Diagnosing Development of Rural Family Enterprises in Golestan Province

Document Type : Research Paper


1 Assistant Professor, Gorgan University of Agricultural Sciences and Natural Resources, Iran

2 Assistant Professor, University of Golestan, Iran

3 PhD, Agricultural Extension, University of Tehran, Iran


In the recent years, significant changes have been occurred in rural areas. These changes are mostly concerned in agricultural employment and the necessity to transform its labour force to other sectors. Within the context of these developments, the governments have attempted to stimulate the economic diversification and the integrated development of rural areas, especially through the so-called “small enterprise”. There is consensus that the keys to promote rural progress are lied in development of rural enterprises in order to create new employment in rural areas and make diversification in the rural economy. Therefore, enhancing rural enterprises seems as a main strategy of fostering the sustainable rural development. Strategic policy-making for enhancing all types of rural enterprises, including family enterprises need to consider the constructed inter-correlated components of "rural family enterprise development" as a complex system, contextual variables, and related dynamics. This qualitative research was done with the aim to diagnose the development of rural family enterprises in Golestan Province.
In order to obtain appropriate data to allow detect the obstacles and barriers for development of rural family enterprise, a qualitative exploratory study was undertaken using semi-structured interview with a low level of moderation. This qualitative study was based on a ‘‘grounded theory’’ approach, which provided an interactive framework for data analysis.  Information was gathered through semi-structured interview with a selected sample (n=37) of family enterprise managers in rural areas the province. Purposed sampling technique by interviewing typical cases (such experienced and famous people), snowball (persons who introduced by other samples), opportunistic, and intensity cases (interview accessible samples and repeat interview to find completed information to ensure theoretical saturation and conceptual enrichment) were used. The in-depth interviews were digitally recorded and fully transcribed. Multiple coding process of grounded theory was used to analyse contents of the interviews. The data were initially coded into concepts and ideas emerging from the data and the literature review. In the first stage the interview texts were analysed and pertinent excerpts were assigned provisional conceptual codes. The next stage involved the search for relationships between conceptual labels and categories. The goal was to systematically develop and relate categories. In the final stage, categories were integrated and refined. Findings were formatted in a matrix structure, including open codes (105 codes), axial codes, and selective codes.
According to the subjective categorized codes (7 categories), the main issues and constraints of development of rural family enterprises can be explained as: non-prosperous milieu of enterprise development in rural areas (unsuitable milieu for development of business in rural areas, unfavourable change in environmental conditions, undeveloped infrastructures), un-developed market for rural enterprise (weak in marketing, inefficiency in local market, unfavourable trend in market), inter generational transition and gap in transfer of values, skills and culture of rural family enterprises (lack of tendency among rural youth, problem and consequence of inter generational transition, inter generational gap in supplying business), lack of formal institutionalized support (lack of solidarity and guild support, identity and formal position, educational services, formal support covering, integrated supportive plan and policy, and institutional inconsistency for supporting the business), unsuitable interaction and synergy of family and the enterprise (improper influence of business on family structure and function, family conflicts and pressures influencing on business, unfavourable family evolution for business), inefficient enterprise functions and production management (scant and unsuitable investment, weak ability in creating innovation, unfavourable capacity and bad conditions for production, inefficient management of labour force, problem to provide input for production, unfavourable productivity and inefficiency in performance, increased production costs , problem to provide enough capital), and social pressures (reduced social capital in business milieu, unreasonable social expectations, effective social conflicts). Finally, the recognised conceptual constructs of rural family enterprise development was linked and the model of "diagnosis of rural family enterprise's development" was diagrammed.
This qualitative study has highlighted some key inhibitory factors influencing development of rural family enterprise. The results of this research revealed that diversity of influential dimensions and components are important for development of rural family enterprise. In fact, rural family enterprises didn’t act just as a economical firm, while they have socio-economic function which represent multi-functionality of the rural family enterprise. It should be noted that family enterprises in rural areas are affected enormously by the function and structure of families in different regions.  Whereas the family in different regions doesn’t have the same function, so establishment conations, process and structures of family enterprise are different in the communities. It is clear from this research that there are distinguished differences between the family enterprises in the different communities, so there are context-based strategies to strengthen business and encourage entrepreneurship in rural areas. On the basis of this research results, we would argue that there is a need for a more strategic and coordinated approach towards building the entrepreneurial capacity in rural areas, based on a clear vision of the role that entrepreneurship can play in future a role for rural development. Given the structural and regional processes affecting the traditional economic activities of these areas, the case for producing rural entrepreneurship and enterprise strategies for rural regions has been given additional urgency.