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

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1.- Mondragon Co-operative Experience

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• Mondragon Corporation

o Formed by 120 co-ops

o Divided into four Groups Finance, Manufacturing, Knowledge and Retail

o Workforce 83,859

o The principles of the Corporation are based on its experience and the International Co-operative Principles (ICA)

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• Mondragon as a reference and successful experience

o Considered one of the most successful and long-lived examples of workers’ co-operatives in the world

o Economic success and social characteristics Social commitment, employee-ownership and solidarity among co-operatives

o 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

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2.- Key factors for success

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a.- Participation of the membersSpecial characteristics of the co-ops (comparing with the traditional trading companies)

a) Co-ops must achieve their business objectives through the active participation of their members Members = Workers

b) Their members (workers) participate actively in the management of the company Take part in the decision-making process

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In Mondragon, all members (workers) are involved in the ownership, the management and the results of the organization:

a) They are more aware of the problems of the company and have real interest in taking appropriate measures

b) These measures will be decided democratically by the members and will be implemented by them

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Decisions:

1.In 2009 the members decided to cut their salary (6.3%)

2.In 2010 their salary was frozen

3.This year, the members have decided to increase their salary (4.25%)

FAGOR EDERLAN TAFALLA

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b.- Solidarity and Inter-cooperation

1. 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%)

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2. Lagun Aro (mutual insurance company) Lagun Aro 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.

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These days, Lagun Aro is helping some co-ops which are trying to adjust their workforce to the new situation Employment Aid Fund (2%)

o When there is not enough work for all the members in a co-op, Lagun Aro provides some of them a new position (temporary or definitive) in another company

o If the member cannot be relocated, Lagun Aro will pay him an unemployment benefit (Max. 2 years) or a retirement pension

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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


THANK YOU VERY MUCH

[email protected] [email protected]

MONDRAGON CORPORATION

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