Beruflich Dokumente
Kultur Dokumente
Coping With
Entrepreneurial
Stressor
ONLINE CONFERENCE PAPER
MANAGEMENT ORGANIZATIONAL
BEHAVIOR GAB / GBB 1033
SYNERGY
NUR ISWADI BIN ZAINUDDIN 12142
MOHD SYAFIQ BIN SAIFULAH 12032
LILIK ANITA BINTI KAMBYAH 11966
NUR FARHANA BINTI ABDUL AZIZ 12136
SYNERGY
4/15/2009
SYNERGY ONLINE CONFERENCE PAPER
ABSTRACT
This study evaluates the entrepreneurial stressor or in the other words, problems
that are facing by the entrepreneur. All of the chapters covered on how entrepreneurs
cope with all these stressor by deriving from the problems facing by themselves. As
entrepreneurs closely related to the factors of production; land, labor, capital and
entrepreneurship, they need to really understand on these factors to come out with a
solution.
LITERATURE REVIEW
Today, world has gone a lot of changes and until now, world are still changing.
Entrepreneurs are facing with different type of problems and factors of production are
the stereotype of problems facing by most of the companies around the globe. To be
enough to take risk and a kind of special ‘human capital’. Stressor is defined as an
unseen force behind subjects that lead to the unstable of emotion and quality of life.
stress that are facing by entrepreneurs most of the time in business prospect. The
theory on factors of production refers to the resources that can be defined as the
inputs used in the production of those things that we desire. From big problems to the
small problems, they are totally disturbed the business process and the economic
activities. Economists believe that the factors of production including land, labor and
capital but some of the economists conclude that there is one more factor which is
human capital and not all of the companies have it. In simple way, these four factors
really influencing the company and entrepreneur should take a correct action to cope
Entrepreneurship
sometimes may not include the last factor; entrepreneurship. Instead of land, labor
and capital, to have a business and start moving to the entrepreneurial world,
which economics activities to undertake and how they should be implemented. [1] It is
also cover on how to use the resources to produce something. For example, when
William Procter and James Gamble started making candles and soap, they were
provided with resources that were easier to ‘handle’. But, today, Procter and Gamble,
P&G, really stressed on creating new products to market them around the world.[2]
Thus, to fulfill the customer needs and to fully complete the factors of production,
those who make decision to start a new product should be expert on how to allocate
resources, how to choose the applicable economic activities and the process in
to choose the dazzling but still the applicable economic activities. To have more
describe as the activities which are involved in the production or distribution of goods
and services for economic motive. Any activity undertaken for personal consumption
or are exchanged free, fell outside the scope of business.[3] Most of the
Coping with this stressor, entrepreneurs are advised to implement the strategic
entrepreneur are always not very expert on these strategic initiatives that lead them
used traditional systems that are not efficient and effective. Thus, by implementing
Implementing ERP help the companies to integrate their systems to avoid redundancy
while the implementing of BPR really helpful on the improvement for the future plans.
By using CRM and SCM, entrepreneurs can reduce the problems to get the raw
materials for the production processes and to well distribute the products worldwide.
For example, again about P&G, the implementation of SCM enable the company
to dynamically manage its global supply chain, giving it visibility into the entire process
and helping it to optimize inventory and react quickly to any changes compared to
their systems before which facing with delay supply of products, not up-to-date
products and so on.[5] Other companies like Charles Schwab and Kaiser Permanente
Besides, to deal with this problem, entrepreneurs that still have not so much
process. Specialization allows you to define new kinds of information (new structural
types or new domains of information), while reusing as much of existing design and
respective field. Thus, companies are now reducing their weakness on certain
outsourcing to several departments that they are not specializing for particular
departments. Most of the big companies tend to outsource expertise from other
companies. For example, Microsoft outsources a company from India that is InfoSys
development instead of doing by their own and having lagging on the processes. [7].
Next, the increase in the raw material prices leads a big problem for entrepreneur
to allocate resources. Then, from the problem, many of the entrepreneurs tend to
have duo mission and vision. In the end of the day, the companies are going ruin
allocate the resources from the customers’ demand. Economists refer to this concept
as “derived demand.” It simply means that resources are demanded or valued only if
they can be used to produce desired goods and services. [4] To allocate resources,
income, taste and preferences, substitutes, complementary goods and the others.
These determinants help entrepreneurs to allocate the resources by the current prices
of the substitute products, the income of the customers, the prices and quantities for
the complementary goods and the current taste and preferences of customers. It is a
reverse process. From the law of demand, entrepreneurs come out with an analysis
and lastly for the next stage which is to allocate their resources.
and skills of the entrepreneur. To deal with economic activities in production and
distribution processes, strategic initiatives are the best practice for the entrepreneurs
way for entrepreneurs to have bright guide on how to allocate resources to cope with
entrepreneurial stressor.
Capital
According to Irvin B. Tucker in his book Essentials of Economics the sixth edition,
capital refers to physical plants, machinery, and equipment used to produce other
goods. In economics, capital can be divided into few categories include human capital
and financial capitals [8]. Human capital consists of employees, while financial capital
refers to stocks, bonds, and value of money. Stated simply, capital means factor of
Financial capital is considered as liquid in nature that can be used to buy any
goods and services that the business needs for production. This capital will help the
business to secure the resources needed to operate and supply products or services
There are few sources of capital that being applied in today business for example,
long term, medium term, and short term capital. Long term capital includes share
capital, mortgage, venture capital, and debenture while medium term capital consists
of term loans, leasing, and hire purchase. Short term capitals usually are bank
start the business, the entrepreneur has to determine the type of capital that will be
imposed for the company. But, with unexpected world economy, many entrepreneurs
will change their sources of capital when they are facing problems with capital. For
Nowadays, with the global economic downturn that being plunged by the
sub-prime borrowing issue, entrepreneurs are facing the biggest problem to start new
business or even to survive their productions. Current economic scenario has pushed
the prices of raw materials to the top causing many unfortunate entrepreneurs to shut
their productions while others minimize it. Entrepreneurs are struggling to make profits
forcing them to reduce wages, cut cost of productions in order to sustain their
businesses [11]. That shows how important financial capital is for entrepreneurs to
Towards the end of 2008, the world was being stunned by the bankruptcy of
Lehman Brothers due to sub-prime mortgage crisis. It is believed that Lehman’s loss
is the effect of holding to huge position in sub-prime and other lower-rated mortgage.
Throughout the second fiscal quarter in 2008, Lehman reported losses of $2.8 billion
and was forced to sell $6 billion in assets [12]. Among that period, Lehman also have
cuts the loan for public, sells most of their stocks and assets. In simple understanding,
The impact of this financial problem, Lehman Brothers finally filed for Chapter 11
bankruptcy protection on September 15 2008 [13]. The bankruptcy has hailed many
business during the breakup process. Barclays take over core business of Lehman
Brothers mainly involved $960 million of Lehman’s Midtown Manhattan while Nomura
Holdings owns all Lehman Brother’s franchise in the Asia Pacific region including
Japan, Hong Kong and Australia [14]. From this situation, we can conclude that
without well financial preparation, the company is unsecure when a crisis takes place
in the company. Because of no money flows within Lehman Brothers, finally the
company collapse.
Based on the crisis facing by Lehman Brothers, there are several ways to cope
Capital in their businesses. Venture capital is a common term used when investor buy
part of the company. The investors or normally being called as venture capitalist put
money or investment in a company that they believe have high growth within the
period that both sides (company and venture capitalists) have agreed. After the period,
venture capitalists will expect a valuable return on their money either by sale of the
Nowadays, ventures have been divided into three categories of capital investment;
(i) early stage financing, (ii) start up financing, (iii) expansion financing. In early stage
business. Most entrepreneurs seek for seed financial or first stage financing from
angel” whose are willing to take the risk [16]. The financial capital can be used to
construct a new well - built team, market research, grow a business plan or even buy
After that, entrepreneur need to seek for start up financing that is a venture capital
when a business has been operating for less than a year and usually their products
have not being sold widely yet. Instead, the start up financing is the capital will be
The last stage of venture capital is expansion financing that includes second and
third stage financing, and bridge financing. Second stage of financing refers to
on its feet. At this point, profit is not the main concern as long as the company keeps
investment to company that becoming profitable and the capital will be used to
expand the business. Finally, bridge financing usually being used when restructuring
is taking place within the company. The capital can also being used if a pioneer
For entrepreneurs, capital is very important for them to build a strong business.
But, not all entrepreneurs are equipped with enough amount of capital when they
started their businesses because the start up needs a large amount of financial
investment. In order to cope with this matter, venture capital is the best solution for
Lab or
Nowadays, entrepreneurs are competing with each other to ensure the company
is successful. They need to face a lot stress to ensure that they are success in their
own business. One of the entrepreneur stressor is labor force. Handling the labor
force is a very difficult task to accomplish by a manager. Human are unpredictable and
there are variety of problem can be created by them. If you are facing with labor force
that’s means you are more on how to cope with them and how to handle them. The
ways you handle the labor force determine the successful of a company.
Firstly, I have seen that the entrepreneurs are difficult to maintain good
relationship with their employee. Some of the manager is only thinking about their
profit without thinking the welfare of their workers. This would make the employee feel
unsatisfied and tend to leave the organization. Besides that, employee would tend not
doing a good works because they are losing of interest with that organization. This
problem can be overcome when a manager taking a good role in managing people.
They should be able to take care of their workers feeling and welfare. Manager should
be aware the needs of the employee not only use their skill to optimize the productivity
of a company. Besides that, good relationship would ensure that employee are
satisfied and feel good with their works. When they are feeling good with the works
environment, they would give high commitment in their works. For example, Tony
Fernandez the chief executive manager of Air Asia are really good example.[17]He
has high level of agreeableness, he easily tolerance with others and he always ensure
the welfare of students. Consequently, a lot of workers like him. This would encourage
the employee to feel comfortable with their work environment and also they would
give a full commitment in their work. As a result, the quality of works produce is good
and now Air Asia become one of the most important airplane services in Malaysia.
Besides that, Tony Fernandez is one of the successful managers in Malaysia and
Tony Fernandez
The other stress faces by the entrepreneurs is the way they are balancing up the
use of labor force and amount of money they spend on labor forces. Manager is
difficult to make decision to ensure that they are really optimizing the use of labor they
hire with the amount of money they use. The correct strategies are important to
ensure that the number unemployment does not increase. Failure in managing their
labor force causes a lot of problem on ensuring the productivity of the company. For
example, a lot of peoples loss their workers when first time technology are invented.
This is a waste because neglected the use of this workers that have their own skills.
Manager should have a good planner in managing their labor force. They need to
ensure that the planner that they had set should be beneficial for the both parties. For
example, Cadbury Company had optimized their labor for by hire all the labor force.
[18]They control the cost of labor by reducing the number of works hour and optimize
the use of technology. This strategy would increase the profitability of a company.
The other stress they need to cope is the communication breakdown between the
labor forces. A lot of company are having problem in ensuring the information flow
smoothly from one department to another department. This problem would mostly
occur in tall organization rather than in short organization. There is a lot of process
the information they pass through does not pass smoothly from top level management
to the low level of management. This miscommunication would cause a lot of problem
in a company and also would cause loss. As a solution, a manager should be able to
downsize the size of organization so that the information flow would be passing
smoothly from one department to another department. For example, KFC have a
organization. This is essential because they need to response faster with the
customer demands.
Manager also has a lot problem in believing their labor force. Some of them do
not know how to allocate and find the suitable employee for their company. This stage
process.[19] During the selection stages, workers are selected through their
achievement. Manager would select the people with appropriate skill. Then, they will
go through recruitment stage. During this stage, employees are needed to go through
for the interview and test. After the employee is success to go through this process.
This employee would be recruiting to be the part of the company. From here, a
manager should be able to ensure that the employee is capable to cope with the new
environment. For example, labor force for a university is students. Before they
entering the university, they need to send their application form that contain their
result. From this, some number of candidates is selected. Then, they go through into
recruitment stages. Other than that, a manager could show theirs believe on manager
decision. From this, they employee would feel more appreciated by an organization.
As a conclusion, labor force is one of the big stressor for the entrepreneurs. They
need to handle their labor force wisely and be able to maintain their loyalty in a
company. When labor forces are feel good with their working environment. They will
do their work more productively without been pushed frequently. When they can
Land
In doing business, there are four factors of productions that they rely on that
are land, capital, labor and entrepreneurship. In terms of land, it does not mean only
the land and estate where the business builds its buildings and its plant. In economic
terms, land is all the natural resources used in an enterprise, so this includes the ores
and minerals mined from the ground and the native plants and animals [20]. some
business may not depends much on the natural resources but the other companies
where they getting its products in order to used it to produce our products might using
natural resources. If they are not using natural resources, they cannot produce the
products. For example, fuels. Businesses need fuels in order to operate their machine
to produce the finish products and the finish products are sold to other companies as
Nowadays, companies are facing problems that there are not enough land to
build their plants and premises. The earth is providing less and less space for the
entrepreneur to build their premises as the population of the world keep increasing
and increasing. There is some land but it is forest and preserved by the government.
Hence, the entrepreneurs have to find the other way in order to solve this problem.
One way to solve this problem is by doing business online. By doing business online,
the company can minimize the use of land. The company can only build the
warehouse and do not have to build the premise as the customers can do the
business with them via internet. For example, Amazon.com. Amazon.com undergoes
multinational-electronic commerce business and they are doing their business via
online. Thus, all the buying and selling is done via internet so they do not have to build
a premise in order to do the selling and buying process. They only have to build
warehouse to store all the products before they are sent to the customer. Therefore,
the used of land can be minimize and they company do not have to burden their mind
on thinking where to find perfect land to build their plant and premises.
In economic terms, land also covers all the natural resources available for
production[21]. In these world, fuels have become an important natural resources that
is needed by almost all industries in the world. The factories need fuels to operate
their machine in order to produce products and vehicles also need fuels in order to
transport the products to the store. However, nowadays, fossil fuels are replenishing
and become less and less. This is a great problem for business as most companies
rely on fuels to produce their products. Without fuels, they cannot produce anything
unless there is an alternative or substitutes for fuels that they can use. For examples,
Toyota Corporation. Toyota is a company that produces cars. Cars need to have fuels
in order to operate. If there is no fuel, then there is no good for Toyota to produce cars
as the cars they produce do not have fuels to make the car move. Hence, Toyota has
scientists are doing researches on what are the substitutes for fuels. Scientists have
been developing technologies that enable cars to move without fuel. For instance,
there is electric car that utilize electric motors and motor controller instead of an
internal combustion engine [22]. This electric car that firstly developed by a Scottish
businessman Robert Anderson used electric in order to move [23]. Hence, it does not
use fuel and the problem of fuels are replenishing will not bother it.
As a result, land indeed has many challenges that the entrepreneur has to
overcome in order to have a good business. Therefore, the entrepreneur himself has
that he can be successful and establish his company to all over the world [24].
CONCLUSION
Nowadays, there are a lot stressor should be overcome by our entrepreneur. The
world of globalization is full of challenges and there are a lot problem should be solved.
The entrepreneur stressors are divide into capital, land, labor and
Capital is one of the most stressor for an entrepreneur. The financial capital is the
entrepreneur to continue their plans. This became one of a stressor that should be
some difficulty in managing their resources. Besides that, labor also contributes to this
stressor. The difficulty can be seen when we are managing people in a company. This
would lead to big stress for a manager. Finally, the entrepreneurship stressors also
cause problem. Early stage, entrepreneurs are deciding the market that they should
enter. This would need a full of attention to ensure that they are doing the right
decision-making.
there are a lot of ways to overcome this problem. The ways of solving the problems
show how creative a manager in handling problem. The production also might be
better than before. There are a lot of success story that become a guidelines for
others peoples.
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