LETTERS: BASED on research, get-rich-quick schemes that are promoted as entrepreneurial ventures or digital-based businesses occur mostly during an economic crisis.
These schemes have nothing to do with business or companies but are merely a form of gambling. These schemes always have a sad ending: money will be lost. Aware of such a situation, the government introduced the new National Entrepreneurship Policy 2030 to encourage entrepreneurship.
In a nutshell, entrepreneurial competency is one’s ability to perform entrepreneurship functions effectively. Underlying characteristics include generic and specific knowledge, motives, traits, self-images, social roles, and skills that result in venture birth, survival, and/or growth.
Specifically, entrepreneurs’ experience, training, education, family background and other demographic variables are considered as factors influencing entrepreneurial competency.
Competency is different from skills. Competency exists from the influence of life values, attitude and a person’s drive to commit to his duties perfectly and yield outstanding results.
On the contrary, skills are measured from academic excellence or based on good work results that ignore the attitude and motivation towards the profession that one is undertaking.
Preaching entrepreneurial competency must be grounded on risk and return trade-off.
An entrepreneur needs to invest his hard-earned money in order to be competitive in the field that he is in. Consequently, as an entrepreneur with high competency, it is his responsibility to manage the risk that arises in multiplying his investment.
To succeed, there is a need for the ability to evaluate potential risks as a means of being entrepreneurially competent.
The trade-off between risk and return is related with each and every investment decision that is made.
We will always face the risk of loss based on each trade decision but will gain if we effectively manage these risks. These risks differ from one company to the next. As what has been known generally, the higher the expected rate of return, the greater the risk.
It is impossible for one who wishes to invest to avoid risks.
Risk management is a systematic process to identify and evaluate risks that can possibly be faced by an individual or an organisation.
Risk management techniques are then implemented that are most suitable to reduce the impact of the loss. Therefore, the entrepreneurial competency in this context is the ability to take calculated risks and not gambling.
OSWALD TIMOTHY EDWARD
Senior Lecturer, Faculty of Business & Management, UiTM Johor