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Mondragon Leads the Way
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Dan Clore
Mar 19, 2012, 9:40:45 PM3/19/12
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News & Views for Anarchists & Activists:
http://groups.yahoo.com/group/smygo
https://socialenterprise.guardian.co.uk/en/articles/social-enterprise-network/2012/mar/12/cooperatives-spain-mondragon
Co-operatives in Spain - Mondragon leads the way
Co-operatives round the world could learn a lot from Spanish co-op giant
Mondragon, says Andrew Bibby
Mondragon
The name of the small Basque town of Mondragon has, over the years, had
something approaching talismanic status from British advocates of
co-operative business looking for evidence to convince sceptics that
coops really can work. The story of the co-operative which bears
Mondragon's name, originally a small manufacturer started in the bleak
Franco period of the mid-1950s, continues to cast a powerful spell: the
Mondragon Corporation today is an international cooperative business
empire, employing over 85,000 people and operating across the globe, but
still claiming to be run in strict accordance with co-operative principles.
"The Mondragon Corporation is based on a commitment to solidarity and on
democratic methods for its organisation and management," says Mikel
Lezamiz, director of Mondragon's c-ooperative dissemination unit.
Mondragon demonstrates an alternative to the 'business as usual' mantra
of shareholder-owned companies, he maintains: "Our mission is not to
earn money, it is to create wealth within society through
entrepreneurial development and job creation."
Mondragon has grown to be the tenth largest business in Spain and it
certainly dominates the Basque economy, historically one of the
industrial powerhouses in the Spanish state. Having begun with the
manufacture of domestic appliances, it continues to have a strong
presence in the white goods industry (mainly under the brand name
Fagor). It also has major interests in other areas of manufacture as
diverse as bicycle production and lift manufacture (the latter including
its UK Quality Lifts subsidiary, based in Wiltshire). It counts as its
competitors firms such as Hitachi, Mitsubishi, GE and LG. Mondragon also
has major interests in retailing, in finance (where it operates a
savings bank and an insurer) and in education, where it operates
schools, technical colleges and a cooperative university. There are also
14 research and development centres.
Given this breadth of activity, there are obvious questions to ask in
relation both to Mondragon's overall strategic management and corporate
governance. Mondragon, in fact, operates less as a single corporate
entity of the kind familiar from conventional multinational corporations
and more as a network of more than 120 separate co-operative ventures,
each of which are managed semi-autonomously. This means, for example,
that workers in individual businesses within the Mondragon framework
have the sort of rights of membership and control more often found in
smaller workers' cooperatives. Co-operative membership – and with it the
right to benefit from profits - is usually open to employees after an
initial six or twelve month period.
Mondragon has also explored some interesting models of stakeholder
co-operative governance, an area where its ideas may prove to be
valuable elsewhere in the world. Its retailer Eroski, for example, is
jointly run by representatives of consumer members and employee members.
Its schools and universities give formal governance roles not only to
staff and students, but also to a wider group of stakeholders, including
other co-ops and local authorities.
The individual co-operatives within Mondragon contribute financially to
the Corporation's development, exchange staff (particularly as an
alternative to redundancies in one business) and jointly establish
Mondragon's strategy. This is done through the Co-operative Congress
(650 delegates, representing each member firm) and the General Council
it appoints. One interesting issue which Mondragon has begun to address
is the way in which staff working in overseas subsidiaries can be
included in the internal cooperative democracy. Mondragon was
historically criticised by some for leaving these workers disempowered.
This is becoming more important as Mondragon Cooperative Corporation
increasingly becomes a global business. International sales now
represent 65% of total turnover. Its President José Maria Aldecoa talks
of the cooperative's " firm commitment to reinforcing Mondragon's
international business", both in Europe and in the BRIC countries of
Brazil, Russia, India and China.
Mondragon also has something to teach other cooperatives in its approach
to capital, always an issue for businesses not using equity-based
capital markets. Employee members are required to make a financial
investment in their business, typically of €14,000, which is
automatically deducted from salary over the first three or five years of
their membership. Profits paid across to members are also retained in
the cooperative, being distributed only at retirement or if a member of
staff leaves. Interest on members' capital is paid, however, when
businesses are profitable.
If Mondragon is a unique creation, the impulse which led to its
development has also been at work elsewhere within Spain, particularly
in the Basque country and Catalonia. The Basque coop confederation
KONFEKOOP represents over 800 coops operating in the Basque autonomous
region, whilst the equivalent Catalan body is the active Confederació de
Cooperatives de Catalunya. Catalonia has over 5000 coops, in broad terms
one in five of the total for Spain, and although they are predominantly
small ventures (on average, employing about seven staff), they operate
in many sectors, especially services and construction, but also in
industry and agriculture. Proponents of cooperative schools in the UK
may be interested in the Catalan experience, where about forty
cooperative schools are currently operating.
Workers' cooperatives– there are about 18,000 across Spain, together
employing 300,000 people - have their own organisation in Coceta.
Coceta, which has just celebrated its 25th birthday, points proudly to
recent data from the Spanish state suggesting that coops have in total
created 19,000 new jobs in the last quarter of last year. Coceta's
president Juan Antonio Pedreño says that coops are providing a valuable
solution to Spain's current chronic unemployment problems. "In moments
of crisis, coops are capable of creating jobs while other forms of
business are destroying them," he says.
More generally, cooperatives in Spain are seen as an important
constituent part of the broader social economy, which also brings in
not-for-profit associations and foundations. "The concept of the social
economy is relatively strong in Spain, and cooperatives are seen as one
of the key actors," says Klaus Niederlander, Director of Cooperatives
Europe. The Spanish social enterprise association Cepes, analogous in
some ways with Social Enterprise UK, is a member organisation of the
International Cooperative Alliance.
--
Dan Clore
New book: _Weird Words: A Lovecraftian Lexicon_:
http://tinyurl.com/yd3bxkw
My collected fiction: _The Unspeakable and Others_
http://www.lulu.com/product/paperback/the-unspeakable-and-others/6124911
Lord Weÿrdgliffe & Necronomicon Page:
http://tinyurl.com/292yz9
News & Views for Anarchists & Activists:
http://groups.yahoo.com/group/smygo
"From the point of view of the defense of our society,
there only exists one danger -- that workers succeed in
speaking to each other about their condition and their
aspirations _without intermediaries_."
--Censor (Gianfranco Sanguinetti), _The Real Report on
the Last Chance to Save Capitalism in Italy_
http://groups.yahoo.com/group/smygo
https://socialenterprise.guardian.co.uk/en/articles/social-enterprise-network/2012/mar/12/cooperatives-spain-mondragon
Co-operatives in Spain - Mondragon leads the way
Co-operatives round the world could learn a lot from Spanish co-op giant
Mondragon, says Andrew Bibby
Mondragon
The name of the small Basque town of Mondragon has, over the years, had
something approaching talismanic status from British advocates of
co-operative business looking for evidence to convince sceptics that
coops really can work. The story of the co-operative which bears
Mondragon's name, originally a small manufacturer started in the bleak
Franco period of the mid-1950s, continues to cast a powerful spell: the
Mondragon Corporation today is an international cooperative business
empire, employing over 85,000 people and operating across the globe, but
still claiming to be run in strict accordance with co-operative principles.
"The Mondragon Corporation is based on a commitment to solidarity and on
democratic methods for its organisation and management," says Mikel
Lezamiz, director of Mondragon's c-ooperative dissemination unit.
Mondragon demonstrates an alternative to the 'business as usual' mantra
of shareholder-owned companies, he maintains: "Our mission is not to
earn money, it is to create wealth within society through
entrepreneurial development and job creation."
Mondragon has grown to be the tenth largest business in Spain and it
certainly dominates the Basque economy, historically one of the
industrial powerhouses in the Spanish state. Having begun with the
manufacture of domestic appliances, it continues to have a strong
presence in the white goods industry (mainly under the brand name
Fagor). It also has major interests in other areas of manufacture as
diverse as bicycle production and lift manufacture (the latter including
its UK Quality Lifts subsidiary, based in Wiltshire). It counts as its
competitors firms such as Hitachi, Mitsubishi, GE and LG. Mondragon also
has major interests in retailing, in finance (where it operates a
savings bank and an insurer) and in education, where it operates
schools, technical colleges and a cooperative university. There are also
14 research and development centres.
Given this breadth of activity, there are obvious questions to ask in
relation both to Mondragon's overall strategic management and corporate
governance. Mondragon, in fact, operates less as a single corporate
entity of the kind familiar from conventional multinational corporations
and more as a network of more than 120 separate co-operative ventures,
each of which are managed semi-autonomously. This means, for example,
that workers in individual businesses within the Mondragon framework
have the sort of rights of membership and control more often found in
smaller workers' cooperatives. Co-operative membership – and with it the
right to benefit from profits - is usually open to employees after an
initial six or twelve month period.
Mondragon has also explored some interesting models of stakeholder
co-operative governance, an area where its ideas may prove to be
valuable elsewhere in the world. Its retailer Eroski, for example, is
jointly run by representatives of consumer members and employee members.
Its schools and universities give formal governance roles not only to
staff and students, but also to a wider group of stakeholders, including
other co-ops and local authorities.
The individual co-operatives within Mondragon contribute financially to
the Corporation's development, exchange staff (particularly as an
alternative to redundancies in one business) and jointly establish
Mondragon's strategy. This is done through the Co-operative Congress
(650 delegates, representing each member firm) and the General Council
it appoints. One interesting issue which Mondragon has begun to address
is the way in which staff working in overseas subsidiaries can be
included in the internal cooperative democracy. Mondragon was
historically criticised by some for leaving these workers disempowered.
This is becoming more important as Mondragon Cooperative Corporation
increasingly becomes a global business. International sales now
represent 65% of total turnover. Its President José Maria Aldecoa talks
of the cooperative's " firm commitment to reinforcing Mondragon's
international business", both in Europe and in the BRIC countries of
Brazil, Russia, India and China.
Mondragon also has something to teach other cooperatives in its approach
to capital, always an issue for businesses not using equity-based
capital markets. Employee members are required to make a financial
investment in their business, typically of €14,000, which is
automatically deducted from salary over the first three or five years of
their membership. Profits paid across to members are also retained in
the cooperative, being distributed only at retirement or if a member of
staff leaves. Interest on members' capital is paid, however, when
businesses are profitable.
If Mondragon is a unique creation, the impulse which led to its
development has also been at work elsewhere within Spain, particularly
in the Basque country and Catalonia. The Basque coop confederation
KONFEKOOP represents over 800 coops operating in the Basque autonomous
region, whilst the equivalent Catalan body is the active Confederació de
Cooperatives de Catalunya. Catalonia has over 5000 coops, in broad terms
one in five of the total for Spain, and although they are predominantly
small ventures (on average, employing about seven staff), they operate
in many sectors, especially services and construction, but also in
industry and agriculture. Proponents of cooperative schools in the UK
may be interested in the Catalan experience, where about forty
cooperative schools are currently operating.
Workers' cooperatives– there are about 18,000 across Spain, together
employing 300,000 people - have their own organisation in Coceta.
Coceta, which has just celebrated its 25th birthday, points proudly to
recent data from the Spanish state suggesting that coops have in total
created 19,000 new jobs in the last quarter of last year. Coceta's
president Juan Antonio Pedreño says that coops are providing a valuable
solution to Spain's current chronic unemployment problems. "In moments
of crisis, coops are capable of creating jobs while other forms of
business are destroying them," he says.
More generally, cooperatives in Spain are seen as an important
constituent part of the broader social economy, which also brings in
not-for-profit associations and foundations. "The concept of the social
economy is relatively strong in Spain, and cooperatives are seen as one
of the key actors," says Klaus Niederlander, Director of Cooperatives
Europe. The Spanish social enterprise association Cepes, analogous in
some ways with Social Enterprise UK, is a member organisation of the
International Cooperative Alliance.
--
Dan Clore
New book: _Weird Words: A Lovecraftian Lexicon_:
http://tinyurl.com/yd3bxkw
My collected fiction: _The Unspeakable and Others_
http://www.lulu.com/product/paperback/the-unspeakable-and-others/6124911
Lord Weÿrdgliffe & Necronomicon Page:
http://tinyurl.com/292yz9
News & Views for Anarchists & Activists:
http://groups.yahoo.com/group/smygo
"From the point of view of the defense of our society,
there only exists one danger -- that workers succeed in
speaking to each other about their condition and their
aspirations _without intermediaries_."
--Censor (Gianfranco Sanguinetti), _The Real Report on
the Last Chance to Save Capitalism in Italy_
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