ECONOMIC ACTORS AND ENTREPRENEURSHIP
ARIZONA STATE UNIVERSITY
ENT 441 - ENTREPRENEURIAL MANAGEMENT
WEEK 1
1.1. Economic Actors
We talk about entrepreneurship is also talking about economic problems, because in the
economy one of them is entrepreneurship. Entrepreneurs should understand economic issues,
especially microeconomics that are in direct contact with production activities. We see the
economic actors below.
A.
Consumer households (individuals)
B.
Corporate households (private business entities),
C.
Government (state) households.
Each of the three groups has a certain pattern of economic activity that is more or less
influenced by the prevailing economic system. Basically, the typical economic activities for
each group of economic actors mentioned above can be summarized as follows:
A.
Family household. In the literature, this group of economic actors is commonly referred to as
a household, and can be a family organization or an individual. Individuals are considered to
be single-member family households. The economic activities carried out by family
households basically include:
1.
Selling or renting out their resources and earning income in the form of wages, salaries,
rent, interest and profit as a result of the sale or rental of their resources,
2.
Pay taxes,
3.
Purchasing and consuming personal goods and services produced by corporate
households, and
4.
Utilizing public goods and services provided by the government.
B.
Corporate households or business entities. Economic actors belonging to this category have
various juridical forms. Some are in the form of limited liability companies, limited liability
partnerships, partnerships with firms, individual companies, state companies, cooperatives
and so on. Corporate households, which we briefly call producers, companies or business
entities carry out economic activities which are basically as below:
1.
Purchase resources from family households and government households,
2.
Pay taxes,
3.
Utilize public goods and services provided by the government,
4.
Using the resources referred to above to produce goods and services, and
5.
Selling the goods and services they produce, to family households, government
households, and also to fellow corporate households.
C.
Government households. This economic actor, commonly referred to simply as the
government, carries out the following kinds of economic activities:
1.
Purchasing resources, (for our economic system mainly human resources), goods and
services from family households and corporate households,
2.
With the resources, goods and services it purchases, government households produce
and deliver public goods for use by family households and business households,
3.
Collecting taxes from family households and business households with a view to,
among other things, financing the purchase of the goods, services and resources
required under item 1 above,
4.
Acting as a regulator of the economy, the government is obliged to:
(a) Strive for a fair distribution of national income,
(b) Pursue a high level of national income and employment opportunities,
(c) Maintain a relatively stable price level, and
(d) Pursue adequate economic growth.
To get a better picture of the economic relationships between the three economic actors, we
summarize the economic activities mentioned above in the form of a circular flow of
economic activity as shown in Figure 1.1.
Microeconomics:
Above it has been revealed that the branch of economics that we can call
microeconomics, microeconomic theory, micro economics, or microeconomics for short, can
be defined as a branch of economics that specifically studies the behavior of economic actors.
If we stick to this definition we must conclude that the materials of microeconomics in the
form of economic behavior of household consumers / individuals / families, the economic
behavior of corporate households and the economic behavior of government households.
However, economic thinkers seem to think pragmatically. In filling the microeconomic
literature, economic thinkers do not want to be bound by the definition of microeconomics as
they pronounce it. First of all, it can be pointed out that based on the consideration that the
transactions carried out by the government in addition to the overall value is very large also
the main purpose is often to influence the course of the economy, most economic thinkers do
not include the theory of economic behavior of government households into the discipline of
microeconomics.
1.
Consumer theory. This part of microeconomics basically discusses the economic
behavior of family households in using their limited income to meet their needs by
obtaining the maximum level of satisfaction. Furthermore, it can be stated that this
consumer theory provides the theoretical basis for the conception of the consumer
demand curve, a conception that plays a very large role in trying to explain the behavior
of market prices.
2.
Business entity theory. This section discusses the behavior of corporate households in
determining the amount of goods or services produced, in determining the unit price of
goods or services produced, and in determining the combination of resources used in the
production process, all of which are based on the assumption that what corporate
households want to pursue is maximum profit. This theory provides the theoretical basis
for the conception of the producer supply curve.
3.
Market price theory. This part of microeconomics basically discusses the behavior of
market prices for goods and services. This theory, as mentioned above, makes extensive
use of the theoretical conclusions of consumer theory and enterprise theory, especially
the conception of demand and the conception of supply generated by these two theories.
4.
Income distribution theory. This part of microeconomics tries to explain the behavior of
resource prices, which can change wages for human resources, interest on capital for
capital resources, and rent for natural resources. The theory of income distribution
draws heavily on the theoretical conclusions of corporate household theory and family
household behavior theory.
5.
General equilibrium theory. The theories mentioned above, namely the consumer
theory, producer theory, market price theory and income distribution theory are all
based on the assumption of the absence of mutual influence or interdependence between
the economic activities of one economic actor and the economic activities of other
economic actors. The real world shows the existence of these interdependence
relationships. Microeconomic theory, in an effort to explain price formation,
determination of the quantity of goods or services produced and consumed, and so on as
described above, includes in the analysis the element of mutual influence among these
economic actors, commonly called general equilibrium analysis.
6.
Welfare economics. None of the microeconomic theories described above, from point 1
to point 5, pay attention to the scale of people's preferences. On the other hand, the
branch of microeconomics called welfare economics, in trying to explain the behavior of
consumers, producers, prices and so on, pays attention to the ethical norms of society.
Business Production Factors
1. Man
Humans are very decisive; it is humans who make goals carry out the process of activities to
achieve predetermined goals; without humans there would be no work process; the central
point (central point) of management.
2. Money
Money is also very important as a medium of exchange and a measure of the value of a
business and usually the size of the company is measured by the amount of money circulation
that occurs.
3. Machines and equipment
Machinery and equipment are as a tool for human work, to facilitate carrying out work,
provide benefits to labor, their use is highly dependent on humans, facilitating the
achievement of human life goals.
4. Methods
Whether or not the goal is achieved depends on how to carry it out or the method, with a good
way of working it will facilitate and facilitate the course of work so that it can achieve the
target or expectations.
5. Materials
Management exists because of human activities together to take care of materials. These
materials are very limited so management is needed to manage them optimally.
6. Market
The market is a meeting place between sellers and buyers. The market function plays an
important role in marketing goods or services produced by business activities, the market is
important to control, for the continuity of the process of business or industrial entity activities.
1.2. Entrepreneurship:
l.2.1.
Definition of Entrepreneurship
The word entrepreneurship comes from the translation of "entrepreneurship" which can be
interpreted literally "the nerve center of the economy", therefore entrepreneurship is defined
as "(he back bone of economy" and some even interpret it also as "toil bone of economy" or
controlling the economy of a nation or country.
Entrepreneurship is a creative endeavor that is built on innovation to produce something
new, has added value, provides benefits, creates jobs, and the results are useful for others.
Entrepreneurship means self-employed or entrepreneurship is a branch of economics that
teaches how we can be independent in starting a business in order to achieve profit and
develop our economic potential.
Entrepreneurs are people who can be categorized as self-employed or entrepreneurial
(modern economic theory). If the business is stagnant or does not develop, the entrepreneur is
referred to as self-employed while if the business grows, develops and advances, the
entrepreneur is referred to as entrepreneurship.
Wiraswasta is a person who is a fighter, gallant, noble, brave, and worthy of being a role
model in the field of business on the basis of standing on his own feet. (wira = main, gallant,
brave, noble, role model or warrior, swa = own, sta = stand).
Entrepreneurship is a creative and innovative person who is able to establish, build,
develop, advance, and make his company superior. Examples: Anak Singkong "Chairul
Tanjung", Dr. Ir. Ciputra, Dr. BRM. Mooryati Soedibyo, M.Hum, Bob Sadino, James Riyadi,
MBA, Ir. Aburizal Bakrie, Sahid Sukamdani, Bob Hasan, Eka Tjipta Wijaya, Putera
Sampoerna, Mochtar Riyadi, Rusdi Kirana, Martua Sitorus, Peter Sondakh, Sudono Salim,
Gab Thohir, Sukamto Tanoto, Kartini Kartono, Hardjo Sutanto, Boenyamin Setiawan and
many others.
Intrapreneurship or corporate entrepreneurship is entrepreneurship built within
company employees to produce or develop products according to market desires. For
example: Sachet products, refill products, food products, beverage products, and others.
Entrepreneurial is the activity of running a business or entrepreneurship.
While the meaning of Entrepreneur comes from the word:
Wira : True, Main, Brave, Sublime Swa : Alone, Independent
Business: Business, Enterprise, Productive activity Stand, Upright, Strong
The definition of entrepreneurship according to several experts, among others:
1.
Jean Baptise Say (1803), Entrepreneurship is "The ability to move economic resources
from areas of low productivity to areas of higher productivity and greater returns".
2.
Schumpeter (1934), Entrepreneur as the person who destroys the existing economic
order by introducing new products and services, by creating new fronts of
organizations, or by exploiting new raw materials.
3.
Peter Drucker Entrepreneurs are people who always seek change, respond to and take
advantage of opportunities.
4.
Alber Sapliero entrepreneur is a person who takes the initiative by managing various
aspects of the economy, technology, social culture, and is willing to accept the risk of
uncertainty to obtain the results of his efforts.
5.
James W. Halloran Entrepreneur Is One Who Assumes The Risk Of Gaining Profits Or
Incurring Losses In The Undertaking Of Commercial Transactions.
According to Presidential Instruction No. 4 of 1995: Entrepreneurship is the spirit, attitude,
behavior and ability of people in handling businesses and or activities that lead to efforts to
seek, create, apply new ways of working technology and products by increasing efficiency in
order to provide better services and or obtain greater profits.
Figure 1.3: Entrepreneurial Struggle
Entrepreneur is a person who is creative, innovative, independent, confident, tenacious, and
diligent, diligent, disciplined, ready to face risks, observant of seeing and seizing
opportunities, good at managing resources, in building, developing, advancing, and making
the business or company superior. (Eddy Soeryanto Soegoto, 2009)
Entrepreneur is a person who has the ability to see and assess business opportunities, gather
the resources needed to take advantage of them and take appropriate action, to ensure their
success. (Geoffrey G. Meredith et. Al, 1995)
An entrepreneur is someone who takes the risks necessary to organize and manage a business
and receives a reward in the form of non-financial profit. (Skinner, 1992)
Entrepreneurship is everything that is important about an entrepreneur, namely a person who
has the nature of working hard and sacrificing to concentrate all the power and dare to take
risks to realize his ideas. (Siswanto Sudomo, 1989)
Entrepreneur is a person who is capable of coordination, organization, and supervision. He
has extensive knowledge of the environment and makes decisions about the business
environment, manages a certain amount of capital and faces uncertainty to achieve profit.
(Say, 1996)
1.2.2.
Entrepreneurial Philosophy
To be an entrepreneur one must have the ability to discover and evaluate opportunities, gather
the necessary resources and act to take advantage of them. Entrepreneurs are leaders and they
must exhibit leadership traits in the execution of most of their activities. They take calculated
risks and like challenges and moderate risks. Entrepreneurs are confident in themselves and
their ability to make the right decisions. It is this decision-making ability that is the hallmark
of entrepreneurs.
Entrepreneurs are action-oriented, highly motivated individuals who take risks in pursuit
of their goals, the following list of traits and characteristics that provide a profile of an
entrepreneur include:
1.2.3.
The Nature of Entrepreneurship
Entrepreneurs are people who have the ability to see and assess business opportunities; gather
the resources needed to take the right action, take advantage and have the nature, character,
and willingness to realize innovative ideas into the real world creatively in order to achieve
success / increase income.
An Entrepreneur can not only plan, say but also do, realizing the plans in his mind into
action success-oriented. This requires creativity, which is the mindset of thinking about
something new, and innovation, which is the action of doing something new.
The Nature of Entrepreneurship:
•
Entrepreneurship is a value embodied in behavior that is used as a resource, driving
force, goal, strategy, tips, process, and business results. (Ahmad Sanusi, 1994)
•
Entrepreneurship is a value needed to start a business and develop a business. (Soeharto
Prawiro, 1997)
•
Entrepreneurship is a process of doing something new (creative) and different
(innovative) that is useful in providing more value.
•
Entrepreneurship is the ability to create something new and different. (Drucker, 1959)
•
Entrepreneurship is a process of applying creativity and innovation in solving problems
and finding opportunities to improve business life. (Zimmerer, 1996)
•
Entrepreneurship is an effort to create added value by combining resources in new and
different ways to win the competition.
1.2.4.
Entrepreneurial Attitude
The attitude that an entrepreneur must have in building and developing a business is:
•
Discipline
Discipline over punctuality, quality of work, work systems, agreements made and adherence
to principles.
•
High Commitment
Having a high, clear, purposeful and progressive (progress-oriented) commitment to the
agreement that has been made with someone, both to himself, and to others. Clear, directed
and progressive (progress-oriented). Commitment to consumers is excellent service oriented
towards customer satisfaction, product quality in accordance with the price of the product
offered and problem solving for consumer problems so that consumer confidence will have an
impact on purchases that continue to increase so that company profits increase.
•
Honest
Honesty is very attached to the concept of marketing that is oriented towards customer
satisfaction. Entrepreneurs must uphold honesty in carrying out their business activities so
that they will get actual and potential customers, both short and long term.
•
Creative
To win the competition, an entrepreneur must have high creativity. This creativity should be
based on an advanced way of thinking, full of new ideas that are different from existing
products in the market.
Creative ideas generally cannot be limited by space, form or time. In fact, often the genius
ideas that provide new breakthroughs in the business world are initially based on creative
ideas that seem impossible.
However, even good ideas, if not implemented in everyday life, will only be a dream.
•
Innovative
Genius ideas generally require a high degree of innovation from the entrepreneur. High
creativity still needs a touch of innovation to sell in the market.
The innovation needed is the entrepreneur's ability to add use value/benefit value to a product
and maintain product quality by paying attention to "market oriented" or what is currently
selling in the market.
With the increase in the use value and benefits of a product, the selling power of the product
increases in the eyes of consumers, due to an increase in the economic value of the product
for consumers.
•
Independent
An entrepreneur must have an independent attitude in managing his business, i.e. not relying
on other parties in making decisions or taking actions, including fulfilling their business
needs.
•
Realisitis
Determining business decisions must be realistic, objective and rational by looking at
facts/realities in the field and selecting input or suggestions from outside.
1.2.5.
Entrepreneurial Skills
Entrepreneur is someone who has a soul and ability (ability) that is creative and innovative,
able to create something new and different (ability to create the new and different), able to
start a business (start up), able to make something new (creative), able to look for
opportunities (opportunity), dare to bear risks (risk bearing) and able to develop ideas and
mix resources.
An Entrepreneur must have expertise:
•
Having vision knowledge, i.e. having good knowledge and insight and insisting on
realizing it.
•
Self knowledge, namely having knowledge about the business to be carried out or
pursued.
•
Imagination, i.e. having imagination, ideas, and perspectives and not relying on past
success.
•
Preactical knowledge, which is having practical knowledge, such as engineering, design,
processing, bookkeeping, administration, and marketing knowledge.
•
Search, which is the ability to discover and create.
•
Foresight, which is far-sighted.
•
Computation, which is the ability to calculate and predict future situations.
•
Communicatio, which is the ability to communicate, get along, and relate to others.
1.2.6.
Competence
An Entrepreneur must have the following competencies:
•
Knowing your business, must know everything related to the business activities that will
be carried out.
•
Knowing the basic business management, namely knowing the basics of business
management, for example how to design a business, organize and control a company,
including being able to calculate, predict, administer and record business activities.
Knowing business management means understanding the tips, methods, processes and
management of all company resources effectively and efficiently.
•
Having the proper attitude, i.e. having the perfect attitude towards the business he is
doing. He must behave as a merchant, industrialist, businessman, executive, who is
sincere and not half-hearted.
•
Financial competence, namely having competence in finance, organizing purchases,
sales, bookkeeping, and profit/loss calculations. He must know how to get funds and how
to use them.
•
Managing time efficiently, which is the ability to manage time as efficiently as possible.
Organize, calculate, and keep time according to commitments.
•
Managing people, namely the ability to plan, organize, direct, mobilize (motivate), and
control people in the company.
•
Satisfying customers by providing high quality products, namely giving satisfaction to
customers by providing quality, useful and satisfying goods and services.
•
Knowing how to compete, namely knowing the strategy / how to compete. He must
reveal the strengths, weaknesses, opportunities, and threats of himself and competitors.
He must use SWOT analysis both on himself and on competitors.
•
Copying with regulations and paperwork, namely making clear rules / guidelines
explicit in the company.
•
Technical competence, namely having competence in the field of design (know how) in
accordance with the form of business to be chosen. For example, the ability to in
production engineering and production design. He or she must know exactly how goods
and services are produced and presented.
•
Marketing competence, namely having competence in finding suitable markets,
identifying customers and maintaining company continuity. He or she must know how to
find specific market opportunities, such as customers and special prices that have not yet
been explored by competitors.
•
Human relation competence, which is competence in developing personal relationships,
such as the ability to relate and establish partnerships between companies. He must know
healthy interpersonal relationships.
1.2.7.
Required Skills
The skills needed by an entrepreneur to support business success are:
•
Technical skills, which are skills needed to perform specialized tasks, such as secretaries,
accountants-auditors, and draftsmen.
•
Human relations skills, which are skills to understand, comprehend, communicate, and
relate to other people in the organization.
•
Conceptual skills, which are personal skills to think abstractly, to diagnose and to
analyze different situations, and to see outside situations. Conceptual skills are essential
for acquiring new market opportunities and facing challenges.
•
Decision making skills, which are the skills to formulate problems and choose the best
way of acting to solve these problems. There are three main stages in decision making,
namely:
a.
Formulate problems, gather facts and identify alternative solutions;
b.
Evaluate each alternative and select the best alternative;
c.
Implement the chosen alternative, follow up periodically, and evaluate its effectiveness.
•
Time management skills, which are skills in trying and managing time as efficiently
and productively as possible.
•
Individual skills and attitude, i.e. individual skills and attitudes.
•
Knowledge of business, namely knowledge of the business to be entered.
•
Establishment of goals, namely stability in determining company goals.
•
Take advantages of the opportunities, i.e. excellence in finding business opportunities.
•
Adapt to change, which is the ability to adapt to change.
•
Minimize the threats to business, namely the ability to minimize threats to the
company.
1.2.8.
Factors on Entrepreneur
The factors that must be present in an entrepreneur are:
•
The creativity
Creatives produce something new by adding value to it. This value addition is not only
recognized by the entrepreneur, but also by the audience who will use the creation.
•
The commitment
Highly committed to what you want to achieve and produce with your time and effort.
•
The risk
Be prepared to face risks that may arise, including financial, physical and social risks.
•
The reward
The main reward is independence or freedom followed by personal satisfaction. While
monetary rewards are usually considered as a form of degree of success of the business.
Technopreneurship:
Technopreneurship (technology entrepreneurship), is a division of entrepreneurship that
emphasizes technological factors, namely the ability of science and technology in business
processes. (Eddy Soeryanto Soegoto).
Business development in the field of technology is largely the result of synergies between
the owners of creative ideas (technopreneurs), who are generally affiliated with various
research centers (such as universities), and providers of capital to be used in business.
Technopreneurship has two main functions, namely: ensuring that technology functions
according to customer needs, and that technology can generate profits (profitable).
Technopreneurs are people who are able to create, create, and innovate a product that
will be sold to the market.
In general, there are two types of businesses that can form a technology entrepreneur
(technopreneur), namely: lifestyle businesses and high growth businesses.
Lifestyle businesses generally do not grow quickly and are therefore less attractive to
professional investors. High-growth businesses have the potential to generate great wealth
quickly, are high-risk, but provide great rewards, making them attractive to venture
capitalists. Dell, is an example of a company with a high growth business.
The development of various innovation centers and business incubators in the field of
technology in several universities and research institutions is a positive effort to build
technpreneurship in Indonesia.
1.2.9.
Business Opportunity Factors
No.
1
Technology
change
Technological change is a business opportunity because
it allows people to allocate resources in different and
more potential ways. Various providers, internet cafes,
the computer industry has become a land of
new businesses with the change in technology from
conventional to internet.
2
Changes
politics and
policy
Political change from orba to reformasi and change
The move from central to regional autonomy is a source
of new business opportunities.
3
Demographic
change
The demographic structure also opens up business
opportunities. Yogyakarta's demographics as a city of
students and culture, is also known as a destination area
for tourists.
retirees. This has an impact on the types of businesses
developed in the city of Yogyakarta.
No.
4
Educational
institutions
Educational institutions as research centers are a source
of business opportunities by utilizing research results.
Zcker, et al. (1998) found that the number of scientists
and universities in a region correlates with an increase
in the number of firms.
biotechnology and the resulting patents.
5
Access to
information
Information enables a person to seize business
opportunities compared to others who do not know
about them. Some people are able to recognize
opportunities better because they have more
information than others. (Hayek. 1945; Kirzner,
1973).
6
Variety of life
experiences
Variety in life experiences provides access to new
information and can help people find opportunities
because new information sometimes has missing
elements and requires discernment that a new
opportunity has presented itself. Variety in
experience causes a person to receive new information.
7
Social Ties
Social ties increase one's likelihood of discovering
business opportunities through interactions with other
people or their social networks. The structure of the
social network will influence the information received
and how it is categorized.
a.
Extraversion
Extraversion is related to being social, assertive, active, ambitious, initiative, and
exhibitionist. This attitude will help entrepreneurs to exploit opportunities especially in
introducing their valuable ideas or creations to potential customers, employees, and so on. It
helps entrepreneurs to combine and organize resources under uncertain conditions.
b.
Agreeableness
These attitudes are related to friendliness, social conformity, willingness to trust, cooperation,
willingness to forgive, tolerance, and flexibility with others. This will help the entrepreneur in
building a network of cooperation for the maturity of his business, especially the aspect of the
willingness to trust others.
c.
Risk taking
This attitude relates to a person's willingness to engage in risky activities. Some of the risks
that entrepreneurs may face include marketing, financial, psychological, and social.
Someone who has high risk-taking behavior will find it easier to make decisions in uncertain
circumstances and organize resources.
The power it has, especially in introducing its products to buyers.
No.
9
Motivation
Equally important in entrepreneurship is motivation.
When a group of people are faced with the same
opportunity, have similar skills, and the same
information; then people with certain motivations will
take advantage of the opportunity, while others will not.
Most entrepreneurs are motivated by the desire for self-
determination.
There are 2 kinds of needs that underlie the motivation
of an entrepreneur, as follows:
a.
Achievement Needs
b.
Desire for Independence
10
Self-Evaluation
Equally important in entrepreneurship is self-
evaluation, which includes:
a.
Locus of Control
b.
Self Efficiency
11
Cognitive
Characterization
Cognitive characteristics are factors that influence how
a person thinks and makes decisions. In developing
entrepreneurial opportunities, an entrepreneur must
make positive decisions about something they do not
yet understand, under uncertainty, and with limited
information. In making these positive decisions,
cognitive characteristics are needed that help
entrepreneurs to map out ways to take advantage of
entrepreneurial opportunities:
a.
Over Confidence
b.
Representative
c.
Intuition
Table 1.2: Business Opportunity Factors
1.2.10.
Functions of Entrepreneurship
The entrepreneurial function consists of
1.
Seeking and creating new ways, new breakthroughs in obtaining inputs, and processing them
into attractive goods and services. And market goods and services to satisfy customers and
make a profit at the same time.
2.
Recognize the environment in order to seek and create business opportunities and to control
the environment in a direction that is beneficial to the company.
3.
From the point of view of the interests of society, nation and state, entrepreneurs are pioneers
of business development who create jobs, produce better, more useful goods and services and
carry out business development and accumulation of capital resources, SMD and technology.
A.
4 Functions of Entrepreneurship
Entrepreneurship can be divided into:
1.
Administrative enterpreneurs
2.
Resilient entrepreneur (Innovative entrepreneur)
3.
Entrepreneurial excellence
Reliable entrepreneurs have the following characteristics:
a.
Have high self-confidence and independence
b.
Willing and able to seize business opportunities
c.
Willing and able to work hard and persevere
d.
Willing and able to communicate
e.
Facing life and handling business in a planned, honest, frugal, and disciplined manner.
f.
Creating his business activities and his company, straightforward and tough but flexible
enough to protect his business.
g.
Willing and able to improve one's own capacity.
h.
Seek to recognize and control the environment and cooperate with all parties.
Resilient entrepreneurs have the following characteristics:
a.
Think and act strategically and adaptively to changes in the search for profit
opportunities that contain risk.
b.
Always strive for profit through excellence in satisfying subscriptions.
c.
Seek to recognize and control the company's strengths and weaknesses, and improve
capabilities with the internal control system.
d.
Always strive to improve the ability and resilience of the company, especially with
guidance and morale, as well as capital accumulation.
Excellent entrepreneurs have the following characteristics:
a.
Dare totake risksand be able to take into account and try to deal with it.
b.
Always strive to achieve and produce better service work for customers, owners,
suppliers, labor, society, nation and state.
c.
Anticipate changes to accommodate the environment.
d.
Creatively seek and create market opportunities and improve productivity and
efficiency.
e.
Always strive to improve the excellence and image of the company through investment
in all fields.
Entrepreneurial Characteristics
The characteristics of an entrepreneur must have 10 characteristics known as
the 10 Ds, that is:
1.
Dream
2.
Decisiveness
3.
Doers
4.
Ditermination
5.
Dedication
6.
Devotion
7.
Details
8.
Destiny
9.
Dollars
10.
Distribute
People involved in business activities
There are 3 activity groups consisting of:
1.
Hardworking
2.
Entrepreneur
3.
Self-employed
Entrepreneurs are people who have the courage to take risks of creativity (creative)
virtues and exemplary in handling a business or company based on their own willingness and
ability. Then we will discuss how the ability and exemplary of an entrepreneur in carrying out
his activities that have high motivation.
1.3. Motivation in Entrepreneurship
The concept of motivation according to Abraham Maslow consists of :
1.
Basic Needs
2.
Safety Needs
3.
Social Needs
4.
Self Esteem (award needs)
5.
Self Actualization (self-recognition needs)
Self-actualization needs and self-fulfillment (self actualization needs)
Theoretical: use of one's potential, growth, self-development. Applied:
completing challenging assignments,
creative work, skill development.
Self-esteem needs (system needs)
Theoretical: status or position, confidence, recognition, reputation and achievement,
appreciation, self-respect, reward.
Applied: power, ego, promotion, reward, status symbol, recognition, position,
"strokes", appreciation.
Social needs
Theoretical: love, friendship, a sense of belonging and acceptance in a group,
kinship, association. Applied: formal and informal work groups, company-
sponsored activities,
commemorative events.
Safety and security needs
Theoretical: protection and stability
Applied: employee development, safe working conditions, seniority plans, labor
unions, savings, severance pay, retirement security,
insurance, grievance redressal system.
Physiological needs
Theoretical: eating, drinking, housing, sex, rest.
Applied: break room, lunch stop, clean air to breathe, water to drink, vacation, leave,
merit and social security, rest period
on the job.
Figure 1.7: Managerial Motivation-Abraham Maslow's Theory of Needs
a.
Basic needs
Satisfying basic needs by example: A person earns money independently to fulfill physical
needs, food, clothing, and shelter (housing) which is done with the desired motivation
according to their own needs. After basic needs are met, people will be motivated to seek
higher needs, namely the need for security.
b.
Safety needs
In satisfying the need for security, a person needs a group in a society that provides a sense of
security in carrying out their activities,
such as: a sense of security in doing business, a sense of security in doing work and so on.
After the sense of security is fulfilled, people will increase the need for group living.
c.
Social needs
In carrying out social needs, a person needs greater freedom and opportunities to make social
contacts (social interaction) in building a joint business with his business partners through the
business group he fosters. After social needs are fulfilled, people will be motivated to get
rewards.
a.
Self esteem (appreciation needs)
In satisfying the need for self-esteem, it can be obtained from the respect that groups or
the environment have for themselves as self-actualization (self-recognition needs).
b.
Self actualization (self-recognition needs)
To get respect from society, a person is motivated to do work that produces work that can
be recognized by many people. With the recognition from society, a person will feel that
all desires have been achieved.
Achievement motivation (high needs achievement), according to Me Clelland's research
successful entrepreneurs they have high achievement motives (High needs achievement
persons), have properties:
•
High commitment and responsibility to work
•
Tends to prefer challenges
•
Always be keen to see and take advantage of objective opportunities in every assessment
•
Always need feedback
•
Always optimistic in adverse situations
•
Profit-oriented
•
Has the ability to manage proactively
Sconing characteristics of entrepreneurs who have high achievement motivation (the
entrepreneurial characteristic "n Ach" person)
1.
Central to a person's need for achievement is his or her strong commitment to doing the job
with the best possible results. (commitment to the task).
2.
He wants challenging work and sets high standards for his work. He will not be satisfied if
his results fall short of the standards he has set. (choosing moderate risk).
3.
He did not let his dream become just a dream, but made it a vision that stimulated his
enthusiasm to realize his dream. (Seizing opportunities).
4.
He likes success, but achievement is the goal he aspires to. Commitment to the task
a.
Once an "n Ach" makes a commitment to a job, he will pursue it to completion, he will not
forget or utilize himself for a job that is not completed.
b.
He never waited for good fortune, but profited through his diligence in his work.
c.
He is ready to work hard for long and tiring hours until his work is completed and
successful.
Choosing moderate risks
a.
An "n Ach" makes a commitment to a job, he will stick to it until it is completed, he will
not forget or utilize himself for a job that is not completed.
b.
He never waited for fortune, but profited through his diligence in his work,
c.
He is ready to work hard for long and tiring hours until his work is completed and
successful.
Choosing moderate risks
a.
An "n Ach" prefers moderate risk. He does not speculate with high risk, but also does not
prefer servative risk. Moderate risk is quite thrilling, but it gives the risk-taker good reason
to expect a return.
b.
An "n-Nac" understands his or her capabilities very well. He or she is willing to assume the
risk for any job that he or she believes he or she can manage successfully based on his or
her competence.
Seizing opportunities
a.
A true entrepreneur with High n-Ach, can once see and capture opportunities. He releases
his creativity and innovation power to turn opportunities into a realistic work program. He
anticipates opportunities and plans carefully and his predictions are always based on facts.
b.
In seeking to capitalize on opportunities, he does not succumb to obstacles, but sees them
as challenges. He always overcomes obstacles with innovation.
Objectivity
a.
A High n Ach is very realistic. He does not let personal sentiments corrupt his heart.
b.
He chooses people not because of feelings of "like or dislike" but because of the person's
own abilities.
c.
When he issues favors, he will choose among experts rather than among friends or
relatives. He uses "a business like attitude" to carry out his duties.
The need for feed-back
a.
A High achiever craves feedback. He uses it to assess how well he has worked.
b.
He does not distinguish whether the feedback obtained is bad or good information, but uses
it as data that stimulates him to work better in an effort to achieve achievements.
c.
Feedback energizes him to strive to improve his work.
Optimism in novel situations
1.
A High n Ach is optimistic in a difficult situation because of an extraordinary event.
2.
While others begin to despair or run to the mystic world, a "Heigh n Ach" analyzes the
situation and looks for a way out of difficulties.
3.
He believes that in every difficult situation there will be a way to stay in service, and there
could even be new opportunities to grow the business.
Attitude to ward money
1.
The "High n Ach" entrepreneur's attitude values money but he is not a greedy person.
2.
He sees money not as something to hoard but as a sign in his business.
3.
If he earns money from his business it is a sign of business success. But if he loses money
due to business losses, it is a sign that he needs to identify and solve the problems that
caused the business downturn.
Proactive management (productinve management)
1.
Conventional managers leave the business as it is but "Heigh n Ach" entrepreneurs observe
current business trends to anticipate future business changes.
2.
He drew up a business plan that reached into the future, and then worked hard to realize it.
3.
Conventional managers run reactive management, but the "Heigh n Ach" entrepreneur
knows that if he just waits for the ball it won't happen. It will never be a winner.
4.
He must pick up the ball because that is the essence of proactive management B.3
foundation of achievement motivation (Siliouo. DW)
1.4. Finding Business Ideas and Opportunities
There is a difference between an idea and a business opportunity. Many people have a good
business idea, but it is not "A viable business opportunity" with the potential to succeed.
By researching, evaluating and preparing a "business plan" it will be possible to separate
real opportunities from casual ideas, To get ideas and opportunities in business, there are
several sources of information:
•
Books
•
Magazines and newspapers
•
Business association
•
Enforcement related to business
•
Public library
•
The Yellow Pages
•
Trade shows
•
Trading boards
•
Training
•
Convention
•
Workshop
•
Workshop
•
Seminar
•
Business meeting
•
Relationship (Nett works)
•
Social media (Off line and on line)
•
E-commerce
•
Mobile line
Opportunity
There are three elements contained in the opportunity, among others:
1.
Attrractive
2.
Duragel (durable)
3.
Timely
Those related to products and services that create or add value for buyers or end users
(End users) create opportunities because:
a.
Change of circumstances
b.
Inconsistency
c.
Riot
d.
Information gap
e.
Market vacuum
Business
Today's business is very fast-paced, more complex and more demanding of its
responsibilities. The cycle of goods and services has a short life cycle, no longer talking about
years even measured by months, days, even hours. Consumers want quality goods, cheap,
easy to obtain, fast delivery and good after-sales. Company employees want to get a salary
commensurate with the energy expended, a conducive work atmosphere, a structured work
system, and supportive work media. Entrepreneurs want their products to be liked by the
market, sold well, low production costs, easily available raw materials, professional
employees, government regulations that support business and smooth distribution.
Business is an activity carried out by a person or group of people or companies in the
form of services or goods to make a profit.
Business creates many opportunities based on the creativity and innovation displayed by
involving several, tens, hundreds and even thousands of people to produce services or
products needed by consumers. Business can be done manually or utilizing advanced
technology as a means of production by involving aspects of management, finance,
marketing, human resources.
A successful and good business will contribute positively to improving the quality and
standard of living of the community, engage in charitable activities, generate leaders for the
community and set an example for other businesses. Example: Mooryati Sudibyo with her
beauty company.
Profit is the difference between revenue and operating costs in the business process.
Profit is the return that entrepreneurs get for the investment of funds, time, and risks that may
arise in building, developing, and advancing their companies. The income from profit allows
the company to improve the standard of living of its employees, build new businesses, pay
taxes, thus helping the government in development. There are also not-for-profit organizations
that play an important role in society by prioritizing public service over profit, such as:
museums, orphanages, nursing homes, charitable organizations, and others.
Profit is one of the goals of entrepreneurs. Entrepreneurs have run their business or
business according to the times, starting with traditional patterns to enter the current internet
era. Traditional patterns that are still completely manual are gradually changing to an
automation system that uses technology sophisticated in its business processes. This process
of change is called business evolution, which is the process of business activities from time to
time according to conditions.
1.5. Small Business
A small business is a business that is independently managed, does not dominate the market
and meets certain size standards in terms of profit and number of employees.
Small businesses generally have fewer than 20 employees (85%), between 20 and 100
employees (10%) and between 100 and 500 employees (5%).
Small businesses provide the majority of employment in the areas of wholesale trade,
retail trade, services, agriculture, fishing, construction industry, food and beverage businesses.
Privately-owned retail small businesses, such as florists, hardware and jewelry stores, are very
large and far outnumber large corporations. In Indonesia, many small businesses are operated
from the owner's residence or home-based business due to lower operating costs, reduced
rent, flexibility and time freedom.
Small Business Trends
Small businesses in accordance with the development of the business world in Indonesia
today have a tendency or trend to utilize their expertise, utilize family members, use the
internet, and the existence of global opportunities.
Utilizing expertise is a small business trend that most entrepreneurs do because it is
related to the abilities, expertise, and experience concerned in the field of business they
master. Many people leave the company where they work after mastering their field of work
to then open a new business and apply their skills and experience to the business.
Utilizing family members is a small business trend that is widely applied today to save
costs, employee salaries, other unexpected costs and the trust factor of outsiders in managing
the business.
Internet utilization is a small business trend in the era of globalization that is starting to
be used today considering the easier access to the internet, the increasing number of
providers, the increasingly large bandwidth and affordable internet costs. Online trading or
known as E-Commerce is a trend that is loved today, especially by educated young people.
Global opportunities are small business opportunities that see the opportunity to enter
foreign markets from trade between countries, such as the market for handicrafts, agricultural
products, fisheries, plantations, forest products, sending female labor or sending nursing staff.
1.5.1.
Small Business Advantages
Compared to large enterprises, small businesses differ in market position, managerial style,
number of employees, financial capability, organizational form, and staff capability. These
differences give rise to several advantages in small businesses, namely:
1. Innovation
Small businesses are more creative in running their businesses than large companies and are
highly innovative in coming up with ideas for new goods and services.
2. Low cost
Small businesses have low operating costs because of their small organization, low employee
wages, small overhead costs and can provide goods and services at a lower price than large
companies.
3. Market niche
Small businesses are better able to fill isolated market niches compared to large companies
that have to incur high overhead costs.
4. Customer service
Small businesses are better able to provide superior services to their customers compared to
large enterprises due to their high flexibility and faster adjustment of product and service lines
according to customer demands.
1.5.2.
Creative Economy
A creative economy is an economy based on high creativity with a touch of innovation to
produce new products that are different and of high quality.
For 2013, the growth of the creative economy reached 5.76%, higher than the national
economic growth of 5.74%. The sector also contributed 7% to the national GDP. In 2014, it
increased to 5.92% creative economy growth.
The creative economy also created 5.4 million businesses or around 9.68% of the total
number of national businesses.
This sector also absorbed 11.8 million workers or 10.72% of the total national workforce.
The creative economy is the backbone of the economy in countries such as Japan, Korea,
and Singapore. The Ministry of Tourism and Creative Economy for 2015-2019 will focus on
improving and developing the competitiveness of the creative economy industry so that GDP
can reach 5-6% so that it can contribute to national GDP up to 7-7.5%.
In addition, Kemenparekraf will also increase the participation of the creative industry
workforce to 10-11% of the total national workforce. As for the increase in foreign exchange,
it is targeted at 6.5-8%.
To achieve this, Kemenparekraf will develop 15 creative economy sub-sectors. Former
Minister of Tourism and Creative Economy, Mari Eka Pangestu, in Yogyakarta, 2014, said
that in the medium term, the government wants to focus on four creative industry sectors,
namely the music, culinary, fashion and film industries. These four sectors are certain to be
able to increase the country's foreign exchange earnings and people's welfare in the near
future. The government will help develop them by strengthening and expanding overseas
networks and intensively bringing together creative industry players with potential partners.
The focus of the creative economy in the long-term development plan until 2025 is the
development of the music, culinary, film, fashion, fine arts, performing arts, and computer
technology-based creative industries. This sector is considered capable of making a
significant contribution to the economy.
The development of the creative economy will be synchronized with the national
entrepreneurship movement to answer the challenges of demographic bonus or a situation
where the number of productive population is more than the young and elderly population.
The creative economy is also a sector with high labor productivity. There are many
resources with high skill capabilities so that this sector can have high added value. Those who
are visible are generally local creative workers. As such, the sector is not only a great place to
absorb labor, but also a strong economic engine for the region.
On another occasion, President Jokowi campaigned for creative industries through small
and medium enterprises, even targeting growth of 6-7% in 2016 and 2017. In welcoming the
AEC (Asean Economic Community) in early 2016, Indonesia should not be nervous about
welcoming the AEC, it must rise to win the competition, including through the creative
economy. At the US-ASEAN meeting that took place in California on February 15-16, 2016,
the Government brought a mission of economic cooperation in the field of MSMEs (creative
economy), promotion of entrepreneurship, innovation and digital economy.
1.6. Company Strategic Principles Vision
Entrepreneurs should have a vision. Vision is the goal that the founders of a company or
organization want to achieve in the future. Vision is multi-dimensional. Written and unwritten
visions are wishful thinking or ideals designed by founders/owners or top management.
Vision can also be understood as the perspective of a person, founder/owner, top management
towards an object far into the future. A person who has a good and broad insight will be
relatively better at formulating his business vision.
Vision
Entrepreneurs should have a vision. Vision is the goal that the founders of a company or
organization want to achieve in the future. Vision is multi-dimensional. Written and unwritten
visions are wishful thinking or ideals designed by the founder/owner or top management.
Vision can also be understood as the perspective of a person, founder/owner, top management
towards an object far into the future. Someone who has a good and broad insight will be
relatively better at formulating the vision of his business.
Mission
A mission is the mission statement of a company or organization. The mission is also referred
to as the task that must be carried out. A well-stated mission makes it easier to formulate,
implement and evaluate.
For companies, a good mission statement focuses on the customer needs & utilities of the
product. Here is one example of a mission, where the mission must be able to answer one or
more of the following characteristics;
– Customers; Who are the customers?
– Product (Nest/Service); What are the main products produced and sold?
– Market; Where does the company compete?
– Technology; What basic technology is used?
– Raw materials (if any); What are they made of?
– Industry location (if any); Where should it be located?
– Tools used; What are required?
– Company Concept; What is the strategic advantage of the company
– Commitment to Employees; How to treat employees?
– Commitment to Image; What & How is public perception?
– Commitment to growth; What %?
– Social commitment; How responsible is the company?
– And more.
Destination
Goals are the ultimate goal of the journey of a company or organization through its existence
and operations.
It is important for a company to formulate its objectives because, among other things;
– Purpose helps define the organization in its environment,
– Objectives help coordinate decisions and decision-making
– The objective of providing norms to assess the organization's performance,
– Objectives are more tangible goals than mission statements.
Objectives can be understood as qualitative statements about the conditions to be
achieved in the future in the long term. The characteristics of a company's objectives, for
example:
– Profitability
– Growth
– Survivel
– Public Responsibility
Principles that should be considered in goal setting include:
– Suitable,
– Feasible
– Flexible
– Motivating
– Understandable
– Workable
– Linkage
– Measurable
Target
Objectives are a quantified form of goals and take place for the short term. Objectives are
broad, so they need to be translated into operations from work units, therefore a clearer target
is needed from specifics. So it can be understood that goals are more operational or
operationalization of the goals of a company or organization that are technical in nature. In
the study of targets in modern management, it is called Management By Objectives (MBO =
Management By Objectives).
