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Spatial- and Settlement Management Electronic Textbook version 3.0

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Spatial- and Settlement Management Electronic Textbook version 3.0


Table of Contents1. Spatial- and Settlement Management Electronic Textbook version 3.0 .......................................... 1

1. Preface .................................................................................................................................... 11.1. 1. Introduction ............................................................................................................ 11.2. 2. Main contents ......................................................................................................... 21.3. 3. Objectives and requirements .................................................................................. 2

2. 1. Tasks and activities of settlement and spatial management ............................................... 22.1. 1. Objectives ............................................................................................................. 22.2. 2. Contents ................................................................................................................ 22.3. 3. The phrasing of contents ........................................................................................ 3

2.3.1. The definition and types of management ...................................................... 32.3.2. The stages of spatial and settlement management ........................................ 62.3.3. The definition of spatial and settlement management ................................. 10

2.4. 4. Summary .............................................................................................................. 132.5. 5. Self monitoring questions .................................................................................... 132.6. 6. Test questions ....................................................................................................... 13

3. 2. Municipal models ............................................................................................................. 143.1. 1. Objective ............................................................................................................. 143.2. 2. Contents ............................................................................................................... 143.3. 3. The phrasing of contents ..................................................................................... 15

3.3.1. The main features of Europe’s historical regions ........................................ 153.3.2. A short introduction to the self-government types existing in the European systems .................................................................................................................. 163.3.3. The Mediterranean model ........................................................................... 173.3.4. The Scandinavian model ............................................................................. 203.3.5. The German model ...................................................................................... 233.3.6. The Anglo-Saxon System ............................................................................ 24

3.4. 4. Summary .............................................................................................................. 263.5. 5. Self monitoring questions ................................................................................... 273.6. 6. Test questions ....................................................................................................... 27

4. 3. Models of management: differences between strategic and operative management ....... 284.1. 1. Objectives ........................................................................................................... 284.2. 2. Contents ............................................................................................................... 284.3. 3. The phrasing of contents ...................................................................................... 28

4.3.1. On administration models in general .......................................................... 284.3.2. Management of the magisterial activities ................................................... 324.3.3. The internal administration ......................................................................... 324.3.4. Principles of the compound system of interactions .................................... 334.3.5. Strategic and operational management ....................................................... 33


5. 4. Characteristics of technocratic a bureaucratic management ............................................ 385.1. 1. Objectives ........................................................................................................... 385.2. 2. Contents ............................................................................................................... 395.3. 3. The phrasing of contents ..................................................................................... 39

5.3.1. The roots and main features of the technocratic and bureaucratic management ................................................................................................................................ 395.3.2. Features for the corporative and democratic models .................................. 40


Spatial- and Settlement Management Electronic Textbook

version 3.05.3.3. Management in accordance with the Christianity ...................................... 44

5.4. 4. Summary .............................................................................................................. 495.5. 5. Self monitoring questions .................................................................................... 495.6. 6. Test question ........................................................................................................ 49

6. 5. The new public management and the private sector ........................................................ 506.1. 1. Objectives ............................................................................................................ 506.2. 2. Contents ............................................................................................................... 516.3. 3. The phrasing of contents ...................................................................................... 51

6.3.1. The decentralised management of public duties ......................................... 516.3.2. Traditions and changes in public management: techniques from some European countries ................................................................................................................ 526.3.3. Public management in Europe .................................................................... 56


7. 6. Public administration, public law relationships, public servants and service .................. 627.1. 1. Objectives ........................................................................................................... 627.2. 2. Contents ............................................................................................................... 627.3. 3. The phrasing of contents ...................................................................................... 62

7.3.1. The relevance of human resources in organizations ................................... 627.3.2. Some practical aspects ................................................................................ 647.3.3. Personnel management ............................................................................... 66


8. 7. Urban management and the system of factors of the functions of town municipalities, the decentralized management of public functions, co-operative city management? .................... 75

8.1. 1. Objectives ............................................................................................................ 768.2. 2. Contents ............................................................................................................... 768.3. 3. The phrasing of contents ..................................................................................... 76

8.3.1. Urban management ..................................................................................... 768.3.2. Co-operative urban management ................................................................ 808.3.3. Integrated urban development in the EU .................................................... 828.3.4. Co-operative urban management in Hungary ............................................. 85


9. 8. The management of rural settlements and municipalities ................................................ 909.1. 1. Objectives ............................................................................................................ 909.2. 2. Contents ............................................................................................................... 909.3. 3. The phrasing of contents ...................................................................................... 90

9.3.1. Definition of rural and the village ............................................................... 909.3.2. Rural functions ............................................................................................ 949.3.3. Rural development and management – some success stories ..................... 97

9.4. 4. Summary ........................................................................................................... 1019.5. 5. Self monitoring questions .................................................................................. 1019.6. 6. Test questions .................................................................................................... 102

10. 9. The special tasks of micro-regional management ........................................................ 10310.1. 1. Objectives ........................................................................................................ 10310.2. 2. Contents ........................................................................................................... 10310.3. 3. The phrasing of contents ................................................................................. 103

10.3.1. The micro-regional level in Hungary ...................................................... 103



version 3.010.3.2. The function of micro-regions and key-members .................................. 10710.3.3. Practical experiences ............................................................................... 109

10.4. 4. Summary ......................................................................................................... 11510.5. 5. Self monitoring questions ................................................................................ 11510.6. 6. Test questions .................................................................................................. 115

11. 10. Tourism-destination management – a specific domain ............................................. 11611.1. 1. Objective .......................................................................................................... 11611.2. 2. Contents ........................................................................................................... 11611.3. 3. The phrasing of contents .................................................................................. 117

11.3.1. The main definitions of the destination management ............................ 11711.3.2. The basics of TDM system ..................................................................... 12011.3.3. The levels and steps of the establishment of the TDM system ............... 121

11.4. 4. Summary .......................................................................................................... 12611.5. 5. Self monitoring questions ................................................................................ 12611.6. 6. Test questions .................................................................................................. 126

12. 11. The management of value-added chains and local developments ............................. 12712.1. 1. Objectives ........................................................................................................ 12712.2. 2. Contents ........................................................................................................... 12712.3. 3. The phrasing of contents ................................................................................. 127

12.3.1. Regional value-added partnership (RVP) ............................................... 12712.3.2. Opportunities and threats in an RVP ....................................................... 12812.3.3. Development phases of RVPs ................................................................. 13012.3.4. Hungarian experiences from the RUBIRES programme ........................ 137


13. 12. The management of LEADER action groups ............................................................ 14013.1. 1. Objectives ........................................................................................................ 14013.2. 2. Contents ........................................................................................................... 14013.3. 3. The phrasing of contents ................................................................................ 140

13.3.1. LEADER: a new rural development approach ....................................... 14013.3.2. The LEADER approach in Hungary from the experimental programme (2000-2005) to the new LEADER (2007-2013) ............................................................ 14213.3.3. Key actors of LEADER .......................................................................... 14813.3.4. Experiences from the Hungarian LEADER programme ........................ 150


14. Literature .......................................................................................................................... 15514.1. Used websites ...................................................................................................... 15814.2. Legal documents and strategic programmes ....................................................... 160

15. Examination practice ........................................................................................................ 16016. Final Exam ....................................................................................................................... 161

16.1. „A” variant .......................................................................................................... 16116.2. „B” variant .......................................................................................................... 162


Chapter 1. Spatial- and Settlement Management Electronic Textbook version 3.0This course is realized as a part of the TÁMOP-4.1.2.A/1-11/1-2011-0038 project.

1. Preface1.1. 1. IntroductionThe broad variety of the profession means a great challenge even for the professionals of regional and settlement development. Understanding the tasks of regional and settlement development only in a narrower sense we may speak about a manifold and complex definition, theory and a broad spectra of practical activities (planning, project management, fundraising, community development, lobbying, monitoring etc.) as well.

When we have founded the academic specialization of regional manager MSc we wanted to create a type of geographer 2.0 based on German experiences. That’s why the title „manager” appearing in the name on the one hand means the adaptation of the German example, and on the other hand it indicates the development of a professional competence can tackle with the complex set of problems occurring.

Regional and Settlement Management is a key subject of the same name profession of the MSc training going on at the Department of Geography, EKC. As of this sort our students learn it through a theoretical and a practical course as well. Recent work aims to help students’ in learning beyond oral lectures. The course and recent work also relies on the knowledge of the BSc subjects named „Municipal Studies” and „The Public Administration of Hungary”.

The author is in a difficult situation as firstly he has to follow out a twofold aim, namely the adaptation of an alluring external example and the renewal of the education of geographers in Hungary at once inside the framework of this hybrid subject. Secondly the situation has become even more complex as the Hungarian systems of municipalities and public administration lives to see the most dramatic changes of the last 22 years, including the radical transformation of the institutional system of regional and local development.

Actually who can become a settlement or spatial manager, but the question can be asked, who can benefit from these ideas in the daily routine? The role of a settlement manager can be filled either by a major or a notary,



version 3.0vice-notary maybe by a head of office. The function of a spatial manager can be fulfilled by the leaders of the county municipality, district office leaders, or the head of the county government office etc.

1.2. 2. Main contents1. Tasks and activities of settlement and spatial management

2. Municipal models

3. Models of management: differences between strategic and operative management

4. Characteristics of technocratic a bureaucratic management

5. The new public management and the private sector

6. Public administration, public law relationships, public servants and service

7. Urban management and the system of factors of the functions of town municipalities, the decentralized management of public functions, co-operative city management?

8. The management of rural settlements and municipalities

9. The special tasks of micro-regional management

10. Tourism destination management – a special field

11. The management of value-added chains and local developments

12. The management of LEADER action groups

1.3. 3. Objectives and requirementsAfter the completion of the course students will be able to comprehend the definitional frames of regional and municipality management. They are going to get acquainted with the principal background and the practical manifestations of them as well. After the survey of theoretical questions concerning municipalities and public administration they’ll get familiar with special problems of certain regional and municipality management issues. Among them we may find problems of city and village development and the specific issues concerning micro regions. They are going to acquire the bases of the guidance and management of some particular, but for geographers relevant forms (TDM, value added chains and LEADER local action groups of rural development) too.

2. 1. Tasks and activities of settlement and spatial management2.1. 1. ObjectivesWith acquiring the lesson students will be able to understand the special characteristics of management activities, respectively its types. With the cognition of the specialities of spatial and settlement management and the learning of some scientific management interpretations they are going to master those frameworks what determine the management activities. Explanations concerning to the birth of regional level additionally the organizational and functional elements connected to the functions of municipalities will be reviewed.

2.2. 2. ContentsThe definition and types of management

The stages of spatial and settlement management

The definition of spatial and settlement management



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2.3. 3. The phrasing of contents2.3.1. The definition and types of management

Generally we see management as a form of activities done by one or more persons in order to harmonize or co-ordinate the work of an organization. According to another phrasing, management means the planning, organization, control and marketing of a process. (László, M. N.d.)

Harold Koontz differentiates many versions of the interpretation of management in his concluding article. According to him (Koontz, H. 1980):

• The empirical approach states the conception of management is case-sensitive and depending on what leads to success or failure

• The interpersonal behaviour approach says things become active through people, in the centre of management is the explanation of relations

• The group behaviour approach puts the emphasis on the behaviour of group members and built on the experiences of sociology, anthropology and social psychology

• The cooperative social system approach (organizational theory) mixes the elements of the two former ones into one system (organization), co-operation is the most important objective

• The socio-technical system approach adds a further technical system dimension to the former ones, according to these methods and mechanisms have a great impact on society, while the role of the manager is to make harmony between the social and the technical dimension

• The decision theory approach apostolates that management can be marked by the way of decision-making, that is why a systematic approach to this process is a must

• The systems approach features management as something similar to biological systems, like the sum of coherent sub-systems, inputs and outputs, it is the most complex approach integrating the others

• The management science approach supposes that problems may be tackled in a mathematical model which contains the basic connection forms in order to optimize the objective

• The situational approach says management actions are dependent upon the situation, we must take into consideration the effect of them on the behavioural patterns of individuals and the whole organization as well

• The managerial roles approach originates from the research of Mintzberg aiming to investigate the roles filled by the manager

• The operational approach is trying to mix all former ones and so produces one unique understanding of management which can demonstrate the degree of complexity needed by the manager

Inside management different functions can be distinguished. One of the most important is planning, which means the definition of the organizational aims and of the steps needed to reach them, it is a conscious adaptation to environmental changes and so a minimizing of risks (Figure 1).



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Figure 1 Existing sub-systems and active forces in organizational systems (Own edition after Gáspár, M. 1995)

Figure2 The 7S model of McKinsey about the structure of management system (Source: Gáspár, M. 1995)

The 7S model of McKinsey summarizes the dimensions should be touched by management activities in a given organization. (Figure 2) In any organization do exist or revive different kind of forces and there are more or less formalized units whose operations are crucial for the manager.

The stress of individual dimensions can be different in the life of certain organizations; according to it



version 3.0Mintzberg distinguishes seven kind of organizational structures. (Table 1)

Table 1 Organizational structure types written by Mintzberg (Source: Gáspár, M. 1995)

Source: Own edition after Gáspár, M. 1995

It is crucial for a manager to be aware of which type his organization fits in best according to the inner circumstances.

The temporality of management activities can’t be overstressed. Regulation plays an exceptional role in it as it is able to install feedback points into the processes of the organization. In case of permanently repeating activities planning, doing, checking and acting are recurring in continuous cycles, we call it PDCA cycles. (Figure 3)

For the realization of plans organization is inevitable, which helps to secure resources needed for functioning. It is supplemented on the one hand by the guidance which adjusts the input side of the organizational units, and on the other hand by the control which covers the direct or indirect (communication) command of human resources. Especially in case of organizations acting through democratic legitimacy, organizational policy must be arranged when decisions are to be passed by the stakeholders.

According to the timeframe of objectives we can distinguish different types of managements:

• strategic management

• tactic management

• operative management



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Figure 3 The PDCA model (Source: hci.co.au Downloaded 10 February 2013)

For the production of different goods the co-operation of value added chains formed by different economic units is needed. The most important sub-systems of such a chain are as follows:

• Primary activities, sub-systems directly connected to the market

• Marketing management to get connection with market

• Innovation management in order to gain competitive advantage

• Production and service management

• Quality management

• Logistics

• Human resource management

• Information management

• Financial management

2.3.2. The stages of spatial and settlement management

The subject of management can be all short of phenomena, we may speak about business, project and financial etc. management. Especially for geographers management of different spatial units arises as a problem to be answered. While settlements are relatively well-defined, the determination of areas or regions is more indistinct. (Bujdosó, Z. 2008)



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Figure 4 The system of districts in Hungary (Source: www.jarasok.com Accessed: 10 December 2012)

Changes occurring in the Hungarian national spatial system have brought a new situation in the scope of duties of spatial management. (Figure 4 and 5)

Figure 5 The statistic-planning micro regions in Hungary (Source: www.ksh.hu Accessed: 10 December 2012)

Many authors has tried to define the concept of settlements has been tried by many authors. Our opinion is that from them the so-called „tetrahedron model” formulated by József Tóth is adequate to serve as a base for the refinement of the subject of settlement management. According to this author a settlement is a co-operative system based on the interaction of natural, social, economic and infrastructural spheres. The dynamism being in



version 3.0the definition must be highlighted as all sides of the tetrahedron adjacent the others, so a change in one dimension affects every other side. During the process of settlement management attention has to be paid on it as well. (Tóth, J. 2002)

In the functions of municipalities three kind can be differentiated, such as basic, service functions additionally management tasks directing-organizing the former ones. (Figure 6)

Municipal systems of the member states of the European Union are extremely multicoloured, except the regions, micro and macro areas of the 27 member states being at different autonomy degree. The legislation of the EU does not possess full competency or decisive legitimacy in these topics, so the role of the national level is still dominant. The Community legislative contains mainly protocols and non-binding legal elements. The veteran European Charter of Local Government accepted in 15 October 1985 or the European Charter of Regional Government are of this sort. (Figure 7)

Accordingly there exists a principled framework that at least in Europe tries to standardize the frames of management of municipalities. However, management activities are realized over it in the everyday practice. As Cameron Harcourt stated in his analysis of Vancouver, cities are the results of those everyday choices which are taken by us as leaders, activists or citizens. (Harcourt, C. 2007)

Figure 6 The so-called cube model of municipal activities (Source: Gáspár, M. 1995)



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Figure 7 Countries signing the European Charter of Local Government (Source: upload.wikimedia.org)

The region is a broadly used key phrase applied by many actors consequently a broad set of meaning has been connected with it. The European territorial actors have conceived their special region interpretation. In a county-conference held in Hungary in 1998 Hans De Belder, the representative of the Assembly of European Regions has defined the region as follows:

„a democratically elected political authority that is situated directly under the government and more-or-less autonomous economically and financially. Very often they can possess their own culture, history, identity etc.”(De Belder, H. 1998)

Social geography is not uniform in the definition of regions. Our opinion is that the interpretation of regions of Anssi Paasi is a properly complex definition as it states that regions are culturally and socially created units, historical creatures, formations that change in time. They are born by social activities and communication, but more than the pure image of momentarily perceived reality.(Paasi A. 1991)

Paasi (1986) differentiates the REGION from PLACE. The latter is related to the experiences, everyday life and personal meanings of individuals. The former is paralleled with society and collective. (Figure 8) „REGION” is the result of institutionalized practices and collective meanings. Naturally individuals and society are in constant interaction consequently the system is reproduced and transformed.



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Figure 8 The presence of individual and society in human activities (Paasi, A. 2000)

2.3.3. The definition of spatial and settlement management

The phrasing of settlement management – similarly to the former ideas – is not an effortless duty. According to some authors settlement management is in fact not the agency of individual actions, but that of action-networks. Anyway relationships among different organizations are important. In the complex and inordinate, un-sutured system of inter-organizational networks authorities are only one part of input, in no case represent the whole system. (Czarniawska, B.2002)

Spatial and regional management is an even more complex definition than settlement management. It concerns not only the co-operation of individual settlements, but of many more actors (enterprises, NGOs, national and regional authorities and organizations etc.) that can’t be tied to one particular settlement.

Besides there is another explanation of regional management, namely the comprehensive control of organizational units of global companies acting in different geographical areas. (Ambos, B. – Schlegelmilch, B. B. 2010)

The person of settlement and regional manager is substantial despite – as we stated above – management is about the activities of supra-individual networks. Still in the spider web spiders have a crucial role holding the end of pile in his hands and detects all movements of sub-systems.

However the settlement and regional manager is the man nestled between politicians and the technical-executors. Ultimately his activities can be characterized not so by innovation as the endeavour towards the accuracy of reproduction and execution. (Czarniawska, B. 2002)

We may give a complex answer to the question whether what activities do managers have to care about. The performance of an organization, like settlement and areas can be divided into two parts: we may distinguish professional and constitutional issues. While the former ones pertain to relations originated in connection with the main activities of the organization, to the latter ones the next can be instanced:

•

Conceiving among the frameworks of the traditional thinking, management activities to a great extent are about information processing with the next parts:

• analysis: the collection of information about the internal-external environment of the organization



version 3.0• communication: regularly with stakeholders (maintainers, users, inferior staff members)

• planning and henceforth the improvement of the efficacy of decision-making

• implementation: a more effective execution (the improvement of info-systems, the training of human resources etc.)

• utilization: with the implementation resources needed for the work of the organization are born

• follow-up

The manager in other worlds can be named a problem-solver what function may be depicted by a standard formula:

• Raising and determining of problems

• The analysis of the external and internal environment

• The establishment of the framework priorities – the designation of basic values, organizational mission

• Problem analysis (SWOT)

• Search for and evaluation of solutions

• the examination of feasibility

• cost-benefit analysis

• To draft the detailed map of solution

• The detailed description of activities

Expressing a bit in a post-modern way, one main role of a manager is sense-production what can be affected by functionality and the force of authority as well. Another key function is to rule difficulties or the struggle with daily problems including planning and the vision of implementation as well. As a manager it is hard to find peace, it is a must to construct and reconstruct permanently in a way to focus on a further and further piece of reality. Fastening belongs to it as well, thus new inspirations and ideas must be tested by possible actors in order to secure their support.

At last but not least the job of a manager is to peg away at beauty, since either a sound machine or a run-in inter-organizational mechanism is beautiful as well. The aim of the manager is to secure this beauty. (Czarniawska, B. 2002)

According to another approach spatial and settlement managers basically direct different energies as long as from a mere idea a tangible project emerges, as Viktor Schauberger, the great Austrian researcher stated:

„If I want to make an apple pie, there is first the idea, then the planning, translating this through visualization and then finally the physical creation of the pie. This is much more important than we realize. From the simplest task like tying your shoelace, to the complex challenge of becoming a tennis champion, the better the 'mind pictures' of how we are going to perform the required actions, the more successful will be the outcome. The force, the impulse, which is the motivator for us to create, is an unseen energetic process.” (cited by: Bartholomew, A. 2003)

According to different sciences settlement and spatial management can be interpreted in different ways as well.

In history the stories of different settlements and areas, the examination of the relationship between leader persons and phenomena plays elemental importance. In jurisprudence the survey of legal acts and aspects determining development are of primary relevancy. In economics these units exist as the places of economic activities. It is argued by some authors that controlling a city resembles being a multinational company’s CEO. (Czarniawska, B. 2002)

Sociologists analyze the population of settlements and areas, their social constitution that is they are looking for internal factors behind surface processes. According to administration science management is that part of the



version 3.0operation of the given organization which is responsible for the environmental adaptation skills, additionally harmonizes and makes goal oriented different functions. (Gáspár, M. 1995)

Geography as a chorological science deals on the one hand with the spatial distribution of administrative and management activities on the other hand with the geographic relations of different actors. Initiating from the theory of institutionalization by Paasi the task of a spatial or settlement manager can be specified as the second or the arranger of the institutionalization process. (Figure 10)

Figure 9 The system of agents concerning the performance of settlement municipalities (Source: Gáspár, M. 1995)

Figure 10 The draft of the institutionalization of regions (Source: Paasi, A. 2000)



version 3.0Animation 1: The system of agents concerning the performance of settlement municipalities

2.4. 4. SummaryIn this chapter we introduced some possible ways of the interpretation and the types of management. We indicated that in different organizations diverse sub-systems and forces can work, henceforth the tasks of managers can be standardized only to a relatively small extent. It is a crucial statement, that it is not enough to deal with the work of an organization at a glance but rather to analyse it in dynamic. Different assistant methodologies that can be summarized with PDCA cycles serve this purpose. The settlement and spatial management can occur in diverse scenes out of which in recent chapter we highlighted settlement municipalities and different spatial units (regions). The common regulation of the agency of municipalities has been started for more than 25 years, despite the national control today for the main is integer.

Different sciences try to interpret spatial and settlement management by their special point of view, for geographers the theory of the institutionalization of regions by Paasi provides a complex way of understanding.

2.5. 5. Self monitoring questions1. What types of management can be distinguished?

2. What does PDCA model mean?

3. What are the special tasks of settlement management?

4. What is a region?

5. What steps constitute the institutionalization of regions?

6. Which countries have ratified the European Charter of Local Government?

7. When did Hungary ratify this agreement?

8. What kind of financial sources must be made for the European municipalities?

9. What is predicated by the so called cube model of municipal agency?

10. What main points constitute the system of agents concerning the performance of settlement municipalities?

2.6. 6. Test questionsConjugate the organizational structure types written by Mintzberg to the below characteristics!

Organization type Character of the organization

1. Entrepreneurial a, A permanent conflict situation, the cohesion is depending on the efficiency of the conflict management

2. Mechanic bureaucratic b, Internal cohesion given by the organization culture, loosely formalized other internal contacts

3. Diversified c, Instable organization, strong service units, complex co-operation mechanisms

4. Professional d, A priority of the professional staff, democratic decentralization



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5. Innovative e, Strong mid-level, sub-units with a high level of autonomy

6. Missionary f, A strong formal control, quality assurance and limited decentralization

7. Political g, A tight control over the executives

Correct: 1g, 2f, 3e, 4d, 5c, 6b, 7a

Group the following arguments to different phases of the PDCA model!

1. Flowcharts

2. Conflict-solution

3. Data-sheets

4. Cause-effect diagram

5. Graphic analysis

6. Pareto-analysis

7. Small group leader skills

8. Standardization of processes

Correct:

P: 1, 6, 4

D: 2, 7

C: 3, 5

A: 8

3. 2. Municipal models3.1. 1. ObjectiveThis chapter aims at providing an overview on the various self-government systems operating in Europe. Here, a special emphasis will be put on the historic background of the evolution of such systems as well as on specific factors determining the evolution and operation of the levels of local self-determination in Europe’s various historical regions. A more detailed review will be given on the main features of the French, Swedish, German and English self-government systems.

3.2. 2. ContentsThe main features of Europe’s historical regions

A short introduction to the self-government types existing in the European systems

The Mediterranean System

The Scandinavian System

The Anglo-Saxon System



version 3.0The German System

3.3. 3. The phrasing of contents3.3.1. The main features of Europe’s historical regions

Europe – although with physical geographical borders also intended to be contrived – can be interpreted as a socio-cultural region. Through many centuries, its most important force of cohesion was represented by its Jewish-Christian religion and culture facilitating a flourishing variegation at other segments of life (economy, culture, politics, etc.). This force of cohesion was progressively replaced by the modern nation state considered as a European invention and universal institution in the Modern Age. According to the (neo)conservative philosophers, it is still this system unhinging Europe among its global competitors with its sustenance being essential for today’s global capitalism. (SCRUTON, R. 2005)

A key question in the European type democratic systems is the relationship between the local authority and the central national level. It is the local level that can be directly influenced by citizens, has a direct impact on their lives as well as where the most direct experience of democracy is obtained. The significance of these levels is also emphasised by subsidiarity that from a tradition developed in the church had become a key element of the European integration.

According to the masterpiece by Jenő Szűcs, usually three historical regions of Europe are mentioned. They include Western Europe, the home for the notions of freedom, local small communities and the respect for the individual. Sprouts of the development of orders as well as, centuries later, the world of enlightenment, general human rights and liberalism were launched from here. At the other end of the continent, i.e. in Eastern Europe, a rather strongly centralised Bezant (later, Russian tsarist) society and state is found not giving rope to the personal rights of freedom and the autonomy of local communities. (SZŰCS, J. 1983) Between the two is found the so-called ‘In-Between Europe’ with features from both other regions and joined to one of the above regions from time to time (‘Ferry-country’). (Figure 11)

Central Europe as a phenomenon was temporarily ceased due to the duality existing between 1945 and 1990 with however some gaps, i.e. ‘non-aligned countries’ (Finland, Yugoslavia) could not be unequivocally classified as part of either blocks remaining (Figure 12).

Self-government as a developed form of freedom was formed and relished by the collectivum thus developed in the great historical regions with various levels of intensity and forms. In the meantime, at areas affected by the western type European integration, as a result of various historical and cultural roots, several self-government systems developed. Despite this, the most relevant principles of self-government can be summarised as follows (Aimak Foundation):

1. Presence of a selected local governing body;

2. Existence of common property;

3. Legally established agreement between local authorities and citizens;

4. Regional demands fulfilled by own resources;

5. Functions fulfilled at social fields;

6. Existence of a competition-based system in fulfilling self-government employment positions;

7. Responsible finances toward the region’s citizens;

8. Independent decision-making;

9. Protection by law.



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Figure 11 Europe’s social geographical regions (Own edition)

Figure 12 The ‘Iron Curtain’ in Europe (Own edition)

3.3.2. A short introduction to the self-government types existing in the European systems

In Europe, several self-government systems evolved as a result of the given country’s and society’s internal development along with external impacts. Between the central and local levels, usually elected regional self-governments and national deconcentrated bodies are found. The method of the division of functions and roles between the various levels of state authority can be studied based on a research of a multi-approach system of criteria. Among them the following can be mentioned:



version 3.0• effective collection,

• adequate allocation,

• accountability,

• transparency,

• public satisfaction,

• active public participation

It can be claimed that no optimal solution is available to allocate functions as it all depends on the position and traditions of the given system of self-government.

In general it can be concluded that self-governments in the developed and democratic countries enjoy major political independence however have a various extent of economic autonomy. On this basis, three different types of public financial structures can be distinguished in Europe. The so-called Scandinavian model (e.g. Sweden) is described as with expenses of the self-government exceeding 15% of the GDP, and the Mediterranean model (e.g. Spain) when remaining below 5%,. Figure 13 Self-government expenses in the share of GDP in various European countries (2000-2011) (Edited based on Eurostat data)

As seen above (Figure 13) self-government expenditures remain the lowest in some Southern European countries (Greece, Cyprus). As a matter of fact however that in the actual Mediterranean countries as France, Portugal or Spain, the value studied although still remaining below the EU27 average indicated a continuous increase during the past decade. The Nordic countries appearing at the other end of the scale (Denmark, Finland, Sweden and Norway) can be, in some cases, characterised by values around 30% or exceeding that.

A similar distribution can be observed for the share of self-government expenditures from public finances (Figure 14). It is well observable that the Northern-Southern duality can be detected in this indicator, too. In some countries where provinces have outstanding significance (e.g. Spain), this regional level is present as an actor of finances of key importance.

Figure 14 The share of self-government expenditures from public finances in European countries (2011) (Source: Eurostat)

3.3.3. The Mediterranean model

Mediterranean model features centralization, increased state control and a limited role of small-sized self-governments. French is one of the most typical Mediterranean type self-government systems. This type is also called Napoleonic system as such features developed as a result of the administrative reforms of the former French emperor. (Figure 15)

The model’s main feature is the included intensive state influence as well as personal and institutional control operating. Within the system, extensive systems of independent professional control bodies (national and



version 3.0regional court of auditors) exist.

Roles and functions to be attended are allocated to three-level of regional self-governments. In addition to them, in attending roles, the regional service associations of self-governments, the state, civil organisations and the church also fulfil important roles.

Figure 15 The regional self-government system in France

The financial background of roles by self-governments is covered from four sources:

• state subsidies,

• local taxes,

• local fees,

• credit uptake.

Approximately two third of self-government expenditures are covered by own revenues and various credits. The remaining one third is added up by state resource transfer (general, urban planning and solidarity endowments). Local taxes are subject to various factors as property, plots, local business, etc. The assessment of local taxes is compulsory for self-governments. Tax measures are settled by the state defining minimum and maximum values. Taxes are collected by a national body or future tax incomes are advanced to the self-governments. So-called indirect taxes are also present within the system (representing important added revenue for regions and counties) as for example motor vehicle tax, electricity consumption and various dues.

As an important part of the system, in order to implement development, self-governments are allowed to assess surtaxes facilitating the realisation of investments of such type.

As a result of the frittered character of self-governments, the development of local partnerships is supported by the state by providing direct subsidies for self-government associations fulfilling surplus roles. (Figure 16 and



version 3.017)

To replace unaccounted revenues, self-governments can freely take up credits however as observed, such practice has become increasingly stricter as economic difficulties are present in the public sector as well. To supplement development sources, targeted subsidies can also be provided for specific projects by the ministries in charge.

The financial operation of self-governments is supervised by three public institutions (treasury, prefect, regional court of auditors):

• Bureau of Treasury – controlling of warrants

• Prefect – legitimacy control

• Regional Court of Auditors – post legitimacy and subserviency control.

In addition to the above, apparently publicity also has an important controlling role in the self-government systems.

Figure 16 The map showing France’s self-governments of settlements (Source: http://thewhereblog.blogspot.hu/2009/01/topography-of-community.html Downloaded: 10 September 2012)



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Figure 17 The administrative self-government map of Italy (Source: en.wikipedia.org Downloaded: 12 December 2012)

3.3.4. The Scandinavian model

The self-government systems in the Scandinavian countries traditionally root back to the Middle Ages. In these states, a rather developed version of estate system involving the majority of society was developed. As a rare example in Europe, peasantry outlaw elsewhere could exist as an independent estate as an equal category to other estates. With the wide-spreading of reformation in these countries, the Lutheran sect became state religion thus it is no coincidence that for example the Swedish self-government system was developed in the traces of the system of dioceses (Figure 18).



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Figure 18 The map showing Swedish dioceses and self-governments (Edited based on http://upload.wikimedia.org/wikipedia/commons/8/8e/Dioceses_of_Church_of_Sweden.svg and http://en.wikipedia.org/wiki/Municipalities_of_Sweden)

This type of system includes self-governments with extensive areas with extensive system of roles and range of responsibility. Accordingly, self-governments obtain a remarkable financial-economic autonomy. As another feature is that during the 1970s centralisation was predominant as the Swedish welfare state became consummated. In the 1990s, in accordance to tendencies within the EU, the setting up of smaller units was typical. (Figure 19)

Scandinavian type systems are based on the cooperation between the state, counties and settlements. All three levels are involved in the implementation of various types of roles along with controlling, supplementing each other and functioning in partnership.

An interesting feature of the system is that the mayor’s function would not exist in regional self-governments (however obviously would in major towns). Instead of mayors, bodies elected for four years govern in regional units or full-time employed administrators. Committees also play an important role carrying out the majority of operative activities. The most important elements of the system are budgetary and financial committees however such bodies can also be established to fulfil other specific tasks. (Figure 20)



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Figure 19 Changes in the number of the local self-governments in Sweden

Figure 20 The model of a typical Swedish self-government (Edited based on the Local government in Sweden – organisation, activities and finance, 2005)

Some typical roles attended by Swedish self-governments:

• Pre-school education and primary schools

• Secondary schools

• Elderly care



version 3.0• Disabled care

• Maintenance

• Libraries

• Planning and construction

• Environmental protection and health issues

• Water supply

• Sewage water collection

• Public cleansing

• Waste collection

• Ambulance and emergency

The country’s law on self-government is a framework-type law i.e. local level has a significant discretional power representing the actual power concentrated here.

An important feature of the Scandinavian model is that on the level of self-governments, a considerable amount of money is spent on education. Usually, it represents 33% of all expenditures. In addition to this, costs related to elderly care and child care also represent outstanding items in within the budget.

The most relevant source of revenues for self-governments is represented by the income tax paid by citizens (approximately 60% of all revenues). In addition, state subsidies are also substantial and are usually devoted to functioning when local governments intend to implement developments and for that their own resources must be mobilised. To fill in such a function, several municipal corporations were established. Population has a significant and direct influence on local power, as local referenda where the most important and significant issues decided are often held. Before such decisions are made, consultations are compulsory to be carried out with various interest groups and trade unions. Another condition is that the public-private partnership (PPP) developed projects and enterprises can be adumbrated by members of the public and local civil organisations. This is a significant achievement as the local authorities can not conceal any potential corruption cases under the pretext of protection of their business secrets.

The legal control of self-governments is carried out by national and regional bodies, which are supplemented by an internal self-control mechanism.

3.3.5. The German model

Due to the peculiarities of the German history – namely the country’s dividedness for centuries - , many forms of local-regional self-governments have been established in the society.

Economic self-governments are represented for example by chambers of commerce and industry, chambers of agriculture fulfilling important functions in the country's socio-economic system.

Professional self-governments such as chambers of medicine, dentists, veterinary surgeons or pharmacists, also have significant traditions.

Various universities have cultural self-government not only in Germany, but traditionally also in Europe.

Social self-governments include health insurance or pension insurance, accident insurance and Labour governments.

The autonomy of regional self-governments is guaranteed by the German federal government and provinces through legislation. Such basic rights guaranteed are as follows (TILKORN, E. N.d.) :

•

In recent decades, reforms led to a significant reduction in the number of local governments. The German self-



version 3.0government model is based on a federal system of public administration and is a multi-level and hierarchical system in which the lowest level has a relatively limited role. Within the system both the municipal and district levels with different responsibilities exist. The municipal roles include communal services, local health issues, sports and culture, schools, housing construction and the maintenance of the local road network.

Self-governments are an important repository of the functioning German democratic system. Within the Federal State the direct control of self-governments is a provincial responsibility.

Local authorities have their own tax revenues, but may receive additional support from provinces. An important precondition related to their management is that self-governments may be credit granted only for investment purposes. This is subject to strict provincial supervisory approval. Different provinces usually operate strict regulatory system for self-governmental credits. In general, local savings banks and Landesbanks provide cheap loans to self-government developments. (Figure 21)

The provinces are the main bearers of power taken over in certain cases only by the federal state, however, there are also functions jointly occupied. Tax laws are for example federal laws. Across the country, three basic taxes exist as follows:

• Income tax

• Corporate income tax

• Value added tax

A major source of revenues for local governments is represented by a variety of subsidies and state-shared taxes

and local taxes (e.g. luxury tax).

Figure 21 The map of Landesbanks in Germany (Source: de.wikipedia.org Downloaded: 10. December 2012.)

3.3.6. The Anglo-Saxon System



version 3.0Regarding its origin, it is interpreted as the local decentralisation of the central power’s certain functions. Also referred to as ultra vires model meaning the self-governments could not expand beyond their direct legal authorisation. The authorities are responsible for, in the Anglo-Saxon system, fulfilling roles designated by the Parliament and the associated supplementary functions (financing, human resources etc). In this system, self-governments are responsible for organising human and infrastructural public services as well as fulfilling certain public authority (mainly police) functions. Such are, in general, legally binding set of tasks or optional functions. As a special feature, the system consists of a large number of self-governments with very limited substantial scope of authority. Above the level of settlements, the actual level of self-governments is represented by districts, towns and cities. The primary functions are fulfilled by district and towns with district rights. Cities (Unitary Authorities) also perform county and district functions.

The system roots back to the legal system of Victorian England, when local elected bodies had received an increasing number of roles that were covered by revenues coming from their own taxes collected. Since the second half of the 20th century, their functions have been gradually withdrawn - centralised – to the national government. Another blow to the traditional system was dealt by central governments at the end of the century when further functions were given over to so-called quango1 organisations. Today, opposite to the approximately 60,000 designated members of the more than 5,000 quango stand the 22,000 elected representatives of the approximately 500 traditional self-governments. (WOLLMANN, H. 2004)

In fulfilling roles - similar to the Scandinavian system -, a major role is to be played by various committees, whose compositions must reflect the political distribution of the council as a whole.

Resultant from the conservative government of 1980s, the privatization of roles and the flourishing of public procurements were witnessed. It was ended by Blair’s Labour government by introducing the ’Best Value’ (BV) system, which means that each municipality must elaborate an annual plan on the system corrections to be achieved in order to improve its services. (Wollmann, H. 2004) BV and its replacement, the more predictable ’Comprehensive Performance Assessment’s (CPAs) represented the institutionalization of quality assurance system in the self-government system.

The local level is significantly dependent on the central legislation, as it can easily distract or select further local functions. Such systems are in place in the United Kingdom, Australia, New Zealand, Canada and most US Member States.

The contemporary UK self-government system – following the reforms of the 1990s – is particularly diverse. Scotland and Wales witnessed the two levels of fulfilling roles (county/borough and district councils) completely disappearing and replaced by uniform authorities. It is very interesting that in some regions of England, following an extensive public debate in some areas, the uniform system was introduced whereas at other regions the former, traditional categories remained in use. A separate system was put in place in Northern Ireland, where the central government retained major functions. The special and traditional self-governmental division of London’s proper city (’Corporation of London’) is also worth mentioning. (Figure 22)

11Members of the quango (quasi-non-governmental) organisations are appointed by the govenrment, its expenditures are mostly covered by the central budget however deals with local and regional issues.



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Figure 22 The statue marking the border of the City of London (Corporation of London) at the bank of the River Thames

Animation 2: Changes in the rate of the average Swedish municipality tax

3.4. 4. Summary



version 3.0In this chapter, a review was given on the regional disparities of the self-government systems interpreted as a European basic value. A detailed overview was also provided on the centralised French model developed based on the Napoleonic rule of law and was spread mainly in Southern Europe. In Northern Europe, the self-government system developed on the roots of the Lutheran Church is dominated by units with large areas and high autonomy. The third major type is the German one containing, due to the federal state, a multi-level and complex system of self-governments. The English self-government system with its still working form developed, following a complex reform process during the 20th century developed at the edge of the continent, somewhat separately.

3.5. 5. Self monitoring questions1. What are the main features of the Mediterranean self-government system?

2. What are the main features of the Scandinavian self-government system?

3. What are the main features of the Anglo-Saxonian self-government system?

4. What are the main features of the German self-government system?

5. What are the similarities between the Hungarian and the Mediterranean self-government systems?

6. What are the similarities between the Hungarian and the Scandinavan self-government systems?

7. What are the similarities between the Hungarian and the Anglo-Saxonian self-government systems?

8. What are the similarities between the Hungarian and the German self-government systems?

3.6. 6. Test questionsGroup the following arguments to the different municipal models! (Mediterranean, Scandinavian, German, Anglosaxon)

1. Multi-level government-municipal system

2. A system based on the Lutheran Church Counties

3. Low interest-rate loans provided by Landesbanks

4. Small-scale municipalities with only a few functions

5. Crucial role of commissions

6. Total transparency of PPP constructions

7. Called Ultra vires model as well

8. Importance of quango organizations

Mediterranean: 4

Scandinavian: 2, 5, 6

German: 1, 3

Anglosaxon:7, 8

Which one of them is NOT a principle of municipal systems?

1. The existence of an elected local governing body;

2. National defence;

3. The existence of common property;



version 3.04. Legally-based contract between local authorities and inhabitants;

5. Transparency;

6. Local demands fulfilled from own resources;

7. Functions filled in the social area;

8. The existence of a competition-based system in the fill of vacancies of the municipal system;

9. Financial affairs checked by local inhabitants;

10. Autocracy;

11. Independent decision making;

12. Legal protection.

Correct: 2, 5, 10

4. 3. Models of management: differences between strategic and operative management4.1. 1. ObjectivesIn the operation of an organization - whether it is for-profit or non-profit – forms of interaction originating from hierarchical relationships (e.g. magisterial relationships), traditionally play a major role. The ’ability to manage them’ is an essential manager skill. Today, beyond these traditional relationships new skills and competencies essential in solving situations originating from compoundness and partnership as well as from the unpredictable changes in the external and internal conditions are gaining a more and more increasingly important role.

This lesson aims at interpreting the term administration models and the associated basic definitions and giving an introduction to the systems of interaction describing hierarchical relationships. Further, based on the compound partnership relations are reviewed. Within the hierarchical and compound administration systems, strategic and operational management approaches should be distinguished. These two scenarios will also be reviewed in this chapter.

4.2. 2. ContentsOn administration models in general

Management of the magisterial activities

The internal administration

Principles of the compound system of interactions

Strategic and operational management

4.3. 3. The phrasing of contents4.3.1. On administration models in general

In regional and urban management, interests of the given group must be represented during a project or program between hierarchical and compound organisations. In such inter-organizational interactions administration and management are considered to be relevant definitions. These two key terms are essential to the understanding of the relationships within the given organization also in order to establish cooperation with partner organizations.

Under the term ’administration models’, a variety of approaches are found in the literature of various disciplines. Taken as an example, such are interpreted in the jurisprudential literature as the regulated systems of



version 3.0relationships of various power structures determined in legal parlance. Furthermore, a dissertation on the potential systems of models in developing a micro-regional system can also be found (SOMLYÓDY, PFEIL E. 2003) . References regarding the establishment of solid society according to which the model of social administration must be altered can be heard (JUHÁSZ, G. 2004) . Unfortunately, due to this versatility it is impossible to deal with all aspects of administration models. Those interested can accomplish such from the literature of organizational sciences.

Interpreting the term ’administrative models’ from the point of view of a profession (not yet existing in Hungary) i.e. urban and regional management seems to be rather challenging. Especially when this attractive idea is intended to be filled up with concretes provided the flexi definition of ’region’ considered as a basis. To conceptualise this definition, the administration and management interpretation betoken by sociology is called upon for. Thus, according to the social scientists:

"Management is usually of a form of practicing power. In the sociological context, management is a power structure between two organisations where one (the managing) organization influences the other (the managed) organisation. This influence represents the emerging will of the managing one." (http://www.uni-miskolc.hu/~wwwallin/kozig/hirek/altalanos_resz/iranyitas.pdf Accessed: 23 July 2012)

In this sense, thus, two organizations with some kind of power hierarchy and between them have to be assumed. Apparently administration/management potentials beyond the relationship between the two organizations (for example, the relationship between certain public administration bodies and the public), can not be interpreted in this definition. It is better to be supplemented by being the influence of the managing body on organisations, groups or individuals.

The administration science assumes a so-called administrative formula in which a role is provided to the subject of management (manager), the object of management (the managed person or organisation), the objective of management (ensuring the undisturbed functioning of the object) and the content of management (the system of roles fulfilled by the subject) (Figure 23).

The key of the emerging surplus in human cooperation (KALAS T. N.d.) is hidden somewhere in this formula. The urban and regional manager is a person catalyzing the functioning of the processes.

Figure 23 The basic formula of administration (Edited based on KALAS T. N.d.)

Various administrative systems are characterized by applying different tools both in professional and in administrative matters. Accordingly, management can be implemented through legal regulation or the explanation of roles, providing information, financial support, training, etc.

Management relationship is referred by the literature for cases when an organization has management power by law over the activities of others. This can be manifested in direct regulation, disbursing norms, decision making,



version 3.0supervisory or controlling law as well.

From another approach, however, for any organizations, management and administrative activities can be distinguished. In general it can be claimed that the management codes of practice is less regulated compared to the magisterial one which also requires detailed legal authorisation. The manager’s work and conditions within the organization can be associated primarily with management activity. However, magisterial activities as regulations strictly defining the possibilities of management should not be neglected.

The management power of organizations over each other can have a wide spectrum ranging from a limited power to full power of management. The former is more common in modern administrative organisational structures with the autonomy of regulated bodies are ensured by e.g. legal standards.

Various forms of management can be distinguished according to whether the managing body is authorized in organisational or professional matters. Legislation on management can be specified in details or framework-type only. In the latter case, the body managed obtains a so-called discretional power and can manage anything not prohibited by the law under narrower or broader circumstances. According to the jurisprudence, there are several types of management licences. (Figure 24)

. Figure 24 Types of management licences

Figure 25 Types of magisterial supervision



version 3.0Over time, with the gradually decreasing role of state centralisation, the total management scope of duties also indicated a continuous decrease whereas the supervisory role has been re-valued. This, obviously, was accompanied by the strengthening of the autonomy of local communities in the Western European sense.

According to the jurisprudential literature, three types of supervision, i.e. magisterial, legal and technical supervision are distinguished.

The scope of magisterial supervision – also classified into several sub-types – can affect both individuals and organizations. (Figure 25)

Legal supervision serves to retaliating offences. This power is often limited to launching initiatives as e.g. the legal supervision of Hungarian self-governments since the final word (as in certain cases the dissolution of a given self-government) can be declared only by the House of Parliament. (Figure 26)

Figure 26 Possibilities for legal supervision

Professional supervision is supplied by ministries regarding the jurisdiction of self-government and private institutes. Such measures aim at unobjectionably enforcing professional aspects. (Figure 27)

Figure 27 Licenses for professional supervision



version 3.0Following the above description of management and supervision, the question of practical importance on the duty of the managed individual or organisation when the direction clearly violates the law arises.

There are various principles to the practical interpretation of the above matter. One is the principle of unconditional subservience according to which the managed ones have no rights to contribute (unconditional subservience). According to the other, the legality of the directive must be examined and in case it is against the law, implementation is obliged to be refused (full responsibility). The third type provides a possibility for consideration for the managed ones (moderate subservience). Another possibility is given when the managed one requires both written edition and an approval by the superior authorities.

The fact that if by the implementation offence or felony would take place or human life or physical integrity would be directly threatened, implementation should be denied, must be taken into account at all times.

4.3.2. Management of the magisterial activities

Self-government magisterial cases are classified into a special category. The municipal council is entitled to practice the scope of authority in these cases, however this can be transferred. In such cases, the given scope of authority can be transferred to the committee, the mayor, the sub-self-governmental body or to an association with council. These institutions, however, are not allowed to further delegate their scope of authority. It should also be mentioned that such scope of authority can not be transferred either to the town clerk nor a minority self-governmental body.

Self-governmental magisterial scopes can be established on the one hand, by the House of Parliament through law-making activities and, on the other, by the council. Specifically, most social benefit issues are classified as municipal magisterial matters for which the decision must be made in accordance with the General Administrative Procedure Law, the Local Self-government Act and the local organizational and operational procedures as appropriate. The decision is made by the given body in the form of a decree which can certainly be appealed against. In case such decree was made by the subject of the transfer law, the forum of appeal is represented by the council however when the decision was made by the council itself, the truth can be proven through litigation referring to the violation of law. (SZŐRÖS, L. Á. 2006)

In addition to the above, local governments are also involved in public administration matters when the state, instead of establishing local administrative organization systems at high costs, use the self-governments’ already existing offices to fulfil such tasks.

The subjects of such task delegations are usually clerks, however town clerks or administrators of the mayor's office can also be appointed for such state administration tasks. In such cases they obviously have no right to transfer the competence. In exceptional cases (national defence, civil defence, disaster management), the mayor, Lord mayor or president of the county assembly can also be commissioned by such magisterial state administration power by law or governmental decree.

In such cases - given that administrative matters are concerned - the body of representatives can not refuse and can not overrule the decision given. It is very interesting to note that in exceptional cases, the clerk of the district centres or the notary office clerk can be commissioned by law with authority extending to the surrounding settlements to act (Office of Government Issued Documents, Guardianship and Child Protection Office and construction issues).

4.3.3. The internal administration

Administration activity can be classified into several sub-frames among which internal administration, along with decision-making, organisational management, state economy and material activities is classified as an administrative legal but not public power field.

Internal administration includes the functioning of the internal organisation fulfilling administration roles, the evolvement of functioning and its consecutive maintenance. Its tasks include both organisational and professional matters. The administration of this sub-frame is represented by measures, other national regulatory frames and internal regulations. Internal administration, e.g. in the case of a self-government applies to the functioning of its own organisational frame. Among them, one of the most important fields is the financial-economic one. Self-governments, in accordance with the relevant measures, by their total cash-flow as well as all revenues and expenditures are part of the state finances thus the relevant measures of the act on state finances must be applied on their economy. (Figure 28)



version 3.0Figure 28 The various sub-frames of state finances in Hungary

As a principle, the common lawfulness and principles of administration namely optimisation, rationalisation and modernisation must be enforced in this respect. Internal administration related measures including the legal frame of internal administration, the limitations of the leader’s decision right or even the legal content of hierarchical relationships are disposed by the law on public servants.

Based on the relevant legislation, self-governments can independently establish their internal structural and operational frames thus their internal administration frame as well. The European and national regulations provide only framework-type basic regulations and principles as a basis to develop local regulations.

4.3.4. Principles of the compound system of interactions

Compound relationships can be observed even in administration frames characterised by basically hierarchic relationships. Such can be seen for both external and internal legal frames. In a compound relationship, various state administration bodies, law enforcement organisations, local and minority self-governments, development councils, public bodies, public institutes etc. can be present as actors. Compound relationships can also be called, in other words (as also applied in the EU project language), partnerships. Partnership is a rather important element, not only of regional and urban development but also of place and regional management activities. Partnership, in a manner, means the involvement of regions, self-governments, the business sector, civil organisations and the public in development, programming and management. Also, subsidiarity and the establishment of a social dialogue are European principles. Partnership and compound relationships are important as such can be the source of innovations and new ideas as well as are the stages of trust, common goals and cooperation. Compound relationships represent potential solutions to complex problems thus indirectly become value establishing activities. Partnerships are of key importance in regional processes as well. Horizontal and vertical partnerships can be distinguished. (Figure 29)

Figure 29 Vertical and horizontal partnerships

A specific case of compound relationships is networking being a feature of postmodern organisational frames and such formations are characterised by high puffer capacity and bearing capacity.

4.3.5. Strategic and operational management

Administration and management can aim at achieving short-term direct impacts as well as longer-term ones, influencing the life of the given organisation in its perspective. Accordingly, strategic and operational government and management activities are distinguished.



version 3.0Strategic planning and its management mean the determination of the functioning of an organisation or regional unit for a longer period of time. As a determinable final result is attempted to be achieved in a chaotic environment thus the method involved is a rather delicate one whose success is highly dependant on the degree of cooperation and integration during the planning process. Cooperation among the actors of planning, coordinated by a planning centre, is required in order to develop a successful plan. Planning is an activity continuously taking place in time that can not go without a certain level of continuity in the organisational frame, in human resources and the management of the information system. This latter one is essential as with lacking an up-to-date planning database, no precise plans can be developed.

Features of strategic planning specify some considerations for the management whose observation is the pledge for plan implementation. Such considerations are long-term thinking, the representation of alternative possibilities, development orientedness and innovativity. Furthermore, management must analyse organisational changes but should take environmental factors also into account resulting in the principle of flexibility. Today, network relationships are of just as extremely important as management can save time, energy and money by appropriately dividing functions among the members of the network. Strategic management can not work without adequate risk assessment background. In order to manage the designated risk factors, risk management techniques should be applied.

One of the most complex among planning-management methods is log-frame matrix also attends to the presence and exploration of presuppositions and various risk factors (Figure 30)

Figure 30 A draft of the log-frame matrix

Strategic management means envisaging long-term objectives that are attempted to be reached by various forms of management at the given organisation. As being a complex process, its several sub-frames are distinguished. (Figure 31)



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Figure 31 The partial processes of strategic management

It is of key importance for such type of management to develop relationship and harmony between the longer-term sustainability of processes, resources and functioning. To enforce this latter requirement, various eco-methods (ecological accountancy, eco-balance or eco-audit) are applied in the functioning of various organisations.

An eco-balance of an organisation (Figure 32) estimates the institute’s environmental impacts by studying four sub-frames as follows:

• Functioning statute: Input materials (raw materials, intermediate materials), emitted pollution, energy loss, discharge of end-products and stocks

• Product line statute: Environmental impacts of the given product from the exploitation of raw materials to the post-consumer stage (waste elimination) also called C2C cradle to cradle strategy

• Procedure statute: An analysis of input-output relationships in various partial processes

• Settlement statute: the presence of specific features realised at settlements and not realised at previous a statutes (e.g. land-use, infrastructure, etc.)

The management of an organisation is assisted by the four databases to identify and classify various environmental problems more easily. As detailed data are available, environmentally polluting raw materials, production methods or the so-called ecological weaknesses can be more easily identifiable thus become exterminable.



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Figure 32 Sub-elements of setting up an organisational eco-balance

This type of management has been developed by adopting some elements of long-term planning. Meanwhile, it has been applied at an increasing number of places where new social phenomena and stakeholders appeared or changes accelerated with the progress of globalisation.

The successful application of the old types of management was encumbered by the information revolution as an increasing amount of information was accrued among which orientation was only possible by applying new specific methods.

The study and analysis of organisation related external and internal information is a relevant task of strategic management. To the handling of the feed-back system and the definition of appropriate development directives obtained from the information, adequate functioning is required from the entire organisation. By this, however, the significance of the other side of management, i.e. operational management is also pointed out.

Operational management includes the segment of management involved in conducting and organising activities being part of the everyday routine, thus its essential objective is to maintain continuity. Its main features can be summarised as follows:

• its main function being maintaining organisational functioning,

• ensuring continuity,

• short-term approach and

• attempting at fulfilling the existing professional and legal requirements. (László, M. n.d.)

Operational type management mainly focuses on introverted, i.e. intra-organisational matters. Compared to strategic management, ad-hoc techniques are much more of its specifics.

A rather exciting field of management is the so-called crisis management providing the management and prevention of unexpected and dangerous situations along with their solution. Among crisis situations, various



version 3.0types are distinguished as financial, organisational, market, human resources, accident, moral, distinction etc. (HORTVÁTH, GY. 2003). In the case of a crisis, the company’s relationship with its clients, market competitors and other stakeholders undergo drastic changes within a short period of time as well as any other internal facilities can be transformed.

Successful crisis management, although requiring quick response, also contains strategic type elements (planning, communication, compilation of a crisis management team etc.). Based on the experience obtained, crisis management requires team-work, and team members have to have the following skills (HORTVÁTH, GY. 2003) :

• constructive approach

• analytic skills

• team spirit

• stress bearing capacity

• competencies at the given field

• decision-making skill and ability

• loyalty

• leadership ability

• prestige

• charisma

A crisis management team, in general, should bear the following characters:

• crisis manager

• spokesman

• secretary

• internal communicator

Animation 3: Risk Analysis: In how many steps?

4.4. 4. SummaryIn this chapter, the general features of administration models on a legal basis as well as frames such control mechanisms can be enforced in everyday life were introduced. A more detailed discussion was provided on certain aspects of magisterial type relationship with special emphasis put on sub-elements affecting the self-government sector. By reviewing the internal management forms of organisations, the presence of these management possibilities within the system was demonstrated.

In the second segment of this chapter, the so-called compound relationships especially partnerships becoming increasingly common today were discussed. At the end of the chapter, through the review given on the differences between strategic and operational management, definitions that could be rather important in a modern organisation (e.g. eco-audit or crisis management) were introduced.

4.5. 5. Self monitoring questions1. What are the principles of magisterial activities?

2. What are the principles of internal administration?



version 3.03. What are the features of the functioning of compound relationships?

4. What are the relevant specifics of strategic management?

5. What are the partial processes of strategic management?

6. What are the features of operational management?

7. What tools are available to develop organisational sustainability?

8. What are the relevant elements of establishing an organisational eco-balance?

9. What roles are required for crisis management?

10. What skills are required to develop adequate crisis management?

4.6. 6. Test questionsGroup the following actors according to the two types of partnership:

1. National level, 2. region, 3. county, 4. area, 5. settlement, 6. district, 7. NGOs, 8. enterprises, 9. municipalities, 10. residential, 11. public administration

Horizontal: 1, 2, 3, 4, 5

Vertical: 6, 7, 8, 9, 10, 11

Classify the following possibilities to the categories below!

Control authorisation type

Authority control type

1. Call for the removal of a defectiveness

2. Initiation of an impeachment

3. On-the-spot fine infringement

4. Regulation right

5. Make decision in the affairs of the controlled

6. Factual ordinance

7. Right to supervise an act

8. Restrict or forbid an activity

Correct:

Control authorisation type: 4, 5, 6, 7

Authority control type: 1, 2, 3, 8

5. 4. Characteristics of technocratic a bureaucratic management5.1. 1. ObjectivesThe title of this chapter, at least at the beginning, seemed to be logical and adequate for the author as containing



version 3.0two features extremely important from the aspect of management activity. While compiling the chapter, however, (as far as the author is concerned) new information was obtained extending the frame of approach covered by the chapter.

Management activities can be classified in various ways, among which according to one the following types are distinguished: technocratic, bureaucratic, corporative and democratic types. In this chapter, their features are attempted to be introduced as being typically wide-spread in Hungary just as in Central Europe. Other sections discuss other forms of management as corporative and democratic sub-types.

The review given on an approach not wide-spread in the Hungarian context, i.e. the relationship between Christianity and management is also a novelty.

5.2. 2. ContentsThe roots and main features of the technocratic and bureaucratic management

Features for the corporative and democratic models

Management in accordance with the Christianity

5.3. 3. The phrasing of contents5.3.1. The roots and main features of the technocratic and bureaucratic management

The functioning of the anytime management activity and its successfulness are decisively influenced by the social and organisational agent where its functioning must be displayed. A modern and free society can not exist without control however it should exist as being invisible. As a solution to this, the technocratic society, coupled with the so-called industrial democracy, controlled by skills and their owners was created by William Smith. (SMITH, W. 1921) According to Smith’s thoughts written at the early 20th century, a sure token for the future of the dynamically developing mankind driven by the industrial development can be the technocracy-driven system.

In the technocratic systems, knowledge and expertise must be interpreted as priorities whereas other features and values (e.g. informal relationships or commitment) do not have major roles. Logic, experience and adequate information flow are the driving forces in these institutes.

As observed, the neutrality of interest is however, can hardly be provided in actual life as obtaining information opens the ground for many kind of malfeasance (e.g. manipulation and preconceptions). On the other hand, emotional aspects associated with human relationships can not be perfectly excluded from the system. Such is the enforcement of public interests related to the functioning of self-government system as well as collegial or head-underling relationships.

The roots of interpreting the bureaucratic management can also be linked to Max Weber of Germany also called the theoretic of bureaucracy. Weber’s interpretation of bureaucracy yet goes without pejorative interpretation overtones. According to his publications, the bureaucratic administration system is the appropriate frame in which modern civil states can exist. This system is characterised by reliability and rationality. In a country with an increasing number of population and also becoming institutionally more and more complex, administration issues occur in great quantities and to have them arranged in a correct way, the stable, orderly and reliable institutional frame of bureaucratic systems are required. Such occurrent issues could not be adequately resolved otherwise by the contemporary civil state. (Figure 33)

A feature of the bureaucratic system is being built on itemised law, rational guidelines and orders (based on the above) of principals. An important feature of functioning is the division of labour and cognizance, increased regularity (including office discipline, too) as well as office hierarchy. This latter one includes the strict subordination, the system of supervisory bodies as well as the right of underlings to plaint. Scribalness also facilitating the verifiability of issues is intended to provide the precision of the functioning of the system. Theoretically, in the bureaucratic system, the basis of appointment is competence. Accordingly, the possibility of continuous advancing is provided to staff members. Accidentally, this could represent a period involving an entire walk of life. Some sort of objectivity (disapprovingly faceless), administratorship sparing emotions and



version 3.0(principally) partisanship imbibe the whole system.

Due to the above described features, it is obvious that bureaucratic systems bear several advantages. There are certain susceptible points however where the functioning of bureaucratic systems could glance off and therefore potential disadvantages will dominate or the risk of certain threats will be higher.

The literature claims that a bureaucratic system can only function under permanent and stable conditions and more or less isolated from the diffusion of innovations.

Under certain circumstances, however, the organisation can be operated by the bureaucratic system even in the profit-oriented sector. Under stable market conditions and with the presence of a routine-type technology or for standardised products or services produced by a high number of employees, bureaucratic economic management can represent a great scenario.

Figure 33 Paper piles as a pejorative demonstration of bureaucratic systems (Source: www.foter.com)

5.3.2. Features for the corporative and democratic models



version 3.0Corporation is term of Latin in origin, meaning community or assembly. In corporative systems, the say into the decisions made by various interest groups and the possibilities of the enforcement of their interests must be emphasised. The more interest groups are involved in decision-making or the more complex interest associations are developed in the preliminary discourses, the more optimal and quasi-efficient are the decisions in the system.

Such decision-making is however time consuming as a common point should be established at several locations along the breaking points between the existing groups. In other words, the model has a high transaction demand. Such model is applied in regional and urban development, e.g. when conceptions of great significance, important national, regional or county-wide etc. plans are approved. In certain cases, planners are obliged to do so by law. In Appendix 10 of the Governmental Decree No. 218/2009 (6 Oct.), organisations authorised to estimate regional development concepts and programmes in Hungary are specified as follows:

• Hungarian National Regional Development Council;

• ministers;

• the following bureaus:

o Hungarian Central Statistical Office,

o The involved county and metropolitan bureau,

o Hungarian Energy Office,

o Hungarian Atomic Energy Authority;

• Hungarian National Council on the Environment ;

• Hungarian Academy of Sciences;

• National self-government interest associations;

• The involved spatial development councils;

• The involved county self-governments;

• In case involved, the self-government of the capital;

• Self-governments of the involved towns with county rights;

• Self-governments of the involved towns;

• Among the regional public administration organisations:

o competent inspectorate for environment, nature and water,

o the national park directorate involved by its territory,

o the directorate for water management involved by its operational area,

o the regional branch office of the National Institute For Environment.

As seen, regional development is an extensive corporative-type system in Hungary. The organisations involved include self-governments, public administration bodies and government bureaus. The National Regional Development Council fulfilling an important role in the national-level coordinating of regional development is a corporative-type body.

A disadvantage of the corporative model is that, due to its characteristics being prone to discriminative functioning, i.e. the opinions of certain interest groups is taken into consideration more intensively whereas others are not heard at all. Such anomalies can result in social conflicts and debilitate groups eventually leading to the waste of valuable resources.



version 3.0The name of democracy being a term Antique in origin as well as one of today’s magic words is often used and misused by various groups and public personalities. This political system originating from the Greek word ‘demos’ (meaning people) represents as read by Aristotle a dominative frame being however also far from optimal.

In the Modern Age, a model where the values of intromission and brotherhood have primacy prior to other aspects is called democratic. This principle can surely be claimed as the most important basis for the functioning of self-governance. This can also be associated with the matters of decentralisation, local autonomy, participation, brotherhood and independent decision-making. Subsidiarity as a principle that was launched as a principle of the Christian church organisation then penetrated the private sector and secular public management (i.e. the regional policy of the European Union) can not be neglected either.

Democratic participation is a rather delicate question in regional and urban development. Theoretically, the highest possible number and rate of people living and organisations functioning in a region actively participating in the planning and implementation should be intended to be achieved. In the late 1960’s of Great Britain, the so-called Skeffington Report provided a detailed regulation on the implementation of this democratic act. A relevant role was attributed to e.g. civil forums, billboards disposed at public areas as well as suggestion collecting boxes into which local residents could drop in their opinions. The system in such form worked only for some years and as observed, did not function adequately. Usually the majority of residents were not successfully addressed to facilitate the implementation of regional and urban development processes in an appropriate way. (Figure 34 and 35)

Figure 34 Workshops as important stages of democratic participation



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Figure 35 Post offices are important scenes for project popularisation and collection of ideas

Figure 36 The main features of public participation

Unfortunately, the author of this book has got no positive experiences on active public participation involving regional and urban development. (Figure 36) The majority of population is too apathetic and does not intend to



version 3.0or can not conceptualise constructive ideas. 2

5.3.3. Management in accordance with the Christianity

Today, several segments of ‘how’ projects, programmes or even settlements/regions should be managed, planned and supervised are taught in the education sector however the question ‘why’ usually remains unanswered. Regarding the project subject, absolute allegiance, loyalty and fidelity are expected at all levels. It should not be forgotten however such efforts against convincement would not facilitate either the project success or the manager’s personal development. 3

To live in amity with our world and to live in amity with ourselves are two extremely important aspects that are, in addition to several professional ‘how’ disposed, to be disregarded. In the mean time, similar principles that can be successfully applied in a manager’s everyday life have been propagated and applied by Christianity for more than two thousand years. In our Modern Age, such Christian principles can be enforced to a rather limited extent due to the increased secularisation. Some intend to confine all that can potentially refer to this from the business world.

Parallel to this, a restrained approach of values is enforced – namely the primacy of raising narrow means – in case motivations and possibilities basically driving our actions are discussed at all. According to László Faragó, e.g. a required minimum in planning and future generation would be if the philosophical, ideological basis based on which planning would be implemented would be clearly amplified at the beginning of the planning process. (FARAGÓ, L. 2005) Thus, one has to deal with motives in regional management as well.

Figure 37 The Maslow pyramid of basic goods in a secularized world

The so-called Maslow pyramid being an often used symbol of our economic age is intended to represent the hierarchy of human needs. (Figure 37) Fundamental needs are at the bottom. After such are met, requirements found at higher levels can be consumed. According to the above, the top is self-actualisation in which the ‘onefold and unreproducible’ human life achieves its apotheosis. The author of this volume, after having seen the list, as on the one hand, lacks community, public goods and on the other, raises the question on what comes ‘Afterwards’.

22When, in 2006, the new management at the village of Maklár decided to conceptualise the village’s development objectives by collecting ideas from the public, the author of this volume was also asked to review the proposals submitted. Despite the best proposals were remunerated with valuable presents, hardly any proposals were received from the adult population, suggestions were explained mainly by children drawings.33The majority of so-called manager diseases is likely to be led back to this common contradictionary system when the manager intends to serve a matter that can not be adapted or agreed.



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Figure 38 A complete version of the Maslow pyramid

Beyond the top of needs both the supra-individual levels here called ‘public goods’ and the transcendent segment are found.4 Quoting the art of Michelangelo, i.e. sculpture is the removing of the excess material and the release of the statue from the rock, the activity of a successful manager is not else but advancing the implementation of thoughts existing in the transcendent. With quoting the protestant predestination to extent, it can be claimed that real success can be achieved in projects only that are drafted in accordance with heaven-born suggestions. (Figure 38)

Thus management is not else but stewardship with God’s heritage bequeathed to us as written in the first book of the Old Testament:

„And the Lord God took the man, and put him into the Garden of Eden to dress it and to keep it.” (Moses I.2.15)

According to what was written by Alford and Naughton, Christian principle do have a place in the world of the management of profit-oriented organisations. (ALFORD, H. – NAUGHTON, M. 2009)

A key actor in the process of management is the manager who, in addition to being a docile executor of the organisation’s conatus (in case of enterprises, a docile profit-generating mankind-robot), is also a sensitive living creature. In the majority of organisations however the absolute suppression of this dimension is experienced that in addition to leading to the individual’s distortion and affection, in long-term, also threatens the sustenance of the given organisation. Keeping the dual advantage of advancing the public goods and personal benefits in view, as a manager, the following key questions must be raised:

• What sort of man to become as a manager?

• What (settlement-level or regional) organisation should be intended to establish and maintain as a manager?

Among the principles of organisations functioning and managed as Christian the following or similar establishments can be mentioned (ALFORD, H. – NAUGHTON, M. 2009):

• Faith in human dignity

44The reader of this volume may find it valorous and subjective deflection that the author contrabands his own faith into an obejctive genre such as a book of the higher education. It can be said in our justification that our objectives are improvement and perfection. In our own opinion, on the one hand, if remaining within the conventional settings, such could not be met. On the other hand, as observed, the essential, the really profound commitment and really long-term perspectives are often lacking in the activity of urban and regional developers.



version 3.0• Faith in being responsible for public goods

• Faith in the necessity of ourselves’ continuous improvement

• Faith in continuous renewal

In case such approach has a place in the world of for-profit organisations, the enforcement of these aspects should be intended in the management of regions and settlements. In our opinion, the establishment of the ‘City of God’ or Jerusalem existing in Christian traditions converges there.

It is maybe no coincidence that the organisations of the traditional English ‘Countryside Alliance’ (Figure 40) involved in rural and community development regard the poem ‘Jerusalem’ by William Blake as their anthem that also became the non-official anthem for the English (Figure 39):

Jerusalem - William Blake

And did those feet in ancient time

Walk upon England´s mountains green?

And was the holy Lamb of God

On England´s pleasant pastures seen?

And did the Countenance Divine

Shine forth upon our clouded hills?

And was Jerusalem builded here

Among those dark Satanic mills?

Bring me my bow of burning gold:

Bring me my arrows of desire:

Bring me my spear: O clouds, unfold!

Bring me my chariot of fire!

I will not cease from mental fight,

Nor shall my sword sleep in my hand

Till we have built Jerusalem

In England´s green and pleasant land.



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Figure 39 The idealized rural England (Source: www.rgbstock.com Downloaded: 3 February 2013)

Table 2 A stakeholder-matrix

Name of the organisation or person involved

Beneficiaries or disbeneficiaries

Interests, requirements Potential cooperation

What should be done to further activate the interest group?

Inhabitants of the micro-region

+ Cheap energy, clean environment

As energy consumers in the distant future

They need to be motivated, raising of awareness

Municipalities of the micro-region

+ Cheap energy, local tax incomes, employment

Owners of pilot projects

Workshops and personal visits, study tours

Chambers + Extending enterprises Contact towards enterprises

Closer involvement in the establishment of partnership

Eszterházy Károly College

+ Increasing Professional background, cooperation of actors

More intense communication towards the management

Civil organisation

+/- (radical green organisations)

Clean energy, environmentally friendly appliances, social and environmental susceptibility

Establishment of legitimacy

Closer connection in the elaboration of the concept

Egererdő Close Corporation.

+ Market, increase of incomes

Providing base material and

Market establishment for base materials



version 3.0

processing, connections of entrepreneurs

Other enterprises

+/- (involved in the use of fossil fuels)

Higher profit for those intend to join the chain, insignificant changes for adverse parties

Increasing the local added value within the value chain

Demonstration of exact business opportunities, establishment of connections to an already existing chain

From the public management point of view including urban and regional managements, it is of key importance that along whose interests activities are organised.

According to the most common model in the for-profit world the shareholder approach should be followed, i.e. activities should be subordinated to the interest of shareholders obtaining property in the company (i.e. the maximalised profit) whereas potential losses must be charged as externalities to the society or environment if possible.

The other approach, becoming increasingly common with the spreading of the slogan of social responsibility, is the so-called stakeholder model however actors indirectly linked to the organisation (suppliers, residents, consumers etc.) can actually also reach a quasi-stakeholder status. 5 The profit of stakeholders is designated as the model’s primary objective whereas only peripheral role is attributed to other groups. (Table 2)

According to the third model, the serving of public good and improvement in advantages should be set as objectives as goods being the token for real development. (Table 3)

We claim that the application of this third type of approach is justified in the world of urban and regional management.

Table 3 Urban/regional goods based on the first two levels of public goods

Significant objectives /goods Individual improvement

Complete improvement of each member of the settlement/region

Community

Community improvement of each member of the settlement/region

Fundamental objectives /goods Financial conditions

Incomes, wealth etc.

Management conditions

Community features, planning etc.

Private objectives, private goods Public objectives, public goods

Animation 4: The scale of values in accordance with the Christian management approach

55Phylosophically, the basis for this could be that the proprietor should use their propriety in a way that no damaga should be caused, i.e. non-proprietors have the right to this. According to another explanation, today’s multinational companies dispose of such a power due to which influence should be allowed to those beyond stakeholders to a certain level in administratorship. In this interpretation, the management’s main responsibility is to balance the interests of the organisation’s participants and its involved ones.



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Figure 40 The logo of Countryside Alliance draws attention to the love of countryside (Source: Wikipedia)

5.4. 4. SummaryIn this chapter, conditions of the evolvement of technocratic and bureaucratic management approaches along with their features were discussed. As concluded, despite their several deficiencies, these two approaches are still suitable for explaining certain aspects of administration and management. In relation to the corporative and democratic model, it was pointed out that both approaches have both strengths and weaknesses. According to the spirit of the age, democratic approach should play a key role in urban and regional management however as observed this can not be almighty either.

At the end of this chapter, the basics of a new type of management system built on Christian doctrines were drafted in which, instead of the traditional shareholder or stakeholder approach, public goods and transcendent values have privileges.

5.5. 5. Self monitoring questions1. Where technocrat management is rooted?

2. What are the main features of technocrat management?

3. Where bureaucratic management is rooted?

4. What are the main features of bureaucratic management?

5. What are the main features of democratic management?

6. What are the strengths and weaknesses of corporative management?

7. What are the main features of shareholder approach?

8. What are the main features of stakeholder approach?

9. What are the main features of organization working by Christian principles?

10. What values can the Maslow Pyramid be increased by?

5.6. 6. Test questionWhich organizations are entitled to comment regional development concepts and programmes from the following ones?



version 3.01. Országos Területfejlesztési Tanács (National Spatial Development Council)

2. Magyar Nőtanács (Hungarian Women’s Council)

3. Központi Statisztikai Hivatal, (Central Statistics Authority)

4. Sándor Palota (Sándor Palace)

5. Magyar Energia Hivatal, (Hungarian Energy Authority)

6. Országos Atomenergia Hivatal; (National Nuclear Energy Authority)

7. Nemzetiségi Tervtanács (Planning Council of Minorities)

8. Országos Környezetvédelmi Tanács; (National Environmental Protection Council)

9. Magyar Tudományos Akadémia; (Hungarian Academy of Sciences)

10. országos önkormányzati érdekszövetségek; (national interest associations of municipalities)

Correct: 1, 3, 5, 6, 8, 9, 10

To which management systems can the following ones be declared?

Technocratic:

Bureaucratic:

Democratic:

Corporative:

Christian:

1. Transcendent factors are taken into consideration

2. Lobbying of different interest groups is crucial

3. The Skeffington Report has risen it as primary priority

4. Built on partial law and rational principles

5. The prevalence of professional knowledge is of primary importance

Correct:

Technocratic:5

Bureaucratic: 4

Democratic: 3

Corporative: 2

Christian:1

6. 5. The new public management and the private sector6.1. 1. ObjectivesThis chapter aims at providing a presentation on the decentralised public management becoming a predominant



version 3.0social phenomenon today. Based on the literature, similarities and differences once typical of the presence of this process in various European model-countries (Great Britain, France and Germany) will be highlighted below. Along with its positive features, some negative consequences resulting from the proliferation of public management will also be reviewed.

6.2. 2. ContentsThe decentralised management of public duties

Traditions and changes in public management: techniques from some European countries

Public management in Europe

6.3. 3. The phrasing of contents6.3.1. The decentralised management of public duties

Since the second half of the 20 th century, turning the practice of power and management citizen-friendly has become a tendency in Western Europe. Thus e.g. the principle of subsidiarity has by now become included among the principles of the EU’s regional policy. It can be enforced in several ways among them e.g. decentralisation and deconcentration can be distinguished.

As for decentralisation, the number of organisations with decision rights appearing within the system is increasing. The autonomy of decision-making rights is usually guaranteed by law with at most only legal supervision wielded by other institutes. As an important condition, the source of power is selected by the citizens thus the democratic practice of power can be ensured. In theory, the administration of local issues can be effectuated more rapidly and efficiently in such systems which fact can be regarded as a relevant strength.

Two main forms of decentralisation as described below have been developed:

1. Local or regional decentralisation is considered to be a more conventional form as such in Hungary is the local administration function fulfilled by self-governments.

2. The other type is the so-called technical decentralisation when local private or public-owned organisations are assigned by central administration organisations to execute their duties. In these cases, state duties are fulfilled by such organisations as independent legal entities (or, in some cases even with autonomous economy) with usually only legal control wielded over them.

Despite its countless strengths, decentralisation can also bear risks as in case local issues being predominant, regional and national aspects can be effaced resulting in provincialism and even anarchy in the administration.

Another important phenomenon is deconcentration when the practice of power is allocated from the centre to various transmitter institutions. Such transmitter organisations have their own power and decision rights that can be deprived by the centre any time or the effectual decision can be altered. Thus fulfilling tasks becomes closer to the citizens however essentially remains predominated by the state.

By decentralisation wide-spreading, social relationships where instead of direct management rather the indirect influencing of processes is expedient become more frequent. The methodology of this management had been developed in the private sector for many decades. Its adaptation to the public sector is called new public management.



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Figure 41 New possibilities for practicing power (After fao.org)

Several ways to de-concentrate central power and transfer it to new organisations are distinguished. (Figure 41)

6.3.2. Traditions and changes in public management: techniques from some European countries

According to the basic schema typical of the era of classic state organisation, the civil state will establish administration organisations, managing public matters under strict regulation however also in an objective and reliable way, from revenues paid by the citizens. Among its features, among others regular organisational administration, hierarchy and normativity can be mentioned. The basis in the bureaucratic systems described by Max Weber was made up by a long standing system of social contracts (as discussed above).

This system successfully operated until the 1970s and today is referred to as the era of welfare states. Social, health and education services provided as citizen rights were accessible for most of the society. During the 1970s, capital attempting to avoid the impacts of oil crisis thus minimising its losses tried to externalise i.e. shift off all its expenses to the society and the environment. As a solution, economic actors had managed to lobby for measures in an increasing number of states through international economic organisations by which capital has gained a more favourable position as ever before. As a basis of lobby activities, the quasi-religious ideology, fabricated by certain economists’ groups, according to which economy and capital are the most significant public wealth whereas any other phenomena across the globe (culture, society, environment, life and death) are only fictitious.6 A reduction of taxes and affixes on capital revenues has been witnessed as well as the mobility of money has become higher compared to previous times. With the consequences, the world has undergone changes incalculable in scale.

Nation states, due to the decreasing tax revenues and the mobility of capital have begun to compete for investors. To this, the methodology was manifested by further potential tax discounts offered for the capital resulting in an additional drop of national revenues. In this spiral, developed welfare states found themselves in a deepening crisis situation. Along with the decrease of revenues, state-financed public services were not financially sustainable any more.

The ‘solution’ to these problems was represented by adopting various techniques from the private sector. Attempts to adopt this model were made in nearly all countries of the developed world. In e.g. Great Britain in 1970s, during the reign of the Conservative Party, breaking with the welfare policy of previous decades represented by the Labour Party the system of so-called new public management was introduced with intensive political-ideological tail-wind. Its features included drastic privatisation and an intensive out-scouring of state duties. (Figure 42) Furthermore, relevant features included a limited proliferation of administration as well as the appearance of subsidiarity in public services through privatisation. In public services that are marketable

66Extreme representatives of this contexture thought to pinnacle the de-emphasizing of the state by the so-called ’night watchman state’ category. In this case, the state would have transferred all of its relevant functions to the market with retaining only some of the basic services (defence and elementary education). The consequently simplified and inexpensive state would have been managed by the most influential financial groups. It is grotesque that such monetary interest groups intending to disvalue the state, panickly asked for help from such states to be abolished worldwide following the financial catastrophe in the autumn 2008. By these happenings the seriousness of this entire ideology was questionned.



version 3.0more particularly such as in education or health systems resembling original market conditions were established. As another key aspect, in access to public services, the previous basis of legitimacy was replaced by consumer approach.7 During the reign of the British Conservative Party (with Margaret Thatcher and John Major being the prime ministers), several public duties were wound up by the state while for others the responsibility for the given service was separated from the actual provision of service or the public service itself was often made to be subject to paying market fees. (Horváth, M.T. 2010)

Figure 42 The British society is divided by the privatisation of the country’s rail transportation (Source: www.sxc.hu Downloaded 3 February 2013)

Among the arguments supporting changes, economic (competition, tax reduction, savings on public expenditures), management (strengthening efficiency and motivation) and ideological (restoring the market’s predominance) aspects were all involved. On the other hand, however, several counter-advices were seen on e.g. the exploitation of consumers or the disregard of social efficiency due to the primitive fiscal approach.8

France did not witness a turnaround similar to the Anglo-Saxon precedent as in the jointed self-government-settlement structure private-owned suppliers had already fulfilled the role of integrators of key importance. French private companies conventionally contribute to the organisation of self-government public services. Such companies intend to make the most of their experience abroad as well just as many of them envisaged excellent business potential in the Hungarian public services. (Figure 44) In France, four types of fulfilling duties by local self-governments are recognised (Horváth, M.T. 2010):

• In its own sphere, financed by its budget or in some cases by establishing a working organisation

• Through private organisation with participation by the self-government

• Public duties devolved to private organisations

• Laying a charge on fulfilling public duties

Regarding formal solutions, French self-governments also have extensive possibilities for transferring duties as described below (Horváth, M.T. 2010):

• Concession contract: it is agreed for long period and the service supplier implements development financed from its own revenues and get in fees itself, terms and conditions for the service to be provided are defined by the self-government

• Lease agreement: public utilities remain under the ownership or use of the self-government, the system is operated by the leaser however is not engaged to development. revenues are distributed between the leaser and the self-government

• Shared interest: deficiencies due to the discount fees are covered by other revenues of the self-government

77Nothing is for free! This slogan seems to be a talking popint in Hungary from time to time especially for extreme liberals. On the other hand however, it should be acknowledged that an immense amount of sums is deducted from the society’s active age groups in order to facilitate the functioning of large state-owned public service systems. Moreover, following the transformation of services to such an extent, broad layers of society become excluded due to financial reasons that can result in, for many, situations threatening human lives.88A famous-notorious case is linked to the Town of Cochabamba in Bolivia where the water supply including rain water (!) was privatised by the central government as suggested by IMF. Supervision over water supply was obtained by the American Bechtel Corporation that straining its monopoly situation applied a drastic increase of prices. Public protests turned into blood-flooded riots due to which the government and this multinational company withdrawn. (Figure 43)



version 3.0• Management contract: a manager interested in successfulness is employed (not as a public servant), the

proprietary rights of the self-government remain untouched

Figure 43 Cochabamba, the second largest town in Bolivia with its privatised clouds (Source: http://foter.com/photo/cochabamba-1988/ Downloaded 5 August 2012)

Figure 44 The field of activities of the French large company GDF Suez (Source: http://www.enviro2b.com/2009/07/08/gdf-suez-et-e-on-condamnes-a-plus-de-1-milliard-deuros/ Downloaded: 5th August 2012)

This history of one of today’s company French in origin specialized to supply public services present also in Hungary, i.e. the Veolia Waters goes back to the era of Napoleon III. During the emperor’s reign, in 1853 it was founded as Compagnie Générale des Eaux that in the following year obtained the rights to supply water in the Town of Lyon then gained concession rights in Paris for 50 years. During the 1980s, this giant company diversified its activities that now included waste management, energy supplies, community transport, construction industry and trusteeship. (Figure 45)

In 2011, it was one of the world’s leading water suppliers with the annual revenue of $12.6 billion. It supplies drinking water to approximately 103 million citizens in 69 countries along with treating the sewage water generated by 73 million residents worldwide. Moreover, the company has approximately 100 thousand employees in the countries involved.

In Hungary the following companies are under the Veolia’s privity: Szegedi Waterworks Ltd., Budapest Sewage Works Ltd., Salgótarján Sewage Works Ltd., Érd and Environs Waterworks Ltd. and AQUAZALA Ltd.9

99Source: www.veoliaviz.hu Downloaded 30 November 2012.



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Figure 45 A waste collection sites under the privity of Veolia (Source: foter.com Downloaded: 1 December 2012)

Another form of new public management was present in Germany. The new administration model is implemented through applying a successful technique of managerialism not on an ideological-political basis nor through the activities of large-scale private companies.

The so-called new administration model (das neue Steuerungsmodel) or also known as Tilburg Model includes the following elements (Horváth, M.T. 2010):

• In the planning of the budget, the predominance of the output side is enforced

• Outcomes of the administration activities have to be cost-dimension given

• An accounting system similar to what applied in the private sector

• Self-accounting budgetary units

• Defining quantitative indicators in order to facilitate measurements

• Strengthening consumer orientation

• Involvement of external resources and privatisation

• Creating a competition

A commonly applied solution in Germany is the model of a syndicate town (die konzern Stadt) where the settlement operates its public services as a supplier not as a public power.



version 3.0The most important innovation of this recently introduced strategic management is that functioning is evaluated not internally but with social usefulness taken into account. Several task-fulfilling techniques are operating within the system (Horváth, M.T. 2010):

• Through a working organisation present in the budget (Regiebetrieb)

• A budgetary organisation without independent legal entity (Eigenbetrieb)

• Limited liability companies (GmbH) and corporations (AG), where the self-government’s shares can be as high as 100% (Eigengessellschaft) or less (Beteiligungsgesellschaft)

• Fulfilling duties regulated by civil contracts that can be management contract (Betreibevertrag) or concession contract (Konzessionsvertrag).

A good example of the local use of renewable energy sources can be observed in the village of Feldheim where the biogas-based local energy supply system (hot water and electricity) is under a combined ownership. District heating is maintained by Feldheim Energie Ltd. & Co. KG in which households, enterprises and the municipality of Treuenbrietzen have ownership. The electric system is under the ownership of the Energiequelle Ltd. and Co. WP Feldheim 2006 KG. (Source http://www.neue-energien-forum-feldheim.de Downloaded 3 February 2013)

6.3.3. Public management in Europe

In the developed countries, the re-interpretation of supplying public duties in the new public management, except for the different representation forms as discussed above, was realised as below (Horváth, M.T. 2010):

• Reduction of the state

• Extensive marketisation

• Privatization

• Reduced regulation – deregulation

• Extension of PPP systems.

Public management in the governmental activity is manifested in the triad of economy, efficiency and effectiveness (3E). Moreover, in order to spend public money more effectively, Compulsory Competitive Tendering (CCT) became required. Regarding the manager activity adopted from the private sector, total quality management (TQM) systems as well as benchmarking methodologies based on the comparison between organisations functioning in identical field of activities were introduced.

Another adoption of methodology applied in the private sector was represented by the formalisation of establishing the policy in which theoretically rationalism is intended to be mixed with democratism essential in the public sector.

At last but not least, organisations functioning on an agency basis representing and motivating interests to an improved extent were also included into the hierarchy of organisations functioning in the public sector.

Several elements typical of the functioning of public organisations as e.g. a more extensive application of independent liquidity and responsibility, the planning and budget or the use of manager principle or the so-called consumer charter were attempted to be integrated into the operation of public organisations.

The spreading of organisations with independent responsibility and liquidity in the public sector strengthens the power of concernment. The spreading of planning and budget tools is also considered to be a relevant tool in the new public management however the decision made between the planning doctrines or paradigms available during the planning process is a rather responsible step. (Faragó L. 2005)

The appearance of manager principle in the leadership in administration represents the break-off with the principles of reliability of Weber and literal observing of regulations. Consequently, the privity relationships seen in the private sector will be present in the employer-employee relationship as well.



version 3.0Consumer and citizen’s charters are systematised and plain compilations of requisites and requirements. Such certainly requires the elaboration of output indicators abstract in various public services in order to them become comparable.

Figure 46 The topics of public management (After Horváth, M. T. 2010)

As seen in Figure 46 the system of public management is rather extensive including the management of social politics, an innovative technique of community decision-making and resource management as broadly interpreted.

Figure 47 A muddled public management reform project from Hungary: the logo of the disreputable company

The new public management was introduced in the countries of Central Eastern Europe including Hungary in a different situation compared to the Western-European region with development of several decades behind. In Hungary, the several decade long, extremely centralised and state-centric system involved all segments of the society and economy. At the time of the changes of regimes the country’s entire socio-economic structure had to take a U-turn. As part of this process was a rather intensive wave privatisation during which a significant proportion of state property was handed over to ‘real’ owners. Similarly, the large supply systems underwent transformation with supply organisations typically becoming more or less plural. In the field of providing public duties, private sector was given the possibility to have a share in e.g. the collection of communal waste, public utility water supply and sewage water discharge or in maintaining public areas.

The frame of organising public services (Figure 48) became much more complex following the changes of regimes compared to the era before. Prior to 1990, the state was unilaterally present both as a regulatory body and supplier over against the citizens only as consumers whom therefore had no possibility to choose from the



version 3.0suppliers. During the demographic transition, a differentiation of roles was observed according to which governmental and self-governmental organisations partly retained their regulatory functions as well as were present as consumers of services. Among the suppliers however several new actors such as private, non-profit and religious organisations appeared.

Figure 48 The organisational pattern of the public services in a country with market economy of the 21 st century (After Horváth, M. T. 2010)

The European Union is also committed to the introduction of the elements of the new public management in its member states, despite this officially not included in its core competencies. The SIGMA Programme co-financed with the OECD aims at improving administration and management methodologies. The long-term objective is establishing the European Administrative Space where efficiency along with legality will be some of the main measures of value of the administration-management activity (Apaydin, A.A. 2008). (Figure 49)

Figure 49



version 3.0As a summary it can be concluded that by the presence of new public management, the complementary proliferation of public administration observed for the previous decades was remitted in general. Parallel with the decreasing role of the state, the role of local level (subsidiarity) increased. In the name of marketisation, simulated internal markets otherwise complicated to quantify were established. Instead of public services provided as an automatic benefit for citizens, consumers’ orientation became wide-spread. This, from the aspect of share-holders, is a clearly positive development as new grounds open up for investors with such settled markets promising immediate profit. However the social profit becomes rather questionable: services previously strictly supervised by the state now exposed to pillaging become scraggy in time contributing to the decay of traditional welfare societies.

Apparently the glaze put on public management indicates the existence of several success factors as e.g. the measurement of outward social capacity by univocal indicators or the spreading of theoretically fair contract conditions among public suppliers, public procurers and consumers.1010

1010This ’three in some’ constellation later resulted in solutions in which after-sums for the introduced and privatised waste transportation services were cashed up by the self-government as a fine on non-paying clients. This case might look obvious as this is the way capitalism works. What may be confusing to some extent is that this scavenge services not considered to be selective nor environmentally-friendly at all were enfoced en masse on rural households that until then carried out a quasi ecologically conscious life syle not generating waste. The long-time empty refuse bins then slowly became filled up since paid for the service they should not be left empty … Such ’success stories’ of the public serves resulted in rural residents abandoning composting. They are intended to be re-induced today by spending millions of Euros financed by the New Széchenyi Plan… (Figure 50)



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Figure 50 A tragicomedy of environmental sustainability and public services: a placard of a project re-inducing composting in the Village of Csákvár (Source: www.csakvar.hu Downloaded: 10. January 2013)

In addition to the above, the autonomy of service organisation units on liquidity, responsibility and privity as well as both the wide-spreading of strategic approach (at least regarding fiscal matters) and the control of output capacity are considered as successful.



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Animation 5: The functioning of the Tilburg Model

Figure 51 Building C of the Eszterházy Károly College built under a PPP construction (Source: termeszettudas.ektf.hu Downloaded: 4 February 2013)

6.4. 4. SummaryIn this chapter the possible methods of the deconcentration of central power in accordance with the principle of subsidiarity were reviewed. As this is a tendency existing in nearly all European countries, some typical examples were discussed in more details. The new public management was present probably in its most emphatic from in Great Britain. In France, the supplier organisations that today are widely known companies and operate public services in a countless number of countries developed due to the specific features of the local self-governmental system. Germany witnessed the development of a rather specific system known as the Tilburg Model.

6.5. 5. Self monitoring questions1. Describe the decentralised settling.

2. Describe the forms of de-concentration.

3. In what form did the new public management was present in Great Britain?

4. What are the characteristics of the new public management system in France?

5. On what fields does the largest French public service supplier operate?

6. What are the main features of the Tilburg Model?

7. How can be the European new public management movement described in general?

8. What are the main features of the SIGMA Programme?

9. What are the specifics of the new public management in Hungary?

10. What are the actors on today’s public management organisation market?

6.6. 6. Test questionsTo what way of decentralization can the next organizations be attached?

1. Special agencies

2. Private sector



version 3.03. NGOs

4. Municipalities

5. De-concentrated organizations

1. devolution

2. de-concentration

3. privatization

4. delegation

5. partnership

Correct: 1d, 2c, 3e, 4a, 5b

Which of the following can be classed into the elements of the Tillburg Model?

1. In budget planning the output side is dominant

2. Huge municipality-owned enterprises issue the global market

3. An accounting system similar to that of the private sector

4. Self-accounting units

5. To overwhelm people’s resistance through police force

6. Strengthen consumer orientation

7. The inclusion of external sources and privatization

8. Declare disadvantaged strata to be above the law

Correct: 1, 3, 4, 6, 7

7. 6. Public administration, public law relationships, public servants and service7.1. 1. ObjectivesThe aim of the chapter is to highlight the relevance of human resources in the life of different organizations with special regard to the public sector. We examine which measures create a frame for human-resource management activities occurring in the public sector. After the principal bases we are going to show some pragmatic aspects concerning human resource management in the public sector (selection, advancement, pay etc.) At the end of the chapter we’ll analyse some characteristics of the strategic and operative approach of human resource management.

7.2. 2. ContentsThe relevance of human resources in organizations

Some practical aspects

Personnel management

7.3. 3. The phrasing of contents7.3.1. The relevance of human resources in organizations



version 3.0In the functional approach towards settlement and spatial management personnel problems are in a high position. (Lados, M. é.n.)

None of the institutions, including settlements and areas can be operated without personnel. Without the human factor value creation can’t work, assets and different tools are merely barren objects. Though it is the most perfect organizational model, if only incapable human resources are available, the failure will befall.

Douglas McGregor has elaborated his X and Y theory relating to human resource management in the 1960s. Accordingly on the ways of X we approach to management autocratically: people in general dislike working, skulk where possible; at workplaces restraints must be used against them; they have no ambitions, try to avoid responsibility, self-centred, do not care about the interests of the organization and stand against changes. Furthermore benefits supplied by organizations are not enough to unbalance them from this sloth.

Theory Y states the key to the guidance of people is a humanistic and supportive approach. If management secures the suitable environment for the workforce to deploy inherent capabilities, people will work for the organization as naturally as if they would play. (McGregor, D. 1966)

The high quality of human resources can be regarded a real competitive advantage, apparently personnel can decisively support the work of the organization. At the same time it is an essential issue to motivate associates in their loyalty towards the organization, besides in active participation. An inevitable tool of it is the existence and utilization of material and moral incentives. Personnel policy must include the procurement, retaining, development, appreciation and effective employment of human resources as well. (Krauth, M. 2009)

The 1/2009. (IX. 11.) directive of the Ministry of Finance on the internal control standards of the national budget made proposals about the optimal conditions of employment in the public sector. We may summarize it as follows:

• For the efficient occupation the availability of human resource capacities are needed to achieve the proposals of the organization

• In point of each position knowledge and competences needed for occupation must be determined in accordance with concerning legal rules

• During labour selection educational and other compliance assumptions put up in relation with the announced position must be taken into consideration

• It is relevant that the individual position should be filled only by competent personnel, therefore in job interviews both the competent professional leader both the associate of the human resource department should be present

• It is expedient to care about the realization of trainings necessary for the freshly filled positions moreover about providing information and technical tools for the new staff members in order to start the work as smooth as possible

• It is practical to determine further training requirements connected to different positions in accordance with existing qualifications and the available resources

• It is worth to care about the establishment of personal educational schedules taking into consideration training requirements and the needs of staff members

• It is advisable to take care of firstly the composition of annual training schedule based on personal schedules, secondly the organization of receivable trainings and finally the orientation of the included staff members

• It is a must to evaluate the achievements of employees at least once a year and the results have to be discussed by them

• In the evaluation it is practical to mention that beyond trainings what methods could increase the performance of a given person

• Through suitable measures it is worth to secure the development of staff members providing weaker performance



version 3.0• In accordance with the available resources, the possibility must be created to reward those employees

performing well and in a high quality

The legal measures concerning public servants can be called multidimensional for on the one hand the 2012/I. law (Earlier the 1992/XXXIII law) (Hungarian Labour Code) applies to it. On the other hand the 1992/XXIII law (Ktv.) which was modified in many places in 2012 too is also of legal force. Instead of 1992/XXIII (Ktv.) and the law on government servants the Hungarian Parliament accepted the 2011/CXCIX law on public servants. The scope of this law extends to the following institutions and legal relationships:

• Prime Minister’s Office, the Ministry, the Government Office, the organizations of central administration

• the assigned organization for institutional maintenance by the Government Office and the spatial, local organization of the central authority, the Government Office for the County or Budapest respectively its spatial organization, additionally an organization assigned by the Government for institution maintenance,

• the central and spatial units of the Police, the Prison Service and the professional directorate for disaster management,

• the legal relationships of the State Secretary and Deputy Secretary of the Ministry additionally the Deputy State Secretary of the Prime Minister’s Office

• the legal relationship of public servants and assistants of bureaus of local municipalities, additionally of national self-governments minorities

Some setting of the law specifically applies to the officials and leaders of municipalities. The § 239 for example contains regulations for the positions of municipal senior advisers and counsellors. The appointment of counsellors and advisers lasts for the innings at the same time employer’s law over them is exercised by the major.

The § 247 encompasses exposal for the legal status of notaries. There are strict conditions to get nominated. In point of qualification notaries must have a master degree of Administration Management, or doctoral degree of state and law, or manager of public administration and legal or public administration qualifying exam, possibly having a scientific degree from public administration. Besides they must get at least two years of experience in public administration. In case of villages (below 5000 inhabitants) an almost graduating student can be nominated in this position.

7.3.2. Some practical aspects

After the EU access in 2004 alongside the traditional public servants, a new employee stratus has appeared in in public sphere. Many elder and new workers were employed within projects financed earlier (2004-2006) by the HEFOP (Human Resource Development Operational Programme) and later (2007-2013) by the TÁMOP (Social Renewal Operational Programme) and TIOP (Social Infrastructure Operational Programme). Consequently a less known form of workforce management has spread. Employees are engaged for a fixed term in the frame of a project to attend factual tasks, at the same time a „rolling” type of employment can be observed, where from project to project the same person is employed through many years. This form generated many changes inside the organizational structure, activities and financial circumstances of public institutions. (Horváth, M. T. 2010)

Limited duration projects raise such questions as colleagues working in a project in what type of organizational-dependency relation should be with the permanent organizational structure. This situation brings the person of the project manager into an especially slippery situation. On the one hand they possibly can’t be inserted into the traditional hierarchy on the other hand regarding the progress of the project different units must be subordinated to him/her. Anomalies can arise in the financial field as well, hence the budget of project is special (determined by the tender invitations), expense items assigned to individual work phases can’t fit into the traditional organizational finance methods.

From the introduction of human resource management of the public sphere we can’t leave out the everlasting non-formal mechanisms. The publicity-acquaintance-back-stair-influence concepts highly determine the possibilities of finding a job. At the same time we may observe – in certain groups (young dynamic graduated people) – a so called new white-collar behaviour. Its elements are pragmatism, openness, utilitarianism and in the interest of it the representation of the characteristics of new public management in the personal carrier and in the activities concerning the public sphere. These people own the key competences of the beginning of the 21st



version 3.0century (polyglot communication, digital skills, entrepreneurial and cultural competences), recognize the relevance of life-long-learning as the acquired knowledge becomes out-of-date instantly at the informational age. In their life the so-called factor of luck, publicity and intrepidity play significant role. (Pónyi, L. 2012)

This personality deformation or global professionalism caused by globalization on the one hand secures high incomes and social status. On the other hand we can find the total self-exploitation, the very often awkward extroversity, the extremely flexible labour-time – which can be interpreted in a positive way in the national and European statistics – additionally the frequency of situations expecting radical conformism (that can be endured only with the use of drugs and pills) is growing. In the long run this situation may cause depression, alienation, disintegration of families, suicides and human ruin.

The operation of the labour market of the public sphere is a sectioned process as follows (Gáspár, M. 1995):

1. Personnel selection

The selection of candidates is done by the public organizations themselves (decentralized decision-making), though efforts were made in order to centralize the decision making.

Among the legal criteria of selection the prohibition of discrimination is crucial, it is declared not only by national law but also by international conventions (International Covenant on Civil and Political Rights). In many states of the world the principle of preference is used, practically the positive discrimination of handicapped (religious, lingual and ethnic minorities, coloured citizens or veterans) employees. For the present in Hungary it is not a general practice, but some similar steps were taken in connection with the Roma ethnicity. In the autumn of 2009 the Bajnai administration announced a possibility to get into the public administration for 250 graduated Romas.

Employment has general and special assumptions. Among the former are clean sheet, capacitating and Hungarian citizenship. Among the latter qualification, competences in special fields, or a determined duration of professional training can be found. The nowadays spreading trainee system creates a respective opportunity to select the suitable personnel.

1. Career

In a career-type system of public service the advancement of employees is a decisive issue. Recently in Hungary the so called merit type career system is operating. Principally in this we may find the possibilities of the automatic (service period) and the performance-based progress as well.

1. Training and retraining

The tasks being ahead of public sphere are continuously changing, thus the training of the permanent personnel is inevitable. In the system trainings necessary for advancement and facultative ones can be distinguished. (Figure 52)



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Figure 52 A retraining of project application making in the town of Tiszacsege (Own photo)

1. Performance report

The creation of performance report on public servants is the duty of the one exercising the Employer's rights, according to the regulations it is a must at least before promotions. The system of rating is mixed, namely the law contains some bases, however the subjective value judgement of the interpreter plays a crucial role as well.

1. Pay

In the public sector each performance class is equivalent with one pay grade. The salary system in general consists of three parts: basic salary, salary supplement and bonus. The basic salary is the product of the basic fee and the value next to the salary grade. Municipalties can diverge from it only if it creates a separate regulation.

7.3.3. Personnel management

The strategic side of personnel management is crucial in the operation of settlement municipalties and of different areas since it is the active resource that can actuate all of the others. The basic questions of strategic human management are as follows:

• What type of connection do we attribute to human resources to other resources?

• What role does human side have in the organizational strategy?

• What do we regard as human resource?

The latest question seems to be redundant only at the first bluss, since there are many possible interpretations. (Figure 53)



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Figure 53 The possible interpretations of the content of human resources (Own edition after Gyekiczky, T. 1994)

The interpretations of human resources are pending on the introduced management system in the given environment. Its phases are represented by the so-called management screen. (Figure 54)

Figure 54 Characteristic cases of the management screen and of the relation of management towards human resources (Own edition after Gáspár, M. 1995)

Type 1.9 is the so called „country club management” and can be marked by it takes into consideration human affairs at the highest possible rate. Accordingly at this organization the atmosphere is friendly additionally the work goes calm.



version 3.0Type 1,1 is named „poor management”, it means neither the „final product” nor workforce get laureate attention. It is possible to stay inside the organization with only a little endeavour.

Type 5,5 got the nickname „organizational man management” and the followers state that the proper organizational performance, motivation and the gratification of the needs of the workforce together lead to the optimal operation of the organization.

Type 9,1 is the so-called „power-obedience management” and it says the role of human factor in the operation of the organization is minimal comparing to the other resources, consequently we don’t have to care about it.

Type 9,9 is called „team management” which states one crucial secret of organizational success is the enthusiastic work of committed employees, based on mutually good working relationships and recognized common interests.

The other level of management is the so-called operative management which aims to secure the needed expertise for the organization at the right time. In addition one must care about the saving and at the same time motivating personnel cost management. We must pay attention to the fact that parts of the expertise may be procured as a service, thus the wage fund needed for it must be converted into a service fee. To secure optimal staff size should not only depend on the wage fund management. It is crucial to know that deviations (positive or negative) may threat the operations of the organization. Flexibility can be strengthened by part-time jobs, or the use of external services in the carrying out of the tasks. At last but not least duty time management is an important task too, frankly the amount of available and used duty time should converge to each other.

Certainly operative management starts with the selection of workforce, but before this step the given lay had had to be analyzed. Among the questions of analysis we must put the ones prying into the necessity of the job and the customers’ satisfaction elements connected with it. Besides it is worth to examine firstly what tasks should be included in the given lay, secondly what is the legal background of it and finally what right are exercised in it. The integration of the given lay into the organizational structure and the relationship of duties and responsibilities must be analyzed. We can’t neglect to clear what preparedness and personality is needed for the lay. From an affectivity point of view we must see what kind of benefits and motivations do exist, what type of development possibilities are available additionally how big is the prestige of the position inside and outside of the organization. (Gáspár, M. 1995) (Figure 55)

Figure 55 Two sides of the selection of workforce (Own edition after Gáspár, M. 1995)

The expectations towards the wanted one should be determined only after these, what must be in proportion with the offered position. (Figure 56)



version 3.0According to observations it is better for an organization to keep its present workforce thus replacement won’t be needed. If it is needed anyway, there will be many available methods of recruitment and selection which combined utilization can guarantee the optimal replacement.

Figure 56 Methodology of recruitment and selection (Own edition after Gáspár, M. 1995)

An important element of operative human resource management is the measurement of performance. It is dependent on three factors: skills, will and opportunities. The proper measurement system is based on well-documented gauging and pre-determined indicators. The objective, quantitative indicators although not omnipotent, but can help effectively the operation of the system. (Figure 57 and 58)



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Figure 57 Indicators suitable for the measurement of performance in the public sector (Own edition)

Animation 6: The cycle of results approach lay (Own edition after Gáspár, M. 1995)

Figure 58 Possible decisions of performance management (Own edition after Gáspár, M. 1995)

All in all a crucial element of operative human resource management is the planning of lays. The regular and sophisticated execution of it can help the optimal use of workforce and the success of the operation of the



version 3.0organization. (Figure 59) The draft course of planning is as follows (Gáspár, M. 1995):

1. The name of the lay, that should – beyond privities of law – refer to the content of the job, the occupied level in management, the autonomy and prestige within the organization

2. The product-oriented definition of the tasks of the job: the verb referring to the action in 3rd singular, the object of activity and besides the definition of other circumstances.

3. The determination of performance criteria or standards of the job – if it is possible in case of the given organization

4. The list of those fields of responsibility, which do not belong to the general circles of responsibility (responsibility for resources or for the provided services)

5. What special rights belong to that special job (Figure)

Figure 59 Special power that should be taken into consideration in the planning of jobs (Own edition)

1. The description of the vertical dependences of the given job: administrative-professional-financial-legal supervision, the right to request information, the right of general supervision etc.1111

2. What competences are needed for the fill of the job

3. The most expedient system of employment to fill the job: full-time, part-time, privity, permanent or varying external (ad hoc engagement agreements)

4. The determination of wages and benefits

5. Statements

Job descriptions should be prepared adjusted to the determined jobs. These are – by nature – collective documents, for in their completion employees, the human resource leader and the competent member of the general management should participate. For the sake of its practical utilization job descriptions must be prepared in a way to be controllable, maintainable if needed. Such cases can be re-organization, changes in duty, ratings, substitutions or assignments of authority. It is a decisive factor that the maintenance of the job descriptions should be compatible with the regulations of the given organization.

1111The KJT § 38 recognizes only one supervisor



version 3.0The work performance and the employee satisfaction are dependent on many agents. The triad of intent, possibility and motivation can be emphasized as key-factors. The relevance of motivation – which develops in more dimensions simultaneously – can’t be over-emphasized, actually it can fill its part only if the whole organizational culture is filled with this. (Figure 60)

Figure 60 Factors determining motivation (Own edition)

On the opportunity side of motivation basic conditions must be secured for the employees, such as:

• Space to work

• Equipment

• Furniture

• Information

• Printed matters, forms

• Books, manuals

• Social conditions

• Aesthetic conditions



version 3.0Animation 7: The importance of workplace conditions

At last but not least we’d like to mention the relevance of developments and trainings in the field of human resource management. The organization of trainings should be formed partly to the strategy of the organization and partly to the demands and personal capabilities of workers.

The training and re-training of public servants working in the municipal sphere is a relatively compact and regulated system in Hungary through basic and qualification exams of public administration. Additionally the training of elected municipal representatives and majors is an exciting issue. According to the law any adult Hungarian citizen can be elected, who is not in the police record. It means neither education, nor some special course is obligatory, thus in principle the elected representatives might be totally un-illuminated about the operation of the Hungarian municipality system. The new municipality law – accepted at the end of 2011 – however contains a new paragraph (§ 31):

„j) During his/her delegacy it is obligatory to join at least once a training organized by the Government Office of the Capital or the County”

This regulation is going to be mandatory for the members of the new municipal body erected after the new elections. Thereby hopefully a minimal competence will appear in the democratic local exercise of power, thus more responsible decisions could be made.

A whole branch of training methods is available to satisfy the needs of the organizations. (Figure 61)

Of course the character, types and the content is highly dependent on the age specifics of the given person. Different aspects are relevant for an individual being at the beginning of his/her carrier than for an employee staying at the peak of the profession and even for a worker waiting for retirement.

Figure 61 Possibilities of training forms (Own edition after Gáspár, M. 1995)

7.4. 4. SummaryIn the chapter we pointed to the relevance of human resources played in the life of different organizations. Some legal sources were cited which create a framework for the human resource management of the public sphere. Furthermore we looked out to such practical point of views which may help to develop a successful human resource management. At the end of the chapter the main characteristics of the strategic and the operative side of personnel management were introduced.



version 3.0

7.5. 5. Self monitoring questions1. What different kind of indicators useful for the measurement of the performance in the public sector can be

differentiated?

2. List the different types of human resource management!

3. What factors do affect the work performance?

4. List the different decisions of performance management!

5. Which steps should be taken into consideration during the planning of jobs?

6. Which factors affect the motivation at workplaces?

7. What special authorities should be taken into consideration during the planning of jobs?

8. List the main element of proper workplace circumstances?

9. What novelties can be found in the new Hungarian municipal law concerning the training of elected representatives?

10. What training forms could you offer for the human resource development of an institution operating in the public sphere?

7.6. 6. Test questionsGroup the arguments below to the different types of human-resource management!

1. organizational man management

2. poor management

3. country club management

4. power-obedience management

5. team management

1,9:

1,1:

5,5:

9,1:

9,9:

Correct:

1,9: c

1,1: b

5,5: a

9,1: d

9,9: e

Align steps of lay planning!



version 3.0The determination of wages and benefits

The product-oriented definition of the tasks of the job: the verb referring to the action in 3rd singular, the object of activity and besides the definition of other circumstances

What competences are needed for the fill of the job

The list of those fields of responsibility, which do not belong to the general circles of responsibility (responsibility for resources or for the provided services)

The name of the lay, that should – beyond privities of law – refer to the content of the job, the occupied level in management, the autonomy and prestige within the organization

Statements

What special rights belong to that special job

The description of the vertical dependences of the given job: administrative-professional-financial-legal supervision, the right to request information, the right of general supervision etc.

The most expedient system of employment to fill the job: full-time, part-time, privity, permanent or varying external (ad hoc engagement agreements)

The determination of performance criteria or standards of the job – if it is possible in case of the given organization

Correct:

1. The name of the lay, that should – beyond privities of law – refer to the content of the job, the occupied level in management, the autonomy and prestige within the organization

2. The product-oriented definition of the tasks of the job: the verb referring to the action in 3rd singular, the object of activity and besides the definition of other circumstances.

3. The determination of performance criteria or standards of the job – if it is possible in case of the given organization

4. The list of those fields of responsibility, which do not belong to the general circles of responsibility (responsibility for resources or for the provided services)

5. What special rights belong to that special job (Figure)

6. The description of the vertical dependences of the given job: administrative-professional-financial-legal supervision, the right to request information, the right of general supervision etc.

7. What competences are needed for the fill of the job

8. The most expedient system of employment to fill the job: full-time, part-time, privity, permanent or varying external (ad hoc engagement agreements)

9. The determination of wages and benefits

10. Statements

8. 7. Urban management and the system of factors of the functions of town municipalities, the decentralized management of public functions, co-operative city management?



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8.1. 1. ObjectivesIn the chapter we show the general characteristics of city management, define the respects that must be taken into consideration by successful city managers. We are going to highlight some relevant tools that can facilitate this activity. According to the recent European trends co-operative and integrated city development are the successful methods. Connected to these ideas some national (e.g. London Docklands) and community (e.g. URBAN) initiatives will be introduced. At the end of the chapter the importance of the relatively newcomer (at least in Hungary) integrated urban development strategies will be mentioned.

8.2. 2. ContentsUrban management

Co-operative urban management

Integrated urban development in the EU

Co-operative urban management in Hungary

8.3. 3. The phrasing of contents8.3.1. Urban management

According to McGill (2001) urban management must face a double-sided challenge: on the one hand it must be adjusted to the urban environment it want to direct, on the other hand the possible organizational and financial tools must be established that may make successful this complex set of activities. (Figure 62)

Figure 62 Two faces of urban management: city and institution development (The source of photos: www.foter.com)

This duality can be found in the works of other authors as well (Hervai Szabó, Gy. 2008). The management of towns, quarters or urban agglomerations must be in line with the needed democratic and professional aspects as well. In the connections among the levels of to care about the following factors is inevitable:

• Participation and inclusion in politics



version 3.0• The equality of urban rights

• Computability and transparency

• The actuation of local democratic institutions

• The creation of opportunities for social movements

• The development of discursive systems of language and power

• Subsidiarity and the decentralization of actions

The dimension of social cohesion is also a relevant element of democratic processes, such as: (Hervai Szabó, Gy. 2008):

• Social equality and the equal accessibility of services

• The balance of urban environment

• Social connections (integrity in the mainstream systems of employment, education, health end culture, the motivation of business sector in the public investments

• Community planning and management at the level of neighbouring areas and the viability of the social system (security from terror, crime, political unrests)

Among the performance aspects the sub-system of urban management must care about the next elements (Hervai Szabó, Gy. 2008):

• The ability to fulfil public responsibility

• The establishment of capacities in governmental and non-governmental actors, for the identification of programmes in public policy and the working out of alternatives in order to get optimal results

• Competences

The development of competitiveness – according to the narrower explanation of management – can be interpreted as a separate sub-system, with the following objectives (Hervai Szabó, Gy. 2008):

• Determination of the urban management’s driving forces

• Comprehension of the variety of the intra-urban areas, that queries the privilege of unitary urban policy

• Provision of the project-level viability of city-level strategies

• Definition of the public-sector management, legal frameworks and service competences

The manner of unfolding this dual chain is the combination of competitiveness and cohesion. The identification of coherence points and based on it the elaboration of integrative programs relying on demands is indispensable. The harmonization of actions and interventions is mandatory.

The improvement of the integrative role of schools, development of the social elements of the local economy and, in case of necessity, the creation of the conditions of the coexistence in tolerance are crucial. The institutionalization of responsibility locally is of great importance as well. (Hervai Szabó, Gy. 2008)

Urban management can serve these superb aims through the actuation of the next implements: (Hervai Szabó, Gy. 2008) :

• The improvement of IT management

• The elaboration of combined business aspects

• The exploration of illegal land-use forms



version 3.0• The improvement of urban environment and city rehabilitation

• The intervention in certain city quarters in crisis (slums) and in agglomeration relations

The treatment of infrastructure can be considered as a determinant characteristic of the urban management as an integrated tool that can contribute to the economic progress and the spatial growth of towns. Infrastructure is a joint social demand influencing each actor from government to the informal sphere. Additionally the realization demands an integrated development strategy, which constitutes the strategic frame of the urban development, especially for site-specific factors. Besides, chapters of institutional development must be included, with particular emphasis on the completion of self-governance.

The chapter of urban development must focus on the following chapters: (McGill, R. 2001):

• The contexts of development

• The network infrastructure

• The formal sector

• The informal sector

• Buildings

• Basic services

• Finance

The chapter of institutional development must contain the next details (McGill, R. 2001):

• Integration (The so-called urban intervention matrix can help to illustrate it – Table 4)

• Decentralization

• Sustainability

• Organizational development

• Financial development

• Political and budget developments

Table 4 Urban Intervention Matrix: the level of integration

Decentralization Authority Assignment De-concentration

Sector Private Municipality Central government

Sub-sector NGO enterprise Single level Multilevel

Regional

Centralized

Functions

Linear infrastructure

• water

• sewage



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• solid waste

• flood-control

• energy supply

• main roads

• road maintenance (street lighting)

Land-use (general)

• housing

• retail

• industry

• other

Land-use (traditional)

• minimum infrastructure for the pooresta

• illegal estatesb

• official developments

Buildings

• governmental

• municipal

Services

• health

• education

• other basic services

The cost of the whole infrastructure

The cost of all services



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cost %

The price of the whole infrastructure

100

The contribution of the private sector

The contribution of the local municipality

The contribution of the central government

The degree of the needed integration

X%

a„site and service”b„squatter upgrading”

Source: McGill, R. 2001

8.3.2. Co-operative urban management

Co-operative urban management can be called integrative urban management as well. Integration in this case may work vertically and horizontally too. While the former means the co-operation of actors and organizations inside the city, the latter is the co-work of agglomerations and micro regions.

Integrative urban policies are appeared by many European documents and institutions, such as the Lille Agenda (2000), the Copenhagen Charter (2002), the Milano or London principles, the establishment of the Urban Committee of the European Parliament, or the Leipzig Chart (2007).

Instead of urban management city marketing is used by the Hungarian literature (Kozma, G. 1995).

Despite of the broad incidence there are some disadvantages of this method, as depending on interest conditions particular target groups or actors can be dominant. On the contrary since the importance of public revenues is of primary importance, corporatism is a real threat. Recent experiences in Hungary show this model is unable to work properly because of the lack of capital, real partnership and that of confidence. (Lieszkovszky, J.P. 2008) On the contrary, there are really successful and emblematic examples of the realization of co-operative urban management abroad.

The London Docklands development project is – according to certain authors (Mészáros, R. 1999) –beyond question one of these success stories.

At the beginning of the 1980s as part of the efforts concerning the prevention of the further declining of city centres, the UK Government has established the Urban Development Corporations (UDCs). The aim of the UDCs was to revitalize the un-utilized city centre areas. The methodology in every case was to seize the responsibility for spatial planning from local councils and to centralize it. They had the right to expropriate and re-use areas, to restructure old buildings and to improve infrastructure through state sources. Private investments were also motivated by low tax rates hereby industrial housing and community developments were promoted. (Edwards, B. 1992)

The site of the project is on the Northern bank of the Thames, eastward of the historical city centre and it used to be a terminal of shipping lines connecting the British capital to the rest of the World. Accordingly huge stores, docks and subtle waterways were established inside while its society consisted of the elements of the classical port environment. From the 20th century onwards as the importance of other ports started to grow and the bigger, deep-draught ships could not penetrate through the Thames the Dockland quarter became rotten. (Figure



version 3.063) In the 1950-60s the area has become a real crisis zone as it was inhabited by large number of run-down ex-trading buildings and deprived social groups. The situation was swollen by the wrong accessibility conditions as the centre of London could be reached only through a tightly transmissive and congested road. The majority of housing stock consisted of low comfort level maisonettes, open spaces and recreation facilities were missing additionally retailing conditions were harsh. (Church, A. 1988)

The British Government has tried to revitalize the area with the involvement and on the way of private capital. Due to investments causing a functional change in 15 years the Docklands has become the new financial-business centre of London. Additionally its architecture diverges from traditional London and even European forms insomuch as it evokes the spirit of CBDs (Central Business District) of US cities. The highest office building office of Europe (Canary Wharf) was built here, where hiring an office is a point of honour for different companies. The quarter has suffered from the lack of sufficient public transportation opportunities for a long time since business interest groups directing the revitalization did not pay attention to this problem. 1212 However later on – dominantly from public money sources – the public transportation lines were established connecting the Dockland to the city centre (Dockland Light Railway: DLR, underground, shipping services etc.). However the own airport (London City Airport) is usually mentioned as a decisive factor for business actors, or the new yacht ports built in the place of old docks supporting the needs of a certain social group as well. (N.N., 2011) (Figure 64)

Figure 63 The London Docklands in an aerial photograph in 1941 (Source: www.foter.com Accessed: 10 November 2012)

1212According to urban legends the supreme infrastructural elements for businessmen in London are taxis which can be easily flagged and – on a commercial ground – they take us anywhere.



version 3.0Figure 64 A typical vista of the Docklands recently (Source: www.foter.com Accessed 10 November 2012)

The project management organization was the London Docklands Development Corporation (LDDC), founded in 1981, besides other establishments also joined the realization process. For instance the Government has initiated the Isle of Dogs Enterprise Zone in 1982, where in order to encourage private investments subsidies and low interest-rate loans were provided for potential anchoring companies. Real estate developers also contributed in the building of monumental office buildings (such as the Canary Wharf). Moreover local property manager and city patriot organizations respectively the self-government of the quarter also joined the project. (http://www.lddc-history.org.uk/ Accessed 15 November 2012)

Among the environmental results of the project one may specify the building of new path-ways and cycle routes which provide respective passage conditions. Supplementing these, foot-bridges were established on channels. An open area of 150 hectares was created, additionally an Eco-park presenting wetland habitats becoming the first bird sanctuary of London. In order to create a green environment 200000 trees were planted. As a result of these efforts the project landed many architectural and landscape protection prizes. (http://www.lddc-history.org.uk/ Accessed 15 November 2012)

The revitalization of economy was also a crucial element of the project accordingly the level of unemployment was halved in the quarter, new transport lines were opened (the above mentioned DLR, the airport and direct access to the M11 highway). Only in the private sector investments of more than 7.5 billion pounds were realized thus 2700 new firms were settled down (many of them in the financial and high-tech sector). Aggregately 22000 new flats were built, their majority is in private ownership – only 19% of these are maisonettes. (http://geobytesgcse.blogspot.hu/2007/03/inner-cities-case-study-regeneration-of.html Accessed 15 November 2012)

Among the social changes one may stress that 10 million pounds were spent for the renovation of housing stocks belonging to the public sphere. To the flats established from the former warehouses middle-class tenants with secure existence has moved in. The Asda Superstore retail centre with an area of 4600 m2 was built, respectively many of the remaining old buildings got the same or similar (restaurants, pubs, cafes) functions. In accordance with calculations 100 million pounds were spent on health, educational and training projects. (http://geobytesgcse.blogspot.hu/2007/03/inner-cities-case-study-regeneration-of.html Accessed 15 November 2012)

Besides the appreciations of the project’s results many critical opinions have been expressed from the side of local activists and the profession as well. One part of critics emphasized, that „aboriginal East-Enders” could not benefit from developments. The majority of local residents after the developments could not pay the housing rent of the renovated higher comfort flats. In spite of the great number of newly established jobs, the competences of the former residents don’t match the new demands. Along with it the former public spirit featuring the former inhabitants of the Docklands passed away, as the new yuppie groups have not mingled with aboriginals.1313

According to the critical opinions, the extrovert development is the consequence of the leadership of the management organization has been removed from the hands of the elected municipal sphere and was handed to the directly government-dependent LDDC. (Collins, M. 2009)

8.3.3. Integrated urban development in the EU

A basic institution of the European culture is the city (urb), which in terms of the integrated Europe recently overtops in the spread of the idea of polycentric city-network.

The objective of the URBAN Community Initiative established in 1994, was to demonstrate the significance of the integrated approach in the solution of problems (social, environmental and economic) occurring in bigger cities en masse. The URBAN has supported many measures which combined the development of out-of-date infrastructure and the revitalization of economy and labour market. A crucial element was so far the fight against social exclusion or the development and management of environment. (N.N. 2003)

During the next EU budget period the objectives of URBAN II was the creation of innovative solutions either for small and medium sized towns or settlements of the agglomerations of big cities. The aim of regenerative strategies supported by the programme can be summarized as follows (European Commission, 2003):

1313'LDDC OUT - JOBS NOT SNOBS' as one graffitt says.



version 3.0• To reach the critical mass (in population number and the related infrastructure) that may give birth to

innovative and sustainable urban development programmes, moreover the creative forms of city management

• To establish strong local partnerships that can determine different challenges, strategies, priorities, the proper way of resource allocation or the detailed elaboration, monitoring and evaluation of the strategy. Partnership must be sufficiently broad and effective, including the economic and social partners, NGOs moreover other relevant organizations.

• To create an integrated spatial approach where requiring through the propagation of inter-organizational partnership

• To associate the strategic plan with the social and environmental systems of surrounding regions and problems

• To integrate economic, social, environmental, safety and transportation factors, including the equal accessibility to jobs and education

• To spread the equal treatment provided for men and women

• To establish community environmental policy at local level

• To set up the local mechanisms to complement Structural Funds and other community subsidies

Cities joining the URBAN initiative must develop their own problem maps and find solutions along these principles. In order to get the Community’s support it is needed to interleave local strategies with the important EU indicators.

A prerequisite to participation in the programme is that the population of the applicant urban community must reach at least 20000 inhabitants, moreover must possess at least three of the following criteria

(http://europa.eu/legislation_summaries/employment_and_social_policy/social_inclusion_fight_against_poverty/g24209_en.htm Accessed 8 February 2013):

• High level of long-term unemployment

• Low rate of economic activity

• High extent of poverty and exclusion

• Explicit development demand because of local socio-economic hardships

• Existence of numerous migrants, ethnic and minority groups or refugees

• Low level of training, significant shortages in skills and high ration of school dropouts

• High rate of crimes and deviant behaviour

• Unstable demographic trends

• Particularly declining environment

Community documents concerning sustainable urban development have appeared since the beginning of the 2000s (Leipzig Chart – 2005, Bristol Agreement – 2006, Spatial Agenda – 2007).

Point 5 of the Regulation (EC) No 1080/2006 of the European Parliament and of the Council of 5 July 2006 on the European Regional Development Fund states on the integrated urban development:

„Within the framework of an integrated urban development operation, it is considered necessary to support limited actions to renovate housing in areas experiencing or threatened by physical deterioration and social exclusion in the Member States that acceded to the European Union on or after 1 May 2004.”

Thus the regulation concerns new EU member states, where it contains extra possibilities for urban development.



version 3.0In the EU budget period of 2007-2013 integrated urban development got priority among official policies, consequently in case of the national reference frameworks of different member states plays a relevant role as well. Based on community principles in every member state the respect of the following factors is fundamental:

• Cities as development poles determine the performance of their region as well

• The city must be integrated into the development of the region as a sub-system together with its own problems

• Through the integrated urban development concept the economic issues, corrupted technologic structures, nodes of social crisis and environmental problems must be treated aggregately

• Local actors must be integrated even in the phase of planning in order to vindicate partnership to the longest possible duration

• To establish a Europe-wide inter-urban net of co-operation and exchange of experiences (URBACT)

URBACT is an initiative operating in the European Territorial Cooperation – ETC, destined for the facilitation of the spread of experiences in urban development. (Figure 65 and 66) Since 2007 the second cycle of the programme has been operating, in which from every EU member state totally 500 partner cities worked together, it means the involvement of 7000 active participants. Many partners from Hungary have already joined such projects, moreover in many of them Hungarian municipalities were lead partners. (Roma-Net – Budapest, SURE – Eger, RE-Block – Budapest District XVIII) (www.urbact.hu Accessed 3 December 2012).

A crucial principle of the programme is that 50% of the partners must be emerged from Convergence and 50% from Competitiveness and Employment Regions. Inside each and every partner organization a so-called support tem must be established (6-25 members) in which beyond the representatives of municipalities the professionals of different fields must participate. Optimally the team will be operable after the end of the project, thus providing an opportunity for the change of experiences and for the harmonization of different interests manifested in developments (www.urbact.hu Accessed 3 December 2012).

Figure 65 Fields of co-operation in the URBACT programme (Own edition after the website urbact.hu)



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Figure 66 The logo of the URBACT programme (Source: www.urbact.eu Accessed: 22 December 2012)

Figure 67 The logo of the EUKN (Source: www.vati.hu Accessed: 22 December 2012)

The documentation system (library, newsletter) managed and events (e.g. conferences) organized by the European Urban Knowledge Network (EUKN) provide opportunity for the spread of best practices in the field of European integrated urban development. In the system 15 EU member states, the URBACT programme, the EUROCITIES and the European Commission participate. (Figure 67 and 68)

Figure 68 The main fields of the EUKN information system (Own edition based on www.vati.hu)

8.3.4. Co-operative urban management in Hungary

Integrated urban development strategy (IVS) is destined to disperse co-operative urban management in Hungary. (Figure 69)

Figure 69 The position of IVS in the system of settlement development documents (Lieszkovszky, J.P. 2008)



version 3.0According to the LXXVIII 1997 law the establishment of settlement development concept for settlement municipalities is mandatory. The perspective of the document can be long- (7-10 years) or huge-term (15-20 years).

The aim of the specified structure development and regulation plan is to secure the local order of building processes in accordance with the protection of the values of natural, landscape and built environment. Regulation plans are integral parts of local structured development plans. Any local plans and concepts must be coherent with the statements of the local structured development plan.

The integrated urban development strategy is such a medium-term, development-oriented spatial plan which aims to realize spatially aimed planning in cities. Accordingly its crucial part is the establishment and realization of special objectives concerning different quarters of the city. Towards it target-zone plans are integrant parts of the IVS. These contain detailed programmes, technical, economic, social projects, moreover the inevitable financial perspectives.

An indispensable factor of integrated urban development is the development of city quarters together with the original population. That’s why the so-called anti-segregation plan examines the existence of segregated dwelling environments (e.g. yard) by a complex socio-economic indicator system additionally it shows how planned developments can influence the life of the quarter. A relevant phrase connected to these developments is rehabilitation.

Rehabilitation means such renovation of quarters and blocks when existing elements are separated. Some of them will be modernized, while others are restructured or demolished and replaced by new ones. One main principle of rehabilitation is it must be equivalent with the current situation of the quarter in the structure of the settlement. During rehabilitation those quarters must be distinguished where private development sources can be involved as well.

Many possible scenarios must be count with. One of them is the function extending rehabilitation, which contains together the renovation of the technical facilities in the given quarter, the management of the inner resources of local communities, moreover the inclusion of operating enterprises. The main objective of such rehabilitation is to secure favourable conditions for inhabitants and incoming companies in the quarter.

The other basic type of rehabilitation is the social type, when the aim is the revitalization of some segregated quarters, in order to provide better living conditions through the utilization of a complex set of measurements.

In line with the former statements it is usual to use the phrase revitalization that means to bring new life to critically endangered quarters having precious elements (e.g. monuments) with conserving existing values.

The measure of the feasibility of integrated urban development strategies is the extent of success concerning the management of housing stocks of certain quarters. The so-called real-estate management plan aims to make possible the successful utilization of municipal buildings (selling, leasing, owners’ assets etc.).

Thus integrated urban development policy is such a method that deals relevant local problems and different interests simultaneously and the principle of solidarity is taken into consideration as well. The most relevant maxim is partnership where the involvement of economic actors, of inhabitants and that of other stakeholders occurs. The scope pointing beyond public sector makes possible the synergetic realization of investments in both sectors. The final aim of the method is to create a liveable city through different methods. (Figure 70)



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Figure 70 Tools of the integrated urban development (Own edition)

The aim of the Hungarian national urban development policy – in accordance with the European priorities – is the creation of the more balanced so-called polycentric urban network. Recently the primate-city effect (because of the size of Budapest) makes it impossible. Accordingly the support of development pole cities in different regions is a relevant aim. (Figure 71)



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Figure 71 Development thematic of the Hungarian pole cities (Own edition)

Integrated urban development in addition is a relevant tool not only for bigger cities, but for small and even medium sized towns as well.

The aim structure of the method can be divided into two parts. Through developments aiming functional expansion the city can increase its attraction towards inhabitants and enterprises. By social rehabilitation revitalization of quarters lagging behind or going down, moreover the reintegration of segregated social strata can be realized.

8.4. 4. SummaryIn the chapter we determined the factors that must be relevant for a successful city manager. ”Urban Intervention Matrix” as a possible tool for the evaluation of activities was introduced.

In connection with co-operative urban management besides some theoretical documents the main emphasis was put on the display of a world-famous, but controversial national project, the revitalization of the London Docklands.

Among the ongoing integrated urban development programmes in the European Union we got familiar with the URBAN initiative, moreover we introduced the URBACT co-operation which aims the exchange of experiences among different geographical regions.

The process of co-operative urban management has been started in Hungary with the institutionalization of IVS as an urban development document. At the same time our experiences until now are contradictory, probably the acclimatization of integrated urban development will be a multi-decade process.

8.5. 5. Self monitoring questions1. What are the main objectives of urban management?

2. What basic functions can be figured in an Urban Intervention Matrix?

3. Hold a brier for the success of London Docklands Programme!

4. Criticize London Docklands Programme from under co-operative urban management spectacles!



version 3.05. What assumptions can we list for the participation in URBAN initiative?

6. What are the co-operation fields of the URBACT programme?

7. List the thematic fields of the EUKN information system!

8. What are the main characteristics of IVS as an urban development document?

9. What are the tools of the integrated urban development?

10. Name the Hungarian pole cities and their key development themes!

8.6. 6. Test questionsWhat characters must applicants of EU URBAN Programme have?

1. High level of long-term unemployment

2. Existence of buildings older than 100 years

3. Low level of economic activity

4. High rate of poverty and exclusion

5. Autonomous system of public transportation

6. Strong development need to solve local economic and social problems

7. High number of immigrants, ethnic minorities and refugees

8. More than 50% of the housing stock is existing of buildings built by industrial technology

9. Low level of education, lack of competences and a high rate of school dropout

10. High rate of criminal and deviant behaviour

11. Unstable demographic trends

12. Particularly breaking-down environment

Correct: 1, 3, 4, 6, 7, 9, 10, 11, 12

Conjugate the Hungarian pole cities with the appropriate development aims!

1. Debrecen

2. Miskolc

3. Szeged

4. Pécs

5. Győr

6. Veszprém

7. Székesfehérvár

1. Autopolis

2. Technopolis

3. Biopolis



version 3.04. Industrializing knowledge

5. The pole of life-quality

6. ICT, environmental industry

Correct: 1d, 2b, 3c, 4e, 5a, 6f, 7e

9. 8. The management of rural settlements and municipalities9.1. 1. ObjectivesIn this chapter some European and Hungarian interpretations of rural will be introduced. Village as a type of settlements can’t be separated from rural: with the presentation of a possible determination of the village we are going to create the base for the description of basic functions of it. The maintenance and development of these functions – taking the village and the rural in a nice fix – is the aim of management activities.

Later on with the introduction of two less-known rural development methods, the SLA and the Saemaul Undong we take a global lookout in the world of rural management.

9.2. 2. ContentsDefinition of rural and the village

Rural functions

Rural development and management – some success stories

9.3. 3. The phrasing of contents9.3.1. Definition of rural and the village

The problem of the management and development of rural regions and settlements is a crucial problem not only in Europe but also in the World. It is proven by the fact that such world organizations like OECD have their own rural development thematic. According to the OECD’s Rural Development Programme the definition of the rural is connected to population density, regions with less than 150 capita/sq km population density is called rural. The institution differentiates three types of areas according to its economic functions as follows: rural peripheral, rural accessible, urban with open space and urban with closed space. (Jonard, F. et al 2009)

Certainly socioeconomic and historic contexts of a given country broadly specify the main functions, problems and management issues of rural areas. In a developing country – lacking the basic social institutions – the main aim is to reinforce self-support skills of the rural population. In the developed countries – at least thinking in a 20th century way – it is an over-gone problem, thus the achievement of other aims motivate rural and village development: landscape protection, the preservation of local culture, agricultural environmental management etc. However it is worth considering won’t the dismantling of European welfare states by market forces result the growth of importance of the aims of the Third World in recently developed-named societies.

In the European Union rural development policy has been established as part of the Common Agricultural Policy (CAP), that means a very important Community system of objectives and tools. Therefore the definition of rural in the EU is more than a simple theoretical question, as it determinates the distribution of money sources. On the one hand at local community level based on population density urban and rural areas are differentiated, on the other hand at regional level NUTS III level territorial units are classified into different regional types. According to these a settlement can be declared rural if its population density is not more than 100 cap./sq km. In a certain region the area covered by rural settlements can be defined as countryside. According to the above detailed categories 81% of the area of the EU can be called rural. (http://www.terport.hu/webfm_send/544 Accessed 10 September 2011) (Figure 75)

In 2010 a new definition of rural has been established in the EU. Accordingly urban nodes were selected with at



version 3.0least 5000 inhabitants where the population density reached or exceeded 300 cap./sq km, the areas outside these nodes are called rural. (N.N. 2010)

According to the OECD categories areas are grouped in Europe, on this base one may differentiate (http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Urban-rural_typology Accessed 10 February 2013):

• Predominantly urban regions, where less than 15% of the population lives in rural communities

• Significantly rural regions, where 15-50% of the population lives in rural communities

• Predominantly rural regions, where more than 50% of the population lives in rural communities

Different European states use their own rural definitions to operate their own development programmes. In Finland for example the EU rural definition is complemented by the broad presence of virgin nature (wilderness) that is unimaginable in other European countries. (Figure 72 and 74) Thus the specific Finnish rural definition can be interpreted through the following four spheres (Oksa, J. 1993):

• the traditional forms of economy connected to nature

• the relevance of nature as a scene of life

• the existence of huge distances

• the presence of low population density areas

In the country three different kinds of areas can be differentiated according to their development chances (Malinen, P. et al. 1994):

• urban and integrated rural areas

• rural core areas

• peripheral areas

Figure 72 Wilderness in Finland, a permanent actor of rural life (Own photo)



version 3.0In Denmark those settlements are defined as rural which are located outside city agglomerations and have more than 200 inhabitants. It is mandatory as well that 15% of the population should work for agriculture. (Kahila, P. – Hedström, M. 2010) (Figure 73)

In Hungary initially rural development was declared a subordinated part of regional development. Act 21 of 1996 on Regional and Spatial Development contained the phrase „areas of agricultural rural development” applying to the areas with high ratio in agricultural employment, besides the majority of population living in villages and small towns.

Figure 73 Urban-rural types of Danish municipalities (Source: Kahila, P. – Hedström, M. 2010)

Assigning exact values to these indicators 15% of the population and 25% of the area of Hungary was declared rural. With the approach of the Hungarian EU integration sources provided by the SAPARD pre-accession fund have been opened. Towards these opportunities the SAPARD Plan of Hungary had to be elaborated, where the next definition can be found:

„According to the EU criteria the decisive ration (96,1%) of the total area can be declared rural, where almost three-quarter (73,6%) of the population lives. The territorial ratio of the predominantly rural areas (61,5%) exceeds the comparable EU value (47%), the population ratio of these areas is 3,5 more than the EU average. The ratios of inhabitants living in predominantly and significantly rural areas together are 34% higher than the EU average.” (The SAPARD Plan of Hungary)



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Figure 74 Where Wilderness and Civilization interlock – a Finnish rural cemetery in Karelia (Own photo)

According to the Hungarian National Rural Strategy the deplorable co-existence of underdevelopment and disadvantage is inherent for the Hungarian countryside. By statistical indicators areas with population density below 120 cap./ sq km can be called rural

Dominant settlement forms of rural areas are villages. These parts of settlement hierarchy are in the closest connection to agriculture. Village was the first permanent settlement form obviously its birth can be dated in the Neolithic age. With the Neolithic Revolution, the birth of agriculture and the appearance of crops the guarding of treasured goods and the emergence of permanent settlements was a must. Villages of the world represent the same level of existence even today, as Fernand Braudel states: villages are scenes of the material culture of the primary existence, also known as infra-economy. (Braudel, F. 2004)

We may state the terminal objective of every rural settlement (but mainly village) is traditionally to survive, the (narrowly) extended reproduction from generation to generation. Thus villages can integrate innovative factors only to a limited extent as at this level solely well-tried survival techniques have raison d'étre. Any failed innovation can endanger the very existence of the person, family and the settlement.

Consequently referring to the management of rural settlements many outcomes can be stated:



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Figure 75 The classification of NUTS III regions in Europe on the ground of rurality (Source: N.N. 2010)

• Generally to fill less functions locally due to the small settlement size

• Inter-settlement connections – including the partnership with cities play a key role

• Proper land-use management is inevitable because of the relevance of agriculture

• Infra-economy plays a main role, thus grey economy is unavoidable

• Traditional infrastructure development is encumbered by low population density

• A vulnerable society because of the decreasing and ageing of population

9.3.2. Rural functions

The functions of rural settlements and areas – following from the definition in use – are connected to the satisfaction of basic needs. At the same time in the age of globalization, mainly in the developed world society is trying to invent new values of the countryside. Traditional virtues like economic partnership with cities have broken up. Central cities are for instance in a tighter contact with other city nodes or rural background being many hundred kilometres far than with their own surroundings. Its consequence is the devaluation or depreciation of the majority of rural areas. Actually recent economic trends do endanger the very subsistence of the traditional countryside.

This problem has been detected by European politicians one and a half decade ago. As a result the European Charter for Rural Areas was accepted in 1996. This document has extended the interpretation of values connected with rural beyond direct economic ones and as an attachment stated the social functions of countryside as well.



version 3.0The economic functions connected to the countryside are variant, among them agriculture, forestry, fisheries, the production of renewable raw materials are of primary importance besides rural tourism and recreation may be enrolled too. Recently the role of agriculture and forestry must be re-interpreted. The multipurpose character as a priority to be followed is going to determine the future of these branches. In practice it means that beyond economic added value, landscape protection, eco-tope maintenance and the dissemination of landscape-friendly production methods are all relevant objectives.

Ecological-natural functions connected to the countryside become more and more important. The next elements can be connected to them: the protection of natural basics, the saving of landscape diversity, sustain of biodiversity or the saving of landscape character.

In the third category human-ecological and social functions can be found, actually the creation of new bases for the urban-rural partnership (an element appearing in the ESDP as well), and for the protection and the development of cultural life and values of local communities.

Development alternatives available for rural areas are summarized by the next figure (Figure 76). It is plain that the diversification of activities is a possible alternative, ultimately the inclusion of new functions into the system of the traditional rural economy. Another take-off point is the intensification, when traditional functions are passed, but in a new way. The third possible direction can be the development of the new forms of co-operative management or that of new economic bases.

Hence in the management of rural areas and villages the protection and utilization of traditional values as well as gradiation must have a crucial role. The primary aim of management must be not so growth as rather sustainability and protection. A third respect as it can be seen on the figure (Figure 77) is complexity. During interventions into the life of multidimensional rural settlements and areas, externalities – unintended effects caused in different sub-systems – must be taken into consideration that sometimes may be dangerous and can threat the stability of each sub-systems or the whole system.

Figure 76 Prospects in the transition of traditional rural socio-economic activities (Own edition)



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Figure 77 Multidimensional rural development (Own edition)

In the light of it rural areas rural areas can not be interpreted as experimental scenes where often controversial interventions are effected. This deplorable situation is shown by the variety of slogans and rural development models fabricated by UN in the last five decades. (Figure 78)



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Figure 78 Rural development programmes managed by the UN (PTD: Participatory Technology Development; FSR: Farming System Research SLA: Sustainable Livelihoods Approach; PRSP: Poverty Reduction Strategy Paper MDG: Millennium Development Goal) (Own edition based on www.fao.org)

9.3.3. Rural development and management – some success stories

The SLA Method

One of the UN’s relevant, successful and globally used methods on rural development is the so-called Sustainable Livelihood Approach (SLA). It is built on two main fundamentals. One of them states poverty as a complex phenomenon in the life of people concerned. Poor people additionally their secure and sustainable livelihood is in the centre of the approach. During the process the relation (ownership, rent) of the poor towards different natural resources (mainly the land) must be examined. Available technology, possessed skills and knowledge, existing capacities must be reviewed. Besides other characteristics of the poor must be taken into consideration, such as their health condition, accessibility of educational system, possibilities of social support (health and pension insurance) as well as the availability of credits.

The main problem to be solved is the vulnerability of inhabitants. Many factors can hide behind as political or economic crises, epidemics and other illnesses, natural disasters or the negative effects of seasonal changes (e.g. the fluctuation of market prices).

A decisive element of the SLA is to make affected people to sum up their recent situation for the poor must be asked to define their status. It is indispensable so as to people can be motivated and mobilised to solve problems being aware of them.

The other main component contains that interventions to be taken must be special to that region and based on different principles. Consequently the disposal framework of the SLA is situation-based, thus universal solutions



version 3.0can’t be found (Thomson, A.M. 2000).

Principles used in the SLA method can be summarized as follows (Morse, S. 2009) (Figure 79):

• People-orientation: Changes in the livelihood of the poor must be analyzed in addition the active participation of stakeholders is mandatory as well

• Holism: People follow diverse livelihood and survival strategies, there are many stakeholders (private, authorities, community organizations, international institutions) in the situation that must be reckoned with

• Dynamism: The system of livelihood has a varying nature, and is affected by many factors (local-global) additionally they influence each other considerably

• Build on strengths: Strengths and opportunities recognized by people must be concentrated on unlike weaknesses and problems thereby to unfold, development and support existing livelihood strategies are the most significant steps

• Support micro-macro relations: The effects of different policies and institutions on livelihood must be examined, additionally policies must be adapted to the real needs of the poor

• Broad partnership: Programmes to be planned and implemented in the region should be built upon the broad partnership of public and private sector

• Sustainability as an objective: The decrease of poverty should be long-lasting in other words after the spending of external resources processes should continue

Figure 79 The system of poverty according to the SLA method (H: human, N: natural, F: financial, P: physical, S: social (Source Morse, S. 2009 and http://www.ifad.org/sla/index.htm Accessed 3 November 2012)

Saemaul Undong

A usual explanation for the development of South-Korea in the last 60 years lists foreign capital, big companies, opened economy and urbanization as key factors. It is less well-known that the closing-up of rural regions was planned to be achieved by a national anti-poverty and anti-famine campaign through the combined development of agriculture and other sectors based on local initiatives.

The programme was announced by the one-time president of South-Korea Park Chung-hee in the 1970s. Up-down and bottom-up initiatives furthermore traditional Korean values as hardworking, self-help, co-operation,



version 3.0self-confidence and diligence were integrated. Main bases of the programme were the involvement of broad social groups, in addition the continuity of regulations and circles of partnership. In the programme the selection and training of a local leader group was of primary importance. Their function was to carry on development ideas and proposals as local managers. (http://www.isvil.net/eng/pages/introduce/saemaul_01-2.php Accessed 10 February 2013)

Hence problems of the countryside in many regions of the world were similar to the contemporary South-Korean situation (corrupt officials, incapable poor, weak NGOs) thus via the UN the Saemaul methodology (to make the poor an active partner in their own development) was introduced into the realization of global development objectives too (Millennium Development Goal – MDG, Community Empowerment Program (CEP)). (Reed, E.P. 2010)

In other words Saemaul can be successful outside of Korea as well if it is managed properly.

During the realization of the programme firstly the basics of implementation must be established. (N.N. 2003) Accordingly people’s support and seed capital must be gained, additionally principles must be fixed. In the next phase focal groups must be set up, leaders and workgroups are to be organized, in addition the functional patterns must be established even in the sub-groups. At the same starting phase seed money should be collected to finance sample projects, collective work will be supplemental to it.

Secondly the operation of the project will take place when principles and standards are to be determined. On their base the planning of project should be started. After this process rural population must be convinced about the utility of participation. The existing theoretical model should be adjusted to the character of the given rural region besides inhabitants must be encouraged and persuaded they could do it as well. For the successful start a local coalition is to be created among the members of different groups, in order to it focal group meetings and general residential forums are to be held.

The secret of the method is to let participants to find their ideal role inside the groups. Groups will remain sustainable if common property can be attached to them moreover it is managed properly. If some potential groups are started, a local Saemaul Business Centre will be established by government support. Its central role can be summarized it helps local groups deploying their activities moreover it motivates participants.

Networks born in this way communicate with each other as well as with the government for the sake of common success.

Inside a given group one household can be represented by one person still group leaders are elected by members based on the principle of trust.

The third step is the main phase of the project where different development projects must be managed. One main objective is the improvement of living conditions through renovation of houses and building of infrastructure, in addition income increasing steps are included. Among the main element of these are as follows: to overcome obstacles, to initiate common projects and to create marketable local products. In a following phase the naturalization of innovative ideas can take place. To transform distortions of the distribution system is another crucial element of income growth. Certain successful communities may reach the operation of their own factory or plant only if their common identity will be enforced. The establishment of local cultural centres and similar facilities are elements belonging beyond the scope of economy. Finally local savings co-operatives can be established as well.

The project will be closed at the fourth stage through the socialization of results and celebrations. In case of proper fundaments projects can be operated with success over the long-term. The diversification of activities moreover the launch of regular R&D activities may take place. Beyond the realm of economy at this stage it is suggested to built-up a parish hall and the publication of a local newspaper. The plum of Saemaul is relationship building towards different government bodies possibly with similar organizations of foreign countries.

With the development of the system the income of poorer households can be increased. All over the countryside community based agricultural and non-agricultural enterprises are born. The otherwise vulnerable and fated villages are transformed into self-relyant socio-economic institutions using their own resources. With the establishment of CBCs the state directly supports encouraging organizations. All in all it is important to emphasize the priority of the birth of local self-management forms, central support is of secondary importance. It must be stressed that in the convincement of rural inhabitants exemplary projects play a crucial role through the effect of “seeing is believing”. (Figure 80)



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Figure 80 The organogram of Saemaul (Source: www.saemaul.or.kr Accessed 10 November 2012)

Figure 81 The construction of a bridge during Saemaul Undong (Source: Saemaul Undong in Korea)

Beyond economic development the Saemaul is suitable for the transition of the human side moreover the rediscovery of traditional values (one for all, all for one, obedience and work). Since the programme is built upon the conscious management of local environmental and social (healthcare or the prevention of social illnesses) resources therefore it realizes the idea of complex and sustainable development.

According to experiences it takes three years to realize the campaign from the beginning steps till the implementation of the National Workshop aiming to introduce groups moreover to create connections among them. (Table 5)

In the 1970-80s Saemaul was successful in the building of basic infrastructure in the Korean countryside. (Figure 81) Because of the socio-economic transitions from the 1990s the focal point of the campaign has shifted towards the strengthening of the civil and volunteer sphere. Another significant change was the growth of international co-operation. In 2008 the „Economic Commission for Africa” (ECA) has declared to use Saemaul as a model in its own „Sustainable Modernization of Agriculture and Rural Transformation” (SMART) programme. (http://new.uneca.org/TabId/3018/Default.aspx?ArticleId=1906 Accessed: 10 February 2013)



version 3.0Table 5 A possible agenda of the Saemaul programme

Duration Activity Aims

1 month Daylong village consultations The identification of physical and social difficulties

1 month CBC establishment Socio-economic institution building in the village

1 month Training of participants Capacity building

1 month Workshop Strengthening of income generating activities

1 month Credit processing Putting credit

5 months Completion of social reform Community co-operation, diligence and self-support

12 months Income generating activities Increasing household incomes

12 months Reconsideration and monitoring Strengthening proper activities of the organization

1 month National Workshop Evaluating the community development, expanding the national programme

Source: www.saemaul.or.kr

9.4. 4. SummaryIn the first half of the chapter we have cited some interpretations of the rural from the OECD, the EU and from some of its member states. From the definition of village and rural some principles were interpreted that may help to direct rural management.

The mission of rural management is to promote rural settlements and the countryside in the implementation of their complex functions. However the age of globalization has challenged traditional countryside. Many answers can be formulated that constitute a part of the complex rural development.

In the last decades many programmes – managed by the UN or individual nation states – have tried to find solutions to the problems of the countryside. From them the Sustainable Livelihood Approach (SLA) and the South-Korean Saemaul Undong systems were reviewed.

9.5. 5. Self monitoring questions1. On what statistical parameters does OECD interpret the definition of rural?

2. What kind of definitions do exist in the EU for rural areas?

3. What is the special Finnish rural definition?

4. List the special characteristics of the Danish rural definition?

5. What is the definition of rural in Hungary?



version 3.06. What rural basic functions are listed by the European Charter for Rural Areas?

7. What opportunities do exist to transform the traditional rural socio-economic activities?

8. Describe the dymensions of rural development!

9. What are the basic principles of the SLA method?

10. List the main points of the agenda of a Saemaul programme!

9.6. 6. Test questionsWhat statistic characters do the following spatial categories have in Hungary?

1. predominantly rural

2. significantly rural

3. predominantly urban

1. more than 50% of population is living in rural settlements (population density is under 120 cap./km2 )

2. 15 - 50% of population is living in rural settlements (population density is under 120 cap./km2 )

3. less than 15% of population is living in rural settlements (population density is under 120 cap./km2 )

Correct: 1a, 2b, 3c

To which decades can the following rural development principles and phrase be assigned?

1. dual agriculture

2. market liberalization

3. integrated rural development

4. MDG

5. Micro-credit

1950s:

1960s:

1970s:

1980s:

1990s:

2000s:

Correct:

1950s: 1

1960s: 1

1970s: 3

1980s: 2, 3

1990s: 2, 5



version 3.02000s: 4

10. 9. The special tasks of micro-regional management10.1. 1. ObjectivesThe aim of the lesson is to demonstrate briefly the recent past of the national micro-region system, especially reckoned with distinguishing the bottom-up and top-down structures. By demonstrating the most current constitution of micro-region system and the latest institutes we want to mark the attention that the actuation of each micro-region partnership requires a management of a diversified partnership-system by the leaders.

The future of the previously evolved and quite integrally institutionalized micro-region system has become uncertain due to the regional reform-processes in Hungary ongoing while fixing the chapter, so I would like to promote a new model by introducing the deformation taking place in the micro-region of Eger.

10.2. 2. ContentsThe micro-regional level in Hungary

The function of micro-regions and key-members

Practical experiences

10.3. 3. The phrasing of contents10.3.1. The micro-regional level in Hungary

The micro-regional level based directly above the local settlement unit is one of the important elements of the inter-sector among the local and the central authority, which plays a transmitting role between the public services based on lower levels because of subsidiarity, functions and the central ordinance. (Figure 82)

According to literature, micro-region should be the basic unit of labour market and regional development. Theoretically this is the regional level, where the adequate number of region- developmental actors and their interests could appear, moreover they could work in an effective way. (Molnár, E. 2010)

The district system (“ridings”) was running this level through many centuries in Hungary, which – as its Hungarian name shows as well – provided a basically administrative-justice function for residents, which could be reached within a day of walk. These districts played the greatest role in the Hungarian history till the 1950’s, when the majority of settlements were subordinated to the townships. Since that time their roles have been decreasing, and the districts lost their importance. The institutes running by districts were ceased; the district classification was mended de jure in 1. January 1984. Instead of the districts so called “town-precincts” were organized, which had run until 1990. (Hajdú, Z. 2001)



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Figure 82 Irregular administrative regional breakdown form the 1970’s: planned by István Bibó (source: Hajdú, Z. 2001)

After the transition, the Act on Local Governments accepted by the new Parliament gave such authority for settlements’ municipalities that was never seen before. The county municipality remained inter-level and could function only in a coordinating role next to their settlements. For a while there was not any regional unit existing in a normative way under the level of counties. On an optional way, the Act on Local Governments authorized local governments to form associations by their own will. The Act LXV of 1990 defined three different cooperation-forms: Official Administrative Association, Association for the (Joint) Direction of Certain Institutions, Joint Body of Representatives. As a fourth variation, the Office of District-Notary – which stemmed from the dualistic system – has subsisted. (Act LXV of 1990 On Local Governments)

In addition there were cooperation forms, which were not registered in public act according to the partnership liberty provided by the Act. The Government Association for Regional Development was the most prevalent form of the cooperation for regional development of the local governments. The Act XXI of 1996 on Regional Development and Planning provided several facilities for the mentioned co-operations, but the bottom-up suggestions were tended to stiffen at the same time in the end of the 1990’s. (Patkós, Cs. 2008)

According to the regulation of 1996, the Association is allowed to perform its own program for regional development. The authorities above them (County Development Councils) had only the right to form their opinions relating to the programs. This regulation gave several opportunities for initiations, whereupon the evolving structures have become more and more opaque among voluntary associations. There were such municipalities that were not a member of any associations, while there were several others that have become partners in more organizations.

We could consider the cooperation of governments only to be temporary, for instance to obtain tender supports. The 167 created organizations for obtaining the funding of the PHARE Intercommunal Cooperation from the year of 1993 could be mentioned as an example. (Molnár, E. 2010)

Statistic micro-regions were created to collect statistical data in parallel with the Associations of Governments by ordinance of the central regionalization. They covered the whole territory of the country without gaps respectively one settlement could belong unequivocally to one district.

The number of statistical micro-regions has reached 175 in 2010, which means a significant increase from the 150 of 1998. The explanation is that the local lobby forces from smaller towns tended to create their own



version 3.0statistical micro-regions around themselves, whereupon the Act provided facility as well. Consequently the long-term statistical analyses have been often encumbered because of the changing spatial-frame of the analyses.

The organization principles of the micro-regions could be summarized as follows (Schwertner, J. 2003):

• It must cover the territory of the country (county) without gap; every settlement must belong to one micro-region – in addition one settlement could be a part of only one

• There are polycentric catchment area in the system, in which more than one centre settlement exerts the central functions, it is not necessary to organize independent micro-region around every town, which have the range of urban

• The system must be stable for a longer term in order to fulfill the functions according to the Act on Regional Development and Regional Planning, the support-system and the statistical applications

• The statistical micro-region system is a catchment area, which expresses the basic- and medium-level supply-relation system of the population; the regional unit of settlements, that are living together and indigent for each other’s help

• The voluntary development councils do not cover uniformly the whole territory of the country, more settlements is not only member of one association

The micro-region level had an outstanding significance in distributing the supports for the regional development, since the beneficiary districts were marked out among that frame. Five different governmental decrees – defined by various social-economic statistical factors – provided the rating of the micro-regions according to the level of underprivileged situation between 1997 and 2007. (Molnár, E. 2010) (Table 6)

Table 6 The rule of laws about the recipient micro-regions 1997-2007

Rule of law Recipient micro-regions/ total number of micro-regions

Government Decree No 106/1997 78/138

Government Decree 19/1998 88/150

Government Decree 91/2001 94/150

Government Decree 64/2004 95 + 15/168

Government Decree 311/2007 94 + 11/174

Source: Molnár, E. 2010

Getting close to the EU joining, the resolution of all-time governments was to integrate the boundaries of the two kinds of systems and to make them compatible. However the significant obstacle of this was that the local governments were entitled to the right of free association declared in the cardinal Act on Local Governments.

The dissimilarities between the two aspects could be embraced according to the Act on Regional Development and Regional Planning, which determines the micro-regions as follows:

„The regional unit limited by the functional relation-systems among the settlements, the totality of intensive relationship, self-organized, adjacent to each other.”(Act XXI of 1996.)

The modification of the Act in 2004 defines the micro-region in a different way:

„The micro-region is a regional developmental-statistical unit, which is limited by the totality of the functional relation-systems among the settlements. The territory of the micro-regions cover the whole territory of the



version 3.0country without gap and repetition and it accommodates into the boundaries of the regional developmental-statistical region, the county and the other micro-region. The administrative territory of every settlement belongs to one micro-region.” (Act LXXV of 2004.)

The central government has created the system of Multi-purpose Micro-regional Associations in order to regularize the opaque and unfinanced system.

This institution was declared by the Government Decree 65/2004. (IV.15.), when the definition of Multi-purpose Micro-regional Associations was determined as an organization functioning in a micro-region level, which:

1. within the boundaries of micro-region defined by the Government Decree on establishing the micro-regions

2. participation with all local governments that belongs to the certain micro-region

3. organized for providing at least three public supplies and functioning the tasks of the regional development

4. association with legal entity

Motivating the governments to form such organizations, the government provided for the Multi-purpose Micro-regional Associations to obtain extra financial funds to make the public services more efficient and to update the public administration, respectively the different regional development projects were supported. It was also worth for the local governments to adapt to the central ordinance, since they could gain purposeful extra fund among the financial circumstances becoming heavier every day. The specialized task-supply beyond the Multi-purpose Micro-region could have been realized by disproportionately great sacrifices in the last days of the system (after 2008), so there was no other chance for the majority of the settlements. The Multi-purpose Micro-region Associations could contract the following tasks over the obligatory regional development. (Act on CVII of 2004.):

• pedagogy and education

• social services

• health care

• child, family and youth protection

• maintenance of local mass traffic and local public roads

• housing and property management

• supply of safe drinking water

• water resources planning and drainage (of rain water), canalization and sewerage

• communal supplies and energy-supply

• environment protection and conservation

• provide for the collection, disposal, treatment/neutralization and utilization of solidand liquid communal wastes

• spatial planning

• performing equality programs

• participation in solution of employment

• development of economy and tourism

• animal and plant health

• inner control



version 3.0The changes after the year of 2010 have concerned the seemed to be stable micro-region level, one part of the responsibilities of the defunct micro-regions got into the county, while other functions got into the districts. Theoretically there are facilities to continue the previous micro-regional cooperation. Some of the local governments will continue their cooperation among the frames of the civil sector.

The long-time existing parallelism of institutions has not facilitated the clarification of the situation of the micro-regions. There was a time when the micro-region managers representing the local power, the micro-regional agents functioning as the agent of the Minister respectively the rural development managers managed the actuation of that level next to each other. The micro-regional development created in 2004 has become the most important institutions of the regional development. The development agencies worked besides the councils both in the regional and county levels.

10.3.2. The function of micro-regions and key-members

The regional development activity taking place in the micro-regions must be based on local initiations. Subsidiarity defined according to the (being a) main principle of the EU Regional Policy must predominate in that level as well. The reason is that the utilization of inner interest and responsibility of wider parts of the residents generates extra sources. The decentralization of the decision-making could be realized in the micro-regions at theoretically at least. The people are standing in the centre of the developments, and their interest is served by the realization of complex development projects (physical, social, economical and technological).

Theoretically the aim of the development is to realize projects and programs in the micro-regions, which are based on the local characteristics. As a part of that it is important to utilize the local human resources, which are available abundantly in general. Moreover the sustainable utilization of the common cultural and natural heritage must be realized synchronized with the European principles. Certainly the economic-financial sustainability of the projects is important as well, but the solidarity and the social justice has to predominate.

Figure 83 The sort of organizations and interest met in the micro-region (Own edition)

Theoretically the Micro-regional Development Council was the most important forum for the cooperation of the different stakeholders and the bilateral interest-agreement.

The Mayors of the participant governments had voting rate in the Council. At the same time the representatives of the economic chambers, the representatives of the County Development Council, the representative of the organization of employer and employee, which have right to delegate into the County Labour Council, a



version 3.0representative of the professional Consumer Organizations, representative of non-governmental organizations, representative of the County Administrative Office, and the representative of the Hungarian State Treasury have consulting rights.

We consider the participation of the NGOs specifically essential. The so-called micro-regional civil agreement forum is used for the selection of the civil representative. This forum is created and run by the concerned NGOs. It is worth composing a “regional map of interest” so that the non-governmental organizations could accordingly take part in the micro-regional processes. The real NGOs are important supplements of the pattern composed by the public authority organizations and the local governments officiating in the micro-region and the enterprises working for profit. (Figure 83 and 84)

Unfortunately the experiences show that the micro-regional forum of agreement was not founded in all of the micro-regions, moreover where it was done, it did not function appropriately. (Szoboszlai, Zs.2008)

We could see (Figure 85), that such civil forums of agreement in the majority of the regions have been founded but not functioning, while – with the exception of the Western Transdanubian Region – the effectively acting forums are in minority. There were a low number of civil forums of agreement in the North Great Plain and Central Hungary Regions.

Figure 84 Main interest-motivation of the actors in the regional cooperation (Source: Rajnai, G. 2005)

Figure 85 The number and situations of the civil forums of agreement in the different regions (Own edition according to Szoboszlai, Zs. 2008)

The importance of the NGOs is not just self-interested in our analysis. The Multi-purpose Micro-regional Associations were abolished in the end of 2012, but the participant governments had an opportunity for



version 3.0continuing the cooperation voluntary to supply the different responsibilities together. The background of NGOs could play an important role, because where serious civil work led on operation near the Multi-purpose Micro-regional Associations, eventually the micro-regional civil forums of agreement worked efficiently, the switch on the requirements of the new circumstances could not cause a big problem.

10.3.3. Practical experiences

The Author – although has never been either member of micro-regional council or staff-member of labour organization – had work contact with several micro-regions during the practical regional development. He would like to note his experiences in this chapter in order to promote the work of the future regional managers.

Theoretically the main task of the micro-regional management is to create or reform the fair system of conditions, moreover to organize and provide the cooperation and the partnerships between the relevant local actors.

In addition the micro-regional leader (being whether a manager or a clerk) have to pay attention to the maintenance and the interests of the actuator (operative staff) and the leader (development council) organizations in the micro-region, as well as to the organizations running by the micro-region (institutions). The situation reminds us of the Maslow-pyramid, since the actuation, the maintenance and the development of the operative staff is a necessary, but not a sufficient base. Unfortunately there are micro-regions, in which the development work remains on that level, namely the regional development does not extend through the wall of the office of the micro-regional operative staff (procurement of machines, software’s, admission of staff members etc.).

The next level in the pyramid is the interests of the representatives of the local government sector (the Mayors), which are principally represented in the development council. Of course these interests should optimally be supported by the substantive interests of the represented settlements. By all means the relationship between the micro-regional manager and the Mayors has key-importance in the operability of the region. We have to declare about the question of political relations. One part of the Mayors – as an elected head of the settlement – enhances any side sincerely or obliquely of a national political power. According to the experiences of the Author these national political differences recede in the micro-regional meetings and overwritten by the local interests. At the same time, there are examples, when – specifically through the Mayors of greater towns, who are parliamentary representatives in addition – the national faults appear in the micro-regional level as well. The task of the micro-regional manager is to serve and develop the operability of the region, preferably by a professional basis. This pure condition could not be provided every time, we have to say, that the political commitment (concerning any sides) is neither good, nor bad in itself in the micro-regional management.

The relationship system of the micro-regional manager and the heads of the institutes held by the micro-region is an important aspect and affiliation level. The basic condition of the good work-relationship is that the institutes could function in an appropriate environment, the development of the micro-region could be realized accordingly the reality and demands respectively.

The different scale of the settlements building the micro-region is another important question in the management. The leader of the biggest settlement – in a micro-region, which is dominated by a bigger town – has certainly a greater influence, than a smaller, although theoretically every Mayor’s words are equivalent in the micro-regional council. In the Author’s opinion the radical reverse of the administration system from 2011-2012 could bring the revalue of the towns having central function. New functions are opened for the district centers by the realignment of the administration, which could appear by the interposition of the increasing prestige in other functions (for instance regional development).

Other problems could emerge in such micro-regions, where there are more similar scaled towns. For instance we could mention the Derecske-Létavértes micro-region in Hajdú-Bihar County. The two definition towns of the region and Hosszúpályi function as a sub-micro-regional central.



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Figure 86 The sub-micro-regions of the micro-region of Derecske-Létavértes (Own edition)

The Derecske-Létavértesi micro-region Multi-purpose Micro-regional Association was founded in June of 2004 and Sáránd was named as the centre of the association. The explanation is that the three larger settlements – especially Derecske and Létavértes – could not make an agreement, so there was born an obligate compromise. Another element of the agreement is that the micro-regional operative staff changes its place by four month among the three settlements (Derecske-Hosszúpályi-Létavértes). All of the three settlements provided infrastructure and place for the office, however the moving as an attribute of the kings of the Árpád-house had several disadvantages. For instance the office routine was getting complicated on those days – just like the writing and management of the tenders – since one part of the necessary documents was in boxes, while another part was on the way between the two centres. (Figure 86)

It is an interesting question, that what kind of opportunities a smaller town will have in the new administration system for leading their own micro-regions in the „shadows” of Debrecen from the year of 2013. We can read according to the map (Figure 87), that in the case of the analyzed micro-region Derecske will be the district centre, while Létavértes will have the right to run government-window. Comparing to the micro-region, the territory of the new district is getting round in the north and south as well.



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Figure 87 Micro-regional breakdown of Hajdú-Bihar county since 1st of January 2013. (Source: Hajdú-Bihar megye területfejlesztési koncepciója, 2012)

The Eger Multi-purpose Micro-regional Association expanded within the statistical-administrative boundaries, but the Local Government Association for Regional Development of Eger micro-region goes throw the border-line of the county and reaches the area of Borsod-Abaúj-Zemplén County.

Some settlements of the micro-region completed with some individual persons and the Agria Innorregio Knowledge Centrum of the Eszterházy Károly College Faculty of Natural Sciences have established the Association for Development of Eger Area (ADEA) owing to the alteration of 2012 and the governmental intent of abolishing the multi-purpose micro-regional system. The Association focuses on developing the region, improving the living quality in the rural areas, growing the income-generating capacity, making the landscape attractive. An important element of the cooperation is to strengthen the regional cohesion, to promote the inner integration, to intensify the competitiveness of the micro-region, to improve the square and sustainable development through revising the quality of the environment. The cooperation of governmental, individual and non-governmental sector should strengthen so that they could solve problems, which do not stop in the borderline of the settlements, moreover they should search the common solution. (Figure 88)



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Figure 88 The transformation of Micro-Region Eger in 2012 (Own edition)

With its activity, the ADEA is going to continue some responsibilities of the micro-region (for example: regional development), but it is intended to open to the direction of the civil sector so that the ADEA would supply such functions, which are usually put by the NGOs into their activities. The participation of the Eszterházy Károly College is very important in the organization, since the resources and competences of a knowledge centre forming in the region will be available for the regional development.

Obviously the extent of the ADEA is far smaller than the previous micro-region, since on the one hand it does not cross the boundary of the county, on the other hand Eger (the centre) and some other settlements have not joined it yet – at least up to now.

There were micro-regions that were not working actively in the past years. An analysis-series of the National Development Agency (NDA) examine the development career of the home micro-regions, particularly the programs, which have a regional impact. The Author was also a participant in the analysis concerning the micro-region of Kazincbarcika. (Figure 89) Unfortunately the interviewed micro-regional actors (the Mayors, NGOs, contractors) emphasized univocally, that the micro-region was not able to join with the settlements of the area as an integrator forum. The majority of the supported tenders were realized in the level of settlements or the sub-micro-region. The only exception is the public work program, which was planned and realized in micro-regional level. The explanation is that the long-term structural unemployment is a serious problem almost in all of the settlements, so the common institute (the micro-regional association) could play a successful coordinator role in solving the problem. The mutual ideas have emerged in other specialties as well, for instance the common bicycle road project, which remained in theory.

The settlements could have waited for other kind of help over the feasible common thinking, for instance generating the deductible for the tenders together. Certainly a more powerfully organized and institutionalized micro-region would have been needed to realize it.

The shape and the extent of the micro-region result that the particular interests in the different parts of the micro-region could play a more important role than the factors generating togetherness. (Figure 90) For instance



version 3.0we can mention the LEADER Action Groups acting in the micro-region: three of them concern the region, but neither of them has the centre in the micro-region of Kazincbarcika.

The BÜKK MAK LEADER Local Action Group has the central in Bükkaranyos, its members from the micro-regions are the governments of Dédestapolcsány, Mályinka and Tardona, in addition we have to notice that the Borsod-Abaúj-Zemplén County Gypsy Minority Regional Minority Government has joined the organization. The LEADER+ Bükk Action Group was one of the predecessors of the organization before the year of 2007. The aim of the BÜKK MAK LEADER Local Action Group is that the community could establish the sustainable development of the region based on organizing the community- and individual energy-production, applying clear technics and technologies creating new work culture. Accordingly the „1 village – 1 MW” program has become the development pilot-program of the community and its goal is to produce and spread the utilization of the green-energies in settlement level.

The most local governments of the micro-region appear as participant in the Borsod-Torna-Gömör Assocaition (Alsószuha, Alsótelekes, Bánhorváti, Berente, Dövény, Felsőkelecsény, Felsőnyárád, Felsőtelekes Imola, Izsófalva, Jákfalva, Kánó, Kurityán, Múcsony, Nagybarca, Ragály, Rudabánya, Rudolftelep, Sajóivánka, Szuhafő, Szuhakálló, Trizs, Vadna, Zádorfalva, Zubogy), but the central of the action group is out of the region, it can be found in Edelény. The main aims of the community are to strengthen the local enterprises, to create working places, with a particular attention on the touristic possibilities.

Two settlements of the micro-region (Sajógalgóc és Sajókaza) take part in the North-Borsod-LEADER Union Local Community Association. The central of the community can be found in Hangony, while the office of the operative staff is in Ózd.The Association is willing to utilize the local resources sustainably for the development of the rural areas on the behalf of the local society.



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Figure 89 The micro-region of Kazincbarcika (Source: NDA)



version 3.0Figure 90 The end settlements of Borsod-Abaúj-Zemplén county’s public road network, the distance of the settlements from the main roads (Source: Kazincbarcika IVS)

10.4. 4. SummaryIn the chapter we have demonstrated the top-down and bottom-up powers playing role in evolving the home micro-regional system, which have contributed in forming that level before and after the transition. We could establish that the affirmation of the central could be considered after the transition, as the micro-regions were forced to accept the multi-purpose micro-regional terms due to their financial troubles.

The Multi-purpose Micro-regional Associations – although their functions were beset with difficulties – have solved their responsibilities prescribed and provided by the law (regional development, integrated supply of certain public services) reasonably. The latest administrative and regional organizational reforms have caused a drastically new situation in that area. According to the opinion of the stakeholders, the functioning of this transmitter regional level is necessary, but nowadays the future is still not clear.

By the demonstration of some – hopefully not only subjective – details in the last third of the chapter, we tried to help the job of the colleagues working in the micro-regional level.

10.5. 5. Self monitoring questions1. What kind of forms has functioned in the micro-regional level since 1950?

2. How did the Act on Local Government and the Act on Regional Development and Regional Planning bias the conformation of micro-regional level?

3. What are the main principles relating to organizing micro-regions?

4. What do we call Multi-purpose Micro-region concerning to the law?

5. What kind of responsibilities could the Multi-purpose Micro-regional Associations undertake?

6. What kinds of institutes belong to the micro-regional level?

7. What kind of interests of organizations and actors are needed to be agreed to make the micro-regional level work?

8. What kind of characteristics the micro-regional forums of agreement have in our country?

9. What kind of problems could be experienced in certain micro-regions due to the different scale of the settlements?

10. What kind of role may the higher education play in the micro-regional cooperation after 2013?

10.6. 6. Test questionsSelect the principles of micro-region organization from the following ones!

1. Occupy the area of the country (county) fully; every settlement should belong to one but only one micro region

2. Municipalities should join the voluntarily

3. The system should be stabile in order to fulfil functions coming both from regional development Act, from subsidy system and from statistic applications

4. The statistic micro regional system is an attraction zone representing the connection of the basic and secondary communal supply system; the unit of settlements living together and belonging to each other

5. Government and EU reputation

Correct: 1, 3, 4



version 3.0Which functions from the below ones don’t belong to the realm of multi-purpose micro regional association?

1. training and education

2. social services

3. healthcare

4. telecommunication

5. Family- child- and youth protection

6. Public culture and collections

7. Local transport and roads

8. Higher education

9. Real estate and property management

10. Water system - aquaducts

11. Water management, flow-protection, precipitation pipelines

12. Communal services and energy supply

13. Environmental and natural protection

14. Waste and sewage management

15. Spatial management

16. Realize equality programmes

17. Employment

18. Economy and tourism development

19. Animal and plant care

20. Internal monitoring

Correct: 4, 8

11. 10. Tourism-destination management – a specific domain11.1. 1. ObjectiveThe tourism is one of the most important sectors of the economy, so it is an essential element of the different regional and settlement strategies. Its specialty is that the sold product is the settlement and the region itself, so the appropriate cooperation of the regional actors and the management of the complex system are required in order to realize it successfully. In the chapter we are going to demonstrate the definitions of the tourism destination management, which is one of the most essential tools of modern tourism development; and the steps that could help us to establish a well-functioning TDM system. We distinguish the TDM organizations relating to the different regional levels, which have a special action-system in spite of their similarity as well.

11.2. 2. ContentsThe main definitions of the destination management



version 3.0The basics of TDM system

The levels of the configuration of the TDM system

11.3. 3. The phrasing of contents11.3.1. The main definitions of the destination management

The destination is a key concept relating to the tourism management. It involves all of the touristic attractions, institutes, services, that are selected to visit by a tourist or a group. On the other hand the destination is taken to the market as supply and to be sold, also the most important function of the destination is to attract the tourists and satisfy their demands through different provided services, therefore a complex touristic product is required.

The literature defines the touristic destination management (TDM) as following:

„The touristic destination management (TDM) is the complexity of activities, which are needed for the touristic receiving region (destination) to attract visitors and provide special experience during the stay, so that the economic and environmental effects of the trade of the visitors are favourable for the community of the destination today and in the long term as well.” (Csizmadia, L. 2008)

The function of the TDM is the management of activities relating to the tourism so that the visitors could get more special experience, but in parallel the adequate economic, social and environmental advantages could be realized for the receiving area in the present and in the future as well. The realization could be imagined by establishing and operating a competitive and sustainable touristic system. The condition of sustainability is necessary, because the tourism has interference with the environment, the economy and the society, so the feed-back effect is significant. The interests of any actors associating in the system should be represented so that the optimal function of the touristic system could be realized. The regional approach is an important element due of the nature of the sector because neither the sustainability nor the competitiveness could be imagined without its validation.

Figure 91 The VICE-model in the sustainable tourism (Source: Csizmadia, L. 2008)

According to the Figure we could read (Figure 91), that the following conditions have to be fulfilled in order to create a successful model: the tourists could get new experiences, spend their free time to their demands, be satisfied with the staying and preferably become a returning guest. On the other hand the prosperity and the development of profit-producing capacity of the regional “tourism-industry” could not be forgotten, since it gives the necessary fuel and blood to the function of the system. The sustainability must appear in the theoretical



version 3.0dimension as well, it is important that the culture of the local community could enrich, show new values for the visitors by keeping the traditions. The tourism could remain sustainable in such places only, where the natural and the built environmental elements are not hurt, preferably incrementing, which provide the work of the touristic activity. The effects of tourism are multiples on the sub-systems. (Dávid, L. et al. 2009)

Among the effects we can meet positive ones, but unfortunately there are countless negative ones as well. These effects concern the natural, social and economic sub-systems equally. Accordingly we could consider the tourism to be a classical human-ecological problem, since it relates with thousand bonds to all sub-systems (Figure 92).Nowadays it is getting to become a mass phenomenon, which concerns many millions of people directly or indirectly, as consumer or producer, maybe only as a passive receiver hence the idea of so-called spontaneous, unplanned tourism-development can not be accepted.

Figure 92 The system-model of human-ecology (Rambo, T. 1983)

During the planning the balance should be found between the positivistican – based upon statistics, using the analysis of mathematical models – “because” aspect and the post-positivistican – inventing the future – “in order to” aspect.

The plans are not allowed to exist just in paper, being so-called fetishes without an effect. Over the normative tools (acts, decrees, etc.), the organization of the planning process based upon the wider social agreement could be the guarantee that the development of the sector could move into the direction of such rational plans, which are based upon scientific rationalism. Accordingly the cooperation and partnership is necessary among the different organizations and stakeholders of the certain destination at least.

Such organizations have existed in the past in Hungary as well. For instance the Association for the Tourism of Debrecen (ATDE) was founded unprompted as a bottom-up organization gathering all the qualified touristic services in the city. The educational and employment transfer, the rational divisions of accommodations, the common marketing, the professional lobby, the selling of Debrecen City of County Rank as product has to be emphasized from the main aims of the ATDE. Other goals: developing the tourism of Debrecen in the aspect of quantity and quality by the help of spreading the qualitative services. The successful work of the Association pointed out that the regular holding of a forum would be necessary, which is wider than the ATDE, and where the participants would be the interested touristic factors (organizations, institutions, persons) of the city.

We could meet similar initiatives in other settlements and parts of Hungary as well, for instance the accommodators of a certain destination often harmonize their supply to make more tourists stay longer time than a day, motivating them for higher specific spending.

We can consider the successful work of local touristic management organizations abroad (for example in the



version 3.0neighbour country Austria) for many years. The touristic enterprises – as the essence of the partnership – consider these organizations as the key of the success which guarantees the subsistence and the development of the system. They know that their money spent for the maintenance of the system will return multiplied through the higher number of tourists and the realization of spending. The TDM system working in Austria is supported by a modern information technological system: the Tourism Management Information System (TourMIS) application is a complex decision-supporting system. (Harrill, R. 2003) (Table 7)

A tourism destination management organization is demonstrably able to make the tourism of a region competitive, if it is led in an adequate way and the participants recognize the importance of the cooperation. A regional system run and regulated by a TDM system will probably fulfill the dual regards of sustainability and competitiveness. A professionally prepared management is obviously required for the operation, which involves the concerned into the making of decisions, has an adequate separateness for the implementation of the decisions and has the own resources and tools.

Table 7 The role of the TDM in the home touristic institution-system

The characteristics of the touristic institutional system before the TDM

The reached results through establishing the TDM system

The lack of the competency and the division of responsibilities among the certain regional levels.

Creating the harmony in the field of touristic responsibilities and competencies in the local, micro-regional, regional and country-wide level. The delegation of the decisions and competencies as close to the concerned as possible, to that level, where the certain problems and tasks are known the best.

The primary decision competencies of the touristic control are determined by the local governments (local and regional organizations) and the state.

The competency also originates from the members. The primary decisional competencies of the touristic control are delegated to the TDM organizations.

The connection between the leaders of the tourism and the actors of the region. The actual practice: the present institutional system consists of leaders appointed from above and it does not have an interest-relation with the actors, the “makers” of the tourism.

In the case of TDM organization/network: a new interest system is formed by creating a bottom-up TDM network, in which the proprietorial aspect appears in the management of the tourism.

Mostly completing marketing and informational tasks.

Broaden the touristic responsibilities, new tasks are emphasized: destination development, planning, research, development of human-resource, mediation of marketing, partnership network and strategy, management, monitoring.

The local information service is in the middle of the public relations.

The application of public relations based upon information technologies.

The validation of the modern management and the strategic approach is mostly lacking from the lead and control of the touristic organizations.

The validation of the modern operation and strategic aspect is realized in the management and the lead of the touristic organizations:

• the adaption of the professional competency in the management of the processes

• the management staff is responsible for the reached results

• the enforcement of the workmanship through the decision-making processes



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Tasks are financed from the decreasing local governmental, state and tender funds.

Calculable financial operation; to enlarge the number of the return funds by the contributions of the enterprises sharing in returns of tourism and generating own incomes.

The touristic enterprises are mostly tax-payers and sponsor actors, they are not included directly or partially into the forming of the destination-scale tourism policy.

Involving the touristic services actively, the trade and civil organizations into the forming of the destination-scale tourism policy (for example: providing the active and direct participation in the decision-making).

The lack of bottom-up structure, active partnership, relatively weak professional lobbyist-awareness.

The establishment of the conditions of the partnership, the proactive strategic management of the professional and international partnership-programs. Stronger and effective lobbyist-awareness.

The lack of the reliable and updated data from the destination, due to the lack of the survey-research and monitoring system.

The establishment of the reliable and updated data from the destination provided by the survey-research and monitoring system.

Source: Lengyel, M. 2008

According to these it is obvious, that the establishment of the TDM organization system is apostrophized as a country-wide emphasized touristic organization- and system developmental aim of the National Tourism Development Strategy (2005-2013).

11.3.2. The basics of TDM system

Four basic pillars of the establishment of a destination management organization could be determined (Lengyel, M. 2008):

• Bottom-up approach (local, inter-, and regional level)

• Partnership (involving the participant organizations, individuals, etc. of tourism)

• Professionalism (providing professional preparedness in the organization)

• Money and competency (providing the pecuniary circumstances and ability to act).

The bottom-up structure is an important principal organizing the TDM like in many other domains. The experiences show that a more operable organization could be founded which takes the reality into account more.

An adequate scale-widened partnership could provide that not only the touristic organizations, but the whole recipient community could be more receptive concerning the tourists. It is important because the whole system of the destination have an effect on the experience for the visitors – so the local community, the institutions, the economic actors, the public safety, the atmosphere.

The adequate professionalism is necessary for the sufficient operating of the TDM, which should be represented by the manager staff. Moreover it must transpierce the whole organization as a kind of quality, involving all actors. The general responsibilities of the touristic destination management are the followings (Lengyel, M. 2008):

• Planning

• Resource-management (attraction management, development management, financial management, human resource management, operational and change management)

• Marketing

The money and competency are essential principals in the operation of TDMs as well. An efficient destination management organization should be self-sufficient. Also it must have permanent returns next to the persistent state and EU transfers (for instance tenders). The contribution of the TDM member organizations (for example:



version 3.0membership fees) must product significant resources for the TDM, in addition it must be enough for providing adequate offset for the members through the extra incomes made by the operation of the organization.

Over the membership fees the pecuniary resources could origin from other resources as well (Tőzsér, A. 2010):

• central or local governmental support1414

• sources from sponsors

• voluntary supports

• supports of individuals

• provide services

• sale of souvenirs (Figure 93)

Figure 93 Some typical souvenirs of the TDM organizations’ supply (Own edition based on the homepages of TDM organizations)

11.3.3. The levels and steps of the establishment of the TDM system

The different interests of the distinct regional levels must be distinguished through the touristic planning. It is a national-widely important aim, that as many foreign tourists should arrive in the country as possible, also they should spend as much money within the country’s boundary as possible.There is an important emphasis on the inland tourists in the municipal and regional level as well, the aim is that more inland and foreign tourists would spend their time in the certain region and settlements, and in addition spend their discretional income. On the other hand it is also an important aim in the case of all regional level, that as many inland and local residents should use local services. This results that money remains there.

The establishment of the different level TDM organizations can be realized in accordance with the different regional interests. (Figure 94)The organizations constituting the lower level of the TDM system function in the local level, which could be founded by a settlement or settlement-group. According to the experiences, the

1414The tourist tax or the reinvesting of a part of that is a special form of the local governmental support. This demand could be suggested as demand from the actors of the touristic sector, since the settlement has generated this type of income through them. The Author was one of the editors of the touristic program of Debrecen City of County Rank in 2004 and heard this opportunity as demand from several touristic enterprises.



version 3.0destination management organization should be primary founded in such settlement, where the attitude of the local government, the enterprises, the residents, the NGOs and other partners is sufficient. The organization will be probably more successful in the settlements, where a relatively higher number of tourists were realized in the past as well, also adequate pecuniary interests are relating to the sector over the enthusiasm.

The second pillar of the TDM system is the regional, micro-regional level, which can be defined as the non-profit union of the local TDMs. This could play a meditation role between the local and regional organizations. In regions, where neither of the settlements is able to offer a substantive touristic product, they could take part together successfully in the competition concentrating on one special segment. The regional TDMs are appropriate to involve such settlements in the tourism that were not participants before.

The third level is the regional level, which is responsible for keeping the contact among the local, the regional TDMs and the central level. There are special functions, which need to be the emphasized tasks of the regional TDMs (Lengyel, M. 2008):

• regional planning

• destination marketing

• research

• strategic work

• professional trainings

• quality audit

• monitoring

At the same time there are tasks, that all of the TDM organizations – independent from the function level – must provide (Lengyel, M. 2008):

• creating and managing an adequate-scaled partnership;

• coordination conforming to the circumstances;

• information management and research, which could be considered as the basic of the further touristic developments;

• appropriate marketing to attract the tourists;

• touristic product development confirming to the local circumstances and demands;

• appropriate project management for the optimal utilization of resources (financial, human, etc.), so the organization could be successful;

• the permanent promotion of the investments for the interest of developments;

• obtaining the possibly tender funds, continuous attention of invitations to tender, tender management towards the widening of the resources;

• the management of the human resource, which makes the labour force motivated and enabled to conform to the changing circumstances;

• continuous technical assistance and consultancy for the participant organizations, which is necessary for creating a professional TDM organization;

• true and permanent administration.



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Figure 94 The specific tasks of the TDM organizations in the different regional levels (Sources: Lengyel, M. 2008)

The initiation of the establishment of a TDM organization could be related to an interested local-government, an enterprise or a non-profit organization alike. (Figure 97) The organizers need to have adequate theoretical basis and know the National Touristic Development Strategy, the concerned chapter of the New Széchenyi Plan and the main points of the articles and volumes about the functioning of TDMs.

The second step is to give appropriate information for the concerned about the main points of the touristic destination management. In this opening stage of the management such organizer-group has to be created, which represents the compound of the future TDM membership. Of course, for that the characteristics of the organizations working in tourism in the region have to be known. A forum or a workshop could be an appropriate tool to inform the suggested participants of the following stakeholders: local government, hosts, accommodators, information office, travel office, culture house, sport associations, professional and residential NGOs, etc. The mobilization of 10-15 persons gives an adequate take-off base in that session of the project.

Finding the common aims, whereupon the organization strategy could be built up is important to provide the successful operation of the evolving organizer team. Thereinafter the wider attendance has to be informed, thereunto the wider spread tools are the followings: releases, press conferences, paid advertisements or information on the websites. At the same time more creative and innovative methods could be applied in the socialization. According to the experiences of the Author, the information appearing in the websites reaches a very less part of the target group unfortunately due to the Internet has become a daily routine, also this media is not the most appropriate tool for a serious partnership. If our aims is by establishing the TDM organizations is to prove the spending of tender funds only, these solutions are perfect, since the Participating Organization and the Managing Authority accept them widely.

Nothing could compensate the initiation of the human word and the personal contact, since we are working for the establishment of such sector, where the forming the region to be human-faced is a necessary condition.

The administrative foundation of TDM can be realized only after obtaining the adequate social support and providing information for the concerned. This time the issue of laws relating to the foundation – for instance the legal form of the organization, wording the charter of foundation, the appropriate preparation of the written agreements – has to be exposed. The settlement of depositing the member fees and the clarification of the personal questions (the chairman, the election of the constituency members and the selection of the supervisory board) are very important questions as well.



version 3.0An association form (a social organization founded by individuals and legal entity) could mostly provide the actuation of the organization in the sense of legal form, which is advantageous because it could be expanded indefinitely – new member organizations can join without modifying the charter of foundation – in addition organizations having many types of legal status can join. There is an important condition: association could be founded for any objective, but not for economic activity primarily.

On the other hand the management of the daily professional tasks is incumbent on the operative staff. The operative staff is instituted by the association and it is responsible for its activity.According to the literature there are two opportunities for establishing the operative staff. The first way is when the local Tourinform office is converted and the head of this will be the secretary, the head of the operative staff of the association of the TDM organization, becoming a touristic manager.

The foundation of an independent non-profit limited liability company is suggested for creating an operative staff in the regional level, anyway it could be realized in the local level as well. If the for-profit activity is perspectival for the TDM organization, it is worth to establish another profit-oriented limited liability company (or more) as well.

General management principals need to be taken into account in the session of functioning, like the insurance of the appropriate conditions of work, the continuity of administration and the consistency of budget.

Figure 95 The logo of the Móri Borvidék TDM Association (Source: http://www.visitvelenceito.hu/mori-borvidek-tdm-egyesulet-p-1504.html Downloaded: 17. February 2013.)

Figure 96 The logo of the TDM Association for the Tourism of Szigetköz (Source: http://www.visitvelenceito.hu/szigetkoz-turizmusaert-egyesulet-p-1503.html Downloaded: 17. February 2013.)



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Figure 97 The structure of the TDM system (Source: Lengyel, M. 2008)

Figure 98 The logo of the Gyógyvizek Völgye TDM Association (Source: http://www.visitvelenceito.hu/gyogyvizek-volgye-egerszalok-demjen-egerszolat-turisztikai-desztinacios-menedzsment-egyesulet-p-1461.html Downloaded: 17. February 2013.)

The main advantage of the TDMs is that they are complex systems, which are formed by joining many actors so they are able to reach such results, which would have not been realized without the cooperation. In the first step they should run an efficient and common marketing activity (by maximizing the opportunities of the Internet). Certainly, the cooperation could be realized in the planning, the development, eventually in the common quality audit or in the coordination of trainings. The rise of the competitive edge of the destination could be lasting, if the tourists come back after consuming the product and tell good things about the destination. For that the implementation of an own image (touristic brand) is necessary. (Tőzsér, A. 2010) (Figure 95 96 and 98)

The participant local governments of the TDMs could pass off the solutions of their responsibilities relating to the tourism to the new type of organization. Another important increment is that the increasing number of tourists helps by the utilization of sources which were utilized less in the previous, effecting new incomes and



version 3.0workplaces, increasing local tax revenues in the region, moreover the negative migration tendencies could turn over in a long-term.

By the TDM organization such professional competencies might accumulate in the region, which help the long-term actuation of the system based upon the firmer turnover, the more income and the better lobby activity.

Animation 8: The value chain of tourism (based on Dávid, L. – Tőzsér, A. 2009)

11.4. 4. SummaryWe have demonstrated the concepts relating to the destination management and the theoretical frames of the wider, human-ecological approach of tourism in the chapter. Also we have demonstrated the characteristics of some voluntary partnerships in some home region as the antecedent of the TDM. We have pointed out the role of the TDM organizations in the home touristic institution system and emphasized the positive differences, which distinguish them from the traditional organizations. In the followings we have detailed the main principals of the system and the steps by the help such organizations could be founded. According to the literature we have considered the main tasks of the TDM organizations functioning in different levels.

11.5. 5. Self monitoring questions1. Define the concept of the TDM!

2. What does the so-called VICE-model contain?

3. What kind of elements does the human-ecological system-model contain?

4. What is the significance of the TourMIS system?

5. Summarize the role of the TDM in the home touristic institutional system!

6. List the four basic elements of creating destination management organization!

7. What kind of financial sources do exist for the TDM organizations?

8. What kind of regional-level TDM organizations could be distinguished?

9. List such tasks, for that all of the TDM organizations – working on a different level – are responsible!

10. Which are the most important strengthens of the TDM organization?

11.6. 6. Test questionsWhat do V, I, C, E mean in the VICE model?

1. Visitor, Industry, Community, Environment

2. Versus, Imperium, Change, Energy

3. Vanguard, Industry, Companies, Energy

4. Variation, Information, Catalyst, End

Correct: 1

Which ones are the main tasks of regional TDMs from these?

1.

Correct: 1, 3, 4, 5, 7, 8, 9



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12. 11. The management of value-added chains and local developments12.1. 1. ObjectivesRecently local value-added chains have become an important tool of local economic development. Beyond economic actors the participation of the members of non-profit and public authority spheres is advisable. In the chapter we introduce the main concepts connected with value-added chains moreover the possibilities of value-added creation. We are going to show some key factors promoting or compromising the evolution of such systems. At the end of the chapter a possible agenda and some methods will be introduced that may be useful in the development of functioning systems additionally we are going to mention some Hungarian experiences of the RUBIRES programme.

12.2. 2. ContentsRegional value-added partnership (RVP)

Opportunities and threats in an RVP

Development phases of RVPs

Hungarian experiences from the RUBIRES programme

12.3. 3. The phrasing of contents12.3.1. Regional value-added partnership (RVP)

In case of the production of a certain product regional value-added may be determined as decreasing the value of regional processes with the value of outside output.

Recently the re-discovery of localities additionally the appreciation of it because of gas-price rise highlighted tools of the development of local economy. Abridged sales chains, providing safe and guaranteed supply for local consumers in addition the fortification of local communities (e.g. through job creation) besides the strengthening of fairness and solidarity.

The Eszterházy Károly College has joined the RUBIRES (2009-2011) which aimed to research the possibilities of the development of value-added chains permitting the energetic utilization of biomass. The practical utilization of acquired principles and methods during that project has not been occurred yet.

Regional value-added partnerships (RVP) are strategic alliances:

1. on the one hand of the enterprises of a regional value-added chain or network,

2. on the other hand of political, public administration and non-governmental actors

The aim of an RVP is to produce regional value-added sustainably through the development of local and regional chances besides the creation of profit for any joining actors. (Figure 99)



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Figure 99 A draft of a value-added partnership (Schubert, D. – Bühler, J. 2009)

12.3.2. Opportunities and threats in an RVP

Enterprises can benefit from RVPs from many different ways. They may decrease their production costs through better capacity utilization, development of common strategies additionally with mutual marketing activities. Besides, shared investments and know-how may decrease risks.Remarkable assortments, bigger and more flexible capacities, improved know-how, better product quality and stronger competitiveness compared to competitors dropped out of partnership increase the possibilities of the company.

Corporate efficiency may improve through broader user groups, new forms of applications, the opening of new markets and better market accessibility.

The most important explanation of it is the possibility of mutual support, besides regional partnership which can bring social respect and acceptance, consumer loyalty consequently profit for the management. Through better communication it may contribute to the stabilization of demand and the accessibility to new markets.

These co-operations are crucial for the region too on the one hand because of economic (improving employment rate, higher local incomes and value-added) and on the other hand of social (strengthening social cohesion and identity) point of view.

Economic reasons come from the effect of the improving purchasing power of the inhabitants in the region together with local products create a positive feedback. The growth of inter-enterprise co-operations cause the development of import substitution capacities. Collaboration makes possible for economic actors to harness chances hiding in economics of scales. For the strongest local economic units it is possible to increase sales outside the region (regional marketing and branding) too.

Beyond socio-economic factors RVPs open the door for the verification of sustainability at a regional dimension. (Table 8)

Table 8 The affects of RVPs on sustainability

Environment Culture Organization

Strengthen regional material-flow cycles and management

Decrease transportation needs and CO2 emission

Increase the sense of environmental responsibility as environment is recognized as a base for regional value-added

Strengthen regional identity

Conserve cultural heritage

Protect the traditional system of regional production

Strong mobility / participation of regional actors

Strengthen regional solidarity

Enhance positive thinking and optimism

Grow regional social capital



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The conservation and reservation of cultural landscape, protection through utilization

Improve regional governance

Strengthen regional organizational capacity

Own edition

The picture would not be perfect unless we do care about possible bottlenecks and risks in regional value-added partnerships. One of them is the growing costs of co-ordination and network management because of complex and multi-actor decision making. If rights and functions were distributed unclearly in the system, it would result misunderstandings.

Successful examples (organizational or product innovations) fast evoke their imitators. The outflow of knowledge and know-how is a hardly avoidable phenomenon as at the other side of the spectra there is the risk of seclusion for the members of the partnership.

At a higher grade of partnership the loss of independence and flexibility of individual partners may occur. Individual actors joining the partnership may be highly dependent on other members of the group.

As among the members of RVPs governmental actors can be found, the risk of pursuing political illusions and the negligence of real market demands is high.

Ten typical problems of the co-operation can be summarized as follows:

1. Participants are unable to work together harmonically, consequently real trust can’t be produced

2. Partners have communication and language problems, they communicate mistakeably, unsolvable errors do evolve

3. Their interests differ: Each and every partner has diverse expectations towards the co-operation

4. Circumstances of division of labour and of costs are unclear

5. Conditions are too diverse: the size of firms, the structure of companies, the corporate philosophy, mentality and distance

6. Weak commitment from one side: bureaucratic thinking, fear of innovation, slow decision making, disregard of opportunities and non-systematic approach

7. Changing cost-benefit ratio during the project handicapping one side

8. Partners have no time and staff to manage the co-operation

9. Insufficient communication and performance of certain partners

10. Some of the partners start up new projects using gained know-how

Table 9 Success factors of an RVP

Partnership/Process Market/Content

Common ideas Consumer orientation

Promoting Openness to innovations

Trust/Acceptance Information

Clear, vindicable aims Good quality of products



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Benefit for all participants Effective and active logistics and distribution

Early success Communication and marketing

Willingness to learn/ evaluation Price-performance ratio proper to the consumers’ needs

Adequate participation and strong supporters Regional separation

Resources/ financial commitment Quality management

Process-skills Marketing skills

Own edition

RVP method can be used in any areas (even in culture) where more actors participate in the production of a certain product or service. (Table 9) The practical barriers of the utilization of the application can be summarized as follows:

• Demand/market/consumers: Of course existing demands, market and solvent consumers are indispensable factors for the success of the planned product or service. Lastly beyond cost factors there can be other significant ones.

• Region: An RVP is based on strengths and special potential of a region. Building blocks needed for the construction of different phases of the value-added chain must be present in the region.

• Partnership: A precondition of the success of the RVP is the ability and commitment of participants to co-operation.

Figure 100 The visualization of value-added partnerships is crucial – the table of „TANNO” group at the RUBIRES workshop in Miesenbach (Own photo)

12.3.3. Development phases of RVPs



version 3.0It is relevant to keep a certain ranking during the organization of an RVP. It is a needed but not sufficient condition to create a confidential atmosphere, in addition to the apperception of the fact that with co-operation a higher profit can be reached than without. Different levels of inter-corporation co-operation can be distinguished:

1. During the support of a project the regional partnership helps in the removal of bottlenecks in the supply chain (e.g. the replacement of a missing processing phase). Enterprises joining in the chain are not in a real partnership, but earlier they have already had harmonization for example about prices.

2. Firms of the value-added chain co-operate and form a network. Regional partnership firmly supports the evolution of the whole corporation network e. g. through networking management.

3. Enterprises not only co-operate among themselves but their network co-operate with the regional partnership beyond financial support. The partnership joins in the determination of standards concerning products and in solving quality questions as well.

From the above list we may argue that the role of extra-economy actors are crucial in the formation of enterprise co-operations.

Figure 101 A possible agenda of the RVP development (Schubert, D. – Bühler, J. 2009)

At the first stage the initiator of regional partnership is trying to choose companies suitable for integration. (Figure 101) Accordingly opportunities hiding in different potential value-added chains must be identified and investigated from a complex (not only economic) perspective. At this phase:

• The support of the organization must be strengthened: The RVP method must be invented and recognized among potential partners in order to gain reputation capital, additionally start-up capital must be mobilized to realize the first steps (own capital or application sources)

• Resources must be secured for elaboration

• Promising value-added chains must be identified

• Priorities have to be picked among identified value-added chains

• Value-added chains must be analyzed

• The prior aims of RVP development must be determined

Communication concerning the birth of partnership can’t be overemphasized. The benefit of the active support of regional value-added chains, the opportunities of them and problems to be solved must be identified and communicated. During the communication the focus must be put on the benefit side such as on workplaces, value-added and non-economic side.In order to get a clear, comparable, scenic and logical description of



version 3.0benefits, the following methods should be used:

• the adaptation of similar best practices from other regions,

• joint project-visits / fieldtrips to other regions,

• the inclusion of external presenters as nothing can convince more than success, in addition no prophet is accepted in his own country…

Through successful communication regional partnership will be a driving force of co-operation.

Of course communication can be successful only if its content is developed exactly and rationally. According to RVP method useful ideas must be defined exactly. It must be decided whether the support of value-added chains follow a strategic way including many areas or concentrates on special activities. Possibly partnership must support existing and exactly defined value-added chains.

In order to embed partnership in the region, supported development goals, activity areas and projects must be decided. How broad is the available latitude, besides what type of experiences, professional areas and resources may be integrated in the regional partnership. What enterprises can be included in the different link points?

In an economic sustainability point of view it is indispensable to make resources needed for RVP building accountable and exploitable. Among expenses costs of moderation and management of the initial phase of the RVP must be taken into consideration. Incomes may be created in this period by visiting the management of participating enterprises and convincing them of the efficiency of the method additionally assuring them to join the financing. Tools needed to elaborate first pilot projects must be elaborated.These projects must demonstrate the possibilities of RVP. Potential key actors of the RVP must be identified even in the first stages (e.g. planning), preferably get their further support.

In the next step the leading body of partnership selects value added chain(s) to develop. To this end promising regional value-added chains must be identified and ranged.

The process of selection is crucial as sorting of value-added chains plays a key role in the success of RVPs and in the reach of aimed growth path. The process of selection consists of two essential parts:

1. The identification of promising value-added chains

This step temporarily may be realized in different phases, such as before or after the elaboration of regional development concept. Many methods may be used to realize it. Analysis of strengths and weaknesses in the regional economy can be the starting point of the elaboration process. In case of an existing regional concept, it can be used as a reference point additionally value-added chains might be picked in the fore-identified activity areas. In this case value-added chains are part of a special zone of activity. Generally value-added chains can’t be assigned unequivocally to activity zones. Rural tourism for example may contain many value-added chains such as cycling, wellness or cultural tourism.

1. The designation of the final value-added chain

The determination of the value-added chain is of primary importance. Such systems may consist of a product (e.g. ham) or of a branch of products (meat products) either of more product branches (regional food industry products) or even of more range of products (a whole regional umbrella-like brand). The definition is highly pending on the size, complexity and the geographic attraction zone of the value-added chain. Each participant contributes to the evolution of the marketable end product and to the appreciation of it, through it to the development of the area.

The selection among different value chains is not simple, advantages and disadvantages of different options must be taken into consideration. Probably different chains are altered in regional importance and their role in regional partnership, besides in the perspective of growth and success. In the process of evaluation it is recommended to establish an exact system of criteria. Basically the product created by the value-added chain must be demanded.

A possible selection criteria system must include the following aspects:

• the perspective of success,



version 3.0• the opportunity to grow,

• the available preparations,

• the interest of firms,

• the potential of value-added chains.

It is worth to involve as many partners as possible into the selection process, for example through workshops.

After the selection of the proper chain one must concentrate on the analysis of it only. The core team – central enterprises and actors – has to be identified. One must pay attention on the integrability of selected companies into the system. The analysis of the value chain must be the starting point of system building and the elaboration of a vision is an integral part of it. The next questions should be answered in the analysis:

• Which phases and activities should be involved in the chain while the end product is created?

• Which actors can participate? How can they work together?

• What factors do secure the further growth of the chain?

There are many different methods to construe chains, yet visualization is an absolutely recommended tool. Visualization helps to figure different phases, involved actors, bottlenecks of the chain and to secure transparency. (Figure 100 104 and 105) It promotes as well detailed planning, the optimization of chains, the share of information and to gain partners and supporters.

After the inquest of the chain partnership can be optimized through the identification of aims and strategy or the mitigation of possible bottlenecks. It is essential as well to specify the role of regional partnership in economic processes.

Of course at this phase of planning detailed information is missing. The main objective is to coach involved companies for co-operation through regional partnership. Therefore enterprises essential for the chain must be identified, the objectives of partnership must be selected and opportunities respectively risks of chain development have to be elaborated – is possible from the companies’ point of view. Thus the result of these steps is rather intermediate and details must be elaborated together with firms.

In order to unfold details and expand visualization the organization of a workshop is advised where actors of the area may get information respectively might state their case. It is crucial as they have the most information available about the given chain. If members of the chain are already inside the partnership or have good connections with certain member companies, then they must be invited.

An inevitable tool of detailed partnership is the establishment of the so called regional value-added chain map. It has to include the following parts:

1. Phases and functions needed to create the product or service

2. Companies providing different services

3. Vertical connections among companies

Steps of the development of chain base-map are as follows:

1. Identify the end-product supplied for consumers

2. Select different phases of the production process starting from the end-product back to the first phase. Answering the following question is mandatory at any phase: „What has happened to the product before reaching this phase?” It is essential not to divide the process into many details, more than 7-8 elements make hard to understand it. (Figure 103)

3. Identify companies and groups of companies providing functions for different phases. Firms must be drawn a parallel with these functions, while attention must be paid that certain companies might join in more steps.

4. Draw a map of vertical and horizontal connections among firms. (Figure 102)



version 3.0Of course it is just a primitive draft to support decision-making and planning process, what has to be detailed further in order to identify bottlenecks and other details (Table 10 and Figure 106):

• Quantities: e.g. number and size of companies, workplaces

• Economy: turnover, value-added, prices, profit, productivity

• Location: What can be done inside or outside the region?

• Direction: The method of co-ordination and co-operation inside the chain

• Environment: e.g. guidance, finance, market trends

Figure 102 The map of a value-added chain (Source: Tischer, M. –Wedler, M. 2007)



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Figure 103 Theoretical steps of evolution of value-added (Source: Schubert, D. – Bühler, J. 2009)

Table 10 Necessary economic data for partnership building – an example from Slovenia

Income (EUR)

Name of company Activity 2006 2007 2008

Z.M.E.S. d.o.o. Distribution and instalation of biomass heating systems

273.905,00 234.589,00

189.200,00

Žaga Simon Rupnik sp.

Saw 913.972,00 1.318.252,00

458.954,00

Žaga Ohojak, Miloš Ohojak sp.

Saw 850.104,00 984.280,00

797.130,00

Anles d.o.o. Production and distribution 492.940,00 259.040,00

154.818,00

Brst predelava in prodaja lesa d.o.o.

453.203,00 866.21

6,00986.359,00

Gozdarstvo Fanc Urdih d.o.o.

Services for forestry 385.749,00 419.998,00

455.737,00

Go-les tesarstvo in gozdarstvo d.o.o.

122.633,00 128.78

5,00118.481,00

Iles d.o.o. Production of furniture 3.977.712,00 4.991.817,00

4.314.552,00

Lesna Bovec d.o.o. Production of furniture 1.371.449,00 1.358.772,00

1.038.731,00

Eko Les Energetika d.o.o.

Distribution and instalation of biomass heating systems

821.473 866.758

1.629.635



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Madon les d.o.o. Distribution of wood n.p. 1.803.158

3.118.639

Guliles d.o.o. Production of furniture 430.962 437.633

408.686

Source: RUBIRES

Figure 104 The logo of a biomass-based value-chain from Germany (Source: RUBIRES)



version 3.0Figure 105 A simplified illustration of a Slovenian value-added partnership (Source: RUBIRES)

Figure 106 The illustration of a complex, biomass-based value-chain from Austria (Source: RUBIRES)

12.3.4. Hungarian experiences from the RUBIRES programme

Eszterházy Károly College joined the international RUBIRES programme as a project partner. One of the objectives was to establish a value-added partnership, based on the energetic utilization of biomass. (Figure 107 and 108) Attributes of the Eger Micro Region (the chosen target area) – according to our researches – make possible the building of a chain based on wood-chops. Experiences of steps made towards the establishment of this value-added partnership will be summarized below.

Among raw material producers bigger, state-owned were more accessible and could be involved easily into the co-operation. Smaller organizations and private individuals possess smaller potential and very often mistrust partnership-based initiatives. However rational energetic utilization of vineyard pruning potential in the region is impossible without the co-operation of smallholders.

NGOs are often mistrust energetic utilization of biomass. According to extremist opinions any deforesting is a sin against nature and only some recreation is acceptable in these areas.

Municipalities of the region are forced to use local and cheap energy resources to a greater extent by their scarce financial conditions. However this interest is only rarely expressed in the form of responsible thinking (e.g. following with attention their own energy utilization) or in acting. Their material opportunities are limited – bigger investments in general can be achieved only by external sources. Recently smaller municipalities are only at the stage of brainstorming in case of renewable energy utilization. The mobilization of organizations is limited by uncertainties (elections, municipal reform etc.). Besides, different national examples show that municipalities can join value-added chains as raw material producers or processors as well.

Theoretically the most important tools of system building can be the creation of a regional concept, in addition its socialization through workshops, incidentally through personal meetings. In effect according to our experiences neither regional concept was really effective, nor workshops lived up the expectations. Personal meetings and interviews were far more effective. The reach of municipality leaders was achieved through regular appearance on Micro Regional Council meetings. The activity of partners could be increased only if they had been asked to join any actual opened tender application.



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Figure 107 A simplified draft of a bio-energetic partnership planned in the Eger Region (Source: RUBIRES)

Figure 108 The base of a potential bio-energetic value-added chain in the Eger Micro Region: wood-chops in the Felnémet site of Egererdő Corp. (Source: Egererdő Corp.)

Animation 9: The wood-chop maker of the Egererdő Corp. in action

12.4. 4. Summary



version 3.0In the chapter the theoretical bases of regional value-added partnerships were introduced in detail. In spatial development a more and more essential aim for a region – compared to its opportunities – is to produce many different kind of own products. According to Western European experiences regional partnerships are proper way to achieve it. The method has many opportunities for joining actors (companies, municipalities and NGOs).

According to the recommendations of the RUBIRES programme steps and phases were depicted which could help to establish a value-added partnership. At the end of the chapter we pointed some experiences coming from the implementation of the RUBIRES in Hungary.

12.5. 5. Self monitoring questions1. List the strengths of value-added partnership utilization!

2. List the weaknesses of value-added partnership utilization!

3. Describe a possible scenario of value-added partnership development!

4. On what factors should the selection of value-chain be depended on?

5. List the steps of value-added chain base map development!

6. How does value-added emerge during the creation of a product?

7. Why is visualization important during the development of partnership?

8. What data are needed to create a detailed value-added map?

9. Which methods should be used in principle during value-added chain development?

10. What methods are proven to be successful in the creation of value-added partnership in Hungary?

12.6. 6. Test questionsRank the effects of regional value-added partnerships into the following categories!

1. Reinforces regional material-flow cycles and management

2. Maintains and keeps cultural landscape, protection through utilization

3. Supports regional identity

4. Protects the traditional regional system of production

5. Strong mobility / the participation of regional actors

6. Supports regional solidarity

7. Increases the feeling of environmental responsibility as environment is recognized as a base of regional added-value

8. Supports positive thinking and optimism

9. Increases regional social capital

10. Protects cultural heritage

11. Improves regional governance

12. Decreases transportation needs and CO2 emission

13. Reinforces regional organizational capacity



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Correct:


1,2,7,12 3,4,10 5,6,8,9,11,13

What key factors should be taken into consideration during the selection of regional value-added chain?

1. The perspective of success

2. An existing tender application

3. The possibility to grow

4. Available former preparations

5. Interest of companies

6. The support of concurrence

7. The potential in the different value-added chains

Correct: 1, 3, 4, 5, 7

13. 12. The management of LEADER action groups13.1. 1. ObjectivesIn this chapter main characteristics and principles of LEADER-type rural development will be researched. We are going to introduce historically the main phases and spread of the European programme. Furthermore we will present different cycles of the Hungarian national LEADER-type rural development programmes from the experimental – nationally financed – chapter to the latest phase. A general character of LEADER-type programmes is bottom-up approach, thus mobilization of local actors is a key factor for successful activities. At the end of the chapter some concluding remarks will be written on the experiences of the Hungarian programme.

13.2. 2. ContentsLEADER: a new rural development approach

The LEADER approach in Hungary from the experimental programme (2000-2005) to the new LEADER (2007-2013)

Key actors of LEADER

Experiences from the Hungarian LEADER programme

13.3. 3. The phrasing of contents13.3.1. LEADER: a new rural development approach

Beyond LEADER abbreviation hides a French term: Liaison Entre Actions de Développement de l' Economie Rurale. It can be translated as follows: actions for the development of rural economy. In English it may be interpreted in a different way: Links between actions of rural development. In other words it puts an emphasis on the importance of connections, which assumes the essentiality of management functions in the programme.



version 3.0LEADER has started its career as a Community Initiative. In the period of 2007-2013 it became an integral part of „Rural development” integrated by the EU Common Agriculture Policy. (Table 11) Its main aim is to motivate and help actors of rural development in thinking together and in the realization of a sustainable, integrated and innovative development strategy. Key elements of LEADER-type developments are as follows:

• Increase natural and social resources

• Fortify economy

• Develop local organizations

• Improve co-operation

LEADER supports the elaboration so called integrated rural development programmes by Local Action Groups (LAGs). LAGs are responsible for the elaboration of local rural development plans besides the development of a local tendering system. Each project gaining support from local tenders must contribute to the broad strategic aims of the given LAG. Additionally supported projects must be small, innovative besides have to have positive impact on the area in the spirit of social, economic and environmental sustainability. (Figure 109)

Table 11 The first three generations of LEADER programme in the EU

Name LEADER I LEADER II LEADER+

Period 1991-1993 1994-1999 2000-2006

Source 400 million ECU 1,7 million ECU 2,02 billion Euro

Found EAGGF-ERDF-ESA EAGGF-ERDF-ESA EAGGF-Orientation

Recipients State, private and mixed organizations (local action groups)

State, private and mixed organizations (local action groups)

state or private institutions (collective executives)

State, private and mixed organizations (local action groups)

Areas Objective 1 and 5b areas, 5.000-100.000 cap. population

Objective 1 and 5b areas, 5.000-100.000 cap. population

All rural areas, population 10.000-100.000 cap. population density less than 120 cap/km2

Own edition according to: http://europa.eu.int/comm/agriculture/rur/leaderplus/index_en.htm website



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Figure 109 Key factors of LEADER-type rural development approach (FVM LEADER Newsletter)

LEADER credits partnership with great role in the work of the network of LAGs, through which experience and knowledge transfer is realized with a great efficiency.

LEADER has been working in the European Union for 20 years (Table), now it is in its fourth phase. Experiences coming from the experiences of different EU member states can help new member states in the establishment of rural development methods, which may be successful among their special circumstances. In the period of 2007-2013 beyond spending a minimum of 7% of EARDF development fund for LEADER, LAGs have the opportunity to have voice on the distribution of other rural development sources as well.

In the new budgetary period the fourth, comprehensive axis of rural development policy works through a different approach. The aim of the axis is to inspire the establishment and functioning of LEADER-type local development strategies in the realization of the objectives of the other axes respectively of the aims of more axes together. LAGs emerged from the earlier successful LEADER community initiative are now major institutions of rural development in the EU.

13.3.2. The LEADER approach in Hungary from the experimental programme (2000-2005) to the new LEADER (2007-2013)

After the changes of the 1990s role and importance of agriculture has decreased in Hungary to a great extent. This trend is similar to the one had been experienced in the developed countries. After changes 90% of arable has been privatized. The majority of tenure (cc. 40% of the arable land) is cultivated by individual smallholders. There are only a limited number of middle-sized or big farms with sufficient capital supply. The majority is small-size farm, whose market-orientation is only partial additionally their competitiveness is low as it is shown by the sequels of the years expired since the EU access. The remaining 60% of arable is cultivated by corporations and ltd.-s descendants of the former co-operatives, very often they are only leaseholders of lands.



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Figure 110 Rural areas in Hungary (Source: Magyarország Vidékfejlesztési Programja )1515

According to OECD categories more than 96% of the area of Hungary is rural and 75% of the population lives in these regions. (Figure 110) Rural areas are rich in natural, built and historical heritage, additionally there are essential local traditions such as handicrafts or retail services. Unfortunately the unemployment rate is higher than the national average. A huge ratio of unskilled workers, elderly people and disadvantageous social groups – among them Romas – live in harsh conditions. Mainly in backward areas the accessibility of public services and infrastructure is worse than in cities. The traffic accessibility of many rural regions is bad as well.

Furthermore we must state rural areas in general are in a better situation. There are relatively broad natural areas under protection compared with the national average. The spread of intensive agricultural cultures and the inappropriate land-use are threats for the physical, chemical and biological conditions of soil.

A LEADER-type experimental programme has got started in 2000 in order to prepare the ground for other LEADER-type of initiatives. In this programme the main objectives were the elaboration of the appropriate documents and programming principles additionally the collection of local, regional and national practical experiences. The expenses of the programme were covered by the Ministry in 100%. (However applicants had to possess at least 25% of the budget of individual projects.) The experimental programme concentrated on two activities:

• Fit-for practices

• Realization of local rural development plans in limited numbers

In the first round 40 potential local initiatives were selected, taking into consideration recommendations of some professional institutions and NGOs. In the second round 14 local initiatives were selected by the Inter-Ministry Committee. Finally 12 LAGs implemented its development plan. For one LAG 25 million HUF were available. The main results of the experimental programme were as follows:

Inside 12 LAGs totally 270 projects got financial support, the results can be summarized as follows:

• Micro regional, regional and national useful and consumable experiences for other regions

• Publication of a reference book and related documents

1515A pontos OECD definíció megkülönböztet alapvetően vidéki térségeket (a népesség több mint 50%-a falusi településeken él – a népsűrűség kevesebb mint 150 fő/km2), átmeneti területek (a népesség 15-50%-a él falusi településeken) és főleg városi területek (a lakosság kevesebb mint 15%-a él falusi településeken)



version 3.0• Increasing interest in rural areas towards the participation in LEADER+ initiative

Problems and troubles can be summarized as follows:

• None of spatial units possessed enough human resource

• The lack of experiences at local level concerning public fund management

• Scepticism, low level of motivation and initiation

• Low level of project-making and community development

• Financial and project management indiscipline of some project developers

• Development were not always LEADER-type

There was one quite successful LAG in Nógrád County along Ménes Stream. (Figure 111) The area of LAG was totally consisted of multiply disadvantaged settlements hit by population loss, high ratio of Roma people, high percentage of unemployment additionally the decline of traditional handicrafts, agriculture and services. In addition the area has excellent potential for touristic activities. The natural environment, built, material and mental heritage are deliberately rich. Double identity is a character of inhabitants: „Palóc” and „Roma”.The title of the rural development plan of the LAG was: „Lifestyle Rehabilitation in settlements along the Ménes Stream”.

Figure 111 The location of Ménes LAG (Own edition after data from LEADER Newsletter)

In the centre of local programme was Roma and non-Roma co-operation, the main objective was the development of new jobs. Exactly five eligible application aims were declared:

• Establish and develop model family farms

• Create workshops to integrate Roma craftsmen

• Handicraft villages – support local enterprises in traditional handicraft branches

• Fascination of the region – values supplied by two cultures

• School in the field and in the workshop



version 3.0Until the end of the whole programme 17 applicants finished 24 projects totally consuming 25,5 million HUF. The programme affected the area positively in the following areas:

• Confirm local identity

• Create dialog among local key actors

• Strengthen entrepreneur spirit

• Establish new social organizations

• Enrich existing social organizations with new functions

A further consequence of the programme was the creation and coming to the fore in the broad public of a new socio-geographic category: „Region of Ménes Stream”. Besides the programme showed instead of pure Roma programmes the co-operation between Romas and non-Romas should be supported.

After the EU access of Hungary LEADER+ programme was announced as part of the Agrarian and Rural Development Operative Programme of the National Development. (Figure) Among the objectives of the Hungarian LEADER+ the overall aims can be summarized as follows:

• Improve rural living and working conditions, increase welfare

• Create liveable rural communities, improve co-operation skills of organizations

• Develop new, sustainable income sources

• Creation and protection of workplaces

Specific objectives of the LEADER+ can be summarized as follows:

• Diversification of economic activities

• Develop and improve competitiveness of local products

• Establish new and qualified services to meet the needs of local inhabitants

• Develop methods and opportunities to improve the institutional background and local participation of rural development

• Help the participation of local actors in developments in order to realize bottom-up initiatives

In the implementation process four essential operative aims were stated:

• Prepare regional community co-operations to create LAGs and realize LEADER-type work in order to participate actively and successfully in the LEADER+ community initiative

• Create and realize the rural development plans of some LAGs

• Develop co-operation among rural areas in Hungary additionally realize international co-operation

• Transfer results, experiences and new knowledge through network development

The tender call of the Hungarian LEADER + programme contained four activities to support:

• Skill development: A training consort (Promei Kht.) keeps workshops and consultations in every region for potential LAG representatives. Regional Rural Development Authorities helped the organization and realization of these trainings, which aimed to prepare LAGs to create their local integrated rural development plans, in addition prepare the planning and implementation of the LEADER-type steps methodically and administratively.

• Integrated rural development strategies: Create LAGs and rural development plans additionally realize created and accepted plans. Rural development plans must prepare co-operation among organizations of



version 3.0public administration, NGOs and enterprises. Plans must concentrate on one or more special professions, target groups or topics. Rural development plans must mirror the main characteristics of the region – a SWOT analysis has to be included as well – must prove the relevance of the plan, including social, economic and ecologic sustainability. Plans must be innovative from regional and LEADER point of view as well. Development aims of the local development plan mustn’t represent objectives of national or regional plans or operative programmes. Traditionally differentiated economic branches must be treated together.

• Support of national and international co-operation between LAGs: Common projects, technical assistance, complementary developments can be financed to integrate mosaic-like spread know-how, human and financial resources. In co-operation one partner has to be a LEADER+ beneficiary, only its costs can be eligible in the programme additionally costs of common promotion can be legitimate. Partnership can be built even in non-EU member states if there are LEADER-type organizations but its costs can’t be financed by the EU.

• Organize a national co-ordination authority aiming to set up a system to facilitate the exchange of information, experiences and knowledge among LAGs. The aim of the organization is to collect analyse and spread information, give technical assistance to realize local and international co-operation. Every LAG gaining financial support must join actively in the network. There is an EU-wide model of this organization set up by the EU Commission, it is the so-called „Contact Point”, or „Observatory”.

Foremost at the beginning of 2005 trainings were held about general and special questions of the LEADER+ programme for the representatives of potential LAG representatives by trainers of the training organization. Built on this base LAGs could be organized, and the draft version of rural development plans could be elaborated. These drafts were handed into the Regional Rural Development Offices of the Ministry of Agriculture, where they were evaluated by cognizant and the Decision-Preparatory Committee. Based on these reviews the head of Managing Authority makes the final decision.

Winners of the first round got further training and technical assistance in general and community planning, partnership and network development. They got factual information on program-management and administration. The main objective of these trainings was to make possible the elaboration of better local rural development plans. Detailed plans created and submitted in the second round were evaluated by the same authorities as in the first round. In Hungary 67 LAGS were declared final winners in March 2006.

Each of them got 100 million HUF if their area belonged to cumulatively handicapped (socio-economically regions backward or industrial depression) areas, other regions could get 90 million HUF.

In the period of 2007-2013 96 LEADER LAGs were created in Hungary. The financial support granted for them was bigger with on order of magnitude than in the previous period. In the communities totally more than 12.000 organizations were registered from 3021 eligible settlements. (Figure 112 and 113)



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Figure 112 LEADER LAGs in the period of 2007-2013 in Hungary (Source: www.umvp.eu Downloaded: 23 February 2013)

Figure 113 The logo of the „Ipoly-menti Palócok LEADER Community” (Source: www.palocok.com Downloaded: 23 February 2013)



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Figure 114 The utilization of renewable energy sources can be a main element of the LEADER programme: The site of BÜKK MAK Community in Bükkaranyos (Own photo)

13.3.3. Key actors of LEADER

A LAG in an optimal case is a balanced and representative segment of the socio-economic actors in the given region. Its members are coming from the inhabitants, enterprises, social organizations, foundations, churches, respected persons and municipalities of the area. (Figure 114)

LAGs must be created from the co-operation of neighbouring rural settlements in a geographically continuous area where settlements form a socio-economically homogenous unit. It is worth to argue LAG members don’t have to belong to the same statistic micro region, county or region. However it is mandatory for a settlement to be a member of only one LAG.



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Figure 115 Settlements eligible for LEADER+ in Hungary in 2005 (Own edition according to Appendix 4 of LEADER + Call for Tender)

Population of a LAG according to the Hungarian regulations can be 10.000-100.000 with some exceptions. In some counties (Baranya, Borsod-Abaúj-Zemplén, Győr-Moson-Sopron, Somogy, Tolna, Vas, Veszprém és Zala) where in the settlement network many small villages can be found, the population minimum was decreased to 5.000 capita. Settlements with population less than 10.000 capita or with a population density less than 120 capita/km2 can become members of a LAG. (Figure 115)

At the time of LEADER + LAGs consisted of about 9-25 members which signed the consortium contract thus declaring their will to implement the local rural development plan effectively and according to the roles. The inner structure of the LAG must be created to secure the balance of different interests of the members. Of course members could be only local residents or organizations.

In the application LAGs had to designate the organization responsible for decision-making at local level (Local Reviewer and Monitoring Committee – HBMB) HBMB possibly can be the whole LAG, but rather it is practical to create a smaller and operable body inside the LAG. 50% of the members of this smaller institution have to represent social and economic partners. It was mandatory to involve organizations in real decision-making other than local authorities.

In order to secure day-to-day operability of the LAG, the selection of an administrative (authorized gestor) organization was a must. The authorized gestor was responsible for controlling (reception, evaluation) tenders, checking the budget and for monitoring. The authorized gestor had to be a LAG member, but must not be a member in the HBMB. (Figure 116)



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Figure 116 The organogram of an ideal LAG (Source: http://www.sze.hu/etk/_palyazatiras/22_leader+.ppt)

In the new phase (2007-2013) along with LAGs firstly Local Rural Development Bureaus were established in order to help the birth and management of local groups. LAGs were working in the form of associations as legal persons. Compared with the earlier periods they were bigger in spatial and in demographic dimensions as well. It can be explained by the fact that financial resources were distributed according to population data.

13.3.4. Experiences from the Hungarian LEADER programme

The author has got to know LEADER initiative as early as 2003 during the „Taking Charge” international rural development conference in Inverness, Scotland. He has some experiences from LEADER+ as a member of the planning workgroup of the „Eger Térsége” LAG. In the new period he worked directly for „Hortobágyi” LAG in the planning process, besides as a researcher and a mentor of former students – working for LEADER groups – also has remained in contact with the programme.

After these preludes we would like to share some experiences on the realization of the programme in Hungary that may be useful for future LEADER managers.

In the organization of local communities the addressing of the actors of different spheres (municipal, NGO, entrepreneurial) is an essential principle. According to experiences occasionally it is only symbolic, as joining municipalities in order to fulfil legal liabilities only quasi „organize” NGOs and enterprises as pseudo members. However from these „members” we can’t expect neither real activity, development ideas nor viable tenders.

A proper elaboration of the local rural development strategy is the base of the success of the community. This involves the offered methodology (signed attendance registers, photo-documented workshops etc.) should be followed not only in principle, but a real confer and debate must be followed among the crucial social groups (panel discussions for the elderly, young generations, local teachers and entrepreneurs). „Plans are nothing; planning is everything…” The quotation is from U.S. president Dwight D. Eisenhower and frankly expresses the essence of the problem.

In consequence of an improperly elaborated planning process there are some calls for tender which do not meet real needs, thus no tender applications are prepared to win them. There are some development objectives having no owner in the region. (Figure 117)



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Figure 117 The HPME methodology-unified catalogue of LEADER strategies (Source: MVH)

One of the main principles is local management and decision making. In principle it can be reconciled with the fact that Rural Development Ministry is competent for making the final decision about contracts. This would not question the strength of local decisions. Unfortunately concerning Hungarian LEADER+ programme professional factors were not the only decisive ones.

It can be essential for LAGs working in rural regions lagging behind to absorb available resources with a great efficiency. Unfortunately securing own financial resources can be a huge problem, thus the determination of support intensity marked in tender calls should be reconsidered.

The innovativeness of supported project ideas is a European regulation as well, but it can be explained in different ways. It is difficult to find the mean between the two extremism, namely understanding innovative anything that has been never before seen or being new only at a given place. In the decision beyond European and national principles local opinions must be taken into consideration as well. (Heanue, K. 2010)

A miracle of LEADER is it can mobilize latent local resources through relatively small amount of financial support. It is proven by many successful micro-scale projects from the North and the West. Some of the Hungarian experts believe something else, namely small-scale support can’t induce decisive success. 1616 The permanency of the Hungarian official opinion is shown by the 4. § (2) point of the 2013 LEADER regulation: (Figure 120)

„Applications below 1000000 HUF demanded financial support can’t be supported.”

Consequently those micro-projects are excluded from financial support which might help the development of local inhabitants.

Concerning the territorial definition of LEADER groups borders of public administration are not mandatory – except settlement boundaries. The author has heard at the birth of LEADER+ applications from the mouth of a responsible person of the Ministry, accepting the above mentioned factor, but supplementing: „Certainly, the authority will support organizations which accept administrative boundaries.”

Accordingly looking at the map we may find many groups accepting too much administrative boundaries. This factor becomes a source of tension when we realize that administrative boundaries do not coincide with natural, economic or social ones.

The opportunity to join a LEADER LAG is limited by strict demographic factors. Participating settlement must be of less than 10000 inhabitants or in case of more populated ones a population density less than 120 capita/km2

is the limit.However there can be small towns which population number and density exceed the demographic

1616The author witnessed a sharp debate in the 2010 RSA International Conference in Pécs, when an expert from Ireland tried to refute such statements coming from the Hungarian collegaues.



version 3.0limit. The home town of the author Tiszaföldvár belong to this category, although in character it is a real agrarian town. At the same time its Northern neighbour, Martfű is the home of many big companies additionally its built environment makes it a real industrial town, besides as its population number is lower than 10000, in principle it might join a LEADER group. It can be stated, simple statistic determination does not coincide with complex reality. (Figure 118 and 119)

Figure 118 Tiszaföldvár – the „suburb” of the town under groundwater, a small town statistically outside the LEADER programme (Own photo)

Operating such rural development tools what are built on local co-operation and the active participation of the community reputation capital and friendship-kinship relations relations are crucial. Thus it is essential for LAGs to act within the same spatial frames through different EU financial and LEADER cycles. This continuity might provide the realization of long-term aims and the development of local identity as a form of capital. If we compare it with the spatial extent of LEADER-type programmes is certain Hungarian regions, the lack of spatial continuity can be argued. (Tácsik, B. 2009)



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Figure 119 Might be a LEADER participant: the town of Martfű with the new town centre and one of its industrial districts (Source: www.viragosmagyarorszag.hu Accessed: 23 February 2013)

Figure 120 The new face of the Huungarian rural development: the project logo of the Darányi Ignác Plan: new



version 3.0face vs. continuity? (Source: www.kormany.hu Downloaded 20 February 2013)

Animation 10: LEADER-type co-operations in the „Belső-Cserhát” region

13.4. 4. SummaryIn this chapter the European history of LEADER-type rural development programmes were highlighted from the beginning till today. We argued, from an initial and innovative rural-periphery development tool it has turned to an integrated part of the official rural development policy.

In Hungary there was a LEADER-type programme even before our EU accession, after 2004 the country also has joined the European initiative. At the same time the national realization of the programme has contained some characteristics which influenced the success of the LEADER in a negative way.

13.5. 5. Self monitoring questions1. What does „LEADER” mean?

2. List the principles of the LEADER-approach!

3. Which characteristics can be named in the 2007-2013 European LEADER programme?

4. What characteristics were present in case of the experimental LEADER programme in Hungary?

5. What were the principles of the LEADER+ in Hungary?

6. What actors do form LAGs?

7. Which were the main organizations of the LEADER+ programme?

8. What type of demographic-statistic limits does LEADER participation have?

9. What is the bottom financial limit (in HUF) of supported projects in 2013?

10. What does innovation mean in LEADER?

13.6. 6. Test questionsLink the next arguments to the different European LEADER cycles!

1. It was active between 1991 and 1993



4. Had a total budget of 400 million ECU

5. Had a total budget of 1700 million ECU

6. Had a total budget of 2020 million euro

LEADER I:

LEADER II:

LEADER+:

Results:



version 3.0LEADER I: 1, 4

LEADER II: 2, 5

LEADER+: 3, 6

Which ones are NOT LEADER principles?

1. Local finance and management

2. Innovation

3. Subsidiarity

4. Network and co-operation

5. Spatial approach

6. Democratic centralism

Correct: 3, 6

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version 3.0social_inclusion_fight_against_poverty/g24209_en.htm

http://geobytesgcse.blogspot.hu/2007/03/inner-cities-case-study-regeneration-of.html

http://new.uneca.org/TabId/3018/Default.aspx?ArticleId=1906

http://thewhereblog.blogspot.hu/2009/01/topography-of-community.html

http://upload.wikimedia.org/wikipedia/commons/8/8e/Dioceses_of_Church_of_Sweden.svg

http://www.amatormuveszek.hu/modules.php?name=News&file=article&sid=117277

http://www.enviro2b.com/2009/07/08/gdf-suez-et-e-on-condamnes-a-plus-de-1-milliard-deuros/

http://www.isvil.net/eng/pages/introduce/saemaul_01-2.php

http://www.lddc-history.org.uk

http://www.neue-energien-forum-feldheim.de

http://www.sze.hu/etk/_palyazatiras/22_leader+.ppt

http://www.terport.hu/webfm_send/544

http://www.uni-miskolc.hu/~wwwallin/kozig/hirek/altalanos_resz/iranyitas.pdf

http://www.visitvelenceito.hu/gyogyvizek-volgye-egerszalok-demjen-egerszolat-turisztikai-desztinacios-menedzsment-egyesulet-p-1461.html

http://www.visitvelenceito.hu/mori-borvidek-tdm-egyesulet-p-1504.html

http://www.visitvelenceito.hu/szigetkoz-turizmusaert-egyesulet-p-1503.html

termeszettudas.ektf.hu

upload.wikimedia.org

www.csakvar.hu

www.foter.com

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www.ksh.hu

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www.rubires.de

www.saemaul.or.kr

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www.umvp.eu

www.urbact.eu

www.urbact.hu

www.vati.hu



version 3.0www.veoliaviz.hu

www.viragosmagyarorszag.hu

14.2. Legal documents and strategic programmes1/2009. (IX. 11.) PM Directive

106/1997. Government Regulation

19/1998. Government Regulation

1990/LXV Law

1992/XXII Law

1992/XXIII Law (Ktv.)

1992/XXXIII Law (Kjt.)

1996/XXI Law

1997/LXXVIII Law

2004/CVII Law

2004/LXXV Law

2011/CLXXXIX Law

2011/CXCIX Law

2012/I Law

218/2009 Government Regulation





EU 1080/2006 Regulation

Életmód-rehabilitáció a Ménes-patak menti településeken, Helyi integrált Vidékfejlesztési Stratégia, 2004

Kazincbarcika Integrált Városfejlesztési Stratégiája, 2008

LEADER + Pályázati felhívás, 2005

Local government in Sweden – organisation, activities and finance, 2005

Magyarország SAPARD Terve, 2000-2006

Magyarország Vidékfejlesztési Programja, 2004

Skeffington Report, 1967

15. Examination practice1. What are the main activities of spatial and settlement management?



version 3.02. Which management elements are the main ones in case of municipalities?

3. Compare the different european municipial models!

4. Compare the Hungarian municipial system with the main European types!

5. What are the main characteristics of administrative-management models?

6. Compare the strategic and operative managements!

7. Describe the technocratic and bureaucratic manaagement types!

8. What kind of other management types are you familiar with? Describe them!

9. In what main forms is public management realized in some European countries?

10. What EU directives and programmes do exist in the Community-wide realization of public management?

11. Summarize the principles of human-resource management suggested in the public sector according to the legal regulations!

12. Which phases can be differentiated in the human resource management activities in the public sector?

13. What are the main features of city management, mainly concerning the co-operative city management?

14. Compare the integrated city development of the EU and Hungary!

15. Define rurality and rural development!

16. What best practices of rural development exist outside of Europe?

17. How was the role of micro regional level formed in Hungary from 1990?

18. What are the main experiences of the reform of the micro regional system until now?

19. What makes different TDM system from traditional touristic institutional system?

20. What special tasks can be differentiated in special TDM levels?

21. What are the main steps of building value-added partnerships?

22. Summarize the experiences of the RUBIRES program concerning the building of value-added partnership!

23. What are the main features of the functioning of the LEADER programme in Hungary?

24. What are the main differences among the LEADER principles and the Hungarian realization?

16. Final Exam16.1. „A” variant1. Interpret the definition of management in the mirror of different explanations!

2. What are the main scenes of spatial management?

3. Delineate the main features of the Mediterranean municipal systems!

4. Delineate the main features of the Scandinavian municipal systems!

5. What are the main tasks of the manager in the administration formula?



version 3.06. What types of control and official supervision can be differentiated?

7. What are the roots and main features of technocrat and bureaucratic management?

8. What are the features of Christian management model?

9. Delineate the possible ways of the decentralization of public activities?

10. Compare the main features of the English and French public management!

11. Delineate the main features of X and Y models of labour market models!

12. What directives can be found in the regulation 1/2009. (IX. 11.) PM concerning human resources?

13. What point of views can be taken into consideration in case of city management?

14. What features of the London Dockland Project make it a typical instance of new city management?

15. What kind of rural definitions exist in Europe and in the OECD?

16. What ways can be differentiated in the re-construction of rural areas?

17. Summarize the main features and results of the SLA method!

18. Present the formation of micro-regional leveli n Hungary!

19. Present the ideal function of the TDM model in the mirror of the human-ecological system model!

20. What can be called the main pillars of TDM?

21. What are the advantages of the creation of value-added partnership?

22. Present the phases of the development of value-added partnership!

23. Present the main advantages of the LEADER methodology!

24. Who can be called the key actors of the LEADER?

16.2. „B” variant1. Present the definition of spatial and settlement management!

2. What are the phases of the institutionalization of regions?

3. Delineate the main features of the Anglo-Saxon municipal systems!

4. Delineate the main features of the German municipal systems!

5. Compare the tools of professional and legal supervision and of monitoring!

6. What is the difference between strategic and operative management?

7. Compare the features of corporative and democratic model!

8. What are the main features of social participation?

9. Delineate the importance of Tilburg Model!

10. What EU programmes exist to promote the establishment of public management?

11. What are the main features of new type (projec-based) employment relized in the public sector?

12. What phases can be differentiated in the function of the labour-market of the public sector?



version 3.013. Mark the integrated city development in the European Union!

14. In what forms can co-operative city-management be found in Hungary?

15. What are the main features of the village as a settlement and life-style?

16. What principles could be found in the rural development policy of the UN in the last 50 years?

17. Delineate the importance of Saemaul Undong!

18. Present the different organizational types and interests living in the micro regions!

19. What is the importance of TDM sin the Hungarian touristic institutional system?

20. What general and special tasks do exist in case of different spatial levels of the TDMs?

21. What are the main disadvantages of the development of value-added partnerships?

22. Present a possible scenario for the establishment of value-added partnership!

23. What are the main experiences of the Hungarian LEADER programme?

24. Why local action groups are important?
