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

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  • Morten Jakobsen

Abstract

Purpose - The purpose of the paper is to analyse how the intensive use of non-financial performance measures and the lack of an economic reality among Danish farmers have contributed to a low economic performance despite high productivity. The research ambition of the paper is to contribute to a better understanding of the managerial decision-making made by family business managers, in this case farmers, and how these decisions may impact financial performance. Design/methodology/approach - The study is based on a case study including farmers, agricultural consultants and bankers. The analysis uses pragmatic constructivism to analyse the economic reality of the farmers included and the business topos among Danish farmers. Findings - The main finding of the paper is that the dominating non-financial performance management techniques and a historically based strong emotional emphasis on size and production volume as the main success criteria for being a good farmer have led to a neglect of economic rationality. In addition, this practice has made the farmers blind to alternative possibilities for taking advantage of the resources available. The result has been an un-economic utopian reality. Originality/value - The paper shows how the use of non-financial performance measures can lead to prolonging of a certain reality perception that may not be economically sustainable. Small family businesses such as family farms are likely to be more exposed to such risk because such businesses are run by a set of values that include more objectives that are more dominating than the profit objective. The paper concludes that family business managers must be open towards inputs from the society around the business, because family businesses may have a tendency 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.

Suggested Citation

  • Morten Jakobsen, 2017. "Consequences of intensive use of non-financial performance measures in Danish family farm holdings," Qualitative Research in Accounting & Management, Emerald Group Publishing Limited, vol. 14(2), pages 137-156, June.
  • Handle: RePEc:eme:qrampp:qram-04-2016-0035
    DOI: 10.1108/QRAM-04-2016-0035
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    Citations

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    Cited by:

    1. Sebastiano Cupertino & Gianluca Vitale & Angelo Riccaboni, 2018. "L?impatto dei Big Data sulle attivit? di pianificazione & controllo aziendali: In caso di studio di una PMI agricola Italiana," MANAGEMENT CONTROL, FrancoAngeli Editore, vol. 2018(3), pages 59-86.
    2. Mauro, Sara Giovanna & Cinquini, Lino & Pianezzi, Daniela, 2021. "New Public Management between reality and illusion: Analysing the validity of performance-based budgeting," The British Accounting Review, Elsevier, vol. 53(6).
    3. Martin R. W. Hiebl & Martin Quinn & Justin B. Craig & Ken Moores, 2018. "Management control in family firms: a guest editorial," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(4), pages 377-381, February.
    4. Martin Quinn & Martin R. W. Hiebl & Ken Moores & Justin B. Craig, 2018. "Future research on management accounting and control in family firms: suggestions linked to architecture, governance, entrepreneurship and stewardship," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 28(4), pages 529-546, February.
    5. García-Cornejo, Beatriz & Pérez-Méndez, José A. & Wall, Alan & Castrillo Cachón, David, 2021. "Management accounting practices and performance in organic farms. The link to local development," Efficiency Series Papers 2021/08, University of Oviedo, Department of Economics, Oviedo Efficiency Group (OEG).

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