This is an incredibly exciting time to be involved in the food and agribusiness industries. International markets are an inseparable reality for agribusiness managers. Information technology and the Internet make entirely new models for conducting business both possible and practical. Biotechnological developments raise exciting and challenging business and policy issues. Consumer preferences for locally produced food have created exciting new business opportunities. Relationships among players in this system have continued to evolve and, as a result, the food production and marketing system is far more complex and interrelated today than it was a mere decade ago. Add to this the challenge of feeding an estimated nine billion people on earth by 2050—and agriculture and agribusiness will continue to be a dynamic, exciting industry over the coming decades!
This rapidly changing, highly volatile, international, high-technology, consumer-focused world is the one in which today’s food and agribusiness managers operate. This edition of Agribusiness Management was written to help prepare students and managers for a successful career in this new world of food, feed, energy, and fiber production and marketing.
The basic objective of this text has not changed through five editions: to provide students and managers with a fundamental understanding of the key concepts needed to successfully manage businesses adding value to farm products and/or providing inputs to production agriculture. While there are many concepts in this book that will apply to the farm or production agriculture business, the text is focused on the food and input supply sectors of the food production and marketing system.
This edition of Agribusiness Management uses four specific approaches to help readers develop and enhance their capabilities as agribusiness managers. First, this edition of the book offers a contemporary focus that reflects the issues that food and agribusiness managers face today and will likely face tomorrow. Specifically, food sector firms and larger agribusiness firms receive more attention in this edition, reflecting their increasing importance as employers of food and agribusiness program graduates. Second, the book presents conceptual material in a pragmatic way with illustrations and examples that will help the reader understand how a specific concept works in practice. Third, the book has a decision-making emphasis, providing contemporary tools that readers will find useful when making decisions in the contemporary business environment. Finally, Agribusiness Management offers a pertinent set of discussion questions and case studies that will allow the reader to apply the material covered in real-world situations.
More specifically, the opening section of the text has been updated to help students better understand the food and agribusiness marketplace, as well as management and basic economic principles. The second section includes chapters on forms of business organization and international agribusiness management, which is an area no contemporary book on agribusiness can ignore. In the third section, we start our discussion on the four functional areas of management—marketing, finance, supply chain, and human resources. Ultimately, all business activity revolves around the customer, and the text reflects this customer-oriented philosophy. The marketing management section has been substantially revised to reflect the current thinking in this area. The finance section also received an update, and includes chapters on financial reporting and analysis, with increased emphasis on credit analysis and management. The fifth section, supply chain management, was updated to reflect the current thinking in this area. Finally, the human resource section was rewritten, again to reflect what we now know about managing people.
Preparing for a new food and agribusiness market requires application of concepts and tools to current situations. This edition of Agribusiness Management ends every chapter with discussion questions that are either new or have been revised for this text. Also included are cases that cover a variety of situations and types of firms. We feel you will find this mix of cases to be a distinguishing feature of the book.
The bottom line on this fifth edition of Agribusiness Management: this book is contemporary, solid on the fundamentals, practical, and applicable. It provides students and adult learners with an essential understanding of what it takes to be a successful agribusiness manager in today’s rapidly evolving, highly unpredictable marketplace.
Agribusiness Management was written for students. There are tremendous career opportunities in the food and agribusiness industries. In this book, you will be exposed first to the breadth of these opportunities, from research and development manager for a biotech company, to a logistics manager for a major food retail organization. You need to understand the marketplace and some of the unique institutional features of the food production and marketing system before embarking on a career as an agribusiness manager. Preparing for a career in agribusiness management also requires that you understand the fundamentals of management—the basic tasks of planning, organizing, directing, and controlling, and the basic functions of marketing, finance, supply chain, and human resource management. In this book you will find all of these topics covered in a straightforward way. We hope the many food and agribusiness examples and case studies bring these concepts to life for you. This is a book you will continue to use as a reference as your managerial career unfolds.
Agribusiness Management was written for managers and soon-to-be managers who are already in the workforce. We have had the opportunity over the past 30 years to work with literally thousands of managers through the activities of the Center for Food and Agricultural Business at Purdue University. Most of the case studies and examples in this book come from these industry relationships and interactions. As the business environment changes, and as people assume new responsibilities, we see a need to retool in areas that individuals have not recently been applying in their job. For example, the production manager in a food-processing firm who has been asked to serve on a task force focused on helping the firm become more customer oriented may need a “refresher” in marketing management. These individuals (and corporate learning and development directors and training managers) will find this book useful in sharpening their skill set.
Agribusiness Management was written for instructors. Over time, we have found that every instructor has his or her own take on what an agribusiness management course should look like. Some are introductory courses, others have more of a capstone orientation. Some of these courses are part of an entire curriculum in agribusiness management. In other cases, a program may offer only a course or two in the agribusiness area. The organization of this book is structured in a way that instructors will find convenient when developing their course, wherever that course fits in the program’s overall curriculum.
An instructor could easily use the material in this edition over a single semester, or over a two-semester or three-quarter course, covering each topic in more detail. Some instructors will find that moving through the book from start to finish sequentially as part of a one-semester course makes the most sense. Others may drop chapters on specialized topics like international business or human resource management, because these topics are covered in other courses. For an advanced course, the book has plenty of rigor. Supplemented with outside case studies, this is an excellent text for a capstone-type course where the material here would be covered more quickly, with more time spent on some of the more advanced ideas. The new and updated cases and the discussion questions will be of value to all instructors as they serve the needs of students hungry for applications and illustrations of the concepts and tools covered in the book.
In Part 1, Scope, functions, and tasks, we focus on the food and agribusiness industries and the role of the agribusiness manager. In addition, a set of economic concepts of fundamental importance to agribusiness managers is covered. Part 1 exposes readers to the tremendous variety of firms that comprise the food production and marketing system. The core focus of this book is the four functional areas of management—marketing, finance, supply chain, and human resources. Readers will better understand the role that managers of food and agribusiness firms play as they execute the four tasks of management—planning, organizing, directing, and controlling.
Part 2, Organization and context, leads readers toward better understanding the context or environment in which agribusiness managers operate by taking them inside the different forms of business organization, including cooperatives, given their prominence in the food and agribusiness markets. This section also provides a glimpse into the issues an agribusiness manager must face when doing business outside of the United States. The challenges of serving international markets, of sourcing raw materials from international locations, and of competing with international firms have all emerged as key issues in the past decade. Looking to the future, this area promises to be even more important.
We begin our look at the four functional areas of management in Part 3 with Marketing management. This section covers the fundamental concepts and tools an agribusiness manager uses in identifying the target market, and taking the firm’s product-service-information offering to the market. The marketing mix—product, price, promotion, and place—is covered in some detail. In addition, important tools for making marketing decisions are discussed. All of this material is presented in the context of the strategic marketing planning framework.
Financial management is the focus of Part 4—starting with basic financial statements, and moving through financial ratios, financing the agribusiness and on to tools for making operating and capital investment decisions. This section addresses the fundamental elements of finance that any agribusiness manager should understand. A series of integrated examples, and clear explanations of key terms, will help you better understand the language and concepts of finance. More importantly, you will better understand how to use financial information when making managerial decisions.
Part 5 looks at supply chain management. This section takes you into areas such as production planning, total quality management, and logistics management. Production/operations and supply chain management in agribusiness firms have undergone a profound change over the past two decades. These two chapters will provide a fundamental understanding of the key elements in this important area.
Finally, in Part 6, Human resource management, we look at key issues involved in managing a firm’s people resources. First, we explore issues around organizational structure and leadership. Then we turn our attention to the personnel functions of hiring, training, evaluation, and compensation of employees. The final section—the issues surrounding the human resource area—are likely the most pressing of all to an agribusiness firm facing a rapidly changing operating environment.
This is an exciting time in the food and agribusiness marketplaces. It is also an exciting time to be preparing for or retooling for a career in these industries. We have tried to capture some of that excitement in Agribusiness Management. We hope that you find this book readable and interesting, challenging and pragmatic, and most of all helpful as you better prepare yourself or your students for successful careers in the food production and marketing system.