Tourism Management 45 (2014) 201e210

Contents lists available at ScienceDirect

Tourism Management
journal homepage: www.elsevier.com/locate/tourman

Successful managerial behaviour for farm-based tourism: A functional

approach
Duk-Byeong Park a,1, Kyung-Rok Doh b, *, Kyung-Hee Kim b, 2
a
Department of Community Development, College of Industrial Science, Kongju National University, Daehak-ro 54, Yesan-gun, Chungnam 340-702,
Republic of Korea
b
Department of Rural Tourism, National Academy of Agricultural Science, Rural Development Administration, Suin-ro 126, Gwonseon-gu, Suwon,
Gyeonggi-do 441-707, Republic of Korea

h i g h l i g h t s

Farm-based tourism operators must cover a wide range of managerial sectors.

Functional approach regards managerial process as a set of functions with specific skill.

Managerial behaviours of farm operators consist with six categories.

Developing new products and promotion factor among managerial behaviours have significant influence on business performance.

a r t i c l e i n f o a b s t r a c t

Article history: Despite the overall growth of rural tourism, not all have benefited equally. This study reports research
Received 30 July 2013 designed to improve managerial performance in the rural tourism sector in Korea. Six areas are identified
Accepted 23 April 2014 as being important: product/service development, business planning and evaluation, promotions, human
Available online 21 May 2014
resource management, networking, and cost reduction. It was found managers in farm-based tourism
have primarily concentrated on product/service development, human resource management, and cost
Keywords:
reduction. Of these areas, only product/service development and promotions have exhibited a statisti-
Managerial behaviour
cally significant effect on real profits and on positive subjective evaluations of financial results. Based on
Tourism business
Farm tourism
these results, this study suggests that continuous investment in product/service development and pro-
Rural tourism motions should have positive effects on operations and result in increased competitiveness and viability
in the Korean farm tourism sector.
Ó 2014 Elsevier Ltd. All rights reserved.

1. Introduction quality of rural life and local development (Hjalager, 1996;

The necessity of regenerating the rural economy combined with
the needs for alternative tourism attractions has encouraged the
development of various tourism activities in rural areas (Do, 2010;
Page & Getz, 1997). In addition, inspired by success stories and
governmental support, rural entrepreneurs have accelerated the
diversification of agricultural business into tourism (Lordkipanidze,
Brezet, & Backman, 2005; Sharpley, 2002; Wilson, Fesenmaier,
Fesenmaier, & van Es, 2001). Tourism in rural areas is now
considered to be a significant growth engine for improving the
* Corresponding author. Tel.: þ82 31 290 0280.
E-mail addresses: parkdb84@kongju.ac.kr (D.-B. Park), roadtokr@korea.kr,
roadtokr@gmail.com (K.-R. Doh), khkim08@korea.kr (K.-H. Kim).
1
Tel.: þ82 41 330 1383, þ82 10 9276 4735 (mobile).
2
Tel.: þ82 31 290 0289.
Nickerson, Black, & McCool, 2001).
However, despite the current expansion of rural tourism, the
performance of tourism business in rural areas has not created
sufficient profits to lead to rural rehabilitation. For example, in the
United States, the number of farms engaged in recreational activ-
ities actually decreased from 28,016 in 2002 to 23,350 in 2007,
although there is currently growth in the rural tourism market in
the United States (USDA, 2009). Likewise, in Korea, many tourism
farms have run into deficits despite their growing numbers; more
than half of these farms have earned less than US$18,000 per year
(Yoon, 2010).
These statistics imply that a gap remains between the growth of
the rural tourism market and the success of individual farm-based
tourism businesses in rural areas. Although rural tourism has
developed over a long period of time, farm-based tourism busi-
nesses have remained small-scale enterprises with mixed

http://dx.doi.org/10.1016/j.tourman.2014.04.007
0261-5177/Ó 2014 Elsevier Ltd. All rights reserved.
202 D.-B. Park et al. / Tourism Management 45 (2014) 201e210
economic results (Ateljevic, 2007). Thus, rural tourism businesses
have not become feasible or particularly profitable. In fact, Reichel,
Lowengart, and Milman (2000) contend that many operators of
rural tourism business have failed to meet customer demands for
services because of their inadequate knowledge regarding service
management. Therefore, it might be that the failure to achieve
financial success is a reflection of the inefficiencies of individual
farm-based tourism enterprises (Fleischer & Pizam, 1997; Fleischer
& Tchetchik, 2005). Nevertheless, studies examining the rural
tourism business have paid little attention to explaining how to
manage rural tourism operations from a practical perspective.
Practical management processes and the influence of operational
characteristics on performance at the individual business level have
rarely been studied (Barbieri, 2013).
From this perspective, the complex contexts of rural tourism
businesses have raised interesting issues and questions concerning
the characteristics of successful rural tourism management (Comen
& Foster, 2006; Komppula, 2014; Reichel et al., 2000; Wilson et al.,
2001). Developing sustainable rural tourism business through
effective management should be investigated. In particular, re-
searchers in small business management and rural tourism busi-
ness have argued that rural tourism businesses are usually small,
family-run businesses e the success of which is highly dependent
on a single decision maker or owner-manager (Do, 2010; Feltham,
Feltham, & Barnett, 2005). The manager must typically operate
across a range of management functions (Sadler-Smith, Hampson,
Chaston, & Badger; 2003), and managerial distribution of limited
resources significantly affects the operations and viability of such
businesses (Getz & Carlsen, 2005). Thus, the managers’ practical
activities in operating tourism businesses are crucial elements of
the competitiveness and profitability of these businesses. Firm-
level studies that concentrate on the successful operation of small
tourism businesses in rural areas must be conducted.
In this study, an empirical investigation examining managerial
behaviour in farm-based tourism businesses and its influence on
business performance was conducted. Unlike previous studies
concerning rural tourism business management, the main pur-
pose of this study is to explain the practical and functional ac-
tivities of a small farm-based tourism business operation. In
addition, this study concentrates on what type of managerial ac-
tivities and what operational functions would be most helpful in
improving the viability and growth of such businesses. In partic-
ular, monitoring the managerial behaviour of operators in small
tourism enterprises should allow for an evaluation of the orga-
nisation’s success in achieving its own goals and provide the basis
for future decision-making and performance improvements
(Morrison & Teixeira, 2004; Noel & Breakey, 2008; Reichel &
Haber, 2005; Sadler-Smith et al., 2003). Through empirical
investigation, this study addresses effective ways of operating
tourism businesses in rural areas. Lastly, this study examines the
influence of managerial behaviour on small tourism businesses’
performance. Managerial behaviour and competence should pro-
vide a useful lens through which to understand and improve
business operation and viability. By suggesting how to distribute
limited resources to different functional areas in operation, thus
study may also help to enhance the competitiveness and sus-
tainability of businesses.
2. Literature review
2.1. Farm diversification and farm-based tourism businesses
Farm-based tourism businesses have grown because of the in-
terest in rural rehabilitation (Hjalager, 1996; Nickerson et al., 2001;
Sharpley & Vass, 2006). Sharpley and Vass (2006) focused on the
possibility that rural tourism businesses might serve as a supple-
mental income source for traditional agricultural production. The
authors addressed the transition of many traditional agricultural
businesses to a new model with diversified income streams. As a
supplemental enterprise, tourism might be helpful in maintaining
the farm and its environment. Thus, to stay in business, farmers
have been encouraged to diversify into various areas of entrepre-
neurial family-based business activities, including farm tourism (Di
Domenico & Miller, 2012; Sharpley & Vass, 2006). For farmers,
tourism has been considered to be a good opportunity for
improving their quality of life despite the severe downturns of
many rural economies (Pearce, 1990). By developing special at-
tractions and products based on an agricultural setting, certain
farmers have been able to enjoy supplemental income and pursue
hobbies (Sharpley & Vass, 2006; Walford, 2001). In addition, the
diversification of farm business has also increased the competi-
tiveness of their agricultural operations by adding value to their
products (Nickerson et al., 2001). To date, there are consistent re-
ports of an increase in farm diversification and farm-based tourism
businesses (Barbieri, 2013; Sharpley & Roberts, 2004; Su, 2011;
Yoon, 2010).
McGehee and Kim (2004) have argued that the boundary of
farm-based tourism would be delimited by being ‘on a working
farm’. The authors identified farm-based tourism attractions such
as farm accommodations, farm catering, and farming-related ac-
tivities. Likewise, Davies and Gilbert (1992) divided farm-based
tourism businesses in rural areas into three categories:
accommodation-based, activity-based, and daily-visit-based, with
the last including educational visitors or retail activities, such as
farmers markets. Of these different types of farm-based tourism, an
educational farm is an alternative farming enterprise. An educa-
tional farm may be defined as a business conducted by a farm
operator for the enjoyment and education of the public that pro-
motes products from the farm and thereby generates additional
farm income. The list of farm-based tourism activities continues to
grow and includes a variety of participant, educational, and spec-
tator experiences (Adam, 2004; Canavari, Huffaker, Mari, Regazzi, &
Spadoni, 2011; Wilson, Thilmany, & Sullins, 2006). By offering
natural and family-friendly programs, farm-based tourism has been
hailed as an opportunity for education, rest, and fun (Pearce, 1990).
In Korea, educational farm is a leading business category in rural
tourism market. In 2006, the Rural Development Administration
(RDA) of the Korean government started national-wide projects for
developing educational farms. The projects have created approxi-
mately 60 educational farms per year. Unlike other farm tourism
businesses focused on simple experiences, such as ‘pick-your-own’
farms, the educational farm was encouraged the development of
specific and organised education activities based on a school
curriculum.
2.2. Managerial behaviour in farm-based tourism businesses
Small-business management literature suggests that there are
certain unique characteristics of farm-based tourism businesses,
such as informality, secondary operation, and personalised moti-
vation (Doh & Lee, 2009; Getz & Calsen, 2005; Page & Getz, 1997;
Pearce, 1990). The facts indicate that such enterprises do not typi-
cally have long-term strategies or formalised control systems (Page,
Forer, & Lawton, 1999). Likewise, most studies on management
behaviour have insisted that small businesses typically do not
spend time and money on management development, and limited
resources of business information and knowledge have hampered
formal strategic planning (Ogunmokun, Shaw, & FitzRoy, 1999). As a
result, informality and improvisation in management activities
have often fostered unreasonable expectations, marginal decisions,
 D.-B. Park et al. / Tourism Management 45 (2014) 201e210
and unpredictable results (Carland, Hoy, & Carland, 1988; Slevin &
Covin, 1995). In particular, in rural and farm-based tourism, many
operators have experienced a variety of overlaps between business
and personal goals and between agricultural and tourism values
(Do, 2010; Fleichel & Pizam, 1997; Getz & Carlsen, 2005; Reichel
et al., 2000).
The context surrounding farm-based tourism operations has
inevitably increased the dependence of operational management
on a single top manager or decision maker (Do, 2010; Feltham
et al., 2005). Therefore, managers must possess the capability to
secure resources for business operations. In turn, the indepen-
dence of management decision making and the reliance on
managerial business skills might increase the level of guesswork
in the management process (Morrison, Rimmington, & Williams,
1999). As the scale and situation of small rural businesses
necessarily limits the amount of information about the environ-
ment available to the managers of such businesses, managerial
decision making has been more significantly shaped by personal
intuition and other idiosyncrasies of operators instead of more
sophisticated factual data and analysis (Do, 2010; Feltham et al.,
2005). Therefore, it is more likely that the decision-making
styles of owners are affected by personal attributes such as
values and beliefs, education, business experience, and the social
and informal networks in which owners participate (Coleman,
2007; Fletham et al., 2005; Premaratne, 2001). Such types of
management behaviour have had serious ramifications for the
day-to-day operations of small farm-based tourism businesses
(Beaver, Lashley, & Stewart, 1998).
In this context, managerial behaviour refers to a manager’s
preference in operational decision making (Covin & Slevin, 1988;
Sadler-Smith et al., 2003). Thus, managerial behaviour could also
be regarded as the profile of management activities connoting the
preferences of managers operating a business at a tactical level
(Doh & Lee, 2009; Gartner, 1988; Sadler-Smith et al., 2003; Slevin &
Covin, 1995). Discussing managerial dispositions, Frese, Gelderen,
and Ombach (2000) noted that people who know their environ-
ment sometimes blindly follow routine activities without making
explicit strategic choices (or even considering them). From this
perspective, managers of farm-based tourism businesses who have
abundant knowledge of farming and their environment would be
more likely to follow habitual management routines. Thus, mana-
gerial preferences may affect decisions at the level of investment in
farm-based tourism businesses as well as decisions regarding the
distribution of resources between agricultural and farm-based
tourism businesses. Furthermore, differently motivated owners or
managers in farm-based tourism might exhibit different cognitive
orientations and behaviour preferences (Carland et al., 1988) that
might affect business-planning activities (Carland, Carland, & Aby,
1989).
2.3. Functional approaches to managerial behaviours
Functional approaches are based on the argument that there
are specific transactions or activities that are involved in man-
aging a business (Ateljevic, 2007). Researchers following these
types of approaches have regarded managers as performers of a
set of functions who apply specific skills (Ateljevic, 2007). These
researchers have suggested that the process of managing a
business consists of different functions, including planning,
organising, leading, and controlling (Miller, Mcleod, & Oh, 2001).
Within this functional approach, managerial behaviour has been
examined as the basis of a job-competence framework, and this
approach has manifested itself in the identification of generic
management competencies (Sadler-Smith et al., 2003). The
identification of profiles about tactical behaviour and the
203
application of competence-based analysis for managerial work
have been regarded as useful descriptors of business strategy or
superior job performance (Kaplan, 1987; Sadler-Smith et al.,
2003; Slevin & Covin, 1995). Researchers believe that this profile
of managerial behaviours reveals the strong and weak points of
management performance as a cue for improving managerial
outcomes.
According to Sadler-Smith et al. (2003), attempts to analyse
and categorise the attributes of effective managerial behaviour
are derived from the work of Boyatzis (1982), who described job
competency as what an individual can do that is causally related
to effective and/or superior performance on a job. Since this time,
researchers have actually begun developing a standard for
desirable managerial behaviours. For example, the United King-
dom’s Management Charter Initiative (MCI) published a set of
standards for senior managers in 1995. The standards was
initially intended to educate senior managers of small business.
The nine (9) units of the performance standard include 1)
external trends; 2) internal strengths; 3) stakeholders; 4) strat-
egy and commitment; 5) programs, policies, and plans; 6) dele-
gation and action; 7) culture; 8) monitoring; and 9) evaluating
and improving (Sadler-Smith et al., 2003). Likewise, Slevin and
Covin (1995) also developed an instrument with 30 variables
and nine (9) categories on the process of explaining the effects of
entrepreneurial behaviours on the firm’s performance; the vari-
ables focused on numerous marketing, financial, and operational
issues. The nine (9) categories include 1) advertising, 2) efficiency
and quality concerns, 3) industry awareness, 4) product-related
issues, 5) planning-related activities, 6) customer support, 7)
long-term financial orientation, 8) external independence, and 9)
external financing (Slevin & Covin, 1995). In particular, Slevin and
Covin (1995) argued that firms’ strategies are implemented by
means of these tactical behaviours and that these competitive
tactics define individual business practice and the contents of
micro-level strategies. Furthermore, Slevin and Covin also argued
that this micro-level strategy would have various effects on the
firm’s performance (Slevin & Covin, 1995). Lastly, Sadler-Smith
et al. (2003) conducted an empirical investigation in relation to
this functional analysis of business behaviours. They developed
34 items with nine (9) categories from a practical standpoint
based on the portfolio of behaviours suggested by MCI and
identified seven (7) categories: 1) managing performance, 2)
entrepreneurial style, 3) managing process, 4) managing stake-
holders and environments, 5) managing culture, 6) managing
vision, and 7) managing development.
The application of this functional approach to the managerial
behaviour of farm-based tourism business operators suggests a
considerable number of issues to discuss. Most importantly, this
functional approach focuses on individual performance in the
operational process. Therefore, this approach is more suitable for
evaluating the roles of managers and their influence on the per-
formance of small businesses such as farm-based tourism busi-
nesses (Loan-Clarke, Boocock, Smith, & Whittacker, 2000). In
addition, a profile of managerial behaviour covers all sectors of
business operations. If managerial behaviour in farm-based tourism
businesses is considered to be broader and more diverse because of
its informality and variety of motivations, then this type of business
requires top managers to operate across the entire range of man-
agement (Sadler-Smith et al., 2003), and this broader consideration
of the functional approach would be a great tool for identifying
managers’ focus on operational processes and how they distribute
their resources.
According to Ateljevic (2007), an empirical study of the mana-
gerial behaviour of individual managers in small farm tourism
showed that the orientation of managers’ strategic approaches
204 D.-B. Park et al. / Tourism Management 45 (2014) 201e210
varies between sectors or firms of tourism activities. For small-
farm-based tourism business owners, product quality based on
product differentiation and value selling is widely regarded as a
core element of increasing competitiveness. Although personality,
ability to handle stress, communication skills, general politeness,
and other interpersonal skills appear to be important, weaknesses
have been identified in a number of key areas, such as planning,
marketing, human resource management, use of information
technology, and business networking.
Lastly, it must be noted that a high degree of informality does not
equate to a lack of managerial competence (Ateljevic, 2007). Actu-
ally, informal practice could be both advantageous and disadvan-
tageous to business performance (Getz & Carlsen, 2005; Peters &
Buhalis, 2004). A less formal approach to business management
might have the advantage of allowing and encouraging flexibility
and the ability to react quickly to the needs of the business, although
it might also result in suboptimal business performance (Peters &
Buhalis, 2004). Even with a short-term vision of operations, some
managers have conduct a form of market research about customers’
needs, quality of service, and effectiveness of promotional tools
(Ateljevic, 2007). Therefore, this functional approach in farm-based
tourism businesses would be more concerned with how managers
practice desirable managerial behaviours rather than the level and
influence of informality-related issues.
3. Research method
3.1. Sample
In Korea, farm-based tourism emerged approximately in 2002
as a type of agricultural tourism business. Since 2006, the Rural
Development Administration (RDA) of Korea began to encourage
farm tourism by developing educational programs that corre-
spond to the school curriculum (Yoon, 2010). As of the end of
2012, the RDA has designated 357 tourism farms. In addition, it
has been estimated that there will be approximately 500 tourism
farms with educational programs e including farms established
by local governments (Park, 2012). The data were collected by site
visits and e-mail surveys conducted between July and October
2012 with the operators of educational farms throughout South
Korea. The survey’s target was the 357 educational farms officially
designated by the RDA. Of these, 82 farms were eliminated
because their business histories were too short to properly mea-
sure business performance. The excluded farms started their
business after July 2011. Thus, overall, 275 farm tourism operators
were invited to the survey. After identifying the targets, the
invitation together with the questionnaire were sent to the
educational farms by e-mail. The material sent described the
purpose of the survey and offered some incentives as well as an
RDA-published rural tourism business guide book. As a result, 242
were questionnaires returned, indicating an 88% response rate.
The high response rate was achieved because of the preliminary
phone calls that were made to the operator of each tourism farm.
In addition, operators in farm tourism business actively partici-
pated in the survey because it was administered under the di-
rection of the RDA, an important governmental organisation that
supports rural tourism development. Among the 242 returned
questionnaires, 17 were eliminated because of insufficient infor-
mation, which left 225 for analysis.
3.2. Measurements
To achieve the goals of this study and reveal the nature of
managerial behaviour of farm tourism operators and its influence
on business performance, this study conducted an empirical
investigation by surveying farm tourism operators. The ques-
tionnaire was developed as a self-administered survey and con-
sisted of questions concerning different subjects, such as the
operators’ type of business, managerial behaviour, business per-
formance, and demographic information. In the questionnaire,
the subjects were specifically asked about their level of agree-
ment with 32 general managerial behaviour statements
regarding a farm-based tourism business operation. A Likert-type
scale (from 1: strongly disagree, to 5: strongly agree) was
employed.
To estimate the state of managerial behaviour, the question-
naire developed appropriate scales of constructs with 32 mana-
gerial behaviour statements based on the literature review.
Specifically, this study applied the scales implemented in the
studies of Slevin and Covin (1995) and Ramanujam and
Venkatraman (1987) on product/service development, whereas
the scale for business planning and evaluation was extracted from
the study of Sadler-Smith et al. (2003). Promotion scales were
derived from studies by Slevin and Covin (1995) and Miller et al.
(2001). The human resource management scale was adapted
from the study of Miller et al. (2001). Likewise, scales for
networking were constructed based on Slevin and Covin (1995)
and Ramanujam and Venkatraman (1987), and a cost-reduction
scale was adapted from Miller et al. (2001). After developing pre-
liminary statements, five academic experts with extensive expe-
rience in the field of agricultural tourism and business
management helped verify the validity of all of the scales.
Furthermore, the researchers refined the scales based on the rec-
ommendations received from informal discussions with a group of
three (3) farm tourism operators who are representatives of an
educational farm association.
In addition, this study applied two (2) different dependent
variables in regression analyses. In the first part, the log of gross
sales was applied as the dependent variable, whereas in the
second part, managers’ satisfaction with financial performance
was applied as the dependent variable. These variables were
chosen because the performance of small tourism businesses in
rural areas might not be measured by financial benefit alone due
to the variety of personal motivations and orientations (Reichel &
Haber, 2005). Moreover, the subjective evaluation of a manager
might be a significant element of business sustainability (Do,
2010).
3.3. Analysis
Data were analysed in three (3) Stages. First, descriptive statis-
tical analysis was conducted to explore the overall sample profile.
Factor analysis was performed to develop a correlation matrix of
the 32 items based on their constituent factors. The factor scores for
each respondent were then saved and subsequently used in the
multiple regression analysis performed in Stage 3. A reliability a
(Cronbach’s a) was computed to verify the internal consistency of
items with each dimension. For the factor analysis, a principal
component analysis (PCA) with varimax rotation, which is the
appropriate choice among estimation methods of factor analysis,
was used to identify the underlying dimensions of managerial
behaviour. The identification of factors and elimination of items
were based on the standard suggested by Hair, Black, Babin,
Anderson, and Tatham (2006): (1) factor loading equal to or
greater than 0.50, (2) eigenvalues equal to or greater than 1.0, and
(3) results of the factor analysis that explain at least 68.01% of the
total variance. Multiple regression analysis was used to examine
the relationships between managerial behaviours and the business
performance dimension (dependent variable), gross sales (log).
Before the regression analysis, the procedure for the gross sales
 D.-B. Park et al. / Tourism Management 45 (2014) 201e210 205

with log was undertaken. Log-transformation to normalise the Table 2

distribution of the response variables was used because of the Characteristics of farm-based tourism businesses (N ¼ 225).

skewed data, which was followed by a multiple regression analysis. Length of running n % Type of business n %
This log-transformation also contributed to reducing the different 1 year or below 29 12.9 Educational activities 125 55.5
sales intervals among different business sizes. Six (6) dependent 1 yeare2 year 52 23.1 Educational activities 36 16.0
variables were included to describe managerial behaviour. Mana- and farm stay
gerial behaviours included product/service development, business 2 yeare3 year 58 25.8 Educational activities, 29 12.9
farm stay, and restaurant
planning and evaluation, promotion, human resource manage-
3 yeare4 year 46 20.5 Simple activities 20 8.9
ment, networking, and cost reduction. The values of Cronbach’s a 4 yeare5 year 23 10.2 Activities and restaurant 15 6.7
for the six dimensions were greater than 0.80, which suggests 5 year or over 17 7.5
strong internal reliability. Finally, ANOVA was used to identify
whether there were any differences among the types of farm
The characteristics of the farm-based tourism business are
tourism businesses by comparing the mean ratings of business
presented in Table 2. Most of the tourism farms had a 1e4-year-
performance.
long history. In particular, farms that had been in operation for 2e3
years constituted the greatest proportion of all farms, 25.8%. Like-
4. Results wise, farms that were 1e2 years and 3e4 years old constituted
23.1% and 20.5% of the sample, respectively. Only 12.9% of the
4.1. Profile of respondents tourism farms had been in operation for less than one (1) year,
whereas only 7.5% had been in operation for more than five (5)
Table 1 presents the demographic characteristics of the re- years. All tourism farms that responded to the survey had engaged
spondents. Exactly 60% of the respondents were male, and 40% of in various forms of tourism activities, such as experiential activities,
the respondents were female. Approximately two-thirds (61.0%) farm stays, restaurants, or a combination thereof. According to the
were former farmers who returned from another occupation, and respondents’ own descriptions of their business, 55.5% of farms
this group included managers who had moved from the city after provided a specific activity based on a school curriculum (educa-
retirement. The dominant age category of the respondents was 50e tional activities). In addition, 8.9% of them provided customers with
59 (40.3%), followed by 40e49 (35.4%). The respondents aged 20e simple experiential activities. Simple experiential tasks included
39 composed approximately of 10.8% of the sample, and 13.5% of farming activities such as self-picking or participating in farming
the respondents were at least 60 years old. In terms of education, processes. Some tourism farms engaged in more than two (2)
the largest group (48.4%) of respondents had college diplomas, different types of services: 16.0% of tourism farms engaged in both
36.7% had high school education, and 8.1% of the respondents had activities and farm stays, and 6.7% provided their customers with
graduate school degrees. Thus, more than half (56.5%) of the re- activities and restaurant services. Lastly, 12.9% provided educa-
spondents were well educated (with at least a college diploma). It tional activities, farm stays, and restaurant services. ‘Activity’ in
appeared that managers with this high level of education might be Table 2 indicates that a farm-based tourism business engaged in
related to the high portion of return farmers. Finally, the locations both educational activities and simple experiential programs.
of farms within the various states of Korea were identified. Forty- Tourism farm business performance is indicated by gross sales.
five (45) farms (20.1%) are situated in Gyeonggi Province, and 42 Less than one-half (42.2%) of tourism farms reported gross sales of
farms (18.7%) are situated in Gangwon Province. Gyeongnam has 34 less than $10,000, and 58.9% of tourism farm reported less than
farms (15.1%), Gyeongbuk has 26 farms (11.6%), and Junbuk has 27 $20,000 of gross sales, whereas nearly one-third (29.2%) indicated
farms (12.0%). Moreover, other provinces showed nine (9) to fifteen sales of $30,000 or more. In particular, 45.8% of them had gross
participating farms. sales between $5001 and $30,000 (Table 3).

4.2. Business behaviour of tourism farm managers

Table 1
Respondent characteristics (N ¼ 225). To identify the functional criteria of operational behaviour and
manager’s job performance, this study applied exploratory factor
Variables n %
analysis. Principal component analysis (PCA) was performed with
Gender Male 135 60.0 respect to the importance ratings of the 32 managerial behaviour
Female 90 40.0
items derived from the literature review. Two (2) items, ‘effort for
Location Gyeonggi 45 20.0
Gangwon 42 18.7
the safety management’ and ‘develop business plan based on
Chungbuk 14 6.2
Chungnam 15 6.7
Gyeongbuk 26 11.6 Table 3
Gyeongnam 34 15.1 Business performance of tourism farms per year (N ¼ 192).
Junbuk27 27 12.0
Gross sales of farm tourism business N %
Junnam 13 5.8
Jeju 9 4.0 Less than $1000 11 5.7
Return farmer Yes 133 61.0 $1001e$2000 10 5.2
No 85 39.0 $2001e$3000 11 5.8
Age 20e39 years 24 10.8 $3001e$5000 16 8.3
40e49 years 79 35.4 $5001e$10,000 33 17.2
50e59 years 90 40.3 $10,001e$20,000 32 16.7
60 years or older 30 13.5 $20,001e$30,000 23 11.9
Education Below elementary school 4 1.8 $30,001e$40,000 15 7.8
Middle school 11 5.0 $40,001e$60,000 15 7.9
High school 81 36.7 $60,001e$100,000 11 5.7
College graduate 107 48.4 $100,001e$200,000 7 3.6
Graduate school 18 8.1 $200,000 or more 8 4.2
206 D.-B. Park et al. / Tourism Management 45 (2014) 201e210

Table 4
Factor analysis for managerial behaviour of farm tourism operators.

Factor Factor loading Eigen-value Variance explained a Mean

Product/service development 6.151 19.221 .925 4.15

Develop new educational programs and maintain quality control .821 4.13
Attempt to improve quality standards of educational activities .791 4.18
Emphasise new experiential activity development .782 4.08
Attempt to predict customer requirements/tastes .737 4.25
Attempt to respond quickly to changes in customer demand .710 4.09
Attempt to find specialised ideas and consumer demand .693 4.17
Offer different educational activity programs relative to our competitors .690 4.17
Check the products and operations of competitors .613 4.11
Offer superior product/service than competitors .575 4.00
Business planning and evaluation 4.855 15.172 .911 3.44
Evaluate operational performance periodically .763 3.22
Have own standard for evaluating business performance .743 3.35
Complement of operational weakness based on evaluation .734 3.36
Record information about business operation and performance .725 3.49
Record visitors and educational activities .699 3.55
Have written document for short- and long-term business goals .678 3.51
Have an implementation procedure to achieve goals .633 3.57
Promotion 3.587 11.209 .861 3.60
Send e-mail or letters to visitors for improving relationship .762 3.40
Attempt to secure loyal customer .717 4.01
Promote product/service through various channels .689 3.87
Attempt to secure grouped customers (such as creating incentive) .671 3.16
Attempt to attract new customers .668 3.58
Human resource management 3.016 9.424 .858 3.98
Participate in training programs for improving business skills frequently .669 3.96
Participate in professional training to improve educational programs .656 4.01
Attempt to check customer responses to operations .537 3.83
Train employees to respond to customers problems immediately .505 4.05
Networking 2.099 6.561 .885 3.46
Have joint investment with others to develop new product and supplies .778 3.07
Attempt to respond with other business about environmental changes .681 3.53
Attempt to build a partnership with another business(es) .596 3.77
Cost reduction 2.056 6.425 .802 3.90
Emphasise the reduction of costs in all facets of business operation .670 3.78
Emphasise improvement in productivity and operation efficiency .642 4.03

Total variance extracted ¼ 68.012%, KMO ¼ .928.

Bartlett’s test of sphericity ¼ 4489.550 (df ¼ 496, p < 0.001).
Note: 1 ¼ strongly disagree, 5 ¼ strongly agree.

reliable and objective information source’, were eliminated because
of low factor loadings. The final factor solution was obtained using
factors with eigenvalues greater than one (1) and varimax rotation.
A KaisereMayereOlkin measure yielded 0.928, which demon-
strated that the distribution of values in the initial measure of
managerial behaviour dimensions was adequate for conducting a
factor analysis. The factor loadings of all relevant variables in the
rotated factor matrix were clearly related to only one factor each.
The Cronbach’s a measurement for the six (6) factors ranged from
0.802 to 0.925, resulting in the six (6) factors accounting for 68.01%
of the total variance. The six factors represented specific di-
mensions of managerial behaviour for participating in a farm
tourism business.
In detail, ‘produce/service development’ (factor 1) exhibited
most of the variance (19.22%) with a reliability coefficient of 0.925.
This factor incorporated 10 items of managerial behaviour, pri-
marily in relation to developing new products, scanning the market
and competitors, maintaining product quality, and responding to
customer demands. Thus, this factor is best described as product/
service development. In addition, the relatively large proportion of
the total variance for this factor led us to conclude that, product/
service development represented a central distinguishing mana-
gerial behaviour theme. Factor 2 was identified as ‘business plan-
ning and evaluation’. This factor accounted for approximately
15.17% of the variance in the data. It primarily pertained to items
such as developing a business plan, documentation of practical
processes, evaluation of operational performance, and
complements of weakness. Factor 3 was denoted ‘promotion’ and
occupied 3.59% of the variance. This factor was straightforward and
was concerned with continuing relations for existing customers,
attempting to secure loyal customers, promoting the product/ser-
vice through various channels, trying to secure grouped customers,
and attempting to attract new customers. Factor 4 was concerned
with ‘human resource management’, which focused on personnel
training by participating in various educational programs and
included certain customer relation components. This factor
accounted for approximately 9.42% of the variance in the data.
Factor 5, which accounted for 6.56% of the variance, was identified
as ‘networking’. This factor included joint investment in developing
and supplying products, actively attempting to predict industry
trends with other businesses, and trying to build partnerships with
other businesses. Lastly, factor 6 accounted for 2.06% of the variance
and was labelled ‘cost reduction’. This factor emphasised the
improvement of productivity and operations efficiency in all facets
of business operation and operational cost issues.
The job performance of managers with respect to each mana-
gerial behaviour criterion was evaluated based on the mean of each
factor. According to Table 4, managers mostly concentrated on
‘product/service development’ (m ¼ 4.15), followed by ‘human
resource management’ (m ¼ 3.98), ‘cost reduction’ (m ¼ 3.90),
‘promotion’ (3.60), and ‘networking’ (3.46). The criterion ‘business
planning and evaluation’ showed the lowest average (m ¼ 3.44).
This result implies that managers of tourism farms have high levels
of entrepreneurial attitudes in operations because they focus on
 D.-B. Park et al. / Tourism Management 45 (2014) 201e210
developing new products and service. In addition, low averages for
‘business planning and evaluation’ explicitly indicate the charac-
teristics of informality in small tourism business operation. How-
ever, high averages of human resource management might be
influenced by the strict qualifications required of tourism farms, i.e.,
the government has requested that managers should have high
technical knowledge and skills in educational programs, which
might encourage managers to participate in various training pro-
grams. However, it is noted that managers did not recognise
participation in training as an opportunity for networking,
although many training programs were supposed to provide op-
portunities to build networks and share business information.
In each category of functional behaviour, managers showed the
greatest interest in customer demand and in changes in ‘product/
service development’. They also concentrated on developing high
quality standards and quality control. In addition, the results
implied that high recognition of business competition might
encourage managers to make greater efforts to develop and
differentiate their products and services. In relation to ‘business
planning and evaluation’, it appeared that managers recognised
the importance of a written plan and documentation despite their
low implementation and although they were relatively indifferent
to their operations’ objective evaluation. Moreover, turbulent re-
sults were obtained regarding ‘promotion’. The results showed
that managers in tourism farms typically did not send emails or
letters to existing customers, although they wanted to secure loyal
customers. On the other hand, this low level of personal
communication is the result of difficulties related to protecting
personal information and privacy. In addition, there would remain
a need for increasing personal contact with existing customers to
improve relationships and loyalty. Notably, this result also
revealed that managers in farm-based tourism businesses did not
care much about grouped customers, although their facilities can
serve large numbers of visitors, such as school groups. In addition,
managers attempted to attract new customers by distributing
their information through various channels. With respect to the
category ‘human resource management’, the results showed that
managers were sensitive to training their employees to immedi-
ately respond to customers’ problems. Managers showed relatively
low interest in ‘networking’. It appeared that managers did not
want to have or to create joint investments in developing products
and securing stable suppliers, although they had interests in
building partnerships with other businesses. Lastly, the results
showed that managers were concerned more with improving
operational efficiency than simply reducing costs in operational
management under ‘cost reduction’.
4.3. Influence factors on business performance
To understand the factors influencing business performance,
this study applied two stepwise regression analyses. In the first
analysis, gross sales (log) was applied, an objective performance
Table 5
Multiple regression of managerial behaviour on the gross sales.
Independent variables Coefficient t-value
Constant 4.781 11.873
Product/service development .349 3.320
Promotion .254 3.275
R2 ¼ .188, F ¼ 19.727 (p ¼ 0.000).
Dependent variable: gross sales (log).
Input: product/service development, business planning and evaluation, promotion,
human resource management, networking, cost reduction.
Method: stepwise.
207
measure, as the dependent variable. In the second analysis, a sub-
jective performance measure, the satisfaction of managers with
supplemental income, was used. The independent variables in both
models were product/service development, business planning and
evaluation, promotions, human resource management,
networking, and cost reduction. Multiple regression analysis was
performed with the six (6) managerial behaviours to produce two
(2) statistically significant models. Product/service development
was associated with business performance in model 1 (p < 0.001),
and promotions were associated with business performance in
model 2 (p < 0.001). The explanation level (R2) of model 2 was
18.8%. The results of these analyses showed that ‘product/service
development’ and ‘promotion’ were the major factors affecting
business performance. The findings indicated that developing
products/services based on consumer demand and active promo-
tion would be particularly important in achieving high levels of
financial business performance. This result suggested that the high
entrepreneurial postures of managers were focused on creating
new value through developing new products and services would be
more likely to grow their business (Table 5).
Notably, the second part of multiple regressions, which applied
the satisfaction of managers with supplemental income as a
dependent variable, showed similar results. With respect to model
1, only product/service development showed significant statistics
regarding satisfaction with supplemental income 1 (p < 0.000).
Likewise, promotion was identified as an influential factor in model
2 (p < 0.003). The explanation level (R2) of model 2 was 22.3%.
Lastly, managerial behaviour concerned with products/service
development and promotion had a crucial influence on both the
objective and subjective evaluation of business performance.
Namely, abundant product/service development and promotional
activities increased business sales, causing high manager satisfac-
tion. Moreover, it can be considered that product/service devel-
opment and promotion activities would require higher costs
compared with other functions of the managerial process. There-
fore, a continuous investment of time and finances is required to
improve business performance (Table 6).
5. Discussion and conclusions
Rural tourism has undoubtedly improved the quality of life
and contributed to the economic rehabilitation of rural areas.
Researchers suggest that the diversification of farms into tourism
businesses would serve as a new growth catalyst for local econ-
omies, and studies have encouraged farmers to launch new
businesses in their own farms. Nevertheless, compared to the
numerous discussions regarding the role of farm tourism in local
economic rehabilitation and the possibility of successful farm
diversification for improving the quality of life in rural areas, the
literature has been relatively indifferent about how farmers might
reach a desirable level of success and sustainability with such
Table 6
Multiple regressions of managerial behaviours on the financial satisfaction.
p Independent variables Coefficient t-value p
.000 Constant .116 .236 .818
.001 Product/service development .332 4.655 .000
.001 Promotion .212 2.967 .003
R2 ¼ .223, F ¼ 28.572 (p ¼ 0.000).
Dependent variable: satisfaction with supplemental income.
Input: product/service development, business planning and evaluation, promotion,
human resource management, networking, cost reduction.
Method: stepwise.
208 D.-B. Park et al. / Tourism Management 45 (2014) 201e210
tourism projects. In particular, studies examining farm-based
tourism business’s management have mainly focused on
explaining the diverse motivations and general characteristics of
family businesses and their informality. As a result, determining
how to distribute resources and undertake efforts to improve
operational process to yield better results have rarely been dis-
cussed. Furthermore, this indifference toward operational pro-
cesses at the farm level has caused the competitiveness of small
tourism businesses to weaken despite growth in the rural tourism
market.
To bridge this knowledge gap and help increase the viability of
farm-based tourism businesses, this study tried to identify the
managerial behaviour required to maintain a successful farm-based
tourism businesses by applying functional management analyses.
The functional approach to managerial processes was used to
identify the desirable behaviours in the operation of small business.
Considering the inherent characteristics of small tourism busi-
nesses e such as informality and significant dependence on top
managers e functional approaches were expected to properly
explain the behaviour of individual managers based on stand-
ardised viewpoints. On the one hand, this process identified the
categories and functional activities relevant to operation. Moreover,
the job performance of managers was evaluated in relation to the
operational process on which managers focused. This empirical
investigation resulted in the identification of a variety of activities
required in operating tourism farms. Managerial activities were
divided into six (6) categories of desirable managerial behaviours:
product/service development, business planning and evaluation,
promotions, human resource management, networking, and cost
reduction. Among these categories, operators in tourism farms
have primarily concentrated on product and service development,
human resource management, and cost reduction. This result im-
plies that managers favour operational activities that are most
likely to yield short-term financial benefits. Thus, for operators of
tourism farms, measuring the results of product development and
cost reductions would be an easier way to calculate profit and loss
than other activities, such as planning and networking, which could
take a long time before yielding results. Likewise, this result sup-
ports the argument made in the previous literature (Ateljevic,
2007; Page et al., 1999; Sadler-Smith et al., 2003) that operating a
small farm tourism business requires the manager to be engaged in
various and entire sections of business operation; additionally, the
operations of small businesses are implemented based on short-
term perspectives. In the tourism farm sector, in which the man-
agement and day-to-day operations rest with one or two persons, a
deficiency of human resources and labour time pressure might lead
the majority of operators to be more focused on ongoing activities
and daily events rather than strategic aspects and long-term busi-
ness success. From the viewpoint of consultants and government
agencies, educational programs for developing entrepreneurial
posture might help rural tourism operators to solve their problems
of finding opportunities for business growth. By providing business
skills and raising awareness about desirable managerial behaviours,
these education programs may provide good support for successful
farm-based tourism. Promotion through media, conferences,
community events, and award programs for successful entrepre-
neurs and entrepreneurial behaviours are good examples of such
efforts.
Moreover, the results of the investigation regarding the influ-
ence of managerial behaviours on business performance revealed
that only product/service development and promotion had a sta-
tistically significant positive effect on real profits and on subjective
evaluations of financial results. Based on this result, this study
suggests that continuous investment in product/service develop-
ment and promotion should result in desirable operation
outcomes, such as an increase in the competitiveness and viability
of businesses. From another perspective, this discussion recalls the
argument of researchers in the field of entrepreneurship or entre-
preneurial management that a strong spirit of innovation is
required (e.g., Bosworth & Farrell, 2011; Do, 2010; Komppula, 2014;
Morrison et al., 1999; Slevin & Covin, 1995). Following this argu-
ment, creative innovations in product/service development and
aggressive promotion might improve the results and sustainability
of farm tourism businesses. If so, this argument evokes another
considerable issue regarding the entrepreneurial postures of
tourism farm operators. Indeed, it should be noted that the diver-
sification of farms into tourism businesses manifests the entre-
preneurial spirit. Nevertheless, the success of farm tourism
business requires farmers to continuously engage in entrepre-
neurial behaviour even after launching new businesses through
their farms. Thus, this context suggests that the sustainability of
tourism farms depends primarily on the consistency of engaging in
entrepreneurship in operating farm tourism businesses. Thus, the
main determinant of increased viability of farm-based tourism may
not be the type of businesses into which farms diversify or the
theme of that diversification but how long and well they farms
maintain the entrepreneurial spirit leading to continuous in-
novations in their products. It is perhaps here that the gap between
the growth of rural tourism and failing individual farm tourism
businesses may originate. The launching new tourism businesses
on farms might be a good start for developing communities and
improving the quality of rural life. However, these business
launches would not secure the growth of farm businesses and their
sustainability. Reasonable and persistent efforts to improve the
competitiveness of farms through wise management practices are
required, which is why more practical investigations of issues
related to management practices in small farm-based tourism
businesses should be performed.
To conclude, this study suggests that innovations in devel-
oping new products and services e and promotions e are
required for improving farm business performance. Furthermore,
increasing the competitiveness of small farm-based tourism
businesses will accelerate the growth of rural tourism. By con-
ducting an empirical investigation of managerial behaviours in
operating farm tourism businesses, this study contributes to the
improvement of managerial behaviour and operational processes
in tourism farms. In particular, this study suggests desirable
managerial activities in operating farm tourism businesses by
identifying six (6) categories of managerial behaviours. In addi-
tion, the evaluation of practical managerial behaviour and its
effect on business performance provides a better understanding
of managerial processes in small tourism businesses in rural
areas. Thus, this study may be helpful for farm tourism business
managers and consultants.
Nevertheless, the results of this study have a few limitations in
their application. First, the empirical investigation in this study
concentrated on tourism farms. Although, this study does provide
some implications for rural tourism in general, empirical in-
vestigations should be conducted for the entire rural tourism
business. In particular, it should be considered that the target of this
study was ‘a working farm’ when the results are applied to other
cases. Likewise, this study did not consider the operational pro-
cesses and behaviours of farm businesses by focussing on every
measurement for estimating managerial behaviour and perfor-
mance on the part of tourism businesses, although the farming and
tourism business would not be entirely separated from a farm
tourism business. Moreover, this study did not examine specific
competencies of managerial behaviours with respect to individual
business types due to the ambiguity between experiential activities
and simple activities in the responses of farmers (although it would
 D.-B. Park et al. / Tourism Management 45 (2014) 201e210 209

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210 D.-B. Park et al. / Tourism Management 45 (2014) 201e210
Kyung-Rok Doh is a researcher of Department of Rural
tourism in the National Academy of Agricultural Science,
Rural Development Administration, South Korea. His
research interests are rural tourism and small tourism
business.
Kyung-Hee Kim is a researcher of Department of Rural
Tourism in the National Academy of Agricultural Science,
Rural Development Administration, South Korea. Her
research interests include tourism behaviour and tourism
marketing.