Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/163551
Authors: 
Chaddad, Fabio
Valentinov, Vladislav
Year of Publication: 
2017
Citation: 
[Journal:] International Food and Agribusiness Management Review [ISSN:] 1559-2448 [Volume:] 20 [Issue:] 2 [Pages:] 201-220
Abstract: 
Drawing inspiration from American institutionalism and new institutional economics, this paper discusses the rise of large corporate farms as the transition from the classic capitalist firm to the corporate form of organization based on the separation of ownership and control. Three case studies from the Brazilian cerrado show the rise of large corporate farms to be enabled and impelled by the advance of agricultural production technologies and the search for scale economies. The key finding from the case studies is that complex technology not only necessitates large-scale farming but also generates technical and organizational solutions to the potentially pervasive agency problems. In addition to the use of sound corporate governance practices, these solutions include organizational architecture encompassing computer-aided accounting and budgeting systems, incentive-based compensation, clear definition of performance goals, and delegation of operational decisions to farm managers. Furthermore, organizational architecture has been shown to promote a culture of trust and accountability, which counteract the opportunistic tendencies of farm managers and workers.
Subjects: 
corporate farms
separation of ownership and control
organizational architecture
corporate governance
JEL: 
D23
L22
Q13
Persistent Identifier of the first edition: 
URL of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by-nc-sa/4.0/
Document Type: 
Article

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