Development of an Institutional Model of Organizational Structure of Rural Development Agencies: Using Modeling as a Method of Inquiry

Development of an Institutional Model of Organizational Structure of Rural Development Agencies: Using Modeling as a Method of Inquiry

DOI: 10.4018/978-1-7998-2641-5.ch006


In Chapter 6, the author uses modeling to advocate and develop a new institutional model of organizational structure of rural development agencies that should maintain close collaborative links with both SMEs and local-regional development agencies. The concrete context of the chapter addresses different scenarios and models for innovatively conceived rural and entrepreneurial development. The author structures the departments of potential rural development agencies in improving their sophisticated organizational culture and strategy and places significance on management. Establishment of rural development agencies represents only a starting point for further development of these regions and their SMEs. Such a model of institutional and material support to the development of rural entrepreneurship, of course, requires a proactive approach of rural leaders and managers in further learning and successful mastering of the basics of rural development and management. This chapter completes the second section of the book.
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Development Of Organizational Structure In Rural Development Agencies

Institutions for coordinating all social-economic activities (North, 1991, p. 101) that seem best-placed related to the development of rural areas are the RDAs. This derives from the previous chapters of the book. They relate to a specific region, are responsible for rural development within the overall regional development and take an institutional legal form that is dominantly formed, at least in the North-American, European and Australian practice, on the basis of a private or private-public partnership with purely public management examples as well1. There also exist objections that certain features of this interpretation are unsatisfying. Within this group, it might be suggested that the notion of private-public cooperation (Schaeffer & Loveridge, 2001) is fundamentally better because of less pronounced legal meaning which to a certain extent is a very valid point especially because RDAs need to have cooperative potentiality locally, regionally and nationally regardless of the legal form of their organization. However, before this sort of inquiry is pursued further, it is better to go into RDA functions and how to organize them.

RDA responsibility is crucial for the management of information flows related to planning, financing, business relations and market development. And that includes not only agricultural producers, but also for entrepreneurs in other sub-sectors of rural economy such as crafts, water management, trade and tourism. The prerequisite for good market linkages is the establishment of databases within municipal information management systems (MIS) with data on rural areas, the formation of local and commodity markets, and logistical collection centers. If they develop their existing capacities and structure, regional agencies would certainly be able to take on some of the additional functions listed hereinafter.

However, it seems implied from the previous sections that in the poorest and not easily accessible rural areas where there are no development agencies it would be vital to first establish them. Depending on the structure of the rural economy as well as the available sources of financing, such agencies may also take on a slightly different organizational structure and role compared to what was described in Chapter 3, also depending on the concrete country context.

According to Mintzberg (1979), in the first half of last century organization structure simply meant a set of official, standardized work relationships built around a tight system of formal authority (p10). Mintzberg’s approach is summarized in Box 1.

Box 1. Milestones from Mintzberg’s idea of organizational structure
Gradually, Mintzberg’s organizational structure began to encompass the formal and semiformal means from the following nine major design parameters:
     1. Job specialization
     2. Behavior formalization
     3. Training and indoctrination
     4. Unit grouping
     5. Unit size
     6. Planning and control systems
     7. Liaison devices
     8. Vertical decentralization
     9. Horizontal decentralization

Source: Mintzberg, 1979.

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