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BACKGROUND

BACKGROUND. MONDRAGON = Network of 260+ cooperative enterprises, subsidiaries and affiliates. Employee-owned, not user-owned 7th largest business group in Spain (€14B, sales). CONTEXT. The Basque Country (Euskadi) 2.1 million inhabitants

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BACKGROUND

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  1. BACKGROUND • MONDRAGON = Network of 260+ cooperative enterprises, subsidiaries and affiliates. • Employee-owned, not user-owned • 7th largest business group in Spain (€14B, sales)

  2. CONTEXT • The Basque Country (Euskadi) • 2.1 million inhabitants • Strong industrial tradition since 16th c, esp since late 19th

  3. BASIC PHILOSOPHY

  4. IMPLICATIONS • Democratic control • Distribution of surplus among all worker-members • Egalitarianism • Participation indecision-making 5

  5. See co-op structure chart

  6. The Business Today --

  7. 13.9 billion € (retail & industrial only) Sales, 2009 Retail & Allied Group €8.4 billion 60% 40% Industrial Group €5.5 billion

  8. WORK FORCE, 2009 FINANCE ≈ 3,000 (3%) MANUFACT. ≈ 33,200 (39%) KNOWLEDGE ≈ 1,100 (1%) RETAIL ≈ 48,000 (56%) TOTAL ≈ 85,300

  9. CO-OP CONGRESS Standing Committee GENERAL COUNCIL INDUSTRIAL GROUP Automotive Components Industrial Components Construction FINANCIAL GROUP RETAIL GROUP Industrial Equipment Domestic Appliances Engineering and Capital Goods Machine Tools + 5 other divisions Education, Training and Research Centres MONDRAGON – Network Structure

  10. 11

  11. Rusia Alemania (3) U.K.(4) Polonia (5) Eslovaquia (2) U.S.A. Francia (5) China (8) Marruecos(2) Mexico (6) Italia (3) China Turquía (2) Mexico India(2) Tailandia (1) Brasil Brasil (6) Sudáfrica (1) Corporate Delegations (6) Manufacturing Plants (70+) Mondragon in the World Rep. Checa (5) Rumania (2) India

  12. HOW WAS THIS ACHIEVED? (History)

  13. 1500 – 1925: Industrial tradition, then heavy industrialization—iron, steel, metalworking, shipbuilding, mining 1936-39 Spanish Civil War  Destruction, poverty, repression • 1941: Priest Arizmendiarrieta  Mondragon • Technical School, 1943 • Other “Education” … 15 years • First co-op 1955-56

  14. Growth … and NETWORK INSTITUTIONS • 1955-59 four new co-ops • 1959 Caja Laboral (bank) • 1964 Ularco (regional subgroup) • 1967 Lagun Aro (soc. sec./insurance) • 1969 Eroski (retail food) • 1974 Ikerlan (technology R&D) • 1984 Cooperative Congress • 1991 MCC – Sectoral Restructuring / Central Services • 1997 Mondragon University … ETC.

  15. 2000’s iNNOVATiON CO-OP RENNOVATION The Meaning of Mondragon Experience Participation, Cooperative Ownership Education, Social Responsibility, Other Arenas (Bagara) 12+ R&D CENTERS INTERNATIONALIZATION NOT JUST TECHNOLOGY, also organization, commun-ication, leadership

  16. FUTURE CHALLENGES

  17. CHALLENGES • Globalization • Need to “cooperativize” operations, ensure social responsibility. The “30%” policy. • High pressure  broad impact • Work and management in other cultures • Non-member workers (Retail and Manufacturing) • In co-ops, 20%  15% • In subsidiares (> 50% total wkfce) ... BUT shared ownership + COOP’Z’N in Retail • Manufacturing  Services, new sectors • Environmental Sustainability

  18. CHALLENGES • Participatory decision-making (in the face of post-modern, consumer culture) • The management dimension—conventional management “ideology” re costs, profits, style • The front-line worker dimension—work is means not end; in 2nd generation, co-op membership seen less as “activism” • Re-creation, reinforcement of “cooperative identity” via education, leadership and organizational change TE.

  19. Cooperative Principles

  20. Open and Voluntary Membership Democratic Governance Sovereignty of Labor Capital as Subordinate and Instrumental Participation in Management Solidarity in Compensation Intercooperation Social Transformation Contributing to the Social Economy Worldwide Education COOPERATIVE PRINCIPLES

  21. COOPERATIVE PRINCIPLES Open and Voluntary Membership Open to all those who freely and voluntarily accept our Principles.

  22. COOPERATIVE PRINCIPLES Democratic Governance One member, one vote to elect the Governance Bodies and define codes of behavior

  23. COOPERATIVE PRINCIPLES Sovereignty of Labour Rights are assigned to Labor, not capital. Labor is the engine of collective progress and the key to generating wealth

  24. COOPERATIVE PRINCIPLES Capital as Subordinate and Instrumental Capital is an essential resource, but it is subordinate to labor.

  25. COOPERATIVE PRINCIPLES Participation in Management Responsible involvement of members in management of the business

  26. COOPERATIVE PRINCIPLES Solidarity in Compensation Internal to the company, as well as relative to the sector and region.

  27. COOPERATIVE PRINCIPLES Intercooperation As a mechanism of intercooperative solidarity and business efficiency

  28. COOPERATIVE PRINCIPLES Practice Intercooperation • Central Representative Governance Bodies • Central Management Services and Coordination Bodies • Sectoral Divisions for collaboration, synergies, mutual help • Shared support institutions in key activities—banking, venture capital, social security, education, R&D, non-profit activities

  29. COOPERATIVE PRINCIPLES Social Transformation Commitment to egalitarian and sustainable economic and community development in the Basque Country and elsewhere

  30. COOPERATIVE PRINCIPLES Building the Social Economy Worldwide Collaboration and solidarity with those who work for a democratic social economy around the globe.

  31. COOPERATIVE PRINCIPLES Education Cooperative and professional, in order to consolidate and develop the Mondragon Experience

  32. “The present, no matter how marvelous it may seem, sows the seeds of its own destruction if it separates itself from the future”. “El presente, por espléndido que fuere, lleva la huella de su caducidad, en la medida que se desliga del futuro”. D. José María Arizmendiarrieta

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