PR - Understanding Managerial Ability - Critical Factors And Their Improvement (p324-334)

Most farm managers primarily use intuition when making decisions with only a few managers formally analysing choices with extensive calculations. Furthermore, an assessment of national survey data shows there is a wide range of profit success and consequently managerial ability providing a rich source of information to assess the reasons for the differences in intuition. The real question is of course determining the conditions and factors which give rise to the development of successful managers with their valuable intuition. It then becomes possible to consider ways of improving ability. Any improvement is beneficial to both the nation and the individuals leading to increased efficiency with much the same resource input. Farmer training programmes are the most likely outcome, but the question is over the form they should take. The research reported in this paper determines these skill factors for a large sample of NZ farmers. The survey sought information on the farmers’ early life right through to their experiences as managers. It also gathered data on their personality, objectives, education and training, experiences as well as other demographic information and both financial and physical output. The information collected was used to develop a structural equation model of managerial ability providing information on the factors creating ability, and their degree of importance. Surprisingly farmers who had a strong desire to ‘enjoy farming as a way of life’ tended to have high ability. The results also showed inherent intelligence was not as important as might be expected contributing some 8% of ability, whereas, in stark contrast, ‘experience’ contributed some 67%. Other important factors included ‘management style’, an expression of a farmer’s personality in his approach to management, which explained 16% of ability, and interestingly enough, 9% of ability was apportioned to early parental influences. The survey also estimated farmer’s ‘locus of control’ being a measure of how much influence a farmer believed he had over outcomes relative to chance factors. This factor was correlated with some of the management style factors and also bore some relation to managerial skill. All these conclusions lead to the methods of improving a farmer’s ability. Clearly enhancing the lessons from experience will be important as they lead to a farmer creating successful intuition. The discussion in the paper explores how both intuition and the influence of the other factors can be improved. As part of this process the attributes of the most successful 30% of the 700 farmer sample were isolated and comparisons made. This data will also be presented.