Chapter 2

Chapter 2
Principles of Agribusiness
Management
Asif Maqbool and Adnan Adeel*
Abstract
Agribusiness management is the process of achieving desired results in agriculture
sector with the given resources. A key to successful management is accepting
responsibility for leadership and making business decisions through the skillful
application of management principles. Management of agribusiness is unique due to
biological nature of production, the seasonality of food and agricultural markets, the
significance of food to people, and the perishability of agricultural products. The
management functions are implemented through the use of a variety of skills,
principles and tools that help developing agribusiness manager’s knowledge and
ability. To be successful, the agribusiness manager must be able to carry out the five
tasks for each of the four basic functions of the agribusiness; that is, marketing and
selling, production and operations, financial management and planning, and
management of human resources. The management process is often divided into five
tasks: planning, organizing, staffing, directing and controlling. Planning is
determining a course of action to accomplish stated goals: organizing is fitting
resources and people together in the most valuable way; staffing is the function of
management committed to hiring, training, appraising, and benefiting employees;
directing pertains to motivating and supervising people and controlling function
monitors performance and makes adjustments if needed. Each of these tasks is a
necessary component for accomplishing the recognized managerial goals of
agribusiness firms.
*
Asif Maqbool# and Adnan Adeel
Institute of Business Management Sciences, University of Agriculture, Faisalabad, Pakistan.
#
Corresponding author’s e-mail: wtouaf@yahoo.com
Managing editors: Iqrar Ahmad Khan and Muhammad Farooq

Editor: Abdul Ghafoor
University of Agricutlure, Faisalabdad, Pakistan.
25
26 A. Maqbool and A. Adeel
Keywords: Agribusiness, Planning, Organizing, Staffing, Directing, Controlling,

Management
2.1. Introduction
Agricultural sector in Pakistan is transforming gradually into agribusiness.
Agribusiness does not only comprise land and farms but it also includes people and
firms that offer the inputs (such as chemicals, credit, seed, machinery, etc.), develops
the output (such as meat, grain and milk, etc.), makes the food products (such as
bread, ice cream, cereals etc.), sells and transports the food products to end
consumers (such as markets). In nutshell, agriculture has passed its journey from
traditional outlook to a more commercial and business activity (Baruah, 2008).
In the past, agricultural production activities were simple and performed in
traditional way. Most of the inputs which were needed by the farming community
were produced at farms. Although yields were low but were sufficient to feed people
at that time. With the tremendous growth in population, there emerges pressure on
increasing farm production to feed growing number of people. This process
introduces the concepts of selling and marketing the farm produce. Due to this,
farmers think it advantageous to focus on increasing productivity of their crops and
as a result they start to buy inputs they previously prepared themselves. This kind of
trend helped others to develop businesses focusing on supplying inputs used in
agricultural production for example, fertilizers, seed, pesticide, and machinery etc.
These enterprises develop gradually into industries that formulated the inputs sector.
In the similar manner, evolution takes place in commodity manufacturing and food
processing sectors. Conventional agricultural produce (rice, wheat, milk, livestock
etc.) were altered to make convenient products for end users like wheat flour, yogurt,
and processed milk etc. For these value added products; consumers are generally
ready to pay extra money. Technological advances are also being made in food
preservation methods. Technological developments in food processing firms have
made it possible to supply the agricultural produce for the whole year. Today the
trend has changed and most of the agricultural producing families use purchased fiber
and food products for themselves. The farms that meet up demand of consumers for
better convenience and processing constitute a key element of agribusiness and are
called as processing/ manufacturing sector.
The word ‘Agribusiness’ was introduced by Goldberg and Davis in 1957 as “the sum
total of all operations involved in the production and distribution of food and fiber”,
which mentioned three inter-reliant sectors in international/global food system. This
definition shows agribusiness has three components namely the input sector,
production sector and manufacturing processing sector (Sonka and Hudson, 1989).
Agribusiness is mainly business of farming production. It includes supply of seed,
crop production, agrochemicals, farm machinery, processing, distribution, selling,
retailing and marketing of agricultural product to final consumers. Agribusiness is a
combination of business and agriculture within agriculture sector, including a range
of disciplines and activities (Baruah, 2008).
2 Principles of Agribusiness Management 27
A company which is undertaking business transactions with growers/farmers also

comes under agribusiness sector. These kinds of transactions might be either in the
type of goods or services. Suggestions and consultancies for farming, pesticides,
seeds, provision of agriculture equipment also come under agribusiness. In the
similar way disbursing loans for agriculture, transportation, agriculture insurance,
packing, distribution and processing also fall under agribusiness. The inception of
WTO has created new and better opportunities for making the agriculture and allied
sectors global. The agribusiness sector includes many activities/actions of agriculture
sector like combination of inputs, productions, marketing, trade and agro processing
which put value to agriculture products (Bairwa et al., 2014).
It has already been defined that agribusiness is arrangement of combined business
activities that are undertaken from farm to fork by covering supply of inputs,
manufacturing and conversion of agriculture produce and their supply to end
consumers. Agribusiness is featured by raw resources that are perishable,
unpredictable in quality and are not commonly available. This sector faces strict
regulatory controls on product quality, consumer safety and protection of
environment. Conventional distribution and production techniques/methods are
being replaced with narrowly coordinated and better planned linkages among
agribusiness firms, growers/ farmers, wholesalers and retailers in the marketing
chains.
Management in agribusiness is the art and science of successfully pursuing desired
results with the given resources in organization. Art and science are the first two
Keywords, and, as mentioned above, management is basically both an art and
science. At the same time, there are a number of such management principles and
tools that help us make better decisions in an imperfect world. Everyone cannot
become the top manager for a firm, but everyone can use management principles to
foster continual growth and progress towards their personal managerial potential.
The third key word is successful. Whatever else good management is, it must be
successful in meeting desired and predetermined goals or results. Managers must
know where they are headed in order to achieve such success.
Finally, if we consider the given resources. Each organization possesses or has at its
command a variety of resources viz. financial, human, physical, equipment, patents,
and so on. Successful managers coax the highest potential returns from the resources
available. They recognize the difference between what should be and what is. At the
same time, they know how to expand the firm’s resource base when resources
constraint hampers potential. They use what they have to get what they want and
need, and deal in the realm of the possible efforts.
In crux, management of agribusiness includes various aspects of the economy;
farmers/producers who provide food and services to the consumers, businesses that
put in worth to products, and those who assist the marketing of products to better
marketplaces.
2.2. Agribusiness Manager: Roles and Functions

Success or failure of an agribusiness firm is always driven by the decisions made by
the organization- the allocation of investment funds, the people hired, the products
introduced, the plants constructed, the deals cut, and a hundred other decisions- all
determine if the firm will be able to capitalize on a favorable market and/or how well
prepared the firm is for market developments. Performance of the firm is attributed
with how effectively a manger uses the organization resources. Managers are hired
to utilize firm resources in the best possible manner to achieve the objectives of the
owners of the firm. They use resources to capitalize on trends in the market and to
manage the risks of a downturn. Managers use resources to take the advantage of
fortunate circumstances, and to minimize the damage from unlucky ones. They
basically drive performance in agribusiness firms.
Who are these managers leading today’s agribusiness? They are each unique
individual who vary in age, gender, background, geographic location, and so on.
They are each involved in unique management situations- unique because of their
industry, commodity, location and employees. Because people and situations differ
so dramatically, it is difficult to come up with a specific recipe for what it takes to be
a successful manager. So, while there are certain management skills and principles
that can be learned, these skills must be adapted by each individual to fit the unique
situation in which they operate.
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.
Today’s successful business managers are guided by a set of principles which
promote management in firms. In this chapter, the key tasks of managers to provide
a foundation for exploration of agribusiness management, are explained.
Management is equally a science and an art. Managers must proficiently mix
available human, physical, and financial resources to exploit long-run profits of the
operation by profitably fulfilling the demands of customers. Management requires
individuals be technically familiar with product and function of the organization.
They must be good and efficient communicators. The ability to motivate people is
also essential. They must be expert in practical skills of management like accounting,
forecasting and finance.
In addition to a strong background in management, agribusiness mangers should
understand the biological and institutional factors relevant to the production of food
and fiber. Furthermore, not only they should excel at normal concerns of business
management, agribusiness managers should also be aware of uncertainty of the
weather, perishable nature of many of agriculture’s products, government policies,
and the rapidly changing technology employed in agriculture. They must possess the
capability to rapidly get used to changes in market circumstances that result due to
changes in these uncertain factors of weather, product perishability, government
policies, and technology. Managers must be competent to combine all of these
skills/tactics and perspectives in the true proportion to deliver the greatest long-run
net profit for the organization.
Agribusiness managers must be efficient in evaluating the scope of business and
amount of money needed. They generally maintain records of planting/harvesting
times and identify while said crop/livestock products are in demand. They also
monitor the human resources performing different responsibilities/duties in the
business. Agribusiness managers are also responsible for organizing workshops and
seminars on various issues of agricultural marketing that assist in understanding and
finding solutions of the problems. They also develop and practice teaching/training
modules.
Agribusiness managers create database/files that contain data on input and output
markets benefiting farmers as well as the consumers to get timely information of the
stocks that they are offer. They sometimes also develop a website along with a
marketing plan. It is easier for clients of agribusiness to contact them and see all the
details of their business. Last but not the least, agribusiness manager deals in exports,
imports and logistics in order to become capable of making good decisions in product
placement.
2.3. Key Tasks of Agribusiness Manager

Successful managers feel like managers, see themselves as managers, and are both
ready and willing to play the managerial role. When successful managers look in the
mirror, they see a leader, a person who is willing to accept the responsibility for
change and becomes the catalyst for action. The success-minded manager is
comfortable with this managerial role, and accepts responsibility and authority as a
challenge rather than a curse. Good managers are most effective in an environment
that permits creative change. Such managers live to make things happen successfully
as a manager. He further possesses the ability to understand and feels comfortable
with the managerial role, to accept responsibility, and to provide leadership for
change.
Management principles and concepts are the same for any business. Both, the largest
business in the country and the smallest or even one-person agribusiness, are guided
by the same general management principles. The differences between managing
large and small businesses, between agribusiness and other kinds of businesses, rests
in the art of applying fundamental management principles to the specific situation
facing the business manager.
In this chapter major management principles are explained in context of agribusiness
and agribusiness management. Food as a product, biological nature of production
agriculture, seasonal nature of business, uncertainty of the weather, types of firms,
variety of markets, rural ties and government movement are the unique/features
elements of the agribusiness management. Each of these special features of the
agribusiness requires the agribusiness manager to use the principles of management

in a very special way (Barnard et al., 2012).
Agribusiness managers execute five major tasks in their work. These five tasks are:
Planning
Organizing
Staffing
Directing
Controlling
Task-oriented concept of management can be illustrated as a network that connects
the manager with the goals, objectives, and results which are desired by the
organization. Motivation is the tongue, or speed, or effectiveness, with which these
tasks are accomplished.
Fig 2.1 Key Tasks of Agribusiness Manager
Motivation provides the motion by which the network either moves forward or
reverses, but it is not another task. Strong motivation results in speedy, efficient,
successful, forward-moving management, while a lack of motivation can result in a
discouraging reversal. The axle on which the whole network of management runs is
called communication. Again, this is not another task; however, without effective
and timely communication, the network of management soon begins to wobble.
2.3.1. 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. The first segment of the definition focuses on forward thinking which
also means looking ahead. This is not a prediction rather than activity-oriented
statement-thinking about the future. The second element is courses of action, which
implies developing alternatives or methods of accomplishing specific goals and
objectives, based on a full understanding of all factors involved.
Planning is the course of action of thinking about and organizing the activities
requisite to attain a preferred goal. Planning includes creation and continuance of
a plan. Planning is an essential asset of intellectual behavior. This thinking process
is vital for the formation and fine-tuning of a plan, or amalgamation of it with other
strategy/plans; that is, it combines forecasting of developments with the preparation
of scenarios of how to react to them. A chief, often ignored segment of planning is
its association with forecasting. Forecasting is described as predicting about how the
future look like, whereas planning tells what the future be supposed to look like.
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
In various firms/organizations, planning is called a management process with the
objective of defining goals for future direction of the company, amount of resources
required and missions to attain those targets. In order to achieve the goals, managers
may possibly develop business plan or a marketing plan. Planning at all times has a
reason. The purpose is attainment of definite goals or targets. Major characteristics
of planning in firms are; it enhances the efficiency and productivity of an
organization; it minimizes the risks and it facilitates the accessible resources and
time.
Main idea of planning is to recognize what the firm needs to perform by using four
questions which are "where are we today in terms of our business or strategy
planning? Where are we going? Where do we want to go? How are we going to get
there?"
2.3.1.1. Types/Categories of Planning
The Planning task represents the preparation of the agribusiness firm for future
business conditions. The four types of planning in agribusiness firms are described
as under;
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.
Strategic plans tackle the broadest elements of an agribusiness firm’s Strategy like
what countries will we operate in? What business will we be involved in? What plants
will we build? However, it is important to note that the CEO of a major food company
will have a strategic plan, but so may a small food processor, and sales manager for
a small company. It is the long-term time horizon that distinguishes the strategic
planning activity.
Strategic planning includes the course of action for defining its plan, or direction,
and to make decisions in order to allocate its resources to practice this strategy. It
may also extend the control mechanisms for guiding the implementation of the
strategy. Strategic planning became well-known in corporations during 1960s and
considered a significant aspect of strategic management. It is performed by strategic
planners /strategists, who involve a lot of research sources and parties in their
exploration of the firm and its association to the surroundings in which it competes
(Mintzberg and Brian, 1996).
Strategy has numerous definitions, but usually involves goals setting, determining
events to accomplish the goals, and mobilizing assets to carry out the actions. A
strategy explains how the goals will be attained with the help of resources. The
higher-ranking leadership of a firm is usually tasked with the objective of
determining strategy. Strategy may be planned (intended) or may be experiential as
a sample of action (emergent) as the firm adapts to the surroundings or competes.
Strategy involves processes of formation and execution. Moreover, strategic
planning is logical in nature whereas strategy formulation involves synthesis
through strategic thinking. As such, strategic planning occurs approximately along
with the strategy formulation action (Mintzberg and Brian, 1996).
Strategic planning is a course of action and therefore has inputs, actions, and outputs.
It may be official or unofficial and is normally iterative, with criticism loops right
through the process. Strategic planning supply inputs for strategic thinking, which
supervises and guides the real strategy formulation. The ending result is the firm's
strategy, as well as identification of the surroundings and cutthroat situation, a
guiding course of action on what the firm intends to achieve, and key action plans in
order to achieve guiding policy targets.
Michael Porter described in 1998 that formation of aggressive/competitive strategy
includes four key essentials;
• Analysis of strengths and weaknesses of the Company
• Individual values of major implementers (i.e., board and the management)
• Threats and opportunities of industry
• Broader public expectations
The initial two fundamentals relate to internal situation of the company, while the
last two narrate to the external situation of the company. These fundamentals are well
thought-out during strategic planning course of action as described in the figure
below.
Fig. 2.2 Strategic Management Framework
Strategic planning has been denounced intended for attempting to standardize

strategy formation and strategic thinking which HenryMintzberg certify are
intrinsically original activities including synthesis or "connecting/bringing together
the dots" which cannot be schematized. Mintzberg said that strategic planning can
assist direct planning efforts/works and quantify growth on strategic goals, but that
it occurs "just about" strategy formulation process relatively than surrounded by it.
Furthermore, strategic planning actions/functions distant from the "front lines" or get
in touch with the competitive surroundings possibly will not be helpful to support
strategy efforts/ works (Mintzberg and Brian, 1996).
In many strategic planning situations, first step is the development of the mission
statement or a statement of vision. A mission statement helps to spell out the direction
for a firm and describes the destination it plans to achieve.
A mission statement usually describes who the company is, what they do and where
they are heading/ in very clear and concise fashion. In many cases, it has three parts
• Key markets (who we serve)
• Contribution (what we do)
• Distinction (how we do it differently)
Table 2.1 Examples of Firms’ Mission Statements
Engro Foundation
“Engro Foundation is committed to make positive impact on lives of communities
around its supply chain through provision of improved basic services (health,
infrastructure, water and sanitation); education and skill development;
environment and livelihood training. In addition, it will work with partner
organizations to provide financial and technical support in response to natural
calamities.”
Nestle Pakistan, Ltd.

Mission of Nestlé’s is to: “...certainly impact/influence social atmosphere in
which we work as responsible company citizens, with suitable regard for those
environmental principles/standards and community aspirations which ultimately
get better the quality of life.”
Shezan International Ltd.

“Our mission is to provide the highest quality fruit and vegetable related juices
and products to retail and food services customers”.
Zarai Taraqiati Bank, Ltd. (ZTBL)

“To play effective role in the promotion of economic growth, by enhancing the
availability of credit to the agriculture sector, through reliable access to
sustainable financing, special lending programs, technical assistance, and other
products & services, and to promote career development opportunities for
increasing professionalism and technical proficiencies of employees”.
Tactical Planning
Tactical planning includes short-term plans which are consistent with the overall
strategic plan. Tactical planning is also called small/short range planning and
highlights operations of different parts of the firm. Small/short range is delineated as
a period of moment expanding about 1 year or a smaller in the future. Managers make
use of tactical planning to sketch out what the different parts of firm have to do for
the firm to be doing well at some point in one year or shorter in the future. Tactical
plans are generally established in the areas of marketing, production, workforce, and
finance facilities.
• Tactical planning is distinguished from strategic planning on the following
basis;
• Since upper level managers usually command good understanding of firm
than as lower level managers accomplish, upper level management in
general make the strategic plans and lower level managers as they have
improved knowledge of day to day managerial operations, usually
formulate the tactical plans.
• Strategic planning focuses to analyze the future whereas tactical planning
focuses on analyzing the daily operation of the firm, so facts on which to
base strategic plans are generally much complicated to collect than are facts
on which to base tactical plans.
• Since strategic plans are concerned with the prediction of the future and
tactical plans focus on acknowledged circumstances that exist inside the
organization, so strategic plans are usually less comprehensive than tactical
plans.
• As strategic planning concentrates on long term and tactical planning on
short term, strategic plans cover up a comparatively longer period of time
while tactical plans cover up a comparatively shorter period of time.
Values Key Strategic Issues Key Result Areas

Mission Critical Issue Analysis Critical Issues Analysis
Vision Long Term Objectives Key Performance Indicators
Strategy Strategic Action Plans Objectives
Action Plans
Plan Review
Fig. 2.3 Types of Planning
In spite of their differences, strategic and tactical planning is integrally linked.

Manager requires understanding of both strategic and tactical planning program.
Tactical planning is supposed to highlight on what to perform in the shorter term to
assist the organization in order to achieve the longer term goals/objectives set by
strategic planning.
For example, a fertilizer company’s strategic plan could include a goal of increasing
its market share by 20 percent by using a strategy of expanding its geographic market.
The firm’s tactical plan may be focused on how to increase sales in specific
geographic regions that have less competition and will likely include specific action
steps for getting this done.
Operational Planning
Operational planning is course of action to plan strategic objectives and goals to
tactical objectives and goals. It characterizes milestones, circumstances for success
and examines how, or what segment of, a strategic plan should be placed into
operation throughout a given operational period, in the case of business/commercial
application, a fiscal year or another agreed budgetary term. Operational plan is the
foundation for, and explanation of yearly operating budgetary demand. As a result, a
five-year strategic plan would normally need five operational plans funded by five
operating budgets.
Operational plans are supposed to set up the actions/activities and budgets for each
part of the organization/firm for next 1 – 3 years. They connect the strategic plan
with the activities/actions of the organization/firm and the resources needed to
deliver them.
Operational plan draws straight from agency and agenda strategic plans to depict
agency and agenda missions and goals, agenda objectives, and agenda activities.
Similar to strategic plan, an operational plan outlines four questions;
• Where, are we at the present?
• Where do, we want to be?
• How do we get there?
• How do we determine our growth/progress?
The operational plan is both first and last step in developing an operating budgetary
demand. As the first step, the operational plan describes a plan for allocation of
resources; as the last step, the operational plan may be tailored to reveal financial
changes or policy decisions completed during budget development process.
Operational plans are supposed to be developed by the, people who are involved in
completion. There is frequently a requirement for considerable cross-departmental
conversation as plans shaped by one part of the organization/firm certainly have
implications for other parts.
Operational plans should include;
• Clear cut objectives
• Activities/actions to be delivered
• Quality standards
• Preferred outcomes
• Resource and staffing requirements
• Accomplishing timetables
• Process for monitoring/surveillance progress

Contingency Planning
Contingency plan is generally devised for results other than in expected plans. It is
frequently used for the management of risk when it may have disastrous
consequences. Contingency plans are mostly developed by
governments or businesses. For example, assume many employees of a firm are
traveling collectively on an airplane which crashes, killing all aboard. The firm could
be strictly strained or even insolvent by such a loss/failure. Consequently, a lot of
companies have measures to follow in the occasion of such a catastrophe. The plan
may also comprise standing policies to lessen a potential impact of disaster, such as
requiring employees to move singly or limiting the amount of employees on any one
airplane.
Contingency planning (also referred as alternative planning) is the development of
alternative plans for various possible business conditions. It is part of the strategic
and tactical planning process for a firm. For example the seed varieties provided via
Seed Company to a particular area of the country will usually be determined by
expectations of typical weather during the planting season. However, a prolonged
wet period during the planting season may cause the seed company to implement a
contingency plan based on delayed varieties. On the other hand, a poultry meat
processing company may need contingency plan for the best case scenario. What do
they do if demand for their new, all frozen meat products grows at 10 times the initial
forecast? How will they handle the extra production and distribution?
2.3.1.2. Levels of Planning
Generally, level of planning moves from chief executive to the line workers. At top
management level, plans are strategic and have a propensity towards longer time
horizon, flexibility, more complex usually written and broader in nature. At the lower
levels, plans are specific in nature, for immediate action, usually unwritten, and tend
towards simplicity. Although plans tend to be unwritten at the lower levels, almost
all managers benefit from having written plans. Upon writing down a plan the plan
becomes more focused and any inconsistencies or gaps are likely to be made visible.
Table 2.2 Levels and Nature of Planning in the Agribusiness

Strategic Level Tactical Level Day to Day Level
Top Management Middle Management Line Employees
Employees To some extent Flexible Rigid
Extremely Flexible Intermediate Term Immediate
Long Term Written Reports Unwritten
Written Analysis Less Detailed Outlined Straightforward
Complex Detailed General Extremely Specific
Broad
2.3.1.3. Planning Process

There are six steps in planning process. These six steps provide structure to the
process and are designed to provide management with as much information as is
available when developing the strategic or tactical plan. These steps are to;
• Gather information and facts that have a bearing on the state of affairs
• Analyze the situation and major issues of high concern
• Forecast future developments
• Set performance objectives and the benchmarks for achieving strategic
goals
• Develop alternative courses of action and select the most suitable one
• Develop a means of evaluating progress and readjust the plan as the process
unfolds
Step 1: Gather Facts
Gathering facts and information is the first step of the planning process, even though
information gathering is also a constant, recurring part of the process. Its place as a
first step is easily justified, since adequate information must be available to formulate
or synthesize problem or opportunity. Fact gathering is subdivided into two parts:
Gathering sufficient information to identify the need for a plan in the first place and
systematic gathering of specific facts needed to make the plan work once it has been
developed. Because of the difficulty of gathering facts, some managers tend to skip
or minimize the step of planning process which reduces the likelihood of success. At
the same time, a manager should not become so engrossed in fact gathering that may
delay the operations of the project.
Step 2: Analyze the Facts
The groundwork for developing a sound plan is provided during the process of
analyzing facts. This process answers such questions as where are we and how did
we get here? It helps pinpointing existing problems and opportunities and provides
the framework upon which to base successful decisions. An analysis of facts will
prevent mistakes and allow for the most efficient use of the organization’s resources.
Step 3: Forecast change
Forecasting change is another key element of good planning. It has been said that the
ability to determine what the future holds is the biggest form of management skill.
The broader, more complex and longer range a plan is, the more difficult is to foresee
results accurately. As with all the steps planning, forecasting is interrelated with the
other steps and it is the logical extension of analyses into a future time setting. Many
failures in forecasting result from the sloppy, ambiguous, generalized thinking.
Forecasting change is not guessing game rather it is a part of a disciplined approach
to planning.
Step 4: Set Goals/ Performance Objectives

The development of goals and /or performance objectives is the next step in planning
process. Goals are the specific quantitative or qualitative aims of the company or
business group that provide the directions and standards, one can use to measure the
performance. The management, boards of directors, or chief executive often develop
these goals which help to bring focus and specificity to the organization’s mission.
The mission statement is the target towards which goals are aimed and goals are the
biggest target towards which performance objectives are aimed.
Well-stated goals should;
• Provide guides for performance objectives and results for each unit or
person
• Allow evaluation of results contributed by each person or unit
• Contribute to doing well or overall organizational performance
Performance objectives are then set for specific units or individuals. They provide
the performance target at the unit or individual levels that are needed to accomplish
the broader, long range strategic goals. Performance objectives are usually set for the
shorter time periods than strategic goals and usually are defined by measurable
results.
Step 5: Develop Alternatives
After the performance objectives have been set, agribusiness managers must explore
different ways of getting wherever they want to go by developing alternative courses
of action. Here again, the relationship between performance objectives and results
can be seen. The results achieved depend upon the alternative activities selected to
meet the objectives. Alternatives must be weighed, evaluated, and tested in the light
of resources and possible consequences.
Imagination is crucial, since new ways or new paths may be the key to success. It is
important in this step to be creative, yet practical, in generating alternatives. The
conditions surrounding each decision must be carefully considered. For example, a
pesticide firm may believe that equipping its sales representatives with laptop
computers and training them in the use of a new database management package might
be the best alternative to improve the productivity of the sales force. However, the
firm’s budget situation may mean that only one-third of the sales representatives can
get new computers. So, the firm may need to look for other (low cost) options to
boost sales performance to complement the use of computers and new software.
Step 6: Evaluate Results
Management specialists have found surveillance and motivating of progress to be a
high priority concerns in planning. Carefully reviewing, assessing or evaluating
results shows whether the plan is on course and allows both the analysis of new
information and the discovery of new opportunities. Evaluation cannot be left to
chance. It must be incorporated into the planning process, since a plan is only good
so long as the situation remains unchanged. From evaluation one can tell whether
results matched performance objectives and where the results fell short or overshot
objectives. Evaluation also points out weaknesses in plans and programs so that those
portions that are ineffective can be changed. In a fast-changing world, continuous
evaluation is essential to planning success.
Inventory
Resources
I.
Inventory Analyze Collection & Analysis
Problems Resource
Data
Determine
Objectives
II.
Formulate Evaluate
Decision Support
Alternatives Alternatives
Make
Decisions
Plan
Implementation
III.
Application &
Plan Evaluation
Evaluation
Fig. 2.4 Planning Process
2.3.2. Organizing
Organizing is vital for almost all organizations/firms and usually valuable for those
of high volume and size. According to view point of companies, organizing is the
function of management that generally follows after planning and it involves
assignment of responsibilities/tasks, the grouping of responsibilities /tasks into
departments and the assignment of power and resource allocation in the firms.
The structure in which firm defines how responsibilities/tasks are alienated,
resources be deployed, and departments are harmonized.
• A set of official responsibilities/tasks assigned to departments and
individuals.
• Formal reporting associations, including responsibility of decision, lines of
power, amount of hierarchical levels and period of managerial control.
• Design of systems to make sure effective synchronization of employees
across departments.
Division of Labour
Division of labour is the level to which different tasks of an organization are sub-
divided into personal jobs. It may augment the competence of workers but with too
much specialty, workers may feel cut off and bored. Many firms broaden jobs or
rotate assigned responsibilities /tasks to provide better challenges.
Chain of Authority
Chain of authority is the vertical lines of a control structure that is used to see overall
accountability and responsibility in order to achieve the stated goals and objectives
during the use of orders one way and reports of fulfillment in other direction. Chain
of authority differentiates from horizontal lines in a firm which are essentially the
coordinating and communication lines of a firm.
Responsibility, Authority and Accountability
Responsibility is the duty of employees to carry out assigned activities or tasks.
Authority means official and legal right of managers to make right decisions, allocate
resources, issue orders and to attain preferred outcomes for organization.
Accountability is central with responsibility and authority and must inform and give
good reasons for task/responsibilities outcomes to those persons on top of them in
the chain of authority. Delegation is a process basically used by managers to transfer
responsibility and authority to positions beneath them. Firms today have a tendency
to encourage delegation beginning highest to lowest probable levels. Delegation can
enhance flexibility to meet up customers’ needs and adjustment to competitive
surroundings.
Authority/Responsibility Types
a. Line Authority: Managers encompass official power to express and
control instant subordinates. They advance and issues guidelines and
act as incharge where their subordinates obey and are liable for carrying
out the orders, keeping in mind the instructions.
b. Functional Authority is that kind of authority where managers contain
official power more than a specific division of activities/actions. For
example, production manager possibly has the line authority to make a
decision whether and at what time a new machine is required but if
controller requests that a capital expenditure plan should be submitted
first, presenting that investment will contain a yield of at least x%; or,
an officially authorized department may have functional authority to
get in the way in any activity that could have legal cost. This kind of
authority would not be purposeful but it would rather be staff authority
if such intervention might be "advice" as compared to "order".
c. Staff Authority is fixed to staff experts in the areas of their expertise.
It is not an authentic authority in the sense that a staff manager does not
regulate or instruct but only advises, counsels, recommends in the area
of expertise of staff specialists and is accountable only for quality of
the suggestion. It is communication association with organization/
management.
d. Staff and Line Authorities: This is the combination of staff and line
organizations. There is a condition for focused activities/actions to be
undertaken by staff officers who perform in a consultative capacity
Factors Influencing Larger Span of Management

• Work done by subordinates is steady and routine.
• Subordinates carry out similar work responsibilities.
• Subordinates are determined in a sole location.
• Subordinates are extremely trained and require little course in
accomplishing tasks.
• Procedures and rules and defining job activities are accessible.
• Personnel and support systems are offered in order to benefit the managers.
• Modest time is needed in non-supervisory actions for example planning and
coordination in consultation with other departments.
• Personal preferences of managers and styles help a large duration.
The organizing task occurs constantly all through the life of firm. This task helps
management to set up accountability for the consequences achieved, and it reduces
“Buck-Passing” and perplexity as to who is accountable and it fine points the degree
and nature of authority that is specified to each person as the actions of the
organization are accomplished.
This task is especially important in today’s business environment in which many
firms are frequently restricting their operations. This restructuring may be the result
of efforts to improve efficiency reduce costs, or as the result of a merger or
acquisition. The manager must develop an organizational structure before he or she
can implement the strategies needed to achieve the goals developed in the planning
task. Organizing involves
• To set up the structure of organization
• To determine the jobs to be completed.
• To define lines of responsibility and authority.
• To establish relations inside the organization.
Organizational Structure
An organizational structure means conducting different activities which are
necessary to achieve the aims and objectives of the organization (Pugh, 1990). It is
similar to view organization or its environment across the glass or perspective
(Jacobides, 2007).
Organizational structure in other words means allocation of responsibilities to
different entities for different functions and processes. It includes allocation of work
among branches, departments, workgroups and individuals.
Organizational structure has an effect on organizational activities in two immense
ways. Firstly, it gives the base on which routines and standard operating procedures
rest. Secondly, it ascertains which individuals should take part in which
administrative processes, and to what degree their views and opinions affect and
shape the actions of organization (Jacobides, 2007).
Organizational structure is framework of a company. It provides the beams, braces,

and supports to which the appropriate building materials are attached. Different jobs
are connected to different parts of the whole framework. It is the formal framework
by which jobs are grouped, coordinated, and further defined. Whether they are called
groups, departments, or teams, coordinated communication and cooperation between
work groups is essential. An organizational structure also helps clarify who has
authority of specific decisions.
As discussed by Mohr (1982), early theorists of organizational/managerial structure,
Fayol Taylor, and Weber "saw the importance of structure for effectiveness and
efficiency and assumed without the slightest question that whatever structure was
needed, people could fashion accordingly. Organizational structure was considered
a matter of choice. When in the 1930s, the rebellion began that came to be known as
human relations theory, there was still not a denial of the idea of structure as an
artifact, but rather an advocacy of the creation of a different sort of structure, one in
which the needs, knowledge, and opinions of employees might be given greater
recognition." However, an unusual view arose in the 1960s, telling that
organizational/managerial structure is "an externally caused phenomenon, an
outcome rather than an artifact".
The 21st century, organizational/managerial theorists such as Griffiths, Lim,
Sambrook (2010) advocate that development of organizational/managerial structure
is extremely dependent on appearance of behavior and strategies of the workers and
management as forced by distribution of power among them, and influenced by
means of their surroundings and outcome.
Organizational/managerial structure may not match with facts, evolving in prepared
action. Such divergence lessens performance, when growing. For example, an
incorrect organizational structure may hinder collaboration and thus hamper the
achievement of orders in anticipated time and within restrictions of budgets and
resources. Organizational structure should be adaptive to procedure requirements,
focusing to maximize the ratio of attempt and as well as input to output.
2.3.2.1. Types of Organizational/Managerial Structure
• Functional Organizational Structure
Functional organizational structure is made up of activities like supervision,
coordination and task allocation. It determines how organization performs or
operates or indirectly it means that it directly or indirectly affects efficiency of any
firm. The term organizational structure stands for grouping the people in different
task groups and then allocating authority responsibility nexus i.e. whom they will be
reporting. A good way to organize people into such groups is by purpose. Majority
of functions in an organization include production, human resources, finance,
accounting and marketing.
The process of grouping people keeping in view their specialization guides to
operational competence and efficiency where employees turn out to be specialists
inside their own field of expertise. However, an ordinary issue with functional
organization structure is communication inside the company can be somewhat rigid
which turns into making organization inflexible and slow. So communication among
functions becomes extremely significant. It is necessary for disseminating
information, not only in a vertical manner, but also horizontally within the
organization. This problem in communication can also be due to standardized
methods of operation and elevated level of formalization.
Functional organization is best suited to those producers who produce standardized
products and services in volume and at cheaper cost. Specialization and coordination
of tasks are essential to functional structure, which makes it complex to make limited
quantity of produce and services in a predictable and efficient manner. Efficiencies
and competencies can further be understood clearly as integration of actions proceeds
and as a consequence products are developed and sold in a fast manner and at cheaper
cost. For example, a small business can make components which are generally used
in production process alternatively purchasing them from others.
Functional organizations generally perform with an elevated level of competence.
These groups may see complexity working among each other as they may be
territorial in nature and reluctant to cooperate. This kind of situation may cause
defers, reduced promise due to wellbeing of the organization and worn out time,
make projects fall behind the schedule time. This eventually can fetch down
productivity levels and commitment of employees towards accomplishing objectives
and goals of organization.
• Divisional Structure
Product structure or divisional structure is an arrangement of a firm, which strains
down the firm into divisions that are self-reliant. The division is independent and
made up of a set of functions which are followed in the daily business operations of
the division. It commonly uses a plan to work and operate as an independent separate
business entity.
Workers, who are in charge for various market products or services, are positioned
in divisional structure to enhance their flexibility. The process is classified into
geographic (e.g., an Asian division & Australian division), and product/services for
diverse consumers (e.g., individual or company households). It can further be
understood as an agribusiness firm having different divisions like beverages, dairy
products, meat etc. This division may have their possession of departments such as
marketing, human resources, sales, and engineering and finance.
The benefit of this kind of organization structure is that it utilizes delegated power
and as a result the performance and efficiency can be directly calculated with each
group. This creates the improved performance of managers and high morale. One
more benefit of to use divisional structure is that it is much efficient in organizing
work among different divisions, and at hand is more elastic/flexible to react when
there is an abrupt change in market conditions. A company is also having a similar
process if it requires changing the size of business either to add or remove divisions.
Once divisional structure is functional it generates more specialization inside the
groups and when it is effectively organized, the consumers get benefits due to
specialized products and services offered to them. While using divisional structure
that are organized and utilized by either geographic areas or markets, these usually
have similar purpose and are situated in various regions or markets. This improves
the coordination of business activities and decisions at local/domestic level.
The shortcoming of divisional structure is that it can generate unhealthy conflicts
among divisions. This kind of structure can also enhance costs since officials may
request more capable managers for each division. There is usually additional
emphasis on divisional organization goals and objectives which results in repetition
of efforts and resources like facilities, staff services and personnel.
• Matrix Structure
Matrix structure is a type of organizational structure where employees are grouped
as a result of both products and functions. This type of structure can mix best features
of both organizational structures stated earlier. The matrix organization often uses
teams of workers to complete work. This enables them to get advantage of strengths,
as well as the weaknesses of decentralized and functional forms. A typical example
would be a company that manufactures two products seed and fertilizers. By using
matrix structure, this type of company would categorize functions inside the
company as indicates: seed sales department, seed client service department, seed
accounting, fertilizer sales department, fertilizer client service department, fertilizer
accounting department.
Management of matrix is more vibrant than functional management in that it is a
mixture of all other structures and allows different team members to share the
information more willingly across work boundaries. It allows for more specialization
which can enhance depth of understanding in a specific segment or sector. Matrix
structure has advantages and disadvantages. Main disadvantages include difficulties
in the chain of authority. This happens because of differentiation among project
managers and functional managers, which might be perplexing for workers to
recognize who is after that in the chain of authority. One more shortcoming of matrix
structure is superior manager to employee ratio that consequently results in
conflicting loyalties of workers. Matrix structure has some important benefits that
make it important for firms to use. It also makes it possible for specialize which can
enhance quality of information and makes it possible for individuals to be chosen
according to requirements of project. This association between persons/individuals
and project requirements gives the concept of minimizing weak points/weaknesses
and maximizing strong points/strengths. The organization chart of Nestle, Pakistan
shows the formal organizational structure of a company. It helps capture some
important ideas including division of labor, chain of command, bureaucracy, and
organizational design.
The division of labor is the manner in which jobs are divided into components and
then are assigned to members or groups. The objective is to accomplish more than
one group or different individuals who can successfully and efficiently accomplish
alone by delegating specific smaller tasks. Chain of Command is illustrated in Figure
2.4 in organizational structure by the authority-responsibility relationships or links
between managers and those they supervise. This continuum exists throughout the
company. The chain of command should be clear so employees know to whom they
report and are accountable.
Bureaucracy is a word that has many negative connotations in today’s vermicular;

however, bureaucracy was developed as a highly specialized organization structure
in which work is divided into specific categories and carried out by special
departments. A strict set of guidelines determines the course of activities to ensure
predictability and eliminate risk. A bureaucracy is a tightly run, unyielding
organizational structure. This organizational structure does work well for some types
of businesses. But, given agriculture’s unique characteristics and the variability and
unpredictability of the weather and other uncontrollable circumstances, many food
and agribusiness do not operate under this form of organizational structure.
Fig. 2.4 Organizational Structure of Agribusiness Firm
2.3.3. Staffing/Recruitment
After the structural design of organization is in place, it requires people with right
knowledge, abilities and skills in order to fill in that structure. People are most
important resource of any organization, since people create or weaken reputation of
organization for excellence in both products and services. In spite of this, an
organization must react to alter effectively to stay competitive. The appropriate staff
can carry an organization throughout a period of change and makes sure its future
accomplishments. Since significance of hiring and maintaining competent and
committed workforce is the criteria for success, effective management of human
resources is vital to the accomplishment of all organizational objectives.
Staffing is a management function dedicated to hiring, appraising, training and

compensating workers. As all managers are also human resource managers, though
human resource experts may execute some of these activities/actions in larger
organizations. Concrete staffing practices can shape the workforce of company into
a committed and motivated team talented to manage change efficiently and to achieve
the objectives of organizations (Heneman and Judge, 2005).
Each manager should know the following three philosophies and principles;
• All managers must be human resource managers
• Workers are more vital assets than equipment or buildings; better
employees give a competitive edge to the company.
• Managing human resources is a harmonizing process; it must match the
requirements of organization with the requirements of workers.
Importance of staffing is as under;
• Filling the positions of an organization
• Developing capabilities to face challenges
• Retaining employees - professionalism
• Making best possible use of human resources
Nature of Staffing Function
i. Staffing is the most significant managerial function- Staffing function is
main and vital managerial work along with organizing, planning, directing
and controlling. The operations of the above mentioned functions depend
on the workforce which is accessible throughout staffing function.
ii. Staffing is a persistent activity- Staffing function is performed by all
mangers and in all kinds of concerns where business activities are
performed.
iii. Staffing is a nonstop activity- As staffing function continues all through
the life of a firm due to promotions and transfers that take place in different
departments.
iv. Basis of staffing function is management of personnel efficiently
– Management of human resources can be made more effective by a proper
procedure or system, that is, selection, recruitment, placement, research
training & development, giving remuneration, etc.
v. Staffing make it possible to place right men for right job. It can be
completed efficiently with the help of suitable recruitment measures and
methods and then lastly to select the most appropriate candidate as per the
job needs.
vi. Staffing is done by all managers-keeping in mind the size of the company,
nature of business, qualifications and expertise of managers, etc. All most
in small companies, the higher level management usually performs this kind
of function. In small & medium scale venture, it is done principally by
personnel department of that concern.
Process of Staffing
The following tasks are accomplished by the agribusiness manager in staffing

process;
i. Analyzing workforce requirements: It is building an analysis of job and
to estimate the workforce requirement to complete the same.
ii. Recruitment: It is attracting and identifying competent applicants for
vacant positions. This process ends with the submission of applications by
the aspirants.
iii. Selection: This is to choose the appropriate candidates from the
applications received in the course of action of recruitment.
iv. Placement: This is a probationary period and on successfully achievement
of the same, the candidate may be offered permanent job.
v. Training and development: It is usually concerned to impart and develop
specific skills and expertise for a particular purpose and objective.
vi. Performance appraisal: This is evaluation of personnel systematically by
seniors or others well-known experts based on their productivity so as to
rank workers to ascertain their eligibility requirements for promotions.
2.3.4. Directing
Directing is issuing guidelines, instructions, counseling, leading and motivating to
the staff in an organization for performing work to complete organizational goals.
Directing is an important managerial function which is performed by managers along
with planning, controlling and staffing. Directing is usually a continuous process
started at top level and flows to the foundation through the hierarchy of an
organization. The function of directing is the base of management process and
completion of goals depends on this. Directing is guiding the efforts of others for
achieving a common goal. It is accomplished by;
• Selecting, allocating and training personal
• Staffing positions
• Assigning duties and responsibilities
• Establishing the results to be achieved
• Creating the desire for achievement
• Supervising that the work is done and done in a better way
2.3.4.1. Benefits of Directing
A number of benefits are provided to a firm because giving direction is the essential
point of an organization and are as follows;
i. Directing initiates activities: Giving directions is the foundation of the
subordinate’s carrying out of their work. Actions start right from this
function onward as the workers learn their works and perform under proper
instructions and guidelines that are given to them. Plans which are
formulated can be carried out simply after the real job begins and it is only
then that the course turns out to be supportive.
ii. Directing integrates efforts: The seniors are able to direct, inspire and
instruct the workers to perform only by directing. To accomplish this, every
person desires to work hard in order to complete the goals and objectives of
an organization. Efforts of every department can be streamlined with other
departments in the presence of proper direction. This can be done through
powerful leadership and effective communication.
iii. Directing generally is a means of motivation: The directing function aids
in accomplishing all the goals efficiently. A manager utilizes this motivation
aspect effectively in order to improve the performance of employees in an
organization. This can easily be achieved by giving better rewards or
salaries and this in turn makes it possible to assist as a sort of ‘’Morale
Enhancer’’ for the workers in organization. The workers can perform their
best through efficient motivation and this makes it possible to aid in the
eventual growth of an organization.
iv. Directing provides constancy: Constancy and balance of an organization
is very important to survive in the market in the long run. The managers can
attain this efficiently by using four essentials or tools of direction, carefully
blending powerful leadership skills and capabilities, clever communication,
a solid command and also an efficient motivation. Constancy is very
essential as it is a sign of the expansion of an enterprise.
v. Directing allows coping with the changes: It is usual for humans to
oppose any changes that are brought in a firm. However, to develop into a
leader in the market place, it is vital to able to get used to oneself to the
dynamic environment which in turn helps in supporting designed growth of
a firm. The task of direction is essential for meeting the latest challenges in
a dynamic environment, both externally and internally. The modifications
in an environment can be regulated easily through efficient communication.
The role of manager is to efficiently communicate all the nature and
contents of new changes explicitly to the workers.
vi. Directing aids in proficient use of resources: The appropriate direction
about resources use helps in defining the responsibilities and roles of all the
workers towards their own job. Proper use of resources can be efficiently
done only when there is no repetition of any labors, no consumption
overlapping and overlapping of efforts and so on. The roles of workers
become distinct only through correct direction as the manager utilizes his
guiding, instructions and controlling skills and abilities to motivate and
inspire all his subordinates in an organization. This helps in the judicious
usage of resources regarding materials, humans, finance, machines and this
further helps in the reducing cost and enhancing the profits of an
organization.
2.3.4.2. Elements of Directing
Directing concerns the whole method in which managers affect the actions of their
subordinates. The process of directing function involves the following four elements;
i. Supervision: This refers to the guidance and control of subordinates in the
performance of their tasks. Supervision is an important part of direction
function of management. Supervision assures that the work is being done in
accordance with the plans and instructions. It helps the subordinates in

solving their work-related problems. Effective supervision ensures greater
output of high quality. It assists subordinates the way their tasks are to be
performed.
ii. Motivation: This is an act of stimulating individuals to get a desired course
of action. Motivation activates individuals’ action for the achievement of
organizational goals. Motivation in other words means to stimulate for a
certain act. Higher motivation leads to job satisfaction of employees and
makes them committed to the organization. It energizes individuals to work
more. A successful manager can motivate employees properly to work
harmoniously for the attainment of organizational goals. A manager
motivates subordinates to follow his instructions and work accordingly in
the given directions.
iii. Leadership: This is an important element of the directing process (i.e., to
lead and guide the activities of subordinates). Leadership is the course of
action of influencing the activities and attitudes of subordinates to perform
willingly for the achievement of the organizational goal. Managers, at all
levels, act as leaders because they have subordinates who follow them. The
victory of an organization depends to a larger extent having quality of
leadership. A successful leader can influence people to act willingly with
confidence and zeal for mutual benefits. A leader guides and educates his
subordinates the way of doing a given job. In the past, leadership was treated
as simply a part of management, but today firms view management and
leadership differently. The manager’s duties include efforts to perform the
various management task and functions, where as a leader influences the
attitude and behavior of followers and motivates them to do their best work.
iv. Communication: This is an act of conveying information from one person
to another. Communication refers to the exchange of ideas, feeling,
emotions, knowledge and information between two or more persons.
Communication is an important element of directing process. A manager
tells his subordinates what to do, how to do and when to do. He issues orders
and instructions to his subordinates regarding the work being performed by
them. He guides and educates subordinates the way of performing a given
job. This is achieved by the process of communication. The success of
business depends upon the effectiveness of communication.
Communication facilitates directing function by providing proper
interaction between managers and their subordinates. It improves superior-
subordinate relationship by providing opportunities to employees to express
their opinions and viewpoints.
2.3.5. Controlling
Controlling is the managerial functions e.g., planning, organizing, staffing and
directing. It is a significant function since it helps to pinpoint the errors and to make
corrective action so that divergence from standards are reduced and stated goals and
objectives of the organization are accomplished in a planned manner. According to
present concepts, controlling is a foreseeing act whereas before concept of
controlling was only used in situation when errors and flaws were detected. Control
function in management requires setting standards, to measure actual performance
and to take remedial action.
Fayol (1949) defined controlling as “control of an undertaking consists of seeing that
everything is being carried out in accordance with the plan which has been adopted,
the orders which have been given, and the principles which have been laid down. Its
objective is to point out mistakes in order that they may be rectified and prevented
from recurring”. Mockler (1970) defined decision-making control as “management
control is defined as an effort by business organization to compare actual
performance to predetermined plans, objectives or standards in order to establish
whether performance is good with the set standards and most probably in order to
take a corrective action needed to see that individual and other company resources
are being utilized in the most efficient and proficient ways likely in achieving
company objectives”.
2.3.5.1. Characteristics of Controlling
The major characteristics of controlling function are described below:
i. It is a constant and managing process
ii. It is entrenched in each level of hierarchy of an organization
iii. It is onward looking and very much linked with preparation of a plan
iv. It is a device in order to complete organizational activities
v. It compares and contrast actual performance with planned one
vi. It highlights the errors and flaws in the carrying out process
vii. It aids in reducing cost and achieving standards
viii. It helps preserving the time
2.3.5.2. Controlling Process
Controlling process is basically a set of steps that manager utilizes to determine
whether goals of an organization have been accomplished. The controlling process
includes:
i. Establishing standards to gauge performance
ii. Measuring actual performance
iii. Comparing and contrasting performance with the set standards
iv. Taking remedial actions
Establishing or setting standards- the first step of controlling is to set
standard against which results can be measured. For setting standards,
targeted results must be identified and it should be quantitative as far as
possible. Standards are expressed in general term as;
• Cost should be reduced
• Orders should be executed
• Overhead must be reduced
• All orders must be executed in given time
Standards can be expressed in quantitative as well as qualitative terms. The

quantitative terms are physical standard, cost and revenue standards, capital
standards etc. whereas the qualitative standards are related to employees’
morale, motivation, relations between superior and subordinates and public etc.
Measuring actual performance- in this step, actual performance of
employees, group or units is measured. A manager should examine actual
performance on the basis of given standard which is definite set of work
assigned to definite employees. Different techniques can be used to measure
the actual performance. In convenience of manager, he develops better
information system to measure the actual performance. Actual performance
measurement system should be a regular and constant basis so that it can
provide reliable and regular feedback to the management.
Comparing actual performance with standard- after measuring actual
performance, those results should be compared with standard set in the first
step to know if the expected results are achieved or not. For that, good
system of comparison between performance and standard should be
maintained. These comparisons should answer that whether the actual
performance is equal, lower or higher than that of predetermined standards.
If lower standards are achieved the manager should find out the deviation
and take corrective action.
Taking corrective actions- after comparing actual performance with the
standards, if any deviation is detected, and then corrective actions should be
taken and initiated. If performance does not meet the standard, it is duty of
manager to take corrective action and further help the organization to
overcome any difficulty. The corrective action may be related to;
• Revision of standards if they seem to be unattainable
• Revision of strategies, policies and procedures
• Additional employees training
• Greater motivation
• Change in the existing techniques of direction
• Product design improvement
The controlling task represents the monitoring and evaluation of activities. To
evaluate the activities, managers should measure the performance and compare it
with the standards and expectations they set. In essence, the controlling task assesses
whether the goals and performance objectives developed within the planning task are
achieved.
2.3.5.3. Importance of controlling
Execution of plans- helps in ensuring the performance of plans through regular
examination and evaluation of performance of work that results the performance of
activities for accomplishment of goals.
i. Helps in supervision- helps in reducing deviation between standard

performance and actual performance through effective control system
established by the supervisors.
ii. Effective delegation and decentralization of authority – it is to delegate and
decentralize the authority.
iii. Reduction of cost- when control is effective, employees will have better
performance, proper utilization of resources and prevention of leakage and
wastage which helps in reduction of cost.
iv. Psychological pressure- controlling affects the psychological pressure of
employees. When the employees know that their performance and activities
done will be evaluated, they naturally work hard and their performance is
increased.
v. Optimum utilization of resources- controlling plays a vital role for proper
utilization of human, physical, and financial resources to ensure correct
work performance with respect to cost, quality and time.
vi. Helps in fulfillment of goals- it provides standard for approval of actual
performance it helps to accomplish the plan and achieve goals.
vii. Helps in coordination- an organization grows in size and diversity, it
becomes complex and has various departments and units. Therefore,
controlling helps to establish the coordination in different department and
units.
2.4. Other Roles/Tasks of Agribusiness Manager

The manager must also develop and interpret programs, plans, policies, procedures
and practices within the organization. Every department, division or organization
must have a court of Last resort. Human nature is such that even those with the best
intentions may differ in their interpretations of facts, or information. In such cases, it
is the manager’s tasks to deliver this interpretation.
A manager should not hesitate to provide encouragement for more formalized
training in courses, workshops, seminars, educational meetings and the like. Formal
education can benefit both the organization and the employee. Application of this
technique acquaints the manager with the problems and personalities of employees.
Such contacts also enable the managers to develop and awareness of each employee’s
strengths and weaknesses. Some other roles of managers include;
2.5. Shaping the Work Climate

It is mainly through the ability to create a working climate which polishes employees’
efforts to the point where the employees approach their potential. Principles used to
make the better work environment include:
• Set an excellent example
• Conscientiously seek participation
• The goals and results- centered
• Give credit and blame as needed: credit must be publically and blame
privately
• Be fair, consistent and honest
• Motivate confidence and provide encouragement
Conclusion
Business managers in all disciplines of food and fiber production and marketing
system must be well informed about Principles of Agribusiness Management. These
principles elaborate vital information within the context of the changing world of
agribusiness and provide empirical tools that are imperative to achieve milestones in
efficient and effective agribusiness system. In order to be collaborative and
interactive, agribusiness managers must be competent and flexible. The authors
delineate managerial tasks step by step with clear focus on strategic planning and
direction of agribusiness management. In continuation with learning objectives, this
chapter highlights current business practices and trends of agribusiness. Timely and
provocative, these principles explore key topics affecting agribusiness system and
enhance entrepreneurial skills of agribusiness students.
Discussion Questions
Define management in your own words. What are the differences in the four
tasks of the management and the four functions of an agribusiness?
Pick any food or agribusiness firm in Pakistan. Compare this firm and the
market it serves to the list of distinctive features of the food and agribusiness
market. Which of these features seem to the most important for the firm you
have chosen?
How and why does planning change as one progresses up the organizational
ladder?
Describe the steps in the planning process. Using these steps, develop a plan
for obtaining a summer internship with a food or agribusiness firm.
What are the most important components of the agribusiness manager’s role
as director?
What are the advantages of using the management by exception approach
to control programs?
Assume that Fauji Fertilizer Company reported actual sale of 1.006 and
1.083 thousand tonnes of May and June of the current year. Using these
data, add two months to the Fauji Fertilizer management by exception
graph. Interpret the deviations for these two months. What actions might be
suggested by these results?
Reread the mission statements made by our four agribusiness firms in this
chapter. What similarities do you see in their statements? What are the key
differences?
References
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Bairwa, S.L., A. Kalia and S. Kushwaha. 2014. Agribusiness management education:
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Research Publications 4:1-4.
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Chapter 2

Asif Maqbool and Adnan Adeel*

Managing editors: Iqrar Ahmad Khan and Muhammad Farooq

Keywords: Agribusiness, Planning, Organizing, Staffing, Directing, Controlling,

A company which is undertaking business transactions with growers/farmers also

2.2. Agribusiness Manager: Roles and Functions

2.3. Key Tasks of Agribusiness Manager

agribusiness requires the agribusiness manager to use the principles of management

Fig 2.1 Key Tasks of Agribusiness Manager

Fig. 2.2 Strategic Management Framework

Strategic planning has been denounced intended for attempting to standardize

Table 2.1 Examples of Firms’ Mission Statements

Nestle Pakistan, Ltd.

Shezan International Ltd.

Zarai Taraqiati Bank, Ltd. (ZTBL)

Values Key Strategic Issues Key Result Areas

Fig. 2.3 Types of Planning

In spite of their differences, strategic and tactical planning is integrally linked.

• Process for monitoring/surveillance progress

Table 2.2 Levels and Nature of Planning in the Agribusiness

2.3.1.3. Planning Process

Step 4: Set Goals/ Performance Objectives

Fig. 2.4 Planning Process

Factors Influencing Larger Span of Management

Organizational structure is framework of a company. It provides the beams, braces,

Bureaucracy is a word that has many negative connotations in today’s vermicular;

Fig. 2.4 Organizational Structure of Agribusiness Firm

Staffing is a management function dedicated to hiring, appraising, training and

The following tasks are accomplished by the agribusiness manager in staffing

accordance with the plans and instructions. It helps the subordinates in

Standards can be expressed in quantitative as well as qualitative terms. The

i. Helps in supervision- helps in reducing deviation between standard

2.4. Other Roles/Tasks of Agribusiness Manager

2.5. Shaping the Work Climate

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