Strategic planning as a differentiating factor in performance

Abstract

The purpose of the thesis is to assess the level of strategic planning that farm managers utilize within their business and determine if it is a factor of performance. Through the use of an interview questionnaire, combined with current financial data, the study was conducted on an established client base from a banking institution. All of the participants are actively involved in primary production agriculture in Ontario, Canada. Significant variation identified through the development of a planning index, confirmed that manager’s use planning in their farm businesses. The primary goal of determining the relationship between planning and farm profits, measured through Net Income, is positive. Further to this, farmers seek profit maximization and efficiency through planning. Factors affecting planning most notably include the manager’s age—indicating the role of experience in influencing planning—and the number of people involved in the operation. The results of this research provide input into increasing bankers’ understanding of how farmers plan and how to help them make stronger connections between their production planning effort and their financial planning efforts.