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.