| dc.description.abstract | Commercial farming forms the backbone of food security in most countries and
specifically in South Africa. Moreover, it is evident that agriculture is still an important
source of employment in the South African economy. The agricultural industry
globally, but specifically in South Africa, is facing many influential factors over which
little or no control can be exerted. These influential factors or complexities have an
impact on sustainability of commercial farming operations. The sustainability of
commercial farming in South Africa requires a fresh look at available tools to steer
through uncertainty and instability. The internal management and business decisionmaking
processes of commercial farming operations should firstly be considered.
The importance of sound business decision-making was recently highlighted by the
joint venture between the Chartered Institute of Management Accountants (CIMA)
and the American Institute of CPAs (AICPA) in that quality decision-making has
never been more important – or more difficult. It is argued that management
accounting has a role to play in improving business conduct. This is equally relevant
for commercial farming operations. In 2014, CIMA and AICPA published the first set
of Global Management Accounting Principles (GMAPs) to provide guidance on best
practice for management accounting functions. GMAPs take the combination of
appropriately skilled people and four core principles, within a functioning
performance system, and apply it over fourteen (14) practice areas to describe what
a management accounting function should provide for sustainable success.
The main objective of this study was to evaluate the relevance of GMAPs in the
sustainability of a mechanised piggery in a South African context. The research
design, therefore, took the form of case study research with a combination of
exploratory and contextual applied research with an inductivist approach to
qualitative research. The object of the study is a commercial farming operation in South Africa that has a
focus on pork production, Piggery A. Piggery A is a sole proprietor type business
entity, managed and owned by Owner-A.
The study made use of the concept of business sustainability as a lens through
which GMAPs were evaluated in the case of Piggery A. CIMA and AICPA published
a diagnostic checklist to assist organisations in assessing the contribution that their
management accounting functions are making towards sustainable success. This
checklist formed the foundation of the evaluation of GMAPs in the sustainability of
Piggery A.
Data collection techniques included the observation of the farming operation during a
field visit, as well as a predetermined set of questions that were used within a semistructured
approach to face-to-face interviews.
The study found that, without pre-knowledge of GMAPs, Piggery A employed a large
number of the concepts and principles described by GMAPs as best practice.
Combined with the assessment that the farming operation itself was physically
sustainable, it could be concluded that GMAPs assisted with the sustainability of
Piggery A and the decision-making processes of Owner-A.
However, despite the strong presence of principles of GMAPs within Piggery A, it
was still decided to discontinue the pork production part of the commercial farming
operation, due to external factors beyond the control of Piggery A’s management.
This discovery brought about two questions that remain unanswered: firstly, whether
or not GMAPs could have assisted Owner-A with steering clear of this definitive
decision by providing the information more timely, with strategic options to turn the
profitability of Piggery A around; and secondly, whether or not GMAPs could have
informed the decision earlier on, with strategic alternative options to consider for
cash generating activities which could harness the infrastructure, already in place, to
avoid the prolonged period of internal losses.
Notwithstanding this, namely that GMAPs were found in practice in Piggery A, a sole
proprietor, supporting its sustainability, it could be generalised that GMAPs would be
applicable to more complex business forms such as companies, trusts or closed
corporations. It is therefore recommended, based on the finding of this study, that all commercial farming operations consider GMAPs as a tool to establish best practice
in the support of decision-making, which would promote sustainability of farming
operations | en_US |
