Decision making in horticultural firms

Abstract

Before looking at decision making in the horticultural firm in detail, it is desirable to briefly describe the types of decisions, that are made along with the nature of the environment within which the horticultural firm typically exists. Decision making in horticultural firms is characterised by a diversity of decision types which maybe categorised for convenience on the basis of time scales. In the long term, decisions need to be made concerning the legal form of the business structure, the crop plan choice, scale of operation and location of operation. In the medium term will be decisions concerning investment in equipment, machines and storage facilities. As a result of these medium and long term decisions, there is a requirement in the short term for decisions relating to crop production methods and husbandry matters (e.g. pest and disease control), labour, harvesting and marketing. Marketing policy may in fact be a medium term decision requiring short term decisions for its implementation. Set-out in Figure 1 is one version of an abbreviated decision making cycle (Rae, 1977). The horticultural firm, especially for small family operations, is characterised by a close relationship between the operations of the household and the firm. Both entities consume funds and labour resources and may be in conflict with one another. Horticultural firms maybe legally structured in several ways such as sole ownership, partnerships, companies or as a co-operative. While these forms of business structure determine responsibility for consequences of management decisions, they may not necessarily be an accurate reflection of who makes particular decisions. Having considered briefly the system of the horticultural firm and the types of decisions it is involved in making, we now briefly consider the environment within which the firm exists, as it will markedly influence decision making.