Reviewing Value Creation in Agriculture—A Conceptual Analysis and a New Framework

Vera Sadovska,Lena Ekelund Axelson,Cecilia Mark-Herbert

doi:10.3390/su12125021

Vera Sadovska, Lena Ekelund Axelson + Show 1 more

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https://doi.org/10.3390/su12125021

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Journal: Sustainability	Publication Date: Jun 19, 2020
Citations: 20	License type: CC BY 4.0

Affiliation: Swedish University of Agricultural Sciences

Abstract

Creation of business value is a major objective of any enterprise, but the way in which value is created and its consequences call for re-evaluation in response to current sustainability goals. The agricultural sector serves basic human needs, but its systems and methods for production, processing, and consumption often pose challenges to sustainable development. To address these challenges, this study consolidated value-creating factors identified in a systematic literature review into nine clusters: collaboration, communication, knowledge, production, diversification, entrepreneurism, funding, policies, and inclusiveness. These clusters were analyzed with a Triple Bottom Line framework where financial, environmental, and social dimensions are part of sustainable development. The analysis revealed that agricultural enterprises pursue business activities in a near-term perspective, with few having strategies for long-term activities such as innovativeness, knowledge acquisition, and collaboration with external stakeholders. These findings highlight the complexity in creation of sustainable business value and call for further investigation of how value is conceptualized in the agricultural sector. Re-thinking value creation in the sector should consider why value is created, for whom, the time perspective in which value is assessed, and the aspects given weight in the assessment.

Highlights

Value creation plays a central role for any business system and has been referred to as “the core purpose and central process of economic exchange” [1] and “a central concept in the management and organization literature” [2] (p. 180)
The interest was in a specific understanding of value in terms of business activities in the agricultural sector, and strict selection requirements were set for the initial pool of articles
The papers reviewed applied a variety of methodological approaches to data collection and analysis

Summary

Introduction

Value creation plays a central role for any business system and has been referred to as “the core purpose and central process of economic exchange” [1] and “a central concept in the management and organization literature” [2] (p. 180). The traditional understanding of value in a business context links suppliers, firms, and customers, defining value as customer willingness to pay minus suppliers’ opportunity costs [3,4,5] In this classical view, value capture through maximization of a firm’s net present value is the main objective of business activity [6,7,8]. The value concept has recently attracted a new wave of interest from economics and management scholars [2,14,15,16] It is described as something created along the vertical chain of suppliers, firms and buyers, and dependent on the individual characteristics of chain members [17]. Customer value is taken as the balance between the beneficial attributes of a product (e.g., experience, service, brand) and the price [18]

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