Abstract
In a given operating environment, small family businesses typically have fewer resources to minimize vulnerability. Identifying this exposure is basic to strategic analysis and, potentially, public policy analysis. This can become even more important when structural change in the environment is expected while its exact character is not known. The implications of climate change for Australian family farms are an example. This paper reports a study designed to analyse the vulnerability of dairy farms in Victoria, Australia. The study draws on production control (applied general systems) theory, value chains and image theory to capture comprehensively the lock-in arising from salient past decisions and impact on the current business structure and strategy. This is the path dependence that defines the constraints and associated options available to small family businesses. The authors identify benefits associated with the use of dynamic analysis of vulnerability over static analysis. Generalizable implications regarding analysis of vulnerability in small family businesses are offered.
Highlights
Identifying business vulnerability is a fundamental element of strategic analysis and, at times, public policy analysis
The implications of climate change for Australian family farms comprise a meaningful example of this given the nature of agriculture and high degree of vulnerability of these businesses
This paper describes research about the influences on vulnerability for these businesses, as well as the implications for strategic analysis and public policy that result from such vulnerability
Summary
Identifying business vulnerability is a fundamental element of strategic analysis and, at times, public policy analysis. This can become even more important when structural change in the environment is expected while its exact character is not known. Farm businesses are essentially factories without roofs in which the production system is reliant on, or exposed to, natural inputs (e.g., rainfall, heat, sunlight, pests and diseases). These businesses are commonly subject to vagaries in output prices and input access that are substantially beyond farmer control
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