardware and software for cellular phone based technology,
– e-commerce,
– e-government,
– biotechnology,
– environmentally friendly green technology,
– multi-media based technology,
– health and leisure-based technology,
– pharmaceuticals,
– application of nano-technology, etc.
have created new opportunities for Malaysian technopreneurs.
Technopreneurs (cont.)

 Products like Upin and Ipin is an example of multimedia
product that appeals to the global market.
 There are also successful Malaysian companies that produce
specialized software to cater for a niche global market.
Technopreneurs (cont.)

Intrapreneur
 In 1992, The American Heritage Dictionary acknowledged the
popular use of a new word, intrapreneur, to mean ‘a person
within a large corporation who takes direct responsibility for
turning an idea into a profitable finished product through
assertive risk-taking and innovation’ (Wikipedia).

Agripreneurs
 These entrepreneurs are involved in entrepreneurial activities
in the agriculture sector.
 They may be involved in planting and producing agriculture
products for consumption or for further processing, or other
areas in the supply chain such as the downstream activities
processing and packaging.
 The agriculture sector also involves the fishing industry,
aquaculture and animal husbandry.

Infopreneurs
 Infopreneurs refers to those who utilize information as a
commodity for sale.
 As information is powerful, infopreneurs sell information to
those who want to use the information as a business strategy
or simply for marketing and promotional activities.

Edupreneurs
 Edupreneurs are those involved in setting up educational
institutions privately with the objective to make a profit.
 Owners of tuition centres and private colleges are usually known
as edupreneurs. They operate their institutions as business
organizations and apply similar entrepreneurship principles as in
any other corporations.

2016 DFE3613 Chapter 2 types of entrepreneurship

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