Principles of Agribusiness

Management
Dr. Abdul Ghafoor
Institute of Business Management Sciences

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 Definition of Management

✓The art and science of successfully pursuing desired results with the resources
available to the organization

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 Agribusiness Manager: Roles and Functions

• The agribusiness manager is a person who monitors overall business from

planning to carry out duties/responsibilities required for the business to become a
successful venture.
• Agribusiness managers figure out and analyze the marketing skills/strategies, hire,
supervise and guide the human resources of the farm and
• also carry out some of agricultural/farm duties by themselves. Planning where and
how much to sell the crops and livestock is also major responsibility of
agribusiness managers.

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Managers must be:
✓Technologically knowledgeable about products and services
✓Good and effective communicators
✓Able to motivate people
✓Proficient in management technical skills such as accounting, finance, and
forecasting
✓Strong understanding of biological and institutional factors related to agribusiness
✓Able to respond to changes in marketing conditions, weather conditions,
government policies and technology
Managers must be able to mix each of these skills and perspectives in the right
proportion to deliver the greatest long run net benefits for the firm

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 Key Tasks of Agribusiness Manager

Agribusiness managers execute five major tasks in their work. These five tasks are:

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 Planning

• Planning can be defined as forward thinking about courses of activities based on

full knowledge of all factors concerned and directed at particular goals and
performance objectives.
• Montana and Charnov (2008) delineated a three-step process for planning:
• To choose a destination
• To evaluate alternative routes
• To decide the precise course of plan

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 The Planning Process

✓ Gather facts and information

✓ Analyze
✓ Forecast changes
✓ Set performance objectives (goals)
✓ Develop alternatives
✓ Evaluate results

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 Types/Categories of Planning

• The four types of planning in agribusiness firms are described as under;

• Strategic planning (long-term)
• Mission statement
• Key markets (who we serve)
• Contribution (what we do)
• Distinction (how we do it differently)
• Some examples Nestle, McDonalds, FFC
• Operational Plan
• Tactical planning (short-term)
• Contingency planning
• Best case / Worst case
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 Strategic Planning

• Strategic Planning is focused on developing courses of action for the longer term.
Long-term may be two or three years for a very small agribusiness, while a major
corporate organization, it may be looking at a 20-years (or longer) time horizon.
• It involves goals setting, determining events to accomplish the goals, and
mobilizing assets to carry out the actions.
• Strategic planning is a course of action and therefore has inputs, actions, and
outputs.

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Table 2-4 Levels and Nature of Planning in the Agribusiness Firm

Strategic level Tactical level Day-to-day level

Top management Middle management Line employees

Very flexible Somewhat flexible Inflexible

Long-term Intermediate-term Immediate
Written analyses Written reports Unwritten
Complex, detailed Less detail, outlined Simple
Broad General Very specific
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 Organizing

➢ The management task of organizing provides the framework or structure to

operate in
➢ Systematic classification and grouping of human other resources in a manner
consistent with the firm’s goals
➢ Organizing process is important at each level of management
➢ Helps management establish accountability for the results achieved
➢ Avoid confusion as to who is responsible
➢ Details the nature and degree of authority given to each person as the activities
of the firm are accomplished
➢ Managers must develop an effective organizational structure for the goals set
during the planning process

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 Tasks in Organizing

✓ Set up the organizational structure

✓ Determine the jobs to be done

✓ Define lines of authority and responsibility

✓ Establish relationships within the organization

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 Organizational Structure

✓ The framework of a company

✓ Different jobs are connected to different parts of the whole framework
✓ Formal framework by which jobs are grouped, coordinated and further
defined
✓ Working knowledge of the organizational structure is essential to put plans in
action
✓ Exists in all businesses
✓ One-person business has organizational structure with one person wearing
many hats
✓ Helps clarify who has authority for specific decisions
✓ For new employees, point to potential career path
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 Organizational Chart for Carlson Seed Company
Carlson Seed Company
Macomb, Illinois

President
John Carlson

Vice President Research Vice President Sales/Marketing Vice President Production

Michael Carlson Juanita Lopez Paul Carlson

Plant Breeding Manager Biotechnology Research Manager Sales/Marketing Manager Business Manager Field Production Manager Operations/Facilities Manager

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 Organizational Chart

• Shows the organizational structure of a company

• Division of labor
• The manner in which jobs are broken into components and then are assigned to
members or groups
• Chain of command
• Authority-responsibility relationship or links between managers and those
they supervise
• Bureaucracy
• A highly specialized structure in which work is divided into specific
categories and carried out by special departments

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 Directing

Guiding the efforts of others toward achieving a common goal

✓ Selecting, allocating and training personnel

✓ Staffing positions

✓ Assigning duties and responsibilities

✓ Establishing the results to be achieved

✓ Creating the desire for success

✓ Seeing the job is done and done properly

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Directing
Directing involves
• Leading
• Supervising
• Motivating
• Delegating
• Evaluating

• Management involves performing management tasks and functions

• Leadership involves influencing the attitudes and behavior of followers and
motivates them to do their best work
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 Shaping the Work Climate

✓Set a good example

✓Conscientiously seek participation
✓Be goals- and results-centered
✓Give credit and blame as needed
✓Be fair, consistent and honest
✓Inspire confidence and lend
encouragement

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 Policies, Procedures and Practices

• Policies
• General guidelines for decision-making that guide the thinking process, set
boundaries
• Procedures
• Step-by-step guide to implement a policy
• Practices
• What is actually done in the firm

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 Controlling

✓Monitoring and evaluation of activities

✓Performance is measured and compared with standards set
✓Includes an information system monitoring plans and processes

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