Mondragon

A federation of cooperatives founded in 1956, bringing together more than 116 cooperatives, of which, half of the employees are partners

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About the project Edit

The Mondragon Corporation is a Basque group of 256 corporations and entities (half of which are cooperatives), founded in 2008 and organized into four industry groups: finance, distribution, knowledge of research and training. It is the largest cooperative group in the world. Mondragon operates as competitive business in international markets - using democratic methods of organizing society, creating jobs, promoting the social and professional lives of its workers and showing a commitment towards developing its social environment.

Mondragon is founded on the following principle: the "co-operators" are both employees and shareholders. They contribute to the capital and management of the company. The salaries are generous and sufficient. There is little difference between the lowest and the highest salary. When Mondragon started it business, the ratio of wages was 1 to 3. Over the years, it has changed from 1 to 6, 1 to 9 and now in some cases from 1 to 12.

La Corporation Mondragon is the result of the vision of a young Basque parish priest, José María Arizmendiarrieta, and the united effort of worker/associates, who in 1956 transformed a small workshop, dedicated to manufacturing ovens and oil stoves, into the first Basque industrial group (with more than 35,000 employees in this region) and the seventh one in Spain with €16.7 billion in revenue in 2008 in its manufacturing, financial and distribution operations, €14 billion in intermediate resources and a workforce, which rose at the end of 2008 to 92,773 workers in total.

Themes

In what ways is this project unique and creative? Edit

Mondragon is the largest workers' cooperative in the world. It is also the largest company in the Spanish Basque country - managing to combine social equity and financial autonomy. To achieve this, it has established an organizational model, which is both very innovative and very powerful.

What is the social value of this project? Edit

Within the social economy and the cooperative movement, Mondragon represents an exemplary company that has at least until the 1980s, was seen as typical cooperative that succeeded in ''going nationwide'' while maintaining ethical business requirements. We admire the success of a company that practices democracy like in a Greek city, independence towards the stock market, involvement in local development (particularly the huge investment in training), limiting the income gap and lastly, limiting the capital serving the company and not the reverse.

However, some people are deeply concerned about the insecurity of non-member workers - those who are not part of the cooperative company. Mondragon is partly a cooperative company and partly a company that's competing on the world market with brands such as Fagor, Brandt, De Dietrich, etc.

What is the potential of this project to expand and develop? Edit

It's not easy to generalize Mondragon's experience. Exporting the Basque model to foreign affiliates acquired by MCC Group companies is an attempt that seems to have failed so far.

In fact, many of Mondragon's specific characteristics, in terms of its development, make the experience unique and harder to undertake. Among others:

-A formative history and geography: Basque lifestyle based on work, family, political involvement, deeply rooted Catholic values
- An illustration of resistance against the Franco regime and social exclusion, as well as, the imposition of Castilian as the national language. With the democratization in Spain, these resistance factors decrease.
- The presence of a charismatic leader, Arizmendiarrieta - the founder and selfless priest of exemplary moral rectitude, whose estate has only been made possible through extraordinary training efforts (the Mondragon Cooperatives has its own internal university, with over 4000 students and 22 academic fields, which spends 8 times more on training than what the French law recommends).
- Anchoring in a highly industrialized country, the manufacturing sector is currently one of the spearheads of the group.

What was the triggering factor of this project? Edit

What is the business model of this project? Edit


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