Bureaucratic Learning in the Rural Co-operatives of China

This article traces the transformation of a bureaucracy, the supply and marketing co-operatives in rural areas of China, from an organizational learning perspective. These co-operatives used to monopolize the entire rural distribution system in China. They purchased agricultural produce from and sold raw materials and consumer goods to peasants. However, their monopoly was seriously curtailed and survival was endangered by the opening up of the rural economy during economic reform. Over the past decade, they have been undergoing rapid organizational and operational changes. They have outgrown the original role as simple distribution institutions. They maintain their competitiveness by providing a much greater variety of services to peasants and rural enterprises. In conclusion, these co-operatives demonstrate that bureaucracies do in fact learn. Nevertheless, a prerequisite for significant learning is that operational flexibility has to be injected into the system first.