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MONDRAGON CORPORATION

MONDRAGON CORPORATION. Table of contents. 1.- MONDRAGON CO-OPERATIVE EXPERIENCE 2.- KEY FACTORS FOR SUCCESS a.- Participation of the members b.- Solidarity and Inter-cooperation c.- Education. 1.- Mondragon Co-operative Experience. Mondragon Corporation Formed by 120 co-ops

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MONDRAGON CORPORATION

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  1. MONDRAGON CORPORATION

  2. Table of contents • 1.- MONDRAGON CO-OPERATIVE EXPERIENCE • 2.- KEY FACTORS FOR SUCCESS • a.- Participation of the members • b.- Solidarity and Inter-cooperation • c.- Education

  3. . 1.- Mondragon Co-operative Experience

  4. Mondragon Corporation • Formed by 120 co-ops • Divided into four Groups  Finance, Manufacturing, Knowledge and Retail • Workforce  83,859 • The principles of the Corporation are based on its experience and the International Co-operative Principles (ICA)

  5. Mondragon as a reference and successful experience • Considered one of the most successful and long-lived examples of workers’ co-operatives in the world • Economic success and social characteristics  Social commitment, employee-ownership and solidarity among co-operatives • Several authors have noted its social and economic benefits  Derive from the uniqueness of its business model and have special significance in times of severe economic crisis

  6. 2.- Key factors for success

  7. a.- Participation of the members • Special characteristics of the co-ops (comparing with the traditional trading companies) • Co-ops must achieve their business objectives through the active participation of their members  Members = Workers • Their members (workers) participate actively in the management of the company  Take part in the decision-making process

  8. In Mondragon, all members (workers) are involved in the ownership, the management and the results of the organization: • They are more aware of the problems of the company and have real interest in taking appropriate measures • These measures will be decided democratically by the members and will be implemented by them

  9. Reduce or reinvest compensations (General Assembly): • Interest on capital contributions • Patronage refunds

  10. Decisions: In 2009 the members decided to cut their salary (6.3%) In 2010 their salary was frozen This year, the members have decided to increase their salary (4.25%) FAGOR EDERLAN TAFALLA

  11. b.- Solidarity and Inter-cooperation • Solidarity Funds: • Central Inter-Cooperation Fund (FCI)  To invest in new co-ops or products (10%) • Education and Inter-cooperative Promotion Fund (FEPI)  To invest in education (2%) • Corporate Solidarity Fund (FSC)  To cover the losses of the co-ops of the group (2%)

  12. LagunAro (mutual insurance company) • LagunAro is a mutual insurance company • It was created with the objective of resolving the problem that arose when the government refused to allow co-operative members to qualify for Social Security benefits, maintaining that they were owners (businessman or businesswoman), not employees.

  13. These days, LagunAro is helping some co-ops which are trying to adjust their workforce to the new situation  Employment Aid Fund (2%) • When there is not enough work for all the members in a co-op, LagunAro provides some of them a new position (temporary or definitive) in another company • If the member cannot be relocated, LagunAro will pay him an unemployment benefit (Max. 2 years) or a retirement pension

  14. c.- Education • Mondragon Unibertsitatea • The transfer of knowledge and results to society and strengthen social integration • Own educational model: offering courses very much oriented to entrepreneurship and to incorporate to international networks

  15. THANK YOU VERY MUCH ialzola@mondragon.edu aaizpurug@mondragon.edu

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