Organizational theory offers rural school administrators several ways of thinking about retrenchment made necessary by declining enrollment. Obstacles to innovative responses to retrenchment include a shift in how organizations are perceived: from closed systems in which rational decisions are made about changes, to open systems in which administration is a highly politicized activity, with a tendency to favor encrusted organizational practices over innovative solutions. Under such conditions, rural school districts tend to cut back existing programs and services (the "efficiency" option). These difficult decisions are often postponed until no other visible alternatives are available. Some factors contributing to the choice of efficiency measures over innovation are that quantitative results are easier to ascertain; the most innovative members are the first to leave during difficult times; and, in such times, espousal of traditional values, including "core programs," predominates. To counteract these contributing factors, rural schools should establish priorities through planning, using such strategies as system development planning, quality circles, and opportunistic management. Approaches for improving delivery of programs include use of community members to assist teachers; new technologies such as computer networks; mobile laboratories for specialized courses/services; and shared services within/between school jurisdictions. Universities can help with teacher training specifically oriented toward rural practice. (MH)