A resource based view of productivity, firm growth and technical management tools
a case study of Swedish large-scale farms
The past and ongoing structural change in Swedish agriculture has led to an increasing number of large-scale farms. The biological factors associated with large-scale farming operations may cause increasing variability, risk and reduced yields due to sub-optimal timing and management of field operations. The theory of economies of scale suggests that largescale production may benefit from lower costs due to scale efficiencies. Thus, large-scale farms may face cost reductions in terms of long term inputs factors, e.g. agricultural machinery. However, previous studies show that due to the complexity of farming operations including biological factors the timeliness costs may exceed the possible scale induced costs reductions in terms of machinery and labour. The relationship between farm size and efficiency, profitability and productivity has been extensively researched. However, the previous literature is indecisive in terms of this relationship, presenting various results. Some authors argue that empirical findings supporting economic benefits, in terms of efficiency, for large-scale farming are rare. Furthermore previous literature raises management as an important factor when examining the productivity and efficiency of growth in agricultural firms. Moreover some authors claim that management has not been included in many studies and that management might be a more important factor than technical efficiency. This study examines the relationship between productivity and farm size. Furthermore, management in terms of firm growth is reviewed. Finally this thesis reviews the use of information technology and precision agriculture tools to aid farm management, and how this can be used in large-scale farming operations. A mixed method case study is used in this thesis. The productivity is examined by the use of historical farm management data while interviews are conducted to gain a detailed understanding of management and the growth process of the case farms. The results are analysed with the resource-based view. This implies that the firms competitive advantages are reviewed based on the firms productive resource. The study reveals that there tends to be a negative correlation between farm size and productivity for the case farms, suggesting that farm growth decreases productivity. Moreover, management, administrative work and the employees of the firm have been identified as an important factors for firm growth, where as, machinery and labour is not decisive for productivity. The study has found that the use of information technology and precision agriculture tools do not explain differences in either productivity or costs of management and administrative work.