Sensemaking and the influencing factors on farmer decision-making (original) (raw)

Sensemaking and financial management in the decision-making process of farmers

Journal of Accounting & Organizational Change, 2021

Purpose The purpose of this paper is to contribute to a better understanding of the financial decision-making process of farmers and to highlight the potential role that improved farm financial management (FFM) could play in developing sustainable farm enterprises. Design/methodology/approach This paper adopts a qualitative approach with 27 semi-structured interviews exploring farmers’ financial decision-making processes. Subsequently, the interview findings were presented to a focus group. Sensemaking theory is adopted as a theoretical lens to develop the empirical findings. Findings The evidence highlights that FFM has a dual role to play in farmer decision-making. Some FFM activities may act as a cue, which triggers a sensebreaking activity, causing the farmer to enter a process of sensemaking whilst some/other FFM activities are drawn upon to provide a sensegiving role in the sensemaking process. The role of FFM in farmer decision-making is strongly influenced by the decision ty...

Differences in farmers’ perception of opportunities for farm development

NJAS: Wageningen Journal of Life Sciences, 2017

This paper empirically identifies differences between dairy farmers in their perception of opportunities for farm development. The construct 'perceived Room for Manoeuvre' (pRfM) is used which is defined as: 'the opportunities perceived as viable in order to obtain a (substantial part of) business income'. A unique case study of 79 dairy farmers operating in a highly comparable socio-material context at the level of the case study allows for an empirical analysis of differences in the pRfM using a mix of quantitative and qualitative methods exploratory research, a questionnaire and in-depth interviews with stakeholders in farm development. Differences in the pRfM will likely affect the early phase of strategic decision making and consequently explain heterogeneity in farm development. Data analysis revealed the following three dimensions of pRfM: perception of the opportunity (1) to diversify; (2) to end production; and (3) to maximise production. These dimensions proved useful to explain heterogeneity in farm development and thus showed the importance of a subjective approach towards opportunity identification in farm development. This paper shows the need to view the farmer as entrepreneurial actor in the process of strategic decision making who interacts with the socio-material context of the farm.

Farmers’ perception of opportunities for farm development

Problem definition 1.2 Research objective and questions 1.3 Thesis structure 2 Theory, analytical framework and methodology 2.1 Opportunity identification 2.2 Strategic decision-making 2.3 Threefold embedding 2.4 The analytical framework 2.5 Research methodology 2.5.1 The socio-material context of Kampereiland case study 2.5.2 Research phases 2.6 Ethical remarks: consent and confidentiality 3 Differences in farmers' perception of opportunities for farm (Roep 2000; OECD 2006; Horlings 2010). Examples include energy production and new value chains with products and services that build upon the characteristics of the farm and the rural context as added value (Potter and Tilzey 2005; Oostindie 2015). The development of diversification increases the number of possibilities for farm development, and, thus, the heterogeneity in farm development. Heterogeneity in farm development did not, however, start with diversification in farming. Literature on heterogeneity in farming has shown the existence of different 'farming styles' , in which farm practices are organised in distinctive ways, based on the different approaches of the production factors, labour and capital on the farm (Ploeg and Long 1994; Ploeg 2003). 'Each style can be seen as a distinctive way of equilibrating the many balances that link farming, the farming family and the outside world' (Ploeg and Ventura 2014, 23). These three developments meet in the field of interest for this thesis: the process of strategic decision-making of the farmer, who operates in, and is part of, a socio-material context that affects, and is affected by, the farm practices. A farmer, in the role of entrepreneur, aims to secure farm income by selecting a strategy for farm development in an iterative process of deliberating about the aims and needs of the family farm in relation to the opportunities for farm development that are perceived as viable. In the decision-making on farm strategies, the family farm is inherently intertwined with pre-existing socio-material structures; the farmer does not, and cannot make strategic decisions, as if it operates on a 'blank canvas'. The socio-material structures both enable and restrict farm development, the structures offer limitations and opportunities (Giddens 1984). In other words, there is 'room for manoeuvre' to act within the socio-material context. Operating in this room for manoeuvre, farmers are knowledgeable and interpretive actors, whose actions are guided by, but not determined by, social structures. In making decisions, the farmer influences and, thus, enacts the socio-material structures. This means that the actions and decisions of farmers affect the room for manoeuvre for farm development. In entrepreneurship research, the topic of strategic decision-making in the context of small business is part of a growing body of research. The importance of studying entrepreneurship in relation to its context is described by Watson (2013, 407): 'To act entrepreneurially is to innovate, to deal with social and economic circumstances, with those very circumstances constraining as well as enabling the shaping of entrepreneurial actions and their outcomes'. Another important author in this respect is Welter (2011), who has illustrated how a contextualised view of entrepreneurship contributes to a further understanding of the phenomenon of entrepreneurship. The relation of the actor with its context is a key research field for Sociology, the fields of Entrepreneurship Research and The second field of interest is the embedding of the farm in the socio-material context, in which it operates. The embedding in the context is an important aspect in the identification of opportunities (Portes and Sensenbrenner 1993; McKeever et al. 2015) and is, therefore, likely to also be important for the perception of opportunities. Farm development strategies cannot be explained solely by economic drivers, social embeddedness is also an important factor in farm development (Feola et al. 2015). The concept of Embeddedness is a prominent theoretical and analytical tool to study the relation between an actor or a business and the context in which it operates (Akgún et al. 2010; Roep and Wiskerke 2012a; Ferguson and Hansson 2015). Embeddedness finds its roots in study of the social dimension of economic activity (Granovetter 1985; Dequech 2003). The context, in which an actor is embedded, is broad, ranging from territorial to cultural and from social to ecological. In the context of the study of agri-food networks, embeddedness is often studied through focus on the territorial context of food production (Sonnino 2007). This approach creates a binary view, in which embedding of food production is seen as 'the re-placement' of food and food production in its local context, in response to the ' dis-embedding' forces of conventional food networks (Goodman and Goodman 2009, 208). The binary focus on one aspect of embeddedness creates the risk of losing the interaction between the different fields of embeddedness. An avenue for a more complex approach of embeddedness is found in the work of Hess. Hess reconnects embeddedness to its original meaning: 'the social relationships between both economic and non-economic actors' , and brings it back to the simple question of: 'who is embedded in what' (2004, 176). Hess introduced three dimensions of embeddedness: 1) societal embeddedness, which signifies the importance of where an actor comes from, considering the societal (i.e., cultural, political, etc.) background; 2) network embeddedness, which describes the network of actors a person or organisation is involved in; and 3) territorial embeddedness, which considers the extent to which an actor is 'anchored' in particular territories or places (Hess 2004, 177). The combination of the three dimensions creates a three-dimensional embeddedness perspective and offers a symmetrical, non-binary approach to study differences in the embedding of farms. For use in this thesis, the term ' embedding' is preferred over ' embeddedness': the embedding of a farm in the socio-material context is an active and evolving process, and not a static state of being. This avenue of threefold embedding raises the question of how strategic decision-making in farm development is related to the embedding of the farm in the socio-material context. The combination of the questions related to these two fields creates the core focus of this thesis: the identification of differences in farmers' perception of 1. What are the differences in farmers' perception of opportunities for farm development whilst operating in a highly comparable context? 2. What are the most important drivers for differences in farmers' perception of opportunities for farm development? 3. What are the differences in the embedding of the farm practices that are linked to differences in farmers' perception of opportunities for farm development? Analytical framework 23 'Three-fold embeddedness of farm development'

Can Farm Management advice to Small-Scale Farmers Trigger Strategic Thinking to Innovate?

Journal of Innovation Economics, 2018

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How do current sustainability assessment tools support farmers’ strategic decision making?

Ecological Indicators, 2020

A multitude of farm-level sustainability assessment tools (SATs) exists, reflecting a variety of agricultural practices and sustainability perceptions. Tools differ and insight is lacking about how they match with farmers' needs. This paper examines whether and how existing SATs focus on the farmer's strategic decision-making. The potential of the SATs to direct farmers towards more sustainable management is analysed with a focus on their implementation and the farmers' decision-making process. Based on the published SAT characteristics and on interviews with the tool developers, we classified 18 SATs in a two-dimensional framework. One axis reflects the overall complexity of the SATs, i.e. time required for the entire assessment process; type of assessment, indicators and data, and thematic coverage. The other axis reflects the steps in the farmer's strategic decision making process, i.e. assessment, interpretation, development of improvement strategies, their implementation, and monitoring of results. We make three main observations: (1) many SATs lack a focus on the implementation of the assessment's results and thus provide only a weak link to the farmers' strategic decision making; (2) over its lifetime, a SAT's complexity may evolve, causing it to shift to another complexity level; (3) a diversity of goals was found at each level of complexity. These observations allow us to conclude that SATs are gradually becoming more farm or farmer focused, offering more context specificity and flexibility. The farm(er) focus and the support for strategic decision-making play a central role in the adoption of sustainable practices if there is sufficient interaction between farmers, advisors and experts. Future research should therefore focus on integrating support for farmers' strategic decision-making in (further) development of SATs and in their implementation process.

Implementing Strategy: The Key Strategic Decisions for the Farm Business

2003

Farming success in the past has depended primarily on the ability of farm business managers to develop efficient operations. Successful farm business managers have developed the skjll to evaluate new technologies, assess trade-offs between the effectiveness of substitute inputs, and make production processes adjustments in order to achieve hi gh levels of output and control production costs. The continual introduction of new input products/technologies for use on farms has provided sigillficant rewards for concentrating on production or "doing things right." With the continued industrialization of farming, a clear strategy to guide the farm business becomes increasingly important. Such decisions as the product mix of the farm, foodchain linkages, and the financial structure of the business require strategic analysis. The relationship between farm input suppliers and purchasers of farm production continues to change as identity preserved production increases. The use of contract production increases the importance of carefully selecting partners because payment for products will depend on the financial health of the partner rather than the market. In this environment, success in farming will continue to require that operations be efficient, but there will be a growing payoff to strategic decisions or "doing the right thing".

Farm Management in a Context of the Common Agriculture Policy Financial Support

Proceedings of the 3rd Business & Management Conference, 2016

This paper examines differences in the management styles of Polish farms. The Common Agricultural Policy has a significant impact on structure of production and decisions of farmers. The impact is visible in the financial analysis of farms. Author studies a few changes in structure of assets and many changes of economic indicators. Subsidies have an impact on value of farmland. The financial support influences on flexible management of farms. Farmers need to know all possibilities and instruments of the CAP. They ask about future draft, rules and programmes of this policy. The results demonstrate that farmers make decisions following diverse management strategies.