TY - JOUR
T1 - Consequences of intensive use of non-financial performance measures in Danish family farm holdings
AU - Jakobsen, Morten
PY - 2017
Y1 - 2017
N2 - Purpose: The purpose of the paper is to analyse how the intensive use of non-financial performance measures and the lack of an economic reality among Danish farmers have contributed to a low economic performance despite high productivity. The research ambition of the paper is to contribute to a better understanding of the managerial decision-making made by family business managers, in this case farmers, and how these decisions may impact financial performance. Design/methodology/approach: The study is based on a case study including farmers, agricultural consultants and bankers. The analysis uses pragmatic constructivism to analyse the economic reality of the farmers included and the business topos among Danish farmers. Findings: The main finding of the paper is that the dominating non-financial performance management techniques and a historically based strong emotional emphasis on size and production volume as the main success criteria for being a good farmer have led to a neglect of economic rationality. In addition, this practice has made the farmers blind to alternative possibilities for taking advantage of the resources available. The result has been an un-economic utopian reality. Originality/value: The paper shows how the use of non-financial performance measures can lead to prolonging of a certain reality perception that may not be economically sustainable. Small family businesses such as family farms are likely to be more exposed to such risk because such businesses are run by a set of values that include more objectives that are more dominating than the profit objective. The paper concludes that family business managers must be open towards inputs from the society around the business, because family businesses may have a tendency tocreate their own reality thatat some point may comein conflict with society of which the family business has to co-exist within.
AB - Purpose: The purpose of the paper is to analyse how the intensive use of non-financial performance measures and the lack of an economic reality among Danish farmers have contributed to a low economic performance despite high productivity. The research ambition of the paper is to contribute to a better understanding of the managerial decision-making made by family business managers, in this case farmers, and how these decisions may impact financial performance. Design/methodology/approach: The study is based on a case study including farmers, agricultural consultants and bankers. The analysis uses pragmatic constructivism to analyse the economic reality of the farmers included and the business topos among Danish farmers. Findings: The main finding of the paper is that the dominating non-financial performance management techniques and a historically based strong emotional emphasis on size and production volume as the main success criteria for being a good farmer have led to a neglect of economic rationality. In addition, this practice has made the farmers blind to alternative possibilities for taking advantage of the resources available. The result has been an un-economic utopian reality. Originality/value: The paper shows how the use of non-financial performance measures can lead to prolonging of a certain reality perception that may not be economically sustainable. Small family businesses such as family farms are likely to be more exposed to such risk because such businesses are run by a set of values that include more objectives that are more dominating than the profit objective. The paper concludes that family business managers must be open towards inputs from the society around the business, because family businesses may have a tendency tocreate their own reality thatat some point may comein conflict with society of which the family business has to co-exist within.
KW - Economic reality construction
KW - Familiy farm holding
KW - Non-financial performance measures
KW - Pragmatic constructivism
U2 - 10.1108/QRAM-04-2016-0035
DO - 10.1108/QRAM-04-2016-0035
M3 - Journal article
AN - SCOPUS:85021753432
SN - 1176-6093
VL - 14
SP - 137
EP - 156
JO - Qualitative Research in Accounting and Management
JF - Qualitative Research in Accounting and Management
IS - 2
ER -