MINI CASE STUDY

INSTRUCTION:

Answer the questions below

Awang's Dilemma

Awang was a real craftsman when it came to being a machinist. Awang had learned almost all that he knew from Daud, his first and only employer. Awang was married and had three young children. He was $33$ years old and had worked for Daud ever since he finished his tour in the Army. In $12$ years, Awang had polished his skills under the watchful and critical eye of Daud.

Daud was quick to recognize Awang's talent for the trade. Awang had a positive attitude about learning and displayed a drive for perfection that Daud admired. Daud's Machine Shop was a successful small business. Its success was based mostly on the reputation for quality that had been established over its $42$ years in operation. Daud had come to this country with his new wife, Salmah when he was in his late twenties. Now the business was a success, but Daud remembered the early years when he and Salmah had to struggle. Daud wanted the business to continue to produce the highest quality craftsman products possible.

On a Friday evening, he called Awang into his office at closing time, poured him a cup of half$-$day$-$old coffee, and began to talk with him about the future. "Awang, Salmah, and I are getting old and I want to retire. It has been $42$ years of fun but these old hands need a rest. In short, Salmah and I would like you to buy the business. We both feel that your heart is in this craft and that you will always retain the quality that we have stood for." Awang was taken aback by the offer. He$,$ of course, knew Daud was getting older, but had no idea Daud would retire. Awang and his wife, Timah, had only RM$4,200$ in the bank. Most of Awang's salary went for the normal costs of rearing three children. Daud knew Awang did not have the money to buy the business in cash, but he was willing to take a portion of the profits for the next $15$ years and a modest initial investment from Awang. Awang had, for the past four years, made most of the technical decisions in the shop. Awang knew the customers and was well$-$respected by the employees. He had never been involved in the business side of the operation. He was a high school graduate but had never taken business courses. Awang was told by Daud that even after deducting the percentage of the profits he would owe under the sales agreement; he would be able to almost double his annual earnings. Awang would have to take on all the business functions himself because Timah had no business training either.

a$)$ Based on the characteristics you can pick from this case, explain the type of entrepreneur Awang is$.(10$ Marks$)$

b$)$ Describe five characteristics that could lead to Awang$$s failure. $(10$ Marks$)$