Developing a Workable Approach to Agribusiness Management

1. Developing aWorkable Approach to Agribusiness Management Chapter 19

2. The Unifying Central Goal To maximize the long-term profits of the firm by profitably satisfying customers’ needs This goal ties together everythinga manager does Because business management is an art supported by science, the accomplishment of this goal is a never-ending task

3. The Manager Is a Ringmaster Four-ring circus • Revenues • Costs • Communication/information • People

4. The Two Golden Rules of Management Success • Treat your customers the way the customer wants to be treated • Be the kind of manager you would like to work for

5. The Golden Rules of Management Success A commitment to the golden rules of success will result in • fully satisfied customers • who will buy all they can from you • because your products completely fill their needs and give them great value • and your happy and productive employees always give them excellent service

6. Revenues • Goal is to maximize profits, not revenues • Must jointly manage revenues and costs • Start with monitoring the marketing plan and the marketing mix • Re-examine firm’s purpose and objective and compare it to the financial goals to see if all is compatible

7. Revenue ItemsTo Be Monitored • Changing Customer Needs • Expanding Market Areas • Changing Definition of Value • Degree of Competition • Keeping Customers Aware of Your Products • Changing Credit Policies

8. Cost Items To Be Monitored • Evaluating Effectiveness and Efficiency • Break-Even Analysis • Plant Size • Accounts Receivable

9. Communication/Information • Strong, open, two-way communication system with a free flow of information to all who need it • Communication system full of accurate, timely, and relevant information • Does the system give decision-makers the information they need to make decisions?

10. Communication/Information • Financial records are the highest priority information • The system must provide information on • Dollar Sales • Unit Sales • Costs • Technology • Market Conditions • Miscellaneous

11. People • Formal Monitoring • Exit Interviews • Turnover Rates • Formal Surveys • Formal Performance Evaluations • Informal Monitoring • Management by Walking Around • Catch People Doing Good

12. Discussion Questions • Identify the unifying theme of this book and explain how it ties together the four management functions. • Explain the golden rules of management success and how they help an agribusiness succeed. • Is it better for an agribusiness to focus on maximizing total revenue or minimizing total cost in order to increase profits? Explain the reasons for your answer.

13. Discussion Questions • Which is more important to business success—keeping customers happy or employees happy? Explain the reasons for your answer. • What is the difference between price and value to the customer? Which one is more important? Explain the reasons for your answer.

14. Discussion Questions • Explain what you think Steven Covey meant when he said there are three constants in the world: principles, choices, and change. How does this help an agribusiness manager be more successful? • What is the difference between product promotion and advertising? What is the best way to advertise your products and services? Explain your answers.

15. Discussion Questions • Why is it important to the long-term success of the business to always evaluate the effectiveness and efficiency of everything it does? • Accounts receivable are part of the firm’s sales. Why is it discussed as a cost in this chapter? • Explain how break-even analysis can help a manager make decisions on the profitability of products and areas for improved cost management.

16. Discussion Questions • Explain how monitoring the four areas of revenues, costs, communication/information, and people helps a manager to do a better job. What else should the manager monitor? Does the manager really operate like the ringmaster of a four-ring circus? Explain your answer.