Article

FARM AND NONFARM FAMILY BUSINESS PLANNING COMPARISON USING A QUALITY FRAMEWORK

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Abstract

An integrated quality management approach was used in comparing farm and nonfarm family businesses with less than one million dollars in gross revenues. Businesses with family employees performed more quality management practices than those without family employees. Profit was the primary farmer business goal while almost half of nonfarm owners reported a positive reputation with customers as the primary goal. Farmers do less product and employee management but determine numerical objectives more then do nonfarmers. Female owners performed more service and product management than did male owners. With higher business problems, owners performed more quality management practices. EXECUTIVE SUMMARY Taking an integrated quality management approach with family businesses grossing less than one million, farm and nonfarm businesses were compared. Those with family employees performed more quality management than those without family employees. Farmers reported profit as their primary business goal while nonfarmers reported a positive reputation with customers as their primary goal. Farmers did less product and employment management but determined numerical objectives more than did nonfarmers. Female owners reported higher levels of service and product management. Owners in education, health, finance and service businesses performed less quality management than did those in agriculture, construction, manufacturing businesses. With higher business problems, more quality management was performed. Based on a Sustainable Family Business Theory proposition, family dynamics were included as independent variables along with owner and business characteristics. Study findings indicated the presence of family employees, the number of generations, and owner's ideological orientation contributed to quality management variance, thus indicating the need to include family dynamics in future research. Doing so and investigating its impact on business performance in family businesses would further inform Kalleberg and Leicht's (1991) findings- that quality management in small businesses provided a competitive edge. Findings reflected the past emphasis of farm business educators and consultants on record keeping and financial analysis. With the growing competitiveness in the agricultural market, consultants and educators will need to take a more systemic approach to quality management to meet increasing consumer demands and to maintain a competitive edge. Such an approach will need to become standard practice in all family businesses rather than what kicks in when problems arise.

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The status of planning in small businesses
  • N A Ibrahim
  • J P Angelidis
  • F Parsa
Ibrahim, N.A., Angelidis, J.P. & Parsa, F. (2004). "The status of planning in small businesses," American Business Review, 22(2), 52-60.