Managing for Success and Failure in a Small Agribusiness Firm

I am fearful that I may be evolving into the world's greatest skeptic. Sixteen years of work with small agribusiness firms has contributed much towards this gradually deteriorating mental state. At the young age of 25, I was a confirmed optimist and a staunch believer that the viability of our agricultural economy was dependent upon the entrepreneurial skills and practices of small agribusiness firms. At that time the basic infrastructure of businesses serving Northwest agriculture was comprised mostly of smaller enterprises. Each rural-based service community contained its locally owned and operated supply and/or marketing cooperative. Competition was evident in the form of numerous small independent companies offering such products/services as fertilizer, seed, feed, storage, hardware, and repairs. The only hint of a large corporate presence in the rural communities appeared in the form of petroleum and farm equipment sales, but even here, some local managerial control was afforded. How could one have predicted that the situation was to change? After sixteen years, I find that many local cooperatives have either ceased to exist or have been assimilated into the operations of a much larger regional organization. Similarly, the privately owned independent businesses are now either abandoned or operated as branches of large national corporate entities. One cannot and would not wish to turn back the clocks to a previous era. But as so many small agribusiness firms have disappeared, one does grow increasingly skeptical about the future of small agribusiness firms. As an observer of this phenomenon, I have seen basic patterns of managerial conduct which reoccur again and again, ultimately contributing to the small firm's demise. It is often too convenient to blame the trend on general economic conditions, competitive forces, or just bad luck or poor timing. But this convenience is based upon simplifications and a failure to identify root causes. When a small agribusiness firm survives for many years (or even decades) and then finally falls on hard times, the following observations can usually be made. First, a valuable core of managerial talent and expertise likely remains buried somewhere within the bowels of the struggling company. Second, small but persistent management inadequacies have gradually eroded the strength of the business, leaving it vulnerable to the demands of contemporary times.