THE MONDRAGON COOPERATIVE

SOCIAL ENTREPRENEURSHIP THROUGH THE COLLECTIVE OWNERSHIP OF LABOR, EDUCATION, AND FINANCE.

By Will Klatt

The Mondragon Corporation is a worker cooperative federation, which means it is made up of a number of different cooperative businesses that share resources, facilitates the scalability of large new business investments, and creates an internal social economic safety net that protects its employees from fluctuations in the economic growth.

MISSION OF THE MONDAGON COOPERATIVE

• Cooperation

• Empowerment

• Innovation

• Social responsibility

• Source https://www.youtube.com/watch?v=NORmQ8zaL1c

SOCIAL ENTREPRENEURSHIP FOCUS ;

• While the focus of the cooperative is to make money for its member owners. The company has integrated civic participation, popular democracy, rewarding innovation and creativity into its vision. The end goal is to build middleclass jobs, and to dismantle the authoritarian structure of business capitalism .

• The company applies the most positive components of capitalism (incentives for innovation, and productivity,) with the goals of communism, good wages, democratic control over the workplace, and labor control over the means of production.

MONDRAGON AT A GLANCE

• Source http://www.mondragon-corporation.com/

Mondragon is the largest company in the Basque region of Spain and the 7th largest corporation in the whole of Spain.

• In 2012 it had 12,574 billion in revenue • 257 separate independent cooperatives • Employs 74,060 worker owners• And maintains 15 universities and trade

schools.• It has businesses in finance, heavy

industry, retail and education.

JOSÉ MARÍA ARIZMENDIARRIETA 

• The founder of the cooperative was a catholic priest in the city of Mondragon. In 1943 he help to start a technical college. Jose spent year socializing students into a set of values that was informed by social justice, solidarity and participator democracy.

Some of the graduates of this school went on to found it first cooperative, which produced heaters. Foote, William (1991). Making Mondragón. IRL Press.

WAGE RATIO’S

• Source :Herrera, David (2004). "Mondragon: a for-profit organization that embodies Catholic social thought.".Review of Business (The Peter J. Tobin College of Business, St. John's University) 25 (1): 56–68. Retrieved October 13, 2014.

IN each area of work there are wage ratios that are set up between the highest paid employees and executives and the lowest paid employees.

While the ratio differs depending on the cooperative, they range from 9-1 pay to 3-1 pay for their employees. The average for the cooperatives is 5-1.

INTERCONNECTED RELATIONSHIPS BETWEEN LABOR AND CAPITAL.

• Most of the employees who are apart of the Mondragon corporation went to one of its many technical schools and colleges. It is the belief of the company that socialization into a collectivized work space is a long term educational process, and does not emerge overnight. This behavior must be taught.

• Once an employee is hired, they keep their wages earnings in a collectively owned credit union, enabling the company to reapply these recourses to new investments.

• Excess profits are used to fund new cooperative ideas and business that the company workers come up with.

THE COMPANY HAS INTENTIONALLY DIVERSIFIED TO PROTECT THE WORKERS FROM A VOLATILE ECONOMY • Montergaon has a vibrant finance division that does everything

from running a credit union to wealth and retirment management.

• Industrial production is another area of focus. Many of the workers are engineers. They have a vibrant bike factory, and create products for camping, the garden and the beach. They also work in sheet metal and the construction of machine tools, and car parts.

• Retail and service industry- gas stations, groceries, and perfume stores are just part of this section of the portfolio.

• Education – The cooperative has 15 learning centers in spain.

Source: http://en.wikipedia.org/wiki/Mondragon_Corporation#Industry

WHEN ONE OF THE CO-OPS GOES UNDER….

• Workers can apply to work at another business in the network. Keeping its own workers employed is a primary goal of the cooperative.

THE COMPANY UNDERSTANDS GLOBALIZATION AND HAS CO-OPS ALL OVER THE WORLD.

WHAT I LIKE ABOUT MONDARGON

• The company put competition and innovation at the forefront of its business model.

• It has integrated popular democracy into the workplace

• Many of the employees are owners of the cooperative.

• Banking is done through their own bank, and creates a source of capital investment for new projects.

• They appear to have realized the communist demands of labor control over the means of production without centralized planning

• Education and collective socialization integrated into its vision.

UNANSWERED QUESTIONS

Many of the companies have a two tiered system where some workers are owners and others are not (and have no real access to becoming members)

While the company has a strong corporate social responsibility mission, many of its products require relationships with companies that may exploit workers abroad.

Environmentalism is not a focus of its mission (but I’m not really hung up on that.)