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Consequences of intensive use of non-financial performance measures in Danish family farm holdings

Consequences of intensive use of non-financial performance measures in Danish family farm holdings PurposeThe 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/approachThe 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.FindingsThe 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/valueThe 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 to create their own reality that at some point may come in conflict with society of which the family business has to co-exist within. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Qualitative Research in Accounting & Management Emerald Publishing

Consequences of intensive use of non-financial performance measures in Danish family farm holdings

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References (32)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1176-6093
DOI
10.1108/QRAM-04-2016-0035
Publisher site
See Article on Publisher Site

Abstract

PurposeThe 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/approachThe 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.FindingsThe 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/valueThe 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 to create their own reality that at some point may come in conflict with society of which the family business has to co-exist within.

Journal

Qualitative Research in Accounting & ManagementEmerald Publishing

Published: Jun 19, 2017

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