By : Khawar Nehal
Updated 26 April 2010
Corporate Entrepreneurship. Course for (CTO. Chief Thinking Officer) to come up with new feasible products to develop inside the corporation.
Schumpeter's definition of entrepreneur. To reform or revolutionize the pattern of production by exploiting an invention or move generally, an untried technological possibility for producing a new commodity or producing an old one in a new way, by opening up a new source of supply of materials or a new outlet for products.
Entrepreneurship as defined, essentially consists in doing things that are not generally done in the ordinary course of business routine.
Entrepreneurial activity had a great part in providing the USA with some of the powers it has now.
Entrepreneurs define the future.
Entrepreneurs have the following characteristics :
They are risk takers and managers, creative adventurers, not afraid to change, disrupt and lead a society towards progress.
They take risks to utilize opportunities to utilize available resources in new and useful ways. Also to make available resources which are now readily available so more possibilities become feasible.
They can create large empires out of simple ideas and corporations from small garage shops.
Entrepreneurship is one of the main economic factors including land, labor, capital and entrepreneurship.
The word entrepreneurship comes from the 17th century French word “entreprendre.” Entreprendre under taker. The undertaker undertook the risk of a profit or loss in an enterprise. Usually they paid for a license to collect taxes in an area. If they managed to collect more than they paid for the license, then they ended up with a profit. The government basically outsourced or contracted tax collection to the entrepreneurs of the time.
The French, British and Austrian economists of the 18th and 19th century considered entrepreneurs as “change agents” who led the economies towards progress.
The French economist born in Ireland named Richard Cantillon described an entrepreneur as a person that pays a certain price to sell a product at an uncertain price, thereby consciously making decisions about obtaining and using resources while taking on the risk of enterprise.
Astute entrepreneurs would always seek the best opportunities for using resources for their highest commercial yields.
Cantillon practically implemented his theory by dealing in monetary exchange, controlling commodities such as farm produce to auction in high demand markets.
It is important to note that entrepreneurship and societies shall teach that the maximum financial yield is acceptable. However, it is also important to remember that God has an important part in the profits made in terms of the invisible hand. Allowance of ships of traders and future events based on the niyat of the entrepreneurs.
Large empires are usually created by the combination of two traits. Creativity and maintenance. These two traits are usually not found in a single person. Usually the large empires are created by simple people humble enough to recognize their lack of genius and able to surround themselves with humble geniuses who are willing to work for the simple leader.
Examples include : Toyota's Kaizan method. Warren Buffet's buy low and sell high strategy. Hiring a whole bunh of analyzers in Berkshire Hathaway to summarize the market and research new ventures worldwide. General Motor's chief hiring Peter Druker as a consultant eventhough he goes against the chief's ideas.
Islamic sharia provides for unlimited legitimate profit. This is a complex topic. I shall try to simplify it as follows. Riba is defined as doubling and quadrupling a return payment.
A person in their right economic mind would not agree to pay double or four times the fair value unless there was some kind of emergency or dire need and there was a monopoly or monopoly like situation.
So far as I can understand, unlimited legitimate profit is allowed unless you are hoarding (monopoly) and forcing (riba) people to pay double and four times over the legitimate profits for a commodity, service or product which is a dire need.
Adam Smith considered the entrepreneur to be an industrialist with unusual foresight to recognize potential demand for goods and services. According to Smith, entrepreneurs react to economic change by transforming demand into supply.
Jean Baptiste Say described entrepreneurs as those having skills to create new enterprises, exceptional insight into the society's needs and fulfill them.
Sample Private Placement Memorandum (PPM)