Management Growth and M&A in Farm Management

Abstract

This study clarified the factors contributing to internal and external growth in agricultural corporations. In addition, this study examines whether M&A can be an effective method and the possibilities of its approaches. The results will be used to provide a basic finding on the direction of M&A.

This study investigated the following. First, this study reviewed an overview of management growth in general management studies to clarify the research position of M&A as an effective method of management growth. Second, previous studies on management growth in agricultural corporation management (e.g., management strategy, diversification, innovation, etc.) were reviewed. Third, using the results of a nationwide questionnaire survey of agricultural corporations, we analyzed the actual status and characteristics of the growth stage of each farming type. Finally, the direction of M&A in terms of future management growth is discussed.

Based on these analyses, the following three points were clarified. First, each management stage emphasizes different management objectives in rice and vegetable farms. Second, different business diversifications were developed at different management stages. In terms of diversification, both rice and vegetable farms were found to be diversifying into 2-4 categories. Many managements have developed businesses in “contract production” and “market shipment.” Third, despite the emphasis on “human resource management” in the growth strategy, the main impediment to innovation was the “lack of competent employees” as a disincentive. This result suggests the importance of human resource management.

Finally, M&A (including strategic alliances) was considered effective as a method for acquiring the necessary management resources (land, labor, capital, information, etc.).