Occasional Publication 1

A NEW INSTITUTE OF RURAL MANAGEMENT–

AND A NEW DEVELOPMENTAL DISCIPLINE ?

Michael Halse

Institute of Rural Management, Anand 388001

1980
(Reprinted: January 1997)
 A NEW INSTITUTE OF RURAL MANAGEMENT–
AND A NEW DEVELOPMENTAL DISCIPLINE ?

Michael Halse

A new Institute of Rural Management is to be established at Anand, the heart-

land of India’s rural co-operative movement. One of its first purposes will be to
act as an inductor of young graduates – many coming straight from college –
into the young-executive cadres of India’s rapidly growing, specialised co-
operatives which already handle milk, oilseeds and cotton – and which are
likely to spread into other fields of farmer-owned enterprise.

Like all such institutions, the new Institute will develop its form and content
from the stated and perceived needs of its constituency, the producers’ co-
operatives, and other such rural organisations. Out of its faculty’s response to
these needs, a curriculum in rural management will evolve. This curriculum’s
exact structure cannot yet be foretold; but the author has had the privilege of
being associated with some of the founders of the new Institute for some years
– and has joined at times in their efforts to define “rural management”. Out of
this experience comes the conclusion that rural management is indeed about to
become a new developmental discipline. This paper summarises the reasons for
this conclusion and the main elements which appear to define the new discipline.

I. The constituency and its needs

The main constituency of the new Institute at this time is a set of rural co-
operatives built with a structure which has come to be known as the “Anand
Pattern”, because the original model was founded at Anand (some 500 km
north of Bombay). This Pattern’s main characteristic is that it is based on a set
of Village Co-operatives – one in each participating village – which are started
by the farmers in that village who wish to market one of their products (i.e.,
milk, oilseeds, etc.) co-operatively. Within a radius of 50-75 Km, all the Village
Co-operatives jointly form a Co-operative Union, through which they own and
operate one or more factories which process their product (i.e., dairy factories).

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A number of such Unions (say, 6-8 in a region or state) are increasingly forming
Co-operative Federations, through which they obtain common services and
operate co-ordinated marketing programmes.

The entire structure of the Anand Pattern is geared not only to efficient purchase,
bulking, grading, storage, processing and marketing of the owners’ milk, cotton
etc. – but also, the structure provides production services (e.g. veterinary
services, extension services) to the producer–owners, the costs of which are
borne out of margins earned on their produce. The tasks of managing the
Village Co-operatives and of providing local services (such as artificial
insemination of milch animals) are performed by people living in each
participating village, who are trained for the purpose by the Co-operative Union
and paid out of the Co-operative’s earnings. The tasks of running of the Co-
operative Unions’ dairy plants, cotton ginning mills, etc. – and of managing
the Federations – are performed by professional managers and technicians,
who are the paid employees of the Unions and Federations.

Each Village Co-operative has its own Managing Committee, which is elected
by and out of the Members who actively market their produce through the co-
operative. This elected body sets the Co-operative’s policies and appoints its
chief executive. It is the Chairmen of all Village Co-operatives in a Union who
elect, from among themselves, the Chairman and the majority of the Union’s
Board of Directors, which is the Union’s policy-making body and which appoints
its chief executive. When a group of Unions forms a Federation, their Chairmen
comprise the majority of the Federation’s Board of Directors and they elect the
Federation’s Chairman, set its policies, appoint its chief executive etc.

Thus, the Anand Pattern Co-operatives are chiefly characterised by a very direct
responsibility for policy being in the hands of elected, participating farmer
producers and by the responsibility for management being in the hands of paid,
professional managers. Other important characteristics of these co-operatives
are: equal access to production and marketing services, regardless of class or
creed; single-commodity producer-to-consumer integration; economic viability,
ploughback of profits into improved services, improved rural incomes and
improved living standards in villages (Village Co-operatives often invest part

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of their profits in building primary schools, drinking water supply systems,
etc.) – and a progressive induction of elected, participating farmers (those who
genuinely sell their own produce through the co-operatives) into their region’s
political economy as a whole.

Not surprisingly, the Anand Pattern becomes popular wherever rural people
can see its effects. Farmers want to adopt it for an increasing number of crops
– and possibly for provision of services such as human health-care in their
village.

However, it is also true that the success of the Anand Pattern depends largely
on the quality of the Co-operatives’ elected leadership and of their appointed
professional managers. The elective system tends to identify local leadership of
competence, because farmers soon find that it pays to put an important business
(such as their milk business) only into the hands of competent and honest
representatives. Also, it is not usually very difficult to identify and train the
chief executive of a Village Co-operative, if only because, in most villages, the
power structure and education system leaves a large pool of talent untapped.

Management at the level of Co-operative Unions and Federations, however,

presents different problems. These organisations own and operate, on behalf of
Village members, technically complex facilities for processing and marketing
agricultural produce. Moreover, their number and complexity is growing.
Already, for example, there are some 10,000 Village Milk Producers’ Co-
operatives – and their Unions and Federations process and market at least Rs.250
crores ($300-400 million) -worth of milk: a business which will multiply 3-5
fold during the coming decade. At the same time, provision of production
services will also become more complex: e.g. a controlled breeding programme
for genetic improvement of at least ten million milch animals will be required
during the 1980’s and this will have to be implemented in the villages largely by
the Anand Pattern Milk Co-operatives.

The Anand Pattern structure of Co-operatives comprises the initial constituency

for the new Institute of Rural Management at Anand. India already has several
highly developed institutes of management, producing young post-graduates

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in general management of high calibre – but their numbers are inadequate, few
are motivated to work for rural co-operatives and many might not be acceptable
to co-operatives... The problem is partly one of “style”: many management
graduates regard their starting salary as their main status symbol and/or measure
of “success”. They usually come from and wish to stay in an urban setting.
They also suffer (however unjustifiably) from the image which has at times
afflicted the output of some American business schools: namely, a penchant for
jargon, for unrealistic quantitative solutions to problems of judgement, a
reluctance to start by learning the practicalities of a trade and a preference for
talk (“analysis”) over action. This stereotype is reinforced by a firm conviction
(often openly stated by newly employed management graduates) that they could
do a better job than their employers’ chief executives.

The managers of the Anand Pattern Co-operatives have usually acquired

executive responsibility only after working their way up through the ranks of
technical cadres, as dairy engineers, veterinary doctors, etc. Most are keenly
aware of the need for “modern management” but they often find the style of the
young management graduates hard to take – and suspect the graduates of
characterising them as out-dated, conservative and unsympathetic. In any case,
most management graduates seem to take more readily to the norms and customs
of large corporations, where executives wear ties, belong to clubs and often
share something of the young graduate’s western-influenced culture and
educational background.

Perhaps these incongruities are more perceived than real. Even so, the result is
the same: the co-operatives need a large number of suitably trained young
graduate entrants into their management cadres, while the output of the country’s
existing institutes of management is too small to fill this need (and largely
disinclined to do so).

Does all this mean that the new Institute of Rural Management needs to develop
only a “style” which is different from that of existing institutes of general
management? If that were the case, the need would be satisfied by the fact that
the founders of the new Institute are taking steps to associate the co-operatives
with the process of selecting the institute’s intake of students and to ensure

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that its faculty has relevant experience and a genuine interest in rural
development. This should suffice to avoid the problem of “style,” discussed
above – but could it ensure that the institute’s graduates will be “suitably
trained” to enter the co-operatives as young managers, if the curriculum’s content
were simply to consist of “general management,” as it is conventionally taught,
plus some rural orientation? To the author, it appears that, on the contrary, a
new discipline of rural management is required. The rest of this paper is devoted
to a preliminary attempt to define this new discipline.

II. Evolving a discipline

If anything is to be learned from experience, it should be useful to review the
evolution of the principles on which the first curricula in general management
were based. The case of Harvard Business School can be taken as an example.
When it started in 1908, in addition to accounting, commercial law, etc., the
School taught its students about the USA’s major industries: e.g. rail-roading
and insurance. Also, at the time, there was a Morris-style revival of fine art
typography and book-binding in the USA – and, in 1910, the School responded
to a call from this movement to become “a West Point for printers,” instituting
three courses in the history, technique and business practice of printing. In
different forms, these courses persisted as part of the School’s curriculum until
1920, when they were terminated, partly because students lacked interest –
but also because, according to Assistant Dean D.K. David, “ the School trained
executives and was not in any way a technical school.”1 In other words, it had
taken the School some 12 years to advance significantly toward its original
objective of teaching on a “problem oriented” basis; but this approach was
ultimately to produce the school’s celebrated “case method,” for which it is
alternately praised and excoriated to this day.

This method emphasised the use of actual business problems as teaching material
– not merely as illustrations of a technique, but rather as a means of studying
the whole situation in which an executive had to use a technique or skill, taking
into account the situation’s human, technical and economic elements. How
this approach to analysis of the total situation created new knowledge is

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1. Drawn from HBS Review, Jan/Feb 1979.
illustrated by the impact of the Hawthorne Case on the role of behavioural
sciences in management teaching. By the late 1920’s, knowledge of psychology,
sociology and anthropology was increasing rapidly; but it was the report of a
set of in-plant experiments, known as the Hawthorne Case – and the study of
these experimental results in the context of Harvard Business School by a group
of behavioural scientists – which prompted the emergence of “Organisational
Behaviour” as an object of study in its own right. This in turn led to original
contributions to the available knowledge of human behaviour, in general, and
in particular of the role of behavioural sciences in management education.2

Looking back some 5,000 years earlier, Aristotle’s approach to drama in his
“Ars Poetica” illuminates further this approach to the generation of new
knowledge. To understand the drama, Aristotle plodded through many plays
and patiently described them, in order to classify them by their major
characteristics. He was then able to note that a play had “a beginning, a middle
and an end” and that a tragedy had a “cathartic effect” etc. Thus, Aristotle first
studied what existed, then described and classified the objects of his study –
and, only then, abstracted some general principles. (Although it should be
noted that he generalised only about what he observed – he did not claim that
his generalisations should define the drama for all time to come...)

In any event, the experiences summarised above indicate that an attempt to

create new knowledge of rural management could well start with the study of
the rural management which is being practised today. Our rural managers are
already on the job (and many are doing it with out-standing success). Even at
this juncture, an attempt can be made to describe, classify – and then generalise
from – the tasks already being performed by our rural managers. Perhaps such
an effort can lead to generalisations which will contribute to an improved
definition of rural management.

However, before attempting this (at least in a preliminary way), it may be useful
to note that several abstract models for the study of general management have
been propounded from time to time: e.g. (i) that the study of general management

2. I am indebted to Dr.Kamla Chowdhry of the Ford Foundation, New Delhi for this

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 observation.
consists of studying (a) the environment or context of the general manager’s
work, (b) the issues with which the general manager must deal, and (c) the
techniques available for dealing with such issues; or, more mundanely (ii) that,
for study purposes, the general manager’s tasks can be treated as consisting of
(a) planning; (b) organising; (c) implementing; (d) controlling; (e) obtaining
feed-back received. One model for the study of rural management which the
author has found useful has been that in which the rural manager’s tasks are
taken to consist of dealing simultaneously with a series of interacting systems:
(a) the social and institutional system whereby humans relate to each other,
formally and informally; (b) the physical and technical systems, whereby man
exists within the biosphere and practices agriculture in order to manipulate
these systems to human advantage, and (c) the economic systems whereby
humans exchange the fruits of each other’s labours and (if they are lucky) save
and invest in order to improve their lives in future times.

Many such generalised models may have their uses, no doubt. However, it is
also probably germane to note that – when challenged to help create a short-
term programme for a specified group of rural managers,3 the author found
himself clinging firmly to a set of course-like “streams” of class-room periods
(reinforced by field work) in the management of “procurement”, “processing”,
and “marketing”, plus management’s “uses of figures for planning & control”
and “working with people.” (There were also some integrative case studies,
designed to help pull the material together, under the omnibus title, “Policy”).
The programmes thus presented were at least generously received by most of
the practising managers who attended them. Nevertheless, their structure bore
a marked resemblance to Harvard Business School’s first-year MBA programme
of that era, with a thick top-dressing of “rural orientation.”

III. General Management and Rural Management

Although the early programme in dairy management, mentioned above, did
roughly resemble the first-year MBA of its time. It had one element which was
distinctive: namely, the function described as “procurement”. The title was
sometimes elaborated into “procurement organisation” – but the scope and

3. The multi-level Dairy Management Programme, 1966 - IIM, Ahmedabad.

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 content of this function, as taught, were such that the subject could better have
been titled “management in rural organisations”. It embraced everything from
initial formation of co-operatives in villages to the management of crop
purchasing through a number of village co-operatives, on behalf of their
members.

This might at first sight appear amenable to description and classification as a

purchasing function within the village environment. If this were to prove
correct, the function could be studied and taught quite conventionally as purchase
management – but the top-dressing of village orientation would be difficult to
integrate with the study of purchasing methods and techniques, if only because
the task of helping farmers to organise a village co-operative is quite separate
and different from the purchase function, as such. It requires sensitive
understanding of the village’s social structure, an ability to secure consensus
on matters of mutual interest to producers, a flair for selection and training (of
the village co-operative’s functionaries), a working knowledge of co-operative
law, and a sound understanding of how the crop which the village co-operative
handles is produced and marketed.

This may sound like an impossible set of requirements – but teams of such
people do exist: they are largely responsible for the rapid growth in the number
of Anand Pattern Village Co-operatives in India during the 1970’s. However,
literature is scarce on the nuts and bolts of how they do their job.

Nevertheless, this management function does constitute one substantive

difference between “rural management” and “general management.” It seems
reasonable, therefore, to take this unique function as a starting point for the
process of “observing what exists” of rural management – and then to determine
whether the process of further observation, description and classification can
generate more new knowledge of the work of the rural manager.

IV. Starting with the village

Ignoring for a moment the conventional subject-matter classification under which
management is studied and learnt, one can usefully consider the question: “what
is it that these rural managers do in the villages and how can it be taught?” To

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find some answers, one goes out into the field, observes the activity in as many
varied situations as possible and studies observations made in the field by others.

From the field observations available at the time of writing, it appears that the
basis of the rural organisation function is an ability to perceive the social situation
of a particular village, to observe it impartially yet sympathetically, to be aware
of how the village people see you (the outsider) and understand you – and to
draw strength from the resolutions of conflicts which would otherwise prevent
their working together. By observation, one can collect studies of how this
work is done (yes, “case-studies”) – it remains to be seen to what extent the
behavioural scientists’ knowledge of such matters as class, group and personal
interaction, conflict resolution etc. will aid in classifying observations made in
the field and, thereby, in arriving at useful generalisations. In any case, we have
already seen that there are at least two more kinds of knowledge involved in
the rural manager’s work in the village: namely, knowing how to help the co-
operative’s members to organise their enterprise internally – and this, in turn,
requires a knowledge of co-operative law, the formal frame-work which sets
the co-operative within the structure of the nation-state.

Even this brief glance at the practice of rural management within the villages
indicates that the subject may well prove to be amenable to analysis within any
or all of the three obstracted models of management mentioned earlier:

The “environment/issues/decision-techniques” abstract, for example, suggests

that the subject could be studied and taught by treating the village as the
environment in which this management function is conducted. Examination of
this environment would raise issues relating to social structure, the techno-
economics of the village’s usually traditional agricultural production – and the
techniques used to deal with these issues could then be taught from the available
literature and case studies of actual management practices in the field.

On the other hand, the “planning/organising/implementing” abstract presents

another approach to the function of rural management in the villages. The co-
operatives’ young managers have to be capable of creating and working with
large numbers of village co-operatives. Planning and organising this work is an

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especially important management function in district co-operative unions.
Moreover, the abstract lends itself to uses of the case method for studying and
teaching the subject: an important advantage when literature presenting practical
techniques based on rigorous analysis is in short supply. However, it is also
true that the useful, relevant generalisations which are available might be scanted
in this treatment of the subject; the village environment, for example, would
probably tend to be treated as “background” only.

Such problems would be avoided by use of the third abstract mentioned earlier,
which referred specifically to rural management: namely, the abstract which
would treat the subject as three interacting systems, the social & institutional
system, the physical & technical system of the biosphere and agriculture – and
the related economic system. If this abstract were used for studying and teaching
the rural management function in the villages, then the village environment, for
example, would be treated in detail, with regard to its social, agri-technical
and economic aspects – but, on the other hand, the “social/agri-technical/
economic” abstract does not, by itself, deal specifically with decision-making
techniques, whereas decisions are often considered to be the end-product of
any management function.

One must conclude that each of the three abstracts discussed above – and possibly
others, too – has some relevance to the rural management function in the villages,
but none is a complete answer to the problem of studying and teaching the
subject. Some of the difficulties stem from paucity of knowledge on the subject;
others are pedagogic difficulties. Paucity of knowledge can be overcome only
by further study of the subject: an important function of the new Institute of
Rural Management. Pedagogic difficulties may in practice be overcome by
several approaches; they are not central to our objective here, which is to define
rural management – but their resolution can be a useful means of arriving at a
conceptual structure of the subject of rural management.

V. Relationships between the context and

the pedagogy of rural management
Since the purpose here is to define rural management as a discipline, we are
concerned with concepts, rather than with pedagogical questions as to how

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those concepts can best be taught. But content and method cannot be entirely
separated. Moreover, in the evolution of a new discipline, consideration of
pedagogical structure and method may clarify the nature of the discipline’s
content.

It is, therefore, worth-while to reconsider our immediate teaching objectives,

in the light of what has been observed of the young rural manager’s tasks in the
villages. These teaching objectives can be contrasted with those of an institution
teaching general management, where the teaching objective is to prepare young
executives for entry into any kind of enterprise – while assuming that, within
the enterprise, there will already be some quite sophisticated understanding of
the techniques and attitudes which young executive entrants will bring with
them to the enterprise. In our case, however, we are preparing the young
executive for entry into a farmer-oriented (and usually farmer-owned) enterprise,
in which the management will usually be aware that modern management
methods are desirable, but not necessarily knowing much about those methods.
The youthfulness of the young entrants may cause scepticism about their value
to a farmers’ organisation and, usually, they will in some sense be challenged to
be “useful” to management as quickly as possible. Thus, our young rural
managers may have to be more sensitive to the norms and customs of the
enterprise which they enter – and also more immediately useful and less obviously
chief executive aspirant – than the output of institutions teaching general
management.

All the more reason, then, why the new Institute of Rural Management is intent
on imbuing its faculty, students and curriculum with a commitment to serving
poor rural people, while also ensuring that this commitment is expressed in
terms of teaching management techniques which the Institute’s graduates can
quickly put to practical use in the service of poor rural people. This commitment
will be part of the ethos of the individuals involved – both faculty and students
– but giving it practical expression is a function of the curriculum by which
rural management is taught as a discipline.

This causes some pedagogical problems, especially as the first task of the new
Institute is to produce a programme of one-year’s duration only, which must

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therefore confine what is taught to the essentials. The problems involved relate
to the context, structure and teaching methods of the programme. They can be
illustrated briefly by a few references to the three “abstracts” of management
discussed earlier:
The “environment/issues/decision-techniques” abstract, for example,
emphasises study of the environment as a means of identifying issues,
which in turn are used to indicate the decision-making techniques required
for resolution of the issues identified.
The “planning/organising/implementing” abstract emphasises the
managerial process, as such, and the many kinds of decisions which the
manager has to make – it treats decisions as the most significant end-
product of the managerial process.
The third abstract, which treats rural management as the task of managing
three interacting systems (the social & institutional, the biosphere &
agriculture – and the economic systems) emphasises the systematic nature
of the variables with which the rural manager must deal – and implies
that an understanding of the issues involved will develop from studying
the three systems, as well as correct identification of the techniques
required for decision-making (plus an ability to make a stream of consistent
decisions on planning, organising, etc., in each sphere of action).

Thus, the three “systems” to be studied in the third abstract encompass the
element which is labelled “environment” in the first abstract. The main difference
between these two abstracts is that the three systems approach is specific to
rural management: it tackles the complexity of the rural environment by
classifying the variables in that environment and it helps one to understand
decision-making in a farmer-owned enterprise as part of the dynamics of the
rural environment. However, although classifying the variables involved can
help make the subject more manageable, it does not eliminate complexity. A
study of the three systems and their interaction places a heavy burden on a
time-constrained curriculum, especially as much remains to be learnt about
them and about the decision making techniques required to deal with them.
Moreover (as the “planning/organising/implementing” abstract implies), decision
making techniques, as such, are not all that the young entrants need: they need
also to know how to select and use such techniques in real-life management of

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what is taught from studies of real-life situations in rural enterprises – but it is
also calls for the use of decision oriented methods in teaching the curriculum,
such as the “case method” itself, role playing and adequate allocation of students’
time to work in the field.

Evidently – in this attempt to define rural management as a discipline – content,

structure and methods will be found to be inextricably related. Also, the need
to provide the young entrants with an analytical framework is likely to make
claims on the students’ time which will conflict with the need to help them to
strengthen their practical decision-making ability.

This brief consideration of the pedagogical problems involved, in constructing

a one-year programme to teach rural management, illustrates the need to draw
the content of the programme from the field, in order to teach rural social,
agricultural and economic structure. It also illustrates the need to order (or
“classify”) the material presented by giving the programme a structure which
helps both faculty and students to build up a knowledge of many diverse aspects
of rural reality, without losing track of the central objective of their efforts. It
also illustrates the need for teaching methods which impart not only a knowledge
of decision making “techniques,” but also an internalised art and habit of making
and communicating decisions. Therefore, while we are not concerned here
with pedagogy for its own sake, we shall try to develop a preliminary definition
of the content of rural management as a discipline, while also taking into account
the structural and methodological requirements which must be observed in
order that the discipline may be studied and taught effectively.

VI. A suggested definition of rural

management and its content
Development of any abstract into a set of propositions will appear arbitrary at
times – and what follows is unlikely to be an exception to this rule. So far, we
have examined only generally the process of rural management and some
approaches to structuring it as a discipline – but a discipline, as well as being a
system of thought, must also be an expression of that system in a form which
can be researched and taught.

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For the researcher – or (let us be bold) the academician – a new discipline must
have a structure which holds together its content in a perceivable whole, while
also facilitating its study part by part. Each part must have practical boundaries,
which preferably enable the academician to make full use of knowledge already
developed by academicians in different, but related, fields. Each of these
boundaried areas, when spread out systematically, should contribute to a map
of the discipline which – although never completed – helps to ensure that an
understanding of the whole is of more value than the sum of its parts.

For teachers and students, a discipline must be such that it can be taught and
learned – and this also requires that it be divided into parts which are defined in
ways which facilitate understanding, assimilation and further development of
the concepts involved. Yet these parts must at no time be so numerous as to
obscure their relationship to the whole.

When defining a discipline which is new, the task of satisfying these criteria is
complicated further: the boundaries used must order the subject-matter clearly,
while not deterring the teacher and student from expanding the discipline’s
scope, as understanding of it develops. This is particularly difficult when the
subject-matter is a process of management. Management research is based
largely on observations of management practices and is ultimately validated
only if the students who assimilate its results become, as a result, more effective
managers. Yet, when a discipline is new, the academicians who are developing
it by research and teaching cannot, at the start, be entirely sure that they have
mapped its boundaries appropriately, so that their students will develop skills
which will make them more effective managers in the field covered by the new
discipline.

These uncertainties must beset anyone who tries to define a new management
discipline. To overcome them, in the discussion of rural management as a
discipline which follows, five precepts have been observed: (i) develop the
structure by starting with the function of rural management which is known to
be new to management studies: namely, “rural organisation;” (ii) divide the
subject matter into only a minimum number of parts and define them in ways
which help teachers and students to make full use of knowledge drawn from

14
already established sciences: (iii) at each stage, check that the fullest use is
made of management abstracts which have already proved their utility elsewhere;
(iv) incorporate proven decision making techniques in ways which encourage
their adaptation to the requirements of the rural enterprise, and (v) start the
process of developing a language of rural management which is not a jargon.

The result is summarised in Table 1. The discipline is divided (horizontally)

into five broad areas (e.g. “1. Rural Organisation”) which are in turn sub-divided
(vertically) into three parts. In order to facilitate research, each of the five
areas is designed to draw on one or more of the established sciences and is
limited to activities which have an easily defined location in rural enterprises.
Each of the three vertical sub-divisions is designed to help teachers and students
to use the accepted management abstracts discussed earlier. The result is five
areas, or “streams,” of subject matter, each made up of three blocks – which,
as a matter of practical pedagogy could, for example, be taught as “courses”
(five to a “semester”), each “course” consisting of thirty 60-80 minute class-
room sessions.

It would not be practical for one writer to attempt full exposition of the five
areas, nor would space permit it. Instead, in the following paragraphs, the
coherence of each area, as a subject for study and research, is examined – and,
within each area, the three “blocks” are discussed as vehicles for teaching and
learning which will lead to more effective rural management practices.

The three-step presentation

In general, each area’s three blocks (which could be presented in three semesters)
use the management abstracts discussed earlier as a 3-step teaching and learning
process. Each area uses this concept somewhat differently, but the concept can
be useful to teachers and students, as a way of studying each block separately
while relating it to the discipline as a whole.

Thus, in each area, the first block examines relevant aspects of the rural
manager’s work environment and the manager’s work as part of a dynamic
system. Accurate and objective observation of management situations is
prescribed as the first pre-requisite for decision making – and, for students, the

15
first semester is to be followed by 4-6 weeks of fieldwork, conducted in villages,
structured as an exercise in systematic observation as a basis for decision making.

Taking as its context the first block’s appreciation of environment by objective

observation, the second block examines rural management’s functions in each
area and the major issues which confront rural managers responsible for each
function. Objective and rigorous analysis of issues is prescribed as a basis for
choosing the techniques to be used to resolve them – and, for students, the
second semester is to be followed by 4-6 weeks of fieldwork, conducted in a
rural enterprise (eg., a food processing plant), structured as an exercise in
identifying and analysing issues in one functional management area and
management’s responses to those issues.

The third block uses the analytical processes of the second block as a basis for
explaining decision making techniques and their applications in rural enterprises.
Where complex theory is involved, the intention is to show how the rural manager
can get it applied professionally and practically to his problems, rather than
trying to turn young rural managers into amateur scientists. Usually, the greatest
emphasis is placed on the need for qualitative judgement, even when quantitative
techniques are used, in order to resolve an issue and make a decision on it.

As stated, this three-step sequence may appear artificially neat and simple. In
practice, however, its use is not simple – and it cannot be applied as neatly as
it has been explained above. It has to be modified in the light of the highly
differentiated subject matter to be treated in each of the five areas, which are
discussed briefly below.

(1) Rural Organisation is the reference area, in relation to which the entire
discipline is mapped. Its content is rural society and the rural manager’s
tasks which directly involve that society. Existing knowledge in the social
sciences can be expected help in describing and ordering village society as
a unified system of informal and formal human relations, while case studies
of management practices will be required in order to understand and teach
the rural manager’s tasks vis-a-vis the village. As a subject matter area,
Rural Organisation can be studied and taught in the following three blocks:

16
(i) The first block examines village society and the place of the co-operative(s)
in that society. The important elements are:

The informal structure of village society; its demography; class, clan

and creed self-identity; male and female roles inside and outside the family;
traditional distribution of power and authority; ethics, norms and attitudes
which bear on individualism, status, work, family, property ownership,
bargaining – and the exchange of unwritten assurances.

The traditional institutions of the village: caste and/or creed associations;

trades and occupations; the panch (traditional councils of five wise elders)
and formal codes of behaviour.

Institutions of change: education; modern communications media; political

parties; trade unions; co-operatives and the instruments of government,
including especially laws relating to local self-government, elections,
property ownership, labour and co-operatives.

These elements of village society are presented as a dynamic social system,

in which institutions such as co-operatives can act as a change agency.
The role of rural management in designing, creating and helping to
organise such change agencies innovatively, to suit villages’ needs is
also illustrated by example.

(ii) The second block treats in detail the functions of rural management which
take effect in the village itself and organisational-behaviour aspects of these
functions. The main elements of this block are:

The federal structure of co-operatives as a link between the village and

urban centres of power, science and wealth. The role of village co-
operatives in federal co-operative structures.

The internal organisation of village co-operatives: the roles of elected

office bearers, honorary officials, paid chief executives and other
employees; individual and group behaviour – and the functions of
education, training and specialisation in the development of village co-
operatives and other farmers’ organisations, with some emphasis on
incentives, motivation and remuneration.

17
 Planning and organising new and re-structured village co-operatives
and other innovative change agencies in villages, as a function of the
rural manager: communication and demonstration as means of obtaining
understanding and consensus, election and selection of office bearers
and staff; the role of the extension agent in start-up and maintenance of
viable village organisations.

The main issues treated are: objective selection in traditional power structures;
equal access to co-operative services; replacement of traditional norms vs their
accommodation (e.g. especially, nepotism and corruption).

(iii) The third block treats mainly the process of decision making in rural
organisations and related techniques useful to rural managers in this area
of their work. The main elements treated are:

Development of extension, supervisory and audit personnel who work

with village co-operatives; monitoring and evaluating the progress of
village co-operative systems; reviving dead or dying village co-operatives;
using persuasion and authority to resolve personal and group conflicts,
including the conduct of formal and informal meetings; personnel
management and trades union-management relations in village
organisations and rural enterprises which operate industrial plant and
equipment.

While “techniques” exist for carrying out these functions of rural

organisation, the art (or science or habit) of using these techniques depends
on the practitioner’s decision making ability, which has to be learned, but
cannot be taught by conventional methods which treat the teacher as the
student’s source of authoritative knowledge. If this is correct, this block
will have to be taught mainly by the use of real-life studies (e.g. “case
studies”) for role-playing and analysis by students.

(2) Food and Fibre Systems is the subject-matter area which enables rural
managers to view their work in the context of the practical problems of
farmers. It treats the biosphere and agriculture as a system, made up of the
natural and man-made elements which comprise each rural area’s ecology,

18
 and agriculture as the manipulation of natural resources in order to produce
food and fibre for human consumption. It treats food and fibre systems as
the physical flow of agricultural products from producers to consumers.
Established physical and technological sciences are essential sources of
knowledge for the study of this subject-matter area, although their synthesis
for the purpose of studying food and fibre systems is at an early stage of
development – and there is little specific, decision-oriented material which
can help in describing and ordering information on the biosphere systems
which comprise the work environment of rural managers and their
constituency. Allocation of scarce resources (energy sources, especially)
in villages and rural enterprises is an important part of this subject matter
area; to help deal with it, economic techniques can be used, to demonstrate
concepts of optimisation, while case studies can be used in order to examine
the ways in which rural managers try to optimise returns from the scarce
resources available to them. This subject-matter area can be studied and
taught in the following blocks.

(i) The first block examines the structure and dynamics of bio-sphere systems,
viewed as the basis of rural people’s livelihoods. The main elements are:

The village’s pool of natural and man-made resources; stocks, imports

and exports of energy, which determine a village’s energy balance; food
and fibre consumption needs in villages; the impact of agricultural
modernisation on village energy balances; relationships between field-
crop and animal production; differences in breeds and varieties, and
how they affect the processing and marketing stages of food and fibre
systems.

(ii) The second block analyses the functions of rural managers within food and
fibre systems:

Management of industrial conservation, particulation and transformation

of food and fibre products; planning and organising the purchasing,
transport, processing and storage functions in food and fibre systems;
evolving technologies for improved health, nutrition, education and
environmental sanitation in villages.

19
 The main issues treated are: systems efficiency and appropriate
technology, concepts of quality, product characteristics and the problems
involved in maintaining the validity of food and fibre products throughout
each system, from the producer to the consumer.

(iii.)The third block examines the rural manager’s main decision-making tasks
in food and fibre systems and techniques used by rural managers in dealing
with such matters as:

Sequential development in scale and complexity of product/process

technology and village environmental technology; vertical and lateral
integration of product/process technology; point and systems optimisation
in farming, village environmental improvement and producer-to-consumer
systems.

In this part of the curriculum, the students will be learning how to deal with
sciences (usually technical sciences, such as food technology and
engineering) which they have not previously encountered, but which are
important elements in real-life situations requiring them to make decisions.
Probably, special forms of materials will be needed for teaching this block,
designed to enable the students to incorporate technical relationships into
their decision-making practices (but calling these materials “case studies”
may not help to define them).

(3) The Rural Economy is the subject matter area which examines the social
and physical systems of Area 1 & 2 as a network of exchanges, transactions,
earnings, savings and investment – and the village economy in relation to
the national and international economies. Most of the concepts and
techniques of mathematical economics are relevant – but further studies
will be needed to determine the place of mathematical economics in this
subject-matter area. Not all rural managers need be mathematicians and
most rural enterprises lack access to computers and their data requirements,
but many techniques of quantitative economics require a considerable
knowledge of mathematics and computer technology for their application.
Also, they often do not as yet produce practical answers to many of the
problems faced by rural managers. However, in 5-10 years’ time, most of

20
 our rural enterprises will have access to computers, and if (for example)
they use professional consultancy agencies for such work, their managers
need not be mathematical economists. More experimentation and
development is therefore needed, to identify and adapt the techniques of
quantitative economics which can be useful in rural management.
Meanwhile – especially in basic, time-bound courses for young rural
managers – it will probably prove most practical to concentrate on
accustoming them to seeing the rural enterprise as a part of the economic
system, to understanding how the great economic forces of the money and
banking system affect their enterprises, to reviewing the parts of their work
on which economic theory has a bearing and the parts of their work in
which the practice of quantitative economic techniques may be useful, either
now or in the future, so that they will be receptive to new quantitative
applications as they are developed. Subject to this caveat, uses of economic
analysis and technique, which are treated in the second block of the Rural
Economy, can contribute to the third block of Food and Fibre Systems, as
briefly discussed above, and to the third block of financial Planning and
Control of Rural Enterprises (subject-area 4, which is discussed later).
Allowing for this expanded coverage of the subject matter area in the third
block, the Rural Economy area itself can be studied and taught in the
following three blocks.

(i) The first block treats the economic system, and rural enterprise as part of
that system, in the following sequence:

The village economy: production, consumption, internal and external

trade and exchange, savings, investment and real-income distribution.

India’s rural economy as the sum of all its village economies.

Current production and consumption – and future requirements – of food

and fibre: supply and demand functions, fixation of prices received by
rural producers and paid by urban consumers for food and fibre products.

The structure of investments, costs and revenues in agricultural

modernisation and in producer-to-consumer systems handling food and
fibre products; the place of rural enterprises in these systems.

21
(ii) The second block treats selected economic theory and its bearing on the
rural manager’s functions, which can be studied in the following sequence:

Theories of supply, demand and optimal resource allocation.

Setting prices, purchasing, selling and distributing food and fibre

products, as economic activities and as functions of the rural manager.

Economic analysis of producer-to-consumer systems.

The following issues are particularly relevant to this block: returns to land,
labour and capital with reference to landless labourers’ families, small and
large land-holding families; relationships between price and “quality;”
medium and long-term investment in urban markets via pricing and consumer
services; selective transfers of resources to poor rural families vs equal
access for all to co-operative and public services/resources; rates of return
as criteria for choice of developmental investment projects.

(iii) In the third block, the economic theory and related rural management
practices observed and analysed in the first two blocks are used as a basis
for study of the decision-making processes conducted by rural managers
and related techniques, with particular reference to the following:

Alternative uses of the enterprise’s own professional staff and hired outside
agencies for:- market research; advertising; planning and organising
optimal capacity utilisation and other systems applications; cost-
minimising distribution/retailing systems; development and evaluation
of new produce/packaging in food and fibre systems.

Decisions on these matters are, in real life, usually based on detailed studies
made by employees of (or consultants to) the enterprises concerned. If
access can be obtained to such studies for teaching purposes, they would
probably provide the best basis for teaching materials used in this block.

(4) Financial Planning and Control of Rural Enterprises is the subject matter
area which enables the rural manager to obtain some measure of the returns

22
 which the rural enterprise is helping its constituency to obtain from their
labour and investment in agricultural production, processing and marketing
and in improvement of the villages’ environment. It includes accounting,
which in its conventional form is the most widely established technique for
control of the internal economy of the rural enterprise. Unlike most
quantitative economic techniques, however, accounting techniques and their
practical applications in rural management can be taught in a relatively few
hours of study and classroom sessions. Substantial literature from the fields
of management accounting and financial management is available for
teaching this subject matter area, although further research and development
is required in the adaptation of accounting technique to village enterprises,
especially, and to rural enterprises in general, including non-profit making
developmental enterprises. Initially, at least, teaching these parts of the
subject will require (mostly new) case study materials. Given these materials,
the subject area can be taught in the following three blocks:

(i) The first block teaches the structure and use of accounting system as a
representation of the internal economy of the rural enterprise:

Financial accounting systems; single-and double-entry methods; how

operating statements and balance sheets are assembled.

Physical product flows and cash flows related to operating results and
changes in assets and liabilities.

Accounting for village enterprises and for the village as a single enterprise;
impact of modern producer-to-consumer systems on the village enterprise
and on the village economy.

Village accounts, national accounts and the rural economy.

(ii) The second block treats the rural manager’s uses of accounting systems in
the functions of controlling the rural enterprise’s uses of its funds and of
appraising its investments. It can be studied in the following sequence:

23
 The rural manager’s functions in planning, appraising and monitoring
the techno-economics of individual agricultural and village environment
investment projects; appraising the impact of such investments on
producer-to-consumer systems handling food and fibre products.
Techniques which can be used for these functions.

The main issues considered in this block are: uses of calculated rates of
returns in capital budgeting for socially oriented investments; evaluating
the relevance of accounting reports when projecting and monitoring the
viability of new and expanding rural enterprises; establishing relevant criteria
for identifying optimal investment budgets; capital accumulation in
enterprises owned by poor farmers; welfare activities in commercially
operated co-operatives; timeliness, complexity and usefulness to rural
managers of accounting reports.

(iii) The third block examines the decision making processes involved, and
related techniques, in the financial management of rural enterprises in the
following sequence:

Alternative uses of the enterprise’s own professional staff and hired outside
agencies for the design and installation of physical and financial
accounting systems in rural enterprises – and for the design and/or
appraisal of proposed investments in new or expanded producer-to-
consumer systems.

Obtaining and using farmers’ private savings, public funds, and

commercial bank loans in building the capital structure of rural enterprises.

As mentioned above, this block melds financial analysis with the study of
the rural economy. Teaching materials required will be similar to those
used for the third block of “the Rural Economy.”

(5) Integrative Rural Management is a subject matter area in its own right if
only because it adds to the discipline of rural management, as a whole, the
meaning and the process of making “policy”. Most of its content, however,
is drawn from or built on the content of the other four areas, because the

24
 main function studied in this, the fifth and last subject matter area, is the
making of policy, which is viewed as a process of integrating the content of
the other four subject matter areas of rural management. Most policy making
requires an integrative view of management. Moreover, because the policies
of rural enterprises are made in the context of public policy, that also is a
necessary part of this area’s content. Existing literature on public and
enterprise policy can be used in the study and teaching of this area, together
with case study materials on the context of policy and the functions of
making and communicating it in rural enterprises. (Nb For pedagogic
convenience, written and oral communication, to the extent that it can be
taught at all, can conveniently be treated within this area, especially as
communication on policy “up and down” the rural enterprise’s organisation
often presents great difficulties). The variegated content of Integrative Rural
Management can be studied and taught in the following three blocks:

(i) The first block examines the policy making function, as such, from the
rural manager’s point of view. It can be studied in the following sequence:

The role of professional rural managers in policy making – and their

relationships with policy making office bearers (e.g. elected directors of
co-operatives) – in the rural enterprise which employs them; recognising
the impact of social, physical and economic systems on the policies of
rural enterprises;

Identifying goals as a basis for policy making; objective, professional

“briefs” on enterprise policy for policy makers in rural enterprises, in
oral and written forms.

Public policies on:- income distribution; development of the public, private

and co-operative sectors; planning and the mixed economy.

Recognising the impact of public policy on policies of rural enterprises;

“briefs” on public policies for policy makers in rural enterprises.

(ii) The second block treats mainly the practical reasons for integrating the

25
 policies of rural enterprises – and how rural managers try to accomplish
this. It can be studied in the following sequence:

Integrating the policies of federal co-operatives in their villages units,

industrial and commercial enterprise units and central units.

Integrating a rural enterprise’s policies on production, pricing, purchasing,

processing, storage, transport, selling and distribution.

Integrating a rural enterprise’s policies with the public policy making

process.

This block examines the following policy issues: public policy and the private
interests of the rural enterprise’s owners; the roles of public, private and
co-operative systems in bringing modern science and technology to villages
and in adapting modern science and technology to villages’ needs; the roles
of policy makers and professional rural managers in devising new
organisational forms to improve rural productivity and income distribution;
providing equal access for rural people to modernising services; food pricing,
rural/urban conflict and mutual interest; integrative policy-making in rural
enterprises with regard to short - medium - and long-term gains, risks and
profits.

This block also includes study of the rural manager’s tasks of devising and
presenting oral and written analysis of policy issues.

(iii) In the third block, integrative rural management treats mainly the rural
manager’s decision making processes, and related techniques, in connection
with the making, monitoring and evaluating of a rural enterprise’s policies;
the block can be studied in the following sequence:

Viewing policies as a series of trade-off’s in the priorities given to

conflicting goals – between, for example, equality and traditional power-
structures in the rural social system, productivity and selective transfer
of assets in the physical/ agricultural system, short-term profits and long-
term efficiency and/or economic viability in the rural enterprise as a part
of a producer-to-consumer system.

26
The block also includes study of oral and written communication of policy and
of feedback on its effectiveness in rural enterprises. Teaching materials required
appear to be mainly “policy papers” – which are usually hard to come by in
real-life situations.

VII. Conclusion
This attempt to define rural management in terms of five subject-matter areas
emphasises the amount of further study and research which is needed in order
to clarify the nature of the subject as a discipline. However, even now, it is
evident that the subject can be expected to become a management discipline in
its own right.

It is already being practiced, often intuitively and pragmatically, in existing

rural enterprises. Its development as a discipline will largely be based (especially
at the start) on the study of current rural management practices and situations
– as was the case with the early development of “business management” as a
discipline.

“Rural management,” however, has some characteristics which already mark it

off as a separate discipline. In addition to the behavioural and economic sciences,
the study of rural management must draw more heavily than “business
management” on the physical and technical sciences which deal with food and
agricultural systems. Its study must also view the tasks of rural managers
through the eyes of the rural society which they serve – and its practice requires
sensitivity to the priorities and needs of that society, dominated as it is by the
culture of poverty. Perhaps above all, by looking at the rural manager’s tasks
through the eyes of the poor farmer, the study and teaching of rural management
as a discipline can grasp, and adapt for its purposes, modern management’s
observational skills, analytical techniques and decision making practices, applying
them innovatively to the tasks of rural development and the elimination of rural
poverty. By working for rural people, the professional rural manager can help
them to develop new institutional forms, making the benefits of modern science
and technology available to them in harmony with the development of a vigorous,
modern rural culture that is more stable and humane than the industrial urban
cultures served by most modern managers today.

27
Table 1: Five subject-matter areas, each in three blocks
First Semester: Second Semester: Third Semester:

Primary emphasis: Primary emphasis: Priimary emphasis:

Environment, sys- Functions, issues and Decision making and
tems and description analysis related techniques

Structured rural enterprises fieldwork, supervised report writing emphasising issue identification and analysis
Structure fieldwork and supervised report writing emphasising objective description and classification
1. Rural Village enterprise and Organisational beha- Rural organisation and
Organisation social structure: the viour and the rural the personnel function:
place of the co- co-operative: Federal Developing staff and
operative in village co-operative struc- resolving conflict in rural
society and related tures and their developmental/commer-
social, institutional internal organisation: cial/industrial organisa-
and legal systems human relations and tions
the personnel function

2. Food & Fibre Natural resources and Agricultural process- Sequential development of
Systems conversion efficiency ing, storage and trans- technology in rural
in agriculture: food port. Industrial con- setting; applying concepts
and fibre production servation and reforma- of optimisation in agri-
systems as a means of tion of food/fibre culture and in producer-
combining natural products; the concept to-consumer systems
resources for human of validity in producer-
purposes to-consumer systems

3. The Rural Economic structure of Supply/demand Market research and

Economy villages and farms; theory and its appli- related statistical theory;
the economics of the cations; pricing theory uses of advertising,
national diet; supply and practice for rural agencies and develop-
and demand func- enterprises; buying ment of new products/
tions; determination and selling in agricul- packaging for food and
of urban and rural tural markets; econo- fibre systems; organising
food prices; income mics of food distribu- retail sales systems
distribution tion

4. Financial Financial accounting Planning and con- Design and operation of

planning and systems; physical and trolling use of funds, physical and financial
control of cash flows; rural appraising invest- accounting systems in
rural enterprises’ accounts, ments in expanded or rural enter-prises; the
enterprises analysis of state- new producer-to- money and banking
ments; place of agr- consumer systems in system; financial manage-
iculture in national rural enterprises ment in rural enterprises
accounts

5. Integrative How policy is made, Policies at village/ Appraising available trade

Rural by whom, in rural enterprise/nation-state -offs between conflicting
Management enterprises; roles of level; productivity and goals: e.g. equality (social
and policy makers and equal access; viability systems and goals),
Communica- managers; goals and and stability of insti- productivity (physical
tion policy; rural enter- tutions under rapid systems and goals) and
prise policy; the develop-ment; rural/ efficiency (economic
national diet and urban conflict and systems and goals)
public policy national interest

This stream to be taught by classroom discussion plus a structured set of exercises in oral & written
communication

28
 Occasional Publication 1

A NEW INSTITUTE OF RURAL MANAGEMENT–

AND A NEW DEVELOPMENTAL DISCIPLINE ?

Michael Halse

Institute of Rural Management, Anand 388001

1980
(Reprinted: January 1997)
 1
Occasional Publication 1

A NEW INSTITUTE OF RURAL MANAGEMENT–

AND A NEW DEVELOPMENTAL DISCIPLINE ?

Michael Halse