Sensemaking and financial management in the decision-making process of farmers

Michael Thomas Hayden, Ruth Mattimoe and Lisa Jack

Journal of Accounting & Organizational Change, 2021, vol. 18, issue 4, 529-552

Abstract: Purpose - The purpose of this paper is to contribute to a better understanding of the financial decision-making process of farmers and to highlight the potential role that improved farm financial management (FFM) could play in developing sustainable farm enterprises. Design/methodology/approach - This paper adopts a qualitative approach with 27 semi-structured interviews exploring farmers’ financial decision-making processes. Subsequently, the interview findings were presented to a focus group. Sensemaking theory is adopted as a theoretical lens to develop the empirical findings. Findings - The evidence highlights that FFM has a dual role to play in farmer decision-making. Some FFM activities may act as a cue, which triggers a sensebreaking activity, causing the farmer to enter a process of sensemaking whilst some/other FFM activities are drawn upon to provide a sensegiving role in the sensemaking process. The role of FFM in farmer decision-making is strongly influenced by the decision type (strategic or operational) being undertaken and the farm type (dairy, tillage or beef) in operation. Originality/value - The literature suggests that the majority of farmers spend little time on financial management. However, there are farmers who have quite a high level of engagement in FFM activities, when undertaking strategic farm expansion decisions. Those FFM activities help them to navigate through operational decision-making and to make sense of their strategic decision-making.

Keywords: Sensemaking; Agriculture; Farm financial management; Farmer decision-making; Strategic decision-making; Operational decision-making (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jaocpp:jaoc-11-2020-0186

DOI: 10.1108/JAOC-11-2020-0186

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