The influence of values on strategic decision making: the case of farmers' choice of organic milk production

Little is known about the influence of farmers' values on their strategic decision-making. Profit maximization is assumed, but farmers' may have other values that influence their decision-making. The aim is to explore such influence of values using farmers' choice of organic milk production as a case. A value is defined as the goodness or badness of a condition, situation or thing. Values are neither attitudes nor goals, but these concepts are related. A value deals with what is desirable. An attitude is a readiness to respond in a particular way. A goal is a condition not yet established or attained, which some entity is trying to attain. A hypothetical model of the decision making process was developed based on a literature review and case studies. The hypothetical model was estimated with survey data, and structural equation modelling. The survey was sent out to 868 famers during the year 2000. The response rate was 56 %. The hypothetical model contains a complex system of directly and indirectly related concepts at a fairly high level of abstraction. These can only be measured indirectly, as latent variables, using several measurement variables such as attitudes (measured in Likert scales). The decision making process can be divided in several subprocesses, and to get the model manageable each subprocess was represented by a structural equation. The system of structural equations was estimated with path analysis and the Maximum Likelihood estimator using the LISREL computer program. Values seem to be intimately woven into the decision making process. However, to explain decisionmaking behaviour only by values or value structure is too simple as a solution. That would not give much information about how decisions really are made. Rather the decision making process in that case just would be reduced to a 'black box'. The decision model we have used in this study does include values; in the sense that values are present and important in all phases of the decision-making process in addition to other influencing factors. Personal and socially oriented characteristics seemed to play a more important role in the problem definition phase, in which the purpose is to find solution alternatives to the detected problem. Here the organic ideology-oriented values are significant in our case. The values may change over time because of changes in the life cycle phases, and then a farmer may regret and change a previous choice. The values structure affects choice of information sources (t=3.14), intensity in information search (t=2.15) as well as way of processing information (t=2.47), forecasting consequences (t=2.46) and evaluating consequences (t=2.78). The higher the problem was evaluated, the higher was the probability of implementing the choice (t=2.99). Profit maximization is important, but farmers have also other values, which influence their choices. Researchers, advisors and politicians should be aware of farmers' values (and other influencing factors) so they can understand and predict farmer behaviour and provide relevant information, service, support and policy measures.