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Entrepreneurship Module BMET5103.docx

  1. Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com Kham thảo miễn phí – Kết bạn Zalo/Tele mình 0917.193.864 BMET5103 Entrepreneurship
  2. Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com Kham thảo miễn phí – Kết bạn Zalo/Tele mình 0917.193.864
  3. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com BMET5103 ENTREPRENEURSHI P Dr Cordelia Mason
  4. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com Project Director: Prof Dato’ Dr Mansor Fadzil Open University Malaysia Module Writer: Dr Cordelia Mason Developed by: Centre for Instructional Design and Technology Open University Malaysia First Edition, April 2017 Copyright © Open University Malaysia, April 2017, BMET5103 All rights reserved. No part of this work may be reproduced in any form or by any means without the written permission of the President, Open University Malaysia (OUM).
  5. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com Table of Contents Course Guide ix–xiv Topic 1 Entrepreneurship and its Revolutionising Impact 1 1.1 Definitions of Entrepreneurship 2 1.2 Entrepreneurs – Challenging the Unknown 2 1.3 Entrepreneurs and Small Business Owners 3 1.4 Entrepreneurship: A Mindset 5 1.5 The Evolution of Entrepreneurship 5 1.6 The Myths of Entrepreneurship 7 1.7 Approaches to Entrepreneurship 8 1.7.1 Entrepreneurial Schools-Of-Thought Approach 9 1.7.2 Process Approaches to Entrepreneurship 12 1.8 The Entrepreneurial Economy 14 1.9 Current Trends in Entrepreneurship Research 19 Summary 22 They Terms 23 References 23 Topic 2 Entrepreneurial Mindset of Individuals 25 2.1 The Entrepreneurial Mindset 26 2.2 Entrepreneurial Cognition 27 2.3 Common Characteristics of Successful Entrepreneurs 29 2.4 The Dark Side of Entrepreneurship 36 2.5 Ethics in Entrepreneurship 39 2.6 Entrepreneurial Motivation 41 Summary 44 They Terms 45 References 45 Topic 3 Creativity and Innovation 47 3.1 Opportunity Identification 48 3.1.1 Opportunity and Change 48 3.1.2 Opportunity andEntrepreneurship 49 3.1.3 Sources of Opportunity 50 3.2 Entrepreneurs: Imagination and Creativity 52 3.3 The Role of Creativity 55 3.4 Arenas and Environments in Which People are Creative 57 3.4.1 The Creative Environment 58
  6. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com iv  TABLE OF CONTENTS 3.5 How Entrepreneurs Can Leverage on Innovation 60 3.6 The Innovation Process 62 Summary 64 They Terms 65 References 65 Topic 4 Legal Challenges in Entrepreneurial Venture 67 4.1 Legal Challenges for Entrepreneurial Ventures 68 4.1.1 Inception Phase of an EntrepreneurialVenture 69 4.1.2 On-going Phase of an EntrepreneurialVenture 69 4.1.3 Growth and Continuity Phase of an Entrepreneurial Venture 4.2 Intellectual Property Protections 69 71 4.2.1 Patent 71 4.2.2 Copyright 74 4.2.3 Trademark 76 4.3 Identifying Legal Structures for Entrepreneurial Ventures 79 4.3.1 Sole Proprietorship, Partnership andPrivate Limited Company 4.3.2 Setting up a Corporation 79 82 4.4 Bankruptcy 83 4.5 TheepingLegalExpensesDown 84 Summary 86 They Terms 87 References 87 Topic 5 Sources of Capital for Entrepreneurs 89 5.1 The Entrepreneurial Search for Capital 90 5.1.1 Own Money 90 5.1.2 Support from Family and Friends 90 5.1.3 Support from Investors 91 5.1.4 Bank Loans 91 5.1.5 Sources of Funds from the Government 91 5.2 Debt versus Equity 93 5.2.1 Comparing Debt and Equity 93 5.2.2 Debt Financing 93 5.2.3 Equity Financing 96 5.3 The Venture Capital Market 96 5.4 Informal Risk Capital: Angel Financing 97 5.5 Crowdfunding 102 Summary 105 They Terms 106 References 106
  7. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TABLE OF CONTENTS  v Topic 6 Assessment of Entrepreneurial Opportunities 107 6.1 The Challenges of New Venture Startups 108 6.2 Pitfalls in Selecting New Ventures 110 6.3 Critical Factors for New Venture Development 113 6.4 Why New Ventures Fail 115 6.5 The New Venture Evaluation Process 118 Summary 121 They Terms 121 References 122 Topic 7 The Marketing Aspects of New Ventures 123 7.1 The New Marketing Concept for Entrepreneurs 124 7.2 Marketing Research 128 7.2.1 Defining the Research Purpose andObjectives 128 7.2.2 Data Gathering 128 7.2.3 Developing an InformationGathering Instrument - The Questionnaire 7.2.4 Quantitative versus QualitativeMarketing 129 130 Research 7.2.5 Interpreting and Reporting Information 131 7.3 Inhibitors to Marketing Research 132 7.4 Internet Marketing 134 7.5 Developing the Marketing Concept 136 7.5.1 Current Marketing Research 136 7.5.2 Current Sales Analysis 137 7.5.3 Marketing Information System 137 7.5.4 Sales Forecasting 138 7.5.5 Evaluation 138 7.6 Developing a Marketing Plan 138 7.7 Pricing Strategies 139 Summary 141 They Terms 142 References 142 Topic 8 Financial Statements in New Ventures 144 8.1 The Importance of Financial Information to Entrepreneurs 145 8.2 Understanding They Financial Statements 147 8.2.1 Balance Sheet 147 8.2.2 Income Statement 149 8.2.3 The Cash Flow Statement 150 8.3 Preparing Financial Budgets 152 8.3.1 Operating Budget 152 8.4 Pro Forma Statements 159
  8. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com vi  TABLE OF CONTENTS 8.5 Capital Budgeting 162 8.5.1 Payback Method 162 8.5.2 Net Present Value 163 8.5.3 Internal Rate of Return 164 8.6 Break-even Analysis 166 8.7 Ratio Analysis 168 8.7.1 Balance Sheet Ratios 169 8.7.2 Income Statement Ratios 170 8.7.3 Overall Efficiency Ratios 171 8.7.4 Specific Efficiency Ratios 172 Summary 173 They Terms 174 References 174 Topic 9 Business Plans For New Ventures 176 9.1 What is a Business Plan? 177 9.2 Avoiding Pitfalls in Planning 178 9.3 Benefits of a Business Plan 181 9.4 Developing a Business Plan 183 9.5 Elements of a Business Plan 187 9.6 Updating the Business Plan 190 9.7 Presenting the Business Plan 191 Summary 193 They Terms 194 References 194 Topic 10 Strategic Growth in Entrepreneurship 195 10.1 The Nature of Strategic Planning in Emerging Firms 196 10.2 The Lack of Strategic Planning 202 10.3 The Value of Strategic Planning 203 10.4 Venture Development Stages 205 10.5 The Entrepreneurial Company in the Twenty-First Century207 10.6 Building the Adaptive Firm 208 Summary 210 They Terms 211 References 211
  9. Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com COURSEGUIDE Copyright © Open University Malaysia (OUM)
  10. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com
  11. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com COURSE GUIDE  ix COURSE GUIDE DESCRIPTION You must read this Course Guide carefully from the beginning to the end. It tells you briefly what the course is about and how you can work your way through the course material. It also suggests the amount of time you are likely to spend in order to complete the course successfully. Please keep on referring to Course Guide as you go through the course material as it will help you to clarify important study components or points that you might miss or overlook. INTRODUCTION BMET5103 Entrepreneurship is one of the courses offered at Open University Malaysia (OUM). This course is worth 3 credit hours and should be covered over 8 to 15 weeks. COURSE AUDIENCE This course is offered to all learners taking the Master of Management programme. This module aims to introduce learners to the theory, process and practice of entrepreneurship through topics covering the broad areas of entrepreneurial mindset in the twenty-first century, how to initiate entrepreneurial venture, and how to develop the entrepreneurial plan and growth strategies for entrepreneurial ventures. As an open and distance learner, you should be acquainted with learning independently and being able to optimise the learning modes and environment available to you. Before you begin this course, please confirm the course material, the course requirements and how the course is conducted. STUDY SCHEDULE It is a standard OUM practice that learners accumulate 40 study hours for every credit hour. As such, for a three-credit hour course, you are expected to spend 120 study hours. Table 1 gives an estimation of how the 120 study hours could be accumulated.
  12. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com x  COURSE GUIDE Table 1: Estimation of Time Accumulation of Study Hours Study Activities Study Hours Briefly go through the course content and participate in initial discussions 5 Study the module 60 Attend 3 to 5 tutorial sessions 15 Online participation 10 Revision 10 Assignment(s) and Examination(s) 20 TOTAL STUDY HOURS ACCUMULATED 120 COURSE OUTCOMES By the end of this course, you should be able to: 1. Explain the types of entrepreneurs in the twenty-first century; 2. Describe the features of entrepreneurship and the traits of successful entrepreneurs and their businesses; 3. Describe and apply the principles of business and development for a small business i.e. how to initiate a business venture; 4. Evaluate the roles entrepreneurs play in Malaysia and the impact of entrepreneurship on the national economy; and 5. Develop an entrepreneurial plan and formulate growth strategies. COURSE SYNOPSIS This course is divided into 10 topics. The synopsis for each topic is listed as follows: Topic 1 introduces the field of entrepreneurship by discussing the revolutionary impact of entrepreneurship. It describes entrepreneurs as those who thrive on exploring and challenging the unknown. It explains how entrepreneurs andsmall business owners differ. It narrates the evolution of entrepreneurship and its approaches, and advises on the need to avoid folklore i.e. the myths of
  13. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com COURSE GUIDE  xi entrepreneurship as well as describes how entrepreneurship has defined the economies of countries around the world. The topic ends by describing current research trends in entrepreneurship. Topic 2 focuses on the psychological and cognitive side of entrepreneurs by elaborating on four related areas which are the entrepreneurial mindset of individuals, the entrepreneurial journey, the dark side of entrepreneurship and entrepreneurial motivation. Topic 3 discusses creativity and innovation as applied in the field of entrepreneurship. It covers: opportunity identification; the relevance and roles of imagination and creativity in the entrepreneurial process; the arena where people are creative; innovation and the entrepreneur; and the innovation process. Topic 4 outlines common legal challenges for the entrepreneurial venture focusing on four main topics – how to protect intellectual property, how to select the appropriate legal structure of businesses, comparisons of the different legal structures of business, and bankruptcy and how to minimise legal charges. Topic 5 describes the options entrepreneurs have in terms of entrepreneurial capital; and which types of financing are available and what are the pros and cons of each. The features of the various sources of capital are explained. Topic 6 provides guidelines and advice on how entrepreneurs can assess entrepreneurial opportunities by providing examples of challenges faced by startups, pitfalls in selecting new ventures, factors to consider when developing new ventures, reasons why ventures fail, and how to evaluate the potentials of new ventures. Topic 7 covers the marketing aspects of new ventures. The subtopics include the marketing concept for entrepreneurs, marketing research, inhibitors to marketing research, Internet marketing, how to develop a marketing concept and a marketing plan, and how to decide on pricing strategies. Topic 8 emphasises the importance of financial literacy in entrepreneurship and how entrepreneurs should equip themselves with at least basic financial knowledge. It provides explanations on the key financial statements; explains how to prepare financial budgets, pro forma statements and how to do capital budgeting. It provides brief explanations on how to do break-even analysis and how to calculate some important financial ratios and what theymean. Topic 9 provides an overview of the business plan for new ventures – what a business plan looks like, pitfalls to avoid in planning, benefits of having a business plan, how to prepare, update and present a business plan for new ventures.
  14. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com xii  COURSE GUIDE Topic 10 discusses how strategic growth in entrepreneurship is influenced by the nature of strategic planning in emerging firms, and conversely by the lack of strategic planning. It underscores the value of strategic planning and describes the stages in venture development. It ends by describing the entrepreneurial company in the twenty-first century and provides tips on how to build an adaptive firm. TEXT ARRANGEMENT GUIDE Before you go through this module, it is important that you note the text arrangement. Understanding the text arrangement will help you to organise your study of this course in a more objective and effective way. Generally, the text arrangement for each topic is as follows: Learning Outcomes: This section refers to what you should achieve after you have completely covered a topic. As you go through each topic, you should frequently refer to these learning outcomes. By doing this, you can continuously gauge your understanding of the topic. Self-Check: This component of the module is inserted at strategic locations throughout the module. It may be inserted after one sub-section or a few sub- sections. It usually comes in the form of a question. When you come across this component, try to reflect on what you have already learned thus far. By attempting to answer the question, you should be able to gauge how well you have understood the sub-section(s). Most of the time, the answers to the questions can be found directly from the module itself. Activity: Like Self-Check, the Activity component is also placed at various locations or junctures throughout the module. This component may require you to solve questions, explore short case studies, or conduct an observation or research. It may even require you to evaluate a given scenario. When you come across an Activity, you should try to reflect on what you have gathered from the module and apply it to real situations. You should, at the same time, engage yourself in higher order thinking where you might be required to analyse, synthesise and evaluate instead of only having to recall and define. Summary: You will find this component at the end of each topic. This component helps you to recap the whole topic. By going through the summary, you should be able to gauge your knowledge retention level. Should you find points in the summary that you do not fully understand, it would be a good idea for you to revisit the details in the module.
  15. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com COURSE GUIDE  xiii They Terms: This component can be found at the end of each topic. You should go through this component to remind yourself of important terms or jargon used throughout the module. Should you find terms here that you are not able to explain, you should look for the terms in the module. References: The References section is where a list of relevant and useful textbooks, journals, articles, electronic contents or sources can be found. The list can appear in a few locations such as in the Course Guide (at the References section), at the end of every topic or at the back of the module. You are encouraged to read or refer to the suggested sources to obtain the additional information needed and to enhance your overall understanding of the course. PRIOR KNOWLEDGE This is an introductory course. There is no prior knowledge needed. ASSESSMENT METHOD Please refer to myINSPIRE. REFERENCES Ireland, B. R. (2012). Entrepreneurship: Successfully launching new ventures. Essex, England: Pearson. Thuratko, D. (2014). Entrepreneurship theory, process and practice (9th ed.). Singapore: Cengage Learning. Thuratko, D., Morris, M. H., & Covin, J. G. (2011). Corporate innovation & entrepreneurship (3rd ed.). Singapore: Cengage Learning. Reynolds, P. D. (1991). Sociology and entrepreneurship: Concepts and contributions. Entrepreneurship: Theory & Practice, 16 (2), 47-70. Timmons, J., & Spinelli, S. (2008). New venture creation. Homewood, IL: Irwin Publishing.
  16. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com xiv  COURSE GUIDE TAN SRI DR ABDULLAH SANUSI (TSDAS) DIGITAL LIBRARY The TSDAS Digital Library has a wide range of print and online resources for the use of its learners. This comprehensive digital library, which is accessible through the OUM portal, provides access to more than 30 online databases comprising e- journals, e-theses, e-books and more. Examples of databases available are EBSCOhost, ProQuest, SpringerLink, Books247, InfoSci Books, Emerald Management Plus and Ebrary Electronic Books. As an OUM learner, you are encouraged to make full use of the resources available through this library.
  17. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com ic 1 Top Entrepreneurship and its Revolutionising Impact  INTRODUCTION The field of entrepreneurship has evolved rapidly in the last few decades and many ideas have been formed about it. Topic 1 traces this evolution by discussing how entrepreneurs differ from small business owners, comparing the macro and micro views of entrepreneurship and the various approaches aligned to each of these views, sharing some myths about entrepreneurship, providing some insights on the concept and development of the entrepreneurial economy and current research trends in entrepreneurship. LEARNING OUTCOMES By the end of this topic, you should be able to: 1. Define entrepreneurship in various ways; 2. Explainthe evolution ofentrepreneurship; 3. Compare the macro and micro views of entrepreneurship; 4. Examine entrepreneurial activities using a process approach; 5. Evaluate the impact of entrepreneurial ventures; and 6. Assess the trends in research onentrepreneurship.
  18. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 2  TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT DEFINITIONS OF ENTREPRENEURSHIP The word entrepreneurship is French in origin; entre means „between‰ and prendre means „to take‰, and the French word for entrepreneurship is entreprendre. Figure 1.1 provides some definitions of entrepreneurship. Figure 1.1: Some definitions of entrepreneurship ENTREPRENEURS – CHALLENGING THE UNKNOWN Entrepreneurship is about challenging the unknown, exploring uncharted territories. It is about harnessing oneÊs ability to see what others cannot see and listen intently in order to hear what others fail to hear. It is about the courage to „When I started my airline business, I didn't know everything, right? If I start up a newspaper tomorrow, I might get ripped off by journalists. You'd be naive tothink youknoweverything fromday one.‰ – Tony Fernandez, Founder of AirAsia 1.1 1.2
  19. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT  3 walk where no one dares to walk; and the strength to seize an opportunity when it presents itself. In life, there are many unknowns. The efficacy to challenge the unknown sets the entrepreneur apart from the rest. Although entrepreneurs are willing to go where others have not gone before, to try things that others have not tried before, to do things which others have not done before, they do all these in a calculated manner. They have the knack tospot opportunities and change them into businesses. They dare to take risks. They are passionate and believe strongly in themselves and are passionate about what they do. They push themselves to go beyond what they already know or do. This spirit of an entrepreneur resonates that of the athlete who keeps trying to improve his performance. Both are people who push themselves to create a new frontier. Like an explorer who sails to look for new waters, an entrepreneur keeps looking for how he can serve a market well through the creation of wealth, the creation of enterprise, the creation of innovation, the creation of change, the creation of jobs, the creation of value and finally, the creation of growth. ENTREPRENEURS AND SMALL BUSINESS OWNERS Now that we have some ideas about entrepreneurship, let us explore the main actors or creators in entrepreneurship, the entrepreneurs. Who are they? What are they like? What do they do? Entrepreneurs have keen eyes for opportunities, and are often viewed as heroes for various reasons. They are willing to take risks to start a business, providing jobs for others. Entrepreneurs are innovative. In pursuing a venture, they strive for profitability, and understand the cruciality of growth to sustain a business. Their focus on innovation, profit and rapid growth is the key differentiator between entrepreneurs and small business owners. Small business owners focus on managing their business with the objective of having a stable business. Therefore, although some entrepreneurial ventures may be small in size (many are), it is really the presence or lack of the three elements – innovation, profit and rapid growth which distinguishes entrepreneurs from small business owners. Nonetheless, both play prominent roles in the small and medium size enterprises industry which in ACTIVITY 1.1 Share with a friend one occasion when you „explored uncharted territory‰ or when you „challenged the unknown‰. Do you think entrepreneurial opportunities present themselves to everyone? Discuss with your coursemates. 1.3
  20. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 4  TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT turn has a big impact on a nationÊs economy. For example, since the year 2010, small and medium size enterprises (SMEs) in Malaysia have contributed to more than half of overall employment in the country (refer to Figure 1.2). Figure 1.2: Contribution of SMEs to overall employment (%) and SME employment (%) annual growth Sources: Department of Statistics Malaysia (DOSM) and SME Corporation Malaysia In Malaysia, the National SME Development of Malaysia defines SME as companies with sales turnover of less than RM50 million or having less than 200 full-time employees if they are involved in the manufacturing sector; and those with sales turnover of less than RM20 million or having less than 75 full-time employees if they are in the services and other sectors. Public-listed companies (or their subsidiaries) on the main board of Malaysia or any other countries, and subsidiaries of large firms, multinational corporations (MNCs), government- linkedcompanies(GLCs),SyarikatMenteriThewanganDiperbandankan(MThDs) i.e. Minister of Finance Incorporated companies, in English, and state-owned enterprises cannot be categorised or considered as an SME. SELF-CHECK 1.1 Discuss the main differences between an entrepreneur and a small business owner.
  21. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT  5 ENTREPRENEURSHIP: A MINDSET There is more to entrepreneurship than just the act of creating businesses, an outcome which can be seen and is tangible. In fact, the outcomes of entrepreneurial ventures originate from the entrepreneurial mindset. Financial Times describes the entrepreneurial mindset as a specific state of mind which orientates human conduct towards entrepreneurial activities and outcomes. Those with strong entrepreneurial mindset are often attracted to opportunities, innovation and new value creation. They are able to take calculated risks and manage change and uncertainty. A strong entrepreneurial mindset enables entrepreneurs to seek opportunities, to take risks beyond the safe zone and to have the willpower to push dreams into reality. The mindset is abstract and can be developed in individuals. This topic is discussed in detail in Topic 2. THE EVOLUTION OF ENTREPRENEURSHIP The development in the studies of entrepreneurship has expanded the concept of an entrepreneur as someone who undertakes the opportunity to organise, manage and assume (risk) to that of an innovator, a catalyst for change. As the field of entrepreneurship develops, it is subject to further refinement and we see new hybrid concepts emerging such as collective entrepreneurship, corporate entrepreneurship and social entrepreneurship. What do they mean? The following list provides short descriptions of each concept. (a) Collective entrepreneurship The definition of collective entrepreneurship provided by Connell (1999) captures the complex essence of the concept. It is worded as follows: „Collective entrepreneurship combines business risk and capital investment with the social values of collective action. It is an event that exists when collective action aims for the economic and social betterment of a locality by ACTVITY 1.2 View the talk by Thim Cope entitled „The entrepreneurial mindset: From kid to entrepreneur‰. TheURLlinkishttps://www.youtube.com/watch?v=JiGJttyiqFs Discuss the idea that „Entrepreneurship is a mindset.‰ 1.4 1.5
  22. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 6  TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT means of some transformation of social norms, values and networks for the production of goods and services by an enterprise.‰ A simpler definition would be where individual skills are integrated into a group where the collective capacity to innovate fosters the creation of something greater than the sum of its parts. (b) Corporate entrepreneurship Corporate entrepreneurship can be viewed as the creation of a new business within an existing organisation, sometimes called corporate venture or intrapreneurship. It can also refer to the transformation or renewal of existing organisations; or an organisationÊs act of changing the rules of competition of its industry. (c) Social entrepreneurship Greg Dees (1998) defines social entrepreneurship as the practice of combining innovation, resourcefulness and opportunity to address critical social and environmental challenges; and describes social entrepreneurs as people who are focused on transforming systems and practices that are the root causesof poverty, marginalisation, environmental deterioration and accompanying loss of human dignity. Rees (1998) noted that, whether the organisations they set up are for-profit or non-profit organisations, social entrepreneurs are said to play the role of change agents in the social sectorby: (i) Adopting a mission to create and sustain social value (not just private value); (ii) Recognising and relentlessly pursuing new opportunities to serve that mission; (iii) Engaging in a process of continuous innovation, adaptation and learning; (iv) Acting boldly without being limited by resources currently in hand; and (v) Exhibiting heightened accountability to the constituencies served and for the outcomes created.
  23. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT  7 THE MYTHS OF ENTREPRENEURSHIP As interest in entrepreneurship grows, people form thoughts and opinions about it. Some of them are logical and some are not. These are what we mean by myths. Let us find out what are some common myths about entrepreneurship which are listed in the following: (a) Entrepreneurshavecompletecontrolovertheirschedule Many people are attracted to become entrepreneurs with the idea that they can control their time and schedule. This is usually not the case though as businesses usually deal with many parties and entrepreneurs certainly do have a tight, even strict schedule to make and maintain a successful business. (b) Ifmyproductorserviceisgood,IÊllbesuccessful A „great‰ product or service alone does not guarantee success. There must be a good marketing and product fit before a venture can take off well. Everyone has a „good‰ product, be it the most delicious pineapple tart, the most adventurous mountain climbing programme, the best corporate training programme, etc, which will not see the light of day if the marketing strategy is weak. In short, no matter how much an entrepreneur likes his „good‰ product, there is no guarantee that the venture will be successful. (c) Mostentrepreneursventureintoattractiveindustries Unfortunately, the opposite is true. The world over, it has been observed that entrepreneurs usually start their businesses based on the herd mentality and usually end up failing in the business, as they are ill-prepared to do things they are not cut-out for. (d) Entrepreneurshipisfordoers,notthinkers Becoming an entrepreneur is a tough decision due to the myriad of challenges surrounding setting up a venture. Therefore, it certainly is a myth that entrepreneurship is only for doers. An entrepreneur is highly resilient and is able to analyse, strategise, plan and implement. Entrepreneurship is definitely for a thinker who can execute his or her plans. The entrepreneur has to think ahead of his or her competitors and take timely action. (e) Banks do not lend money to start-ups Many years ago, getting bank loans was quite a challenge. That is no longer the case now as more nations view entrepreneurship as a positive contributor to the economy. Sources of funds have increased. For example, aside from traditional sources of funds, entrepreneurs can also consider crowdfunding. 1.6
  24. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 8  TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT APPROACHES TO ENTREPRENEURSHIP How do people view entrepreneurship? What are their thoughts and beliefs about entrepreneurship? What are some common theories of entrepreneurship? These questions have often been asked by people from all over the world. Since interest in entrepreneurship heightened in the last four decades or so, various views of entrepreneurship have developed extensively. Thuratko (2009) divides the approaches to entrepreneurship into two main clusters as the entrepreneurial schools-of-thought approach and the process approaches to entrepreneurship. Figure 1.3 provides an overview of the two clusters which will be discussed in the following subtopics. ACTIVITY 1.3 In pairs or in groups, appraise the following myths about entrepreneurship. Provide reasons for each myth. (a) Entrepreneurs are doers, not thinkers. (b) Entrepreneurs are born not made. (c) Entrepreneurs are always inventors. (d) Entrepreneurs are academic and social misfits. (e) Entrepreneurs must fit the profile. (f) All entrepreneurs need is money. (g) All entrepreneurs need is luck. (h) Entrepreneurship is unstructured andchaotic. (i) Most entrepreneurial initiatives fail. (j) Entrepreneurs are extreme risk takers. 1.7
  25. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT  9 Figure 1.3: Two Clusters of Approach to Entrepreneurship 1.7.1 Entrepreneurial Schools-of-Thought Approach Under the entrepreneurial schools-of-thought approach there are two ways to think about entrepreneurship, the macro view and the micro view. There are essentially three schools of entrepreneurial thoughts in the macro view which are the: (a) Environment school of thought; (b) Financial/capital school of thought; and (c) Displacement school of thought. Meanwhile, the micro view also has three schools of thought which are the: (a) Entrepreneurial trait school of thought; (b) Venture opportunity school of thought; and (c) Strategic formulation school of thought. The macro view focuses on external factors which affect the success or failure of an entrepreneurial venture. This type of view of entrepreneurship which is also called the external locus of control point of view looks at factors which are beyond the control of the individual entrepreneur. It is an „outside-in‰ view.
  26. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 10  TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT (a) Environmental School of Thought The environmental school of thought contends that the environment in which a person functions, be it the workplace or a social setting, influences his propensity to consider becoming an entrepreneur. The influence can either be positive or negative. For instance, if someone works in an environment which fosters innovation, encourages new ideas on products or processes or allows greater risk taking among its staff, it is highly probable that he will be more confident to engage in entrepreneurial ventures. In other words, if a work or social environment accords one with technical competence, managerial competence and personal competence, he or she would be better prepared to become an entrepreneur. (b) Financial/CapitalSchoolofThought The financial/capital school of thought, on the other hand, views the effort to seek capital as the major focus of entrepreneurship. The entrepreneurs are thus equipped with skills to write business plans and advise on fund application process. Financial management skills are viewed as critical for entrepreneurs and they are guided to make sound decisions suitable for the common phases of a business venture such as the start-up stage, the ongoing stage and the decline or succession stage. Some financial decisions which an entrepreneur might make include: (i) Looking for seed capital or venture capital at the early stage of the business; (ii) Managing the companyÊs finances such as managing cash, managing investment, and analysing and evaluating its financial situation; and (iii) Deciding whether to diversify and how to manage corporate buyout and succession planning. (c) Displacement School of Thought The displacement school of thought states that a person who feels alienated from the group has the tendency to be motivated to become an entrepreneur. In other words, a „displaced‰ person or an individual who has to fight diversity would be more likely to consider venturing into entrepreneurial pursuits. Displacements can stem from political, cultural or economic alienations. For example, many migrants who face political alienation in their own countries would seek a greener pasture in a friendly country, and they usually end up doing business as they do not have much choice, especially if they are at the lower end of the job spectrum in terms of skills and qualifications. Cultural displacement such as discrimination on the basis of ethnicity, religion, race and gender can force a person to engage in entrepreneurship as there are not many opportunities within the public
  27. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT  11 sector. It is therefore not surprising that in many countries, minority businesses are on the rise. Economic displacements can also be caused by economic depression where people face challenges such as job loss and lack of capital, and this can encourage them to venture into entrepreneurship. The second school-of-thought of entrepreneurship is the micro view which focuses on internal factors which affect the success or failure of an entrepreneurial venture. In other words, the type of view of entrepreneurship which is also called the internal locus of control point of view, looks at factors which are within the control of the individual entrepreneur. An entrepreneur can manage (by controlling, directing or adjusting) the influence ofeach factor.It is an „inside-out‰ view. Some of the schools of thought in the micro view are: (a) TheEntrepreneurialTraitSchoolofThought The entrepreneurial trait school of thought is essentially focused on the idea that successful entrepreneurs have some common traits. It goes on to say that if an aspiring entrepreneur can study these traits and emulate them, then he can be equally successful. In other words, entrepreneurship can be learned. There are differing views as to whether it is good to educate people in entrepreneurship; one view thinks it might inhibit creativity, while another view the educational development of entrepreneurs as beneficial to developing new entrepreneurs. Interest in these opposing views has led to more research being done on the concepts of entrepreneurial cognition and metacognition. Another idea is that entrepreneurs can be developed within an entrepreneurial family who run their own businesses – some kind of in- situ learning or apprenticeship. (b) TheVentureOpportunitySchoolofThought The main idea of this school of thought is that an entrepreneur can be successful if he has a good instinct to spot an opportunity. Thus, a skilful entrepreneur is one who is constantly searching for sources of ideas, developing concepts, creative and has high market awareness. He can succeed if he is able to develop the right idea, at the right time for the right market. This school of thought has also developed the corridor principle which is essentially about the ability of an entrepreneur to recognise new pathways or opportunities which present themselves in different directions, and then to take the necessary actions to build a successful venture. A well- prepared entrepreneur who is able to seize opportunities when they arise is knowledgeable about interdisciplinary business segments.
  28. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 12  TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT (c) TheStrategicFormulationSchoolofThought The main thrust of this school of thought is the emphasis on the planning process in a business venture. It argues for the cruciality of strategic planning in business and management. Strategic formulation views venture success as being dependent on having adequate breadth of managerial capability. To be competitive in order to succeed and remain sustainable, entrepreneurs must be able to identify unique markets, unique people, unique products and unique resources, indicating the possibility of creating opportunities through differentiation. 1.7.2 Process Approaches toEntrepreneurship There are quite a few process approaches to entrepreneurship. An entrepreneurship researcher, Steyaert, uses the term „entrepreneuring‰ as a key concept to explain entrepreneurship as a process especially on process theories within a creative process view, attaching it to a series of perspectives such as complexity and chaos theory, interpretive and phenomenological, social constructionist, pragmatic and practice-based to the relational materialist. His review of process theories in entrepreneurship studies to theorise about the concept of entrepreneuring marks a shift to a view of entrepreneurship as a social ACTIVITY 1.4 Watch: ● The Niaga TV Interview with Prof Dr Mazliham Mohd SuÊud President/CEOUNIThL;and ● A talk on „Entrepreneurship education is killing education‰ by Mallam Bolaji Abdullahi (TEDxJabi). The URL links are: https://www.youtube.com/watch?v=MTMduFR6hzQ https://www.youtube.com/watch?v=zYcjTaYasZY. (a) In groups, discuss the roles of a university in developing entrepreneurs. (b) Can entrepreneurship be taught? (c) How does it relate to the approaches to entrepreneurship? (d) How can a technical university produce entrepreneurs?
  29. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT  13 ontology of becoming or being. Two well-known traditional process approaches are the: (a) Integrative approach; and (b) Dynamic states approach. Firstly, the integrative approach to entrepreneurship is a concept provided by researchers Morris, Lewis and Sexton (1994), focuses on two parts of the entrepreneurial process, the input and outcome of the process. They identified five elements which feed the entrepreneurial process which are: (a) Environmental opportunities; (b) Entrepreneurial individuals; (c) An organisational context; (d) Unique business concepts; and (e) Resources. Equipped with these five elements, an entrepreneur will try to identify business opportunities, gather resources and mobilise them into action. As he engages in more entrepreneurial activities through innovating, risk-taking and by being proactive, the entrepreneur intensifies his entrepreneurial skills. The outcomes could, among others, include a grow;ing venture, value creation, new products and/or services, new processes, new technologies, profits, personal growth, as well as employment, assets, equity and revenue growth. This model which could be used to describe the entrepreneurial process for all categories of entrepreneurship including intrapreneurship provides a comprehensive picture of what entrepreneurs do along the supply chain of the development of entrepreneurs. Embedded in this chain would be the supply chain of the venture or business which the entrepreneur undertakes. In contrast with the integrative approach to entrepreneurship is the dynamic state approach, developed by researchers Jonathan Levie and Benyamin B. Lichtenstein, which focuses on how business ventures rely on the environment to survive. In other words, the sustainability of a business venture depends on the entrepreneurÊs ability to turn an opportunity into a business model which describes how activities are carried out, how resources are to be mobilised or employed, and what strategic position to take, and to eventually create value. This concept of a dynamic interface between opportunity and value creation by leveraging on a business model is more user-friendly for a new venture to
  30. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 14  TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT conceptualise its entrepreneurial process. This could be because the business model could provide guidance on: (a) Activities – how to design the business activities, work tasks, etc; (b) Resources – what processes to put in place, what capabilities to build and grow, how to design and manage the supply chain for the venture, and whom to collaborate with; and (c) Position – how to position the business, what strategies to take. THE ENTREPRENEURIAL ECONOMY What is an entrepreneurial economy? An obvious answer would be an economy which is entrepreneurial in nature. It basically means that the economy is driven by entrepreneurial activities. This connotation may have been coined to describe an economy which is opposite to the more common economies which were usually driven or managed by the public sector. The idea of an entrepreneurial economy is gaining popularity for at least two reasons; one is because entrepreneurial organisations contribute to a nationÊs economy, and the second reason is the empowering aspect of entrepreneurship as a mechanism through which millions of people from differing backgrounds, be they men, women, black, yellow or white, rich or poor, can enter mainstream economic or social domains of society, to survive or seek prosperity. In the early 1980s, Peter Drucker, the well-known guru of management, noted that small new businesses are replacing bigger industries as the main driving force for the nationÊs economic growth. Demographic shifts, technological advances, higher risk appetite to challenge common wisdom and innovate, as well as easier access ACTIVITY 1.5 In pairs, draw a model each for the integrative approach and the dynamic state approach. SELF-CHECK 1.2 1. Discuss your insights on entrepreneurship as a process. 2. Discuss the term „entrepreneuring‰. 1.8
  31. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT  15 to capital had enabled start-ups to engage in entrepreneurial activities through systematic application of good management practice. During post World War II, the emergence of small and new businesses began to form a driving force for a nationÊs national growth; and for decades, the United States of America and Europe had acknowledged the impact of these small businesses on their economies especially their huge capacity to provide jobs. Soon after, other nations around the world began to focus on entrepreneurship as an engine of growth. Malaysia also did the same. The major step towards a national focus on entrepreneurship could be traced in the Seventh Malaysia Plan with a section on Entrepreneurial Development. In the previous Malaysia plans, the related terminologies were women in business, youth in business, etc. As a developing nation, MalaysiaÊs focus on entrepreneurship intensified at the turn of the century as it gradually shifted from a strong focus on manufacturing towards a more broad-based economy placing emphasis on multiple industries including the service sector. MalaysiaÊs interest in leveraging on entrepreneurs for national development culminated with the establishment of the Ministry of Entrepreneur and Cooperative Development in 2004 which lasted until 2009. So how has Malaysia rolled out this national effort to encourage entrepreneurial activities? Did all these efforts make Malaysia an entrepreneurial economy? What exactly is an entrepreneurial economy? Which are the most entrepreneurial countries? Many people perceive the United States as the most entrepreneurial country as there is abundant coverage on the start-up (a fundamental notion in entrepreneurship) activities there. The word „start-up‰ conjures up images of newly set up ICT-related companies such as Microsoft by Bill Gates and Apple by Steve Job which have been dominating the business scene for more than three decades. However, in many parts of the world, entrepreneurship has deeper roots among the people as entrepreneurship in the form of self-employment is not a choice but rather a primary means of survival. In poverty stricken countries where jobs are scarce, the only choice to survive may well be self-employment. Going back to the question of which countries are the most entrepreneurial, the Global Entrepreneurship Monitor (GEM) Report gives us some insights on the matter. According to its 2014 Global report, the 15 most entrepreneurial countries are as listed in Table 1.1. Interestingly, in the report, none of the developed countries were in the Top 25. Australia was placed at 26.
  32. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 16  TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT Table 1.1: GEMÊs List of Most Entrepreneurial Countries Country Percentage 1. Uganda 28.1 2. Thailand 16.7 3. Brazil 13.8 4. Cameroon 13.7 5. Vietnam 13.3 6. Angola 12.4 7. Jamaica 11.9 8. Botswana 11.1 9. Chile 11 10. Philippines 10.5 11. China 10.2 12. Indonesia 10.1 13. Ecuador 9.9 14. Burkina Faso 9.7 15. Guatemala 9.2 Source: Global Entrepreneurship Monitor (GEM) Report (2014) The 15 least entrepreneurial countries according to the GEM 2014 Global Report are as per Table 1.2. Table 1.2: GEMÊs List of Least Entrepreneurial Countries Country Percentage (%) 1. Surinam 0.2 2. Puerto Rico 1.3 3. Italy 1.3 4. Japan 1.3 5. France 1.7 6. Thosovo 1.8 7. Sweden 1.9 8. Croatia 2
  33. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT  17 9. Spain 2.2 10. Luxemburg 2.3 11. Finland 2.3 12. Germany 2.3 13. Russia 2.4 14. Ireland 2.5 15. India 2.5 Source: Global Entrepreneurship Monitor (GEM) Report (2014) How entrepreneurial is Malaysia as an economy? According to the Global Entrepreneurship Monitor, although there are many financial and physical infrastructure available in Malaysia, its total early stage entrepreneurial activity rate (TEA) is rather low in the Asia Pacific and South Asia region, the second lowest only after Japan. Given the strong governmental support for entrepreneurship, entrepreneurial growth in Malaysia is relatively slow as evidenced by the following: (a) It has among the lowest percentage of people in the region who intend to start a business, or have positive attitudes towards entrepreneurship; and (b) Very few new businesses hope to employ more than 20 people. Most think they would create jobs for less than four people. The rankings of key indicators (2014 data) for entrepreneurship outlined by GEM for Malaysia are as per Table 1.3. Table 1.3: GEMÊs They Indicators for Entrepreneurship Indicator Description Percentage (%) Rank /80 The total early-stage Entrepreneurial Activity (TEA) Percentage of population* who are either a nascent entrepreneur or owner-manager of a new business 5.9 n/a Established business ownership Percentage of population* who own and manage a business which has paid salaries, wages or any other payments for more than 42 month 4.8 45
  34. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 18  TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT Perceived opportunities Percentage of entrepreneurs* (at any stage of an entrepreneurial activity) who perceive the availability of opportunities where they live. 28.2 49 Perceived capabilities Percentage of entrepreneurs* who believe they have the required skills and knowledge to start a business. 27.8 57 Entrepreneurial intention Percentage of latent entrepreneurs who want to start a business within three years. 5.6 57T** Fear of failure Percentage of population who would not start a business due to fear of failing. 27.1 12 *aged between 18 to 64 years old **Tie Source: Global Entrepreneurship Monitor (GEM) Report (2014) ACTIVITY 1.6 Discuss in pairs: The idea of entrepreneurship as an engine of growth has been widespread around the world for quite some time. As a relatively young developing nation, taking the cue from the global entrepreneurship movement, Malaysia established the Ministry of Entrepreneur and Cooperative Development in 2004 to be responsible for the development of Bumiputera entrepreneurs (among Malays and other indigenous people). This was in tandem with the policy of poverty eradication through the alleviation of poverty among the Bumiputera which was initially introduced in 1970. The ministry defined entrepreneurial culture as follows: „Entrepreneurial culture is a continuous and long-term process designed to attract various strata of society, comprising students at secondary schools and institutions of higher learning as well as the general public to be involved in business.‰
  35. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT  19 CURRENT TRENDS IN ENTREPRENEURSHIP RESEARCH Research on entrepreneurship is gaining popularity. Some current trends in entrepreneurship research include research in the following areas: (a) Entrepreneurship education; (b) Entrepreneurial finance – such as crowdfunding and Fintechs; (c) Social entrepreneurship; (d) Family businesses; (e) Women and minority entrepreneurs; (f) Global entrepreneurial movements; and (g) Technopreneurship. Across the world, the impact of technology on entrepreneurship is a subject matter which is drawing so much attention and many research projects are carried out on how technology impacts entrepreneurship. The World Economic Forum, for example, recently identified six megatrends and 21 tipping points that will change the world. The six megatrends are: (a) PeopleandtheInternet This relates to how the Internet impact how people connect with one another and also with objects through a combination of technologies such as wearable and implantable technologies This will enhance peopleÊs „digital presence‰. (b) Computing,communicationsandstorageeverywhere The rapid decline in size and cost of computing and connectivity technologies provides great potential to access and leverage the Internet. The (a) Evaluate the ministryÊs definition of entrepreneurial culture. Do you agree with its definition? What would you change, if any? (b) Suggest programmes the ministry could organise to build a more entrepreneurial culture among Malaysians. 1.9
  36. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 20  TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT phenomenon of ubiquitous computing power has become more prevalent with greater access to the supercomputer and huge storage capacity. (c) TheInternetofthings Smaller, cheaper and smarter sensors are being introduced – in homes, clothes and accessories, cities, transport and energy networks, as well as manufacturing processes. (d) Artificial intelligence and big data Artificial intelligence and big data are increasing used in decision making and are viewed as tools to enhance competitive advantage. (e) Thesharingeconomyanddistributedtrust The trend is moving towards networks and platform-based social and economic models where resources can be shared efficiently. There are increased opportunities to ideate whole new business models and for social self-organisation. The blockchain, an emerging technology, enables us to do away with third-party institutions to provide security features, enhancing the idea of distributed trust. (f) Thedigitisationofmatters Many processes such as 3D digital printing are lowering cost through a shorter process flow. It is now possible to „print‰ physical objects from raw materials via additive, or 3D printing. This has a transforming effect on industrial manufacturing. The 21 tipping points are: (a) 3D Printing and consumer products; (b) 3D Printing and human health; (c) 3D Printing and manufacturing; (d) A Supercomputer in your pocket; (e) Artificial intelligence and decision making; (f) Artificial intelligence and white collarjobs; (g) Big data for decision; (h) Bitcoins and blockchain; (i) Driverless car; (j) Government and blockchain;
  37. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT  21 (k) Implantable technologies; (l) Internet of things (IOT); (m) Our digital presence; (n) Robotics and services; (o) Smart cities; (p) Storage for all; (q) The connected homes; (r) The sharing economy; (s) Ubiquitous computing; (t) Vision as new interface; and (u) Wearable internet. ACTIVITY 1.7 Discuss how the 21 tipping points can impact entrepreneurship. Pick three of the tipping points and provide examples of their application (in the form of product or service) that you have personally seen or experienced. Present your answers to your coursemates. SELF-CHECK 1.3 1. Discusshowtheterm„entrepreneurship‰hasevolved. 2. Define the role of an entrepreneur in business. 3. Distinguish an entrepreneur from a small business owner. 4. Describe at least five common mistakes of entrepreneurship. How can we avoid them? 5. Discuss the common myths of entrepreneurship. Are there other myths on entrepreneurship prevalent in your community? How do they affect an entrepreneur? 6. State and then discredit three myths of entrepreneurship. Compare your analysis with a coursemate.
  38. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 22  TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT ● The field of entrepreneurship has developed rapidly and evolved in the last five decades, producing many definitions, concepts and views of entrepreneurship, as well as sub-branches such as collective entrepreneurship, corporate entrepreneurship, opportunistic entrepreneurship and social entrepreneurship. ● Entrepreneurs are viewed as breakthrough innovators and distinct from small- business owners; while entrepreneurship is seen as transcending the mere creation of a business to a mind-set. ● Being a field of interest to many and due to the relative lack of research on it, many myths on entrepreneurship have arisen. Believing these myths blindly could affect a personÊs perceptions towards entrepreneurship. ● There are many approaches to entrepreneurship. Two approaches are discussed in this topic, the school-of-thought approaches to entrepreneurship and the process approach to entrepreneurship. ● Entrepreneurship is increasingly viewed as important to an economy and is seen as an engine of growth. The entrepreneurial revolution has become a global phenomenon, spurring interest in how different countries fare in their entrepreneurial venture. The Global Monitor of Entrepreneurship (GEM) research consortium is a dominant authority on entrepreneurial development across nations. 7. Compare the macro and micro views of entrepreneurship. 8. Discuss how can entrepreneurs manage their external locus of control and internal locus of control to achieve success in their entrepreneurial ventures. 9. Thoroughly revolutionary. evaluate the claim that entrepreneurship is 10. Discuss the importance of entrepreneurship to a countryÊs economy. 11. How does technology impact entrepreneurship? 12. Predict future trends in entrepreneurship by giving examples.
  39. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT  23 ● Entrepreneurship research is gaining grounds and themes of research on entrepreneurship are expanding. Some current areas of research interest include venture financing, social entrepreneurship, entrepreneurial cognition and others. Collective entrepreneurship Corporate entrepreneurship Dynamic state approach Entrepreneur Entrepreneurial evolution Entrepreneurial management Entrepreneurial opportunity Entrepreneurial trait school of thoughts Entrepreneurship External locus of control Integrative approach Internal locus of control Macro view of entrepreneurship Micro view of entrepreneurship Myths of entrepreneurship Process approach School of thoughts approach Social entrepreneurship Deep Shift: Technology Tipping Points and Societal Impact. Retrieved from http://www3.weforum.org/docs/WEF_GAC15. Dees, G. (1998). The meaning of social entrepreneurship. Thansas City, MO: Thauffman Foundation and Stanford University. Drucker, P. (1984). Our entrepreneurial economy. Harvard Business Review, 62 (1),58-64 GEM Report2015/2016. (n.d.). Retrieved from www.gemconsortium.org/report/ 49480 Ireland, B. R. (2012). Entrepreneurship: Successfully launching new ventures. Essex, England: Pearson. Thuratko, D. (2014). Entrepreneurship theory, process and practice (9th ed.). Singapore: Cengage Learning.
  40. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 24  TOPIC 1 ENTREPRENEURSHIP AND ITS REVOLUTIONISING IMPACT Thuratko, D., Morris, M. H., & Covin, J. G. (2011). Corporate Innovation & Entrepreneurship 3rd Edition. Singapore: Cengage Learning. Singapore: South Western - Cengage Learning. Levie, J. D., & Lichtenstein, B. B. (2010). A terminal assessment of stages theory: Introducing a dynamic states approach to entrepreneurship. Entrepreneurship Theory and Practice, 34 (20), 317-350. Malaysia Economic Planning Unit (1991). Sixth Malaysia plan 1991-1995. Thuala Lumpur, Malaysia: Prime Minister's Department. Morris, M. H., Lewis, P. S., & Sexton, D. L. (1994, Jan 1). Entrepreneurship (Analysis). SAM Advanced Management Journal (Winter), 59 (1). Steyaert, C. (2007, Nov 15). „Entrepreneuring‰ as a conceptual attractor? A review of process theories in 20 years of entrepreneurship studies. Entrepreneurship and Regional Development. Page 453-477. Retrieved from http://www.tandfonline.com/doi/abs/10.1080/08985620701671759 Stevenson, H. & Jarillo-Mossi, J. C. (1986). Preserving entrepreneurship as companies grow. Journal of Business Strategy (Summer), 7 (1), 10-23. Timmons, J., & Spinelli, S. (2008). New venture creation. Homewood, IL: Irwin Publishing.
  41. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com ic 2 Top Entrepreneurial Mindset of Individuals  INTRODUCTION LEARNING OUTCOMES By the end of this topic, you should be able to: 1. Describe the entrepreneurial mindset and entrepreneurial cognition; 2. Describe some common characteristics of successful entrepreneurs; 3. Discuss the "dark side" of entrepreneurship; and 4. Examineentrepreneurialmotivation. Nothing is Over Encik Nazim watched the vermillion sun as it slowly sank into the horizon. Forlorn and in deep despair, he thought about how he could get out of the doldrums he was in. After, two previous failures, one in the hotel industry and another in the laundry business, he had thought he would be able to survive any business challenge. Apparently, he was wrong. What was supposed to be the biggest break for him turned out to be a nightmare. After 13 years in an IT business worth a few millions, he was back to square one when his biggest account continuously delayed payments. As age was catching up, Nazim was not sure whether he could get up on his feet again. He remembered a famous quote uttered by Rambo [played by Sylvester Stallone (see Figure 2.1)], a troubled Vietnam War veteran skilled in many aspects of survival, weaponry, hand-to-hand combat and guerrilla warfare. The quote was „Nothing is over‰.
  42. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 26  TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS The mindset of an entrepreneur is a popular topic of discussion and has been explored at length in an academic setting. To find out what makes an entrepreneur tick, this topic deliberates on the entrepreneurial mindset, entrepreneurial cognition, as well as entrepreneurial motivation. It describes some common characteristics of successful entrepreneurs; and explains how the negative aspects of entrepreneurship also known as the dark side of entrepreneurship can be destructive to a venture. THE ENTREPRENEURIAL MINDSET What drives individuals to pursue entrepreneurship? What exactly are the driving forces behind entrepreneurship? What does the psychological outlook of entrepreneurs look like? What goes on in the mind of entrepreneurs? What are the "dark side" or negative aspects of entrepreneurship? How do entrepreneurs face ethical challenges? This chapter focuses on the cognition of entrepreneurs with the aim to uncover the entrepreneurial mindset. Entrepreneurial mindset is about how entrepreneurs think. It relates to uncovering their cognition and metacognition, especially how they think about opportunities and how they make decisions. The focus on understanding the traits of Figure 2.1: Sylvester Stallone Source: http://consequenceofsound.net/ Nazim knew that he must remain strong and resilient as business survival or any form of survival is very much in his hands. He reminded himself that a successful entrepreneur always dares to face failure and is ever ready to go again, to explore opportunities, to never give up. Will Nazim get back on his feet again? 2.1
  43. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS  27 entrepreneurs is driven by the idea that entrepreneurs cause entrepreneurship i.e. entrepreneurship is a function of the entrepreneur. The lists of traits of entrepreneurs are endless and are constantly developing. One example is given by the entrepreneur and writer, Roger Cowdrey, who lists the nine characteristics associated with the entrepreneurial mindset which are: (a) A clear and achievable vision; (b) A vision where all the resources may not be in their control; (c) Self-awareness; (d) Confidence; (e) Self-motivation; (f) A willingness to take calculated risk; (g) A willingness to listen to others; (h) A lack of fear of failure; and (i) A willingness to work hard. ENTREPRENEURIAL COGNITION Cognition refers to mental processes, and originates from the Latin word cognoscere which means "to know", "to conceptualise" and "to recognise". Cognition refers to the functions, the processes, and the state of mind of an individual. Mental processes refer to what the mind can do for example thinking, recognising, remembering, producing, understanding meanings through languages, solving problems, making decisions, feeling, reflecting, etc. SELF-CHECK 2.1 Out of the nine characteristics given, choose five which you think describes you the best. Do you think you are cut out to be an entrepreneur? Explain. 2.2
  44. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 28  TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS The concept of entrepreneurial cognition was introduced into entrepreneurship literature through social cognition theory and cognitive psychology. There are many definitions of entrepreneurial cognition, and a widely accepted definitionis that of Mitchell and Busenitz et al. (2002) which is: Understanding entrepreneurial cognition is about getting to know how entrepreneurs think, trying to decipher why entrepreneurs do some of the things they do. An interesting area which has emerged from the study of entrepreneurial cognition is cognitive adaptability which is the ability to be dynamic, flexible and self-regulating, attributes which many successful entrepreneurs possess. Another concept is metacognitive. While cognitive is a process responsible for selecting a response, metacognitive is the process which selects the way the entrepreneur will frame the entrepreneurial task. In short, cognition selects "the which" while metacognition selects "the how". Many studies on entrepreneurial cognition revolve around how founders and entrepreneurs think differently from other individuals in the organisations. Are the differences (if any) due to task or environmental conditions? "The knowledge structures that people use to make assessments, judgments or decisions involving opportunity evaluation and venture creation and growth." ACTIVITY 2.1 Is there such a concept as being „entrepreneurially smart‰? Read the following case and decide. Rozina who had been employed for the last 15 years felt a strongsense of boredom at work. She had been a personal assistant to three CEOs and no longer found it challenging to handle the activities of the top guns. She was interested in starting her own business, perhaps a little cafe or a flower shop. Growing up in a well to do family, Rozina was often surrounded by plants and flowers in the lush garden surrounding her family's mansion. In her condominium, a few tenants were already cultivating organic indoor plants. Rozina wondered if indoor plants could be a potential business to explore.
  45. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS  29 COMMON CHARACTERISTICS OF SUCCESSFUL ENTREPRENEURS Studies on entrepreneurs revealed some common characteristics and traits of successful entrepreneurs such as having clear vision, passion, determination, high energy, drive to achieve, ability to calculate risk and tolerance for ambiguity. Passion is central to the success of an entrepreneur - it is a driver of success. However, according to G. Gupta, passion alone does not guarantee success. An entrepreneur needs to know how to leverage on that passion for turning his dream business into a reality. Gupta suggests three simple steps to turn passion into a successful venture. They are as follows: (a) Find out as much as possible about the industry you wish to do business in. Do secondary research - there is so much information which you can source online. Talk to people who have long experience in the industry. Visit companies doing the business in the industry - they can be a competitor ora collaborator, it is up to you to build the business network! Find out the challenges and opportunities they have gone through. Join an industry- related association - you have a high chance of meeting people with common interests. Strong knowledge in an organisation can help you decide on products to produce or source, determine your market segment and build the business you deeply want to. (b) Once you have gathered "enough" information, jump in! Do not hesitate and wait for "the perfect time". Think, "it's now or never". Starting a business around a passion can give you the courage to overcome challenges. Passion motivates us to learn as much as possible about our object of passion, increasing our enthusiasm and drive to excel in our chosen business venture. As she contemplated when to quit her job and start her business, Rozina began to have doubts. „I am not sure if I could break-even in my chosen business, let alone become successful. Entrepreneurship is the prerogative of the business community and the intelligent. Besides, I am not good incalculations.‰ Can Rozina succeed in business? Discuss this with your coursemates. 2.3
  46. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 30  TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS (c) Be around people who share your passion and vision. You need to avoid negative vibes and naysayers when pursuing your passion as they can drain your energy. Having people who share your passion can be encouraging and inspiring. It would be better still if they have experience in the line of business you wish to pursue as they can guide as you put in long hours to start and grow your venture. Successful entrepreneurs look far ahead and aspire to turn their passion into a venture that is not only profitable, but more so, a venture which allows them to do what they love most and in the process create a good impact on their customers and ensure the endurance of their brand. Entrepreneurs are a special breed of people. Some characteristics which have been associated with entrepreneurs are: (a) Determination and perseverance The level of determination and perseverance of entrepreneurs is very high. They are willing to make a lot of commitment to ensure the success of their venture. Take for example, Zaliha Mohamad (see Figure 2.2) the founder of Palmeka Sdn Bhd (http://palmeka.com/index.php), who gave up a high- paying job to set up a manufacturing company, investing all her savings in the venture. Figure 2.2: Zaliha Mohamad - founder of Palmeka Source: https://my.linkedin.com (b) Drivetoachieve It is the drive to achieve which entrepreneurs have that helps them to visualise success and plan their moves to live their mission in order to achieve their vision. Entrepreneurs believe in what they do and will take whatever it needs to succeed. (c) Opportunity orientation Successful entrepreneurs have the uncanny power to spot opportunitiesand act on them. They can see opportunity in the most mundane and least likely places and turn them into business ideas. In Malaysia, Nizam Mustapha of
  47. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS  31 Medijaring (refer to Figure 2.3) for example became one of the pioneers in providing solutions for third party administration for the healthcare system after observing how doctors seem to juggle with so many roles in their small medical practice. Figure 2.3: Medijaring logo Source: http://www.heart.com.my/ (d) Persistent problem solving Problems spell opportunities for entrepreneurs. They understand that problems require solutions which could be turned into business opportunities. Nonetheless, they know how to avoid unsolvable or easy problems. They will optimise their chances by looking for "lucrative", problems which can help them achieve their business mission. For example, Madam Zhang Yin (refer to Figure 2.4), a paper-recycling entrepreneur and one of the richest women in the world became rich by solving the problem of trash through paper recycling. Figure 2.4: Madam Zhang Yin - founder of Nine Dragons Paper Holdings Source: https://www.nextinsight.net (e) Highneedforfeedback Entrepreneurs are realistic and appreciate feedback. Feedback gives them the chance to improve their business and therefore they take feedback seriously. Entrepreneurs treat failure as a learning point. They move on and take the "nothing is over attitude". Mega entrepreneur Richard Branson (refer to Figure 2.5) for example is a strong believer in the importance of getting
  48. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 32  TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS feedback and he advises companies to get constant feedback from staff as well as people external to the organisation. Figure 2.5: Richard Branson Source: http://www.marketleadership.net (f) Highinternallocusofcontrol Entrepreneurs believe that they are in control of their own destiny. They do not blame fate or luck (lack of) for their failure. They know their decisions and the choices they make determine the performance of their business. Jayson DeMers (refer to Figure 2.6), CEO of AudienceBloom learned that 100 per cent attention, focus and effort is required for a successful venture. On the other hand, low locus of control will derail an entrepreneur. Figure 2.6: Jayson DeMers - CEO of AudienceBloom Source: http://www.inc.com/author/jayson-demers (g) Tolerance for ambiguity The entrepreneur has a high tolerance for ambiguity. The less known or unknown circumstances do not hold them back. In fact, occasionally, entrepreneurs can leverage on ambiguity and turn it into an opportunity.
  49. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS  33 (h) Calculated risk taking While entrepreneurs are in many ways risk takers, they evaluate the risks carefully. Their decisions are well thought out and they are apt at taking calculated risks. They spread out business risk in as much as possible by negotiating business terms and sharing risks through shared partnership. For example, Igor Salindrija (refer to Figure 2.7), a successful entrepreneur and CEO of AskGamblers.com says that beneficial risks require careful planning such as assessing needs, identifying areas that need improvement, formulating strategic plans, and executing initiatives while anticipating mistakes. Figure 2.7: Igor Salindrija - CEO of AskGamblers.com Source: https://eegaming.org (i) Highenergylevel Many entrepreneurs have to work longer hours than most people. This requires a high level of energy. The discipline in entrepreneurs helps them maintain a balanced life - they know that they need to take care of their health. However, for start-ups, the pressure may be higher as they have yet to prove themselves. (j) Creativeandinnovative To be competitive in business, entrepreneurs need to be creative and innovative. They need to constantly keep abreast with market demands to understand the market better. Then, they need to design or choose products which customers want. Creativity comes in many forms. For example, Professor Mohamed Yunus (refer to Figure 2.8) of Grameen Bank introduced microfinance, a kind of innovation for the financial services industry, dedicated for women to help alleviate poverty; while Tan Hooi Ling (refer to Figure 2.9) of Grab, innovated Grab which is one of Southeast Asia's leading ride-sharing platforms.
  50. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 34  TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS Figure 2.8: Professor Mohamed Yunus of Grameen Bank Source: https://en.wikipedia.org Figure 2.9: Tan Hooi Ling of Grab Source: http://fortune.com (k) Has clear vision and strong passion Entrepreneurs are driven by their vision. Without vision, they would not know what to do nor have the drive to undertake a venture. A vision is a dream; and passion is the feeling which comes from the heart, an energy which drives the entrepreneur to achieve his dreams. For example, Vivy Yusof (refer to Figure 2.10) of Fashion Valet went into business with a clear vision of selling fashionable items through the online platform.
  51. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS  35 Figure 2.10: Vivy Yusof of Fashion Valet Source: https://www.easystore.co (l) Able to build a good team No man is an island. The same goes for entrepreneurs. Successful entrepreneurs are inspiring and have the ability to propel others to share their dream, to build good teams. They have stories to motivate their team members and they appreciate the importance of teamwork. This is evident in well-performing companies, for example AirAsia, which has a corporate culture that stresses the importance of teamwork. Entrepreneurs are often exposed to the possibility of failure in their quest to set up a business. Many of them know this, and they learn to cope and in the process develop a tolerance for failure. They learn to manage setbacks and disappointments as part of the learning process. However, the learning associated with failure is neither automatic nor instantaneous. Entrepreneurs need to go through a period of grief recovery process. ACTIVITY 2.2 Watch the YouTube video entitled "50 Entrepreneurs share priceless advice" at https://www.youtube.com/watch?v=QoqohmccTSc. (a) What are the major themes shared by the netrepreneurs? (b) Discuss the top five pieces of advice that you like. Explain why you like them. Are your choices similar, different or a mix of both? Compare.
  52. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 36  TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS THE DARK SIDE OF ENTREPRENEURSHIP Figure 2.11: Manfret Thets De Vries Source: http://www.strategy-business.com The dark side of entrepreneurship relates to risk-taking, stress and ego. It is about how entrepreneurs need to confront risks, manage stress and manage the entrepreneurial ego through personal influence in the venture to rise to the challenges of ethical leadership within each venture. Although entrepreneurship is often touted as a contributor to economic development, not all aspects of entrepreneurship are positive. There is what is called the dark side of entrepreneurship or the negative aspects of entrepreneurship. Some elements of this dark side of entrepreneurship which were written about by a well-known Dutch psychologist, Manfret Thets De Vries (refer to Figure 2.11), in the 1980s include the following: (a) Entrepreneurs have personality quirks which make them hard people to work with for which they could be seen to be prone to take biased actions. They can also act thoughtlessly and have difficulty following instructions. (b) Entrepreneurs could have gone into business because he finds it difficult to work for others. This could stem from the fact that an entrepreneur may not like to take orders from others, an idiosyncrasy which can be harmless if his business is small; but could be detrimental when the business grows big and he would need support and cooperation from others. (c) Entrepreneurs often feel ambivalent when control issues arise, filled with a sense of grandiosity, influence, power and authority but at the same time, they also feel helpless. Their high need of control can affect their ability to take or give direction, and how they relate to and get along with others. 2.4
  53. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS  37 Because they want to be in control, they cannot tolerate subordinates who are independent and able to think for themselves. Their desire for control can lead to micromanaging where they want to be in the know about everything in the organisation. Excessive concern about minute details can have negative repercussions in the long run. (d) Entrepreneurs can be dominant and suspicious of authority, making it hard for them to switch from a superior to a subordinate role. This is because they find structure stifling. The dominant nature of entrepreneurs can build resentment among those they manage and can cause people to leave. (e) Many entrepreneurs are social misfits who want a strong grip on their life and not be at the mercy of others. They do not like being subordinated to others. (f) Yet, another dark side to entrepreneurship is a sense of distrust. They can have a strong distrust of the world around them. This could be because of their fear of victimisation and the need for them to prepare for any disaster. They scan their surroundings to confirm their suspicions. They can be trivial and gradually lose their sense of reality. They become difficult to work with and this can result in low morale, employee dissatisfaction and decreased productivity. (g) Another negative aspect of entrepreneurship is the entrepreneurs desire for applause. The stressful life of entrepreneurs has the power to destabilise their sense of reality, and this can lead to a greater craving for control as well as a greater sense of distrust. The entrepreneurs constantly want to be heardand recognised. They like to be seen as heroes, tell others that they amount to something and are not to be taken for granted. (h) Entrepreneurs have the tendency to externalise their internal problems and often resort to scapegoating,projectingtheir discomforts and fears onto others. If exaggerated, it can create much stress in an organisation and can result in politicalinfighting,denial of responsibilities as well as factions and insularism. (i) Some entrepreneurs are unable to keep a balance between dependency needs and their wish to be independent, and are subject to mood swings. This list is but some of Manfret Thets De Vries' observations of entrepreneurs he had studied in his profession. The good news is that there is "light" to the dark side of entrepreneurship. Firstly, there are countervailing forces to the dark side of entrepreneurship which include institutions, government, banks and a person's good judgement. More reassuringly, the sense of reality for most entrepreneurs acts as a buffer to prevent the dark side of entrepreneurship from getting out of hand.
  54. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 38  TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS Other main points stressed by De Vries are summarised in the following: (a) Entrepreneurs do not necessarily have more personal problems or personal disorders than other people; (b) The boundaries between being creative and aberrant behaviour are blurry, and are not discrete categories; (c) The blend of creative and irrational is what makes entrepreneurs tick and this has driven many positive contributions; (d) As entrepreneurs' personality quirks are the source of their entrepreneurial drive, executives and venture capitalists may well stop fighting these idiosyncrasies and regard developing them as a challenge instead by building a relationship based on mutual trust in order to enable an entrepreneur to test ideas against reality. ACTIVITY 2.3 Rather than being called the COO, Tan Hooi Ling of Grab prefers to be seen as the "plumber" of Grab. What started out as MyTeksi, Grab has now grown into Southeast Asia's leading ride-sharing platform. It continues to transform the way we commute with GrabCar for private car hire, GrabHitch, a carpooling service and newer services such as GrabBike and GrabExpress. Read the following excerpt of a blog entry by Michelle Nickolaisen, owner of a freelance writing business. Discuss with a friend the addictive nature of entrepreneurship. Suggest how it can be managed. "Ask any entrepreneur; we don't measure time in units of weeks or months, but from deadline to deadline, launch to launch and failure to failure. It's how we gauge our impact on the world. Remember the pure euphoria of your first successful launch? Or when you made your first sale? Nothing beats the bliss that came from your first major press mention or reached whatever recent milestone that signalled measurable growth. We crave these moments and fight for them with a superhuman intensity. Friends and colleagues cheer as you turn your vision into reality, transform lives and punch crater-sized dents into the universe.
  55. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS  39 But nobody talks about how addictive that high is. Or that when left unchecked, we risk losing ourselves like an addict seeking any other drug. Entrepreneurship can be a gristly, volatile mess of toxic ingredients on the verge of combustion, threatening to consume your health, relationships, and potentially, your life. According to the Gallup Wellbeing Index, 45% of entrepreneurs report being stressed, and another survey of 242 entrepreneurs, 30% identified as depressed (compared to the national average, which is 7%), and 72% of entrepreneurs have a family history of mental health conditions. Entrepreneurial swagger is often a thin veneer masking crippling self-doubt, insecurity, and fear of catastrophic failure. The more successful you are, the more people depend on you, and the more is at stake if you fail." Source: Nickolaisen, M. (2016, July 25). The dark side of entrepreneurship that nobody talks about. Retrieved from https://www.shopify.com/enterprise/the- dark-side-of-entrepreneurship-that-nobody-wants-to-talk-about. ETHICS IN ENTREPRENEURSHIP Ethics in entrepreneurship has emerged as an important area in academia and research. Entrepreneurship is also increasingly seen to have an important ethical dimension at the individual, organisation and societal level. Entrepreneurial action has powerful ethical dimensions and implications i.e. the question of the ethical (or unethical) entrepreneur, organisation (ventures set up by entrepreneurs) and ethical behaviour of entrepreneurs within each society. Ethics which originate from the Greek word ethos means custom or code of conduct, how one carries oneself. Entrepreneurs are subject to various ethical considerations and they often need to rationalise on how to handle ethical challenges which could constitute acts "against the firm" or "on behalf of the firm". Either way, ethics is not an easy matter to manage. There are many considerations to be made with regard to what constitutes a right or a wrong, and what is acceptable. 2.5
  56. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 40  TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS Ethical conflicts arise due to many reasons. Firstly, entrepreneurs need to balance the needs of various stakeholders, both internal and external stakeholders, and sometimes they have conflicting demands which require ethical considerations. Secondly, the dynamic nature of society entails the need to adapt to changing perspectives, paradigms and values in terms of what is legal and what is ethical. The American Management Association for example, made five assumptions when considering how business ethics will evolve over the next decade and beyond. These five assumptions are as follows: (a) Technology has a major impact on ethics and is expected to grow even stronger and this can affect individual privacy. (b) Global trends which have a strong influence on business ethics include global free trade initiatives, shifting demographic trends, conflicts and a global workforce. There will be a shift towards what constitute global ethics. The development of global ethical standards seems eminent. (c) Organisational structures will see a shift towards greater integration and networking across the globe. There will be an expanded flow of information, technology, goods, services, human resources, etc. There are bound to be differing ways of thinking about values and ethics among partners and allies. Organisations will thus need to set up and maintain codes of ethics and conduct to build shared values. (d) Changes in socioeconomic trends can increase competition and this can tempt organisations to make decisions based on expediency rather than ethics. (e) Environment trends – increasing concerns about the environment requires a more robust ethical framework as conflicting ideas regarding what is ethical in preserving the environment are becoming more pronounced. There is also an increasing demand for companies to be environmentally ethical such as the Green movement. There is a need to determine managerial roles within the ethical framework -non- role, role failure, role distortion and role assertion. Ethics as a code and as a process is becoming more important and entrepreneurs need to consider establishing ethical strategies. The ethics of entrepreneurship must be taken seriously for many reasons. Firstly, at the societal level, it influences the way we live, as to a large extent, our livesare shaped by market activities for example in the products and services we consume. The introduction of social media platforms which we use for communication has had a fair share of ethical issues arising as a result of the misuse of these platforms such as leak on confidential documents.
  57. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS  41 Positive ethical impacts have also been exerted by organisations which were set up with good values as its driving mission, for example, the Body Shop. Their emphasis on social mission had caught on quite rapidly. Across the world, social enterprises had sprung to address the social challenges plaguing each area of concern. These firms not only exert economic power but also symbolic power, motivating a movement to do good around the world. It is obvious that ethical influences of entrepreneurship impact us as individuals, communities and societies. The consumer association movement might provide a clue to the ethical dimensions of businesses and entrepreneurship. In deciding the type of products and services to offer and how to distribute them, ethical considerations are paramount for entrepreneurs as these decisions impact consumers, and entrepreneurial actions have ethical consequences. Entrepreneurs must realise that the entrepreneurial process has ethical demands and this can entail making ethical decisions under conditions of extreme uncertainty, ambiguity and ignorance. Although the field of entrepreneurial ethics is a relatively young one, there have been encouraging findings signifying an important and positive role for ethics. Studies have shown that the perception of the character of an entrepreneuraffects access to financing and impacts the success of the venture. Entrepreneurs are regarded as having high integrity when their values are congruent with prospective resource providers. When they make positive social contributions, they are even more likely to be supported by key stakeholders. ENTREPRENEURIAL MOTIVATION The word motivation originates from the Latin word mover which means "to motive". In English the root word of motivation is "motive" which refers to an inner state of mind which activates or directs our behaviour towards our goals; an expression of a personal needs or goals; and motives are internal and are expressed by our behaviour which is external. Entrepreneurial motivation is about how psychological factors contribute to the process of entrepreneurship - how perceived expectations impact actual outcomes in starting, growing and sustaining a venture. ACTIVITY 2.4 Conduct an Internet search on how technology impacts the ethical behaviour of a firm. Share your findings with your coursemates. 2.6
  58. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com 42  TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS Despite a lack of agreement on the profile of a successful entrepreneur, studies on the psychological makeup of an entrepreneur continues to be a major topic of research interest for many reasons including the fact that the entrepreneur is the main driver of entrepreneurship, and he is driven by his inner innovation. Before we go deeper into the psychological theory of entrepreneurship, let us explore other theories of entrepreneurship and see how they relate to entrepreneurial motivation. Some of these theories include the sociological theory of entrepreneurship, Joseph Schumpeter's entrepreneurship innovation theory, the psychological theory of entrepreneurship, McClelland theory of high achievement and McClelland theory of motivation. (a) The sociological theory of entrepreneurship is about how entrepreneurship is motivated by social values and religious beliefs, and therefore, an entrepreneur performs according the role expectations of a society. Some theorists in this field include Landstrom (1998) who studied entrepreneurship at the level of society and Reynolds (1991) who identified four social contexts relevant to entrepreneurial opportunity: (i) The first is the social network context which focuses on building social relationships which promote trust rather than opportunism - success comes as a result of trust. An entrepreneur must strive ethically and should not take advantage of others to succeed in business. (ii) The second is the life course stage context, a stage where the life situations and characteristics of individuals who become entrepreneurs are analysed. (iii) The third is the ethnic identification context where it is believed that sociological background determines how far one can succeed in business. People born into a society which is already successful in trade would have a greater advantage than those without. However, there are some observations that marginalised groups of people often fight all barriers and obstacles; and against all odds managed to improve their lives. Being marginalised, they are less likely to take things for granted, and know that success is the main path for them to get out from their misery. (iv) The fourth is the population ecology context whereby the external environment impacts the growth and survival of a business venture. The external environment includes the political, social, economic, technological, legal and environmental aspects of a particular community, country or industry.
  59. Copyright © Open University Malaysia (OUM) Dịch vụ viết thuê đề tài – KB Zalo/Tele 0917.193.864 – luanvantrust.com TOPIC 2 ENTREPRENEURIAL MINDSET OF INDIVIDUALS  43 (b) JosephSchumpeter'sentrepreneurshipinnovationtheoryliesonthepremise that an entrepreneur contributes to entrepreneurship by being innovative, creative and having foresight. Innovation comes in the form of new products, new production methods and new markets. Schumpeter stresses on the cruciality of innovation without addressing risk-taking and organisational skills. His focus is on entrepreneurs in big industries coming from more developed countries. (c) The psychological theory of entrepreneurship relates to individuals who possess certain psychological characteristics whereby they have a high need for achievement, vision or foresight and resilience in facing challenges - based on upbringing which stresses on excellence, self-reliance and low father dominance. (d) McClelland theory of high achievement identifies two characteristics of entrepreneurship which are doing things in a new and better way and making decisions under uncertain circumstances. People with high need for achievement and success are more likely to become entrepreneurs. (e) McClelland theory of motivation states that people have three types of needs at any given time - need for achievement, need for power and need for affiliation. Entrepreneurs need achievement the most. They are usually not influenced by money or external incentives, but rather think of profit as a measure of success and competency. (f) Yet another aspect of entrepreneurial motivation is entrepreneurial persistence, an emerging field of research. Research on entrepreneurial persistence looks into "how" and "why" entrepreneurs continue setting a venture, as well as how their experience with adversity and values affect their persistence. ACTIVITY 2.5 Conduct an Internet search on the vision and mission statements of at least two social enterprises. (a) What motivates these social enterprises? (b) How do their entrepreneurial motivations differ from that of conventional business entrepreneurs?
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