Chapter Outline
  • Functions of Management
  • Strategic Farm Management
  • Tactical Decision Making
  • Characteristics of Decisions
  • The Decision-Making Environment in 
    Agriculture
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              Chapter Objectives
    1. To understand the functions of management
    2. To present the steps in developing a strategic 
       management plan for a farm or ranch
    3. To identify common goals of farm and ranch 
       managers, and to explain the steps in the 
       decision-making process
    4. To explain the steps in decision making
    5. To describe some unique characteristics of 
       the decision-making environment for 
       agriculture
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                                 Table 2-1
        Comparison of Low- and High-Profit Farms 
                                  in Iowa
       Item                            Highest Third    Lowest Third 
                                        (Average)         (Average) 
       Value of farm production          $334,981         $241,861
       Net farm income                   $90,800           $2,358
       Return on assets                   10.6%             -1.6%
       Crop acres farmed                    729              802
       Machinery value                   $166,212          $196,490
       Months of labor utilized            16.6              17.6
           Source:  2001 Iowa Farm Costs and Returns
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        Functions of Management
    • Planning
    • Implementation
    • Control
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                     Planning
    Planning means choosing a course of 
    action.
    To plan, a manager must establish 
    goals, identify resources, and allocate 
    the resources to competing uses.  
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