- ‘The bulk of my time at Mondragón was spent doing fieldwork from February through June of 1994. I had total geographic and intellectual freedom, exploring what I wanted and talking with whom I wanted. Ultimately, I decided to focus my attention on three mid-sized industrial cooperatives, each in a different town, each with a distinctive history, and each with a specific kind of linkage to the MCC.’ (xv)
- ‘These hundred and fifty or so cooperatives, which now comprise the tenth largest private firm in the Spanish economy and have annual sales exceeding seven billion U.S. dollars, celebrated their fortieth anniversary in 1996.At the end of 1998, they employed a total of 42,000 persons.’ (11)
- ‘The Mondragón system has witnessed a remarkable process of organizational transformation. Starting as a small manufacturer of gas stoves in 1956, the system now includes dozens of manufacturing firms, the most important tool-and-die makers inSpain
- ‘The question of organizational integrity at Mondragón and elsewhere harks back to one of Max Weber’s greatest fears with respect to large bureaucratic organizations: the tendency to depart from fundamental human goals.’ (14)
- ‘Though his premature death in 1920 prevented him from writing much about it, Weber may have had in mind a fourth type of organization, organization dedicated to higher human values and committed to periodic reflection on them. Two insightful scholars, Joyce Rothschild-Whitt and Roberta Satow, have argued that there is a gap in Weber’s own typology; that his discussion of organizational types or categories was incomplete; that there are hints of a value-driven organization scattered throughout his works and notes.’ (15)
- ‘When a value-related term enters the domain of unquestioned “common sense,” it can easily be employed in propaganda.’ (20)
- ‘In the word “consumer” we have a disturbing example of how terminology can be transformed over time. At the beginning of the twentieth century, “consumption” referred primarily to waste and to the disease of tuberculosis. With the rise of advertising and the greater availability of mass-produced goods from the 1920s through the 1950s, consumption became desirable and thus the notion of the consumer emerged.’ (23)
- ‘In his ground-breaking research on Mondragón and other worker cooperatives, Jaroslav Vanek explains that in typical non-worker-owned capitalist firms the desire for growth may well be infinite, whereas in cooperatives an efficient level of equilibrium may be achieved beyond which substantial growth will not be pursued.’ (32)
- ‘In his ground-breaking research on Mondragón and other worker cooperatives, Jaroslav Vanek explains that in typical non-worker-owned capitalist firms the desire for growth may well be infinite, whereas in cooperatives an efficient level of equilibrium may be achieved beyond which substantial growth will not be pursued.’ (32)
- ‘My attention centers on how patterns of discourse reveal fundamental aspects of the organization, its character, its mission, and its direction.’ (36)
- ‘The tension between what Taylor
- ‘I’m especially concerned about how external aspects of the life of the organization, especially the market, are framed and discussed so as to shape internal practices such as employee participation.’ (37)
- ‘The Mondragón cooperatives began with the efforts of a socially committed but relatively uncharismatic Basque priest, José María Arizmendiarrieta, and five young engineers who gathered around him in a discussion group after his assignment to Mondragón in February 1941.’ (38)
- ‘His thoughts about business, labor, and organizations were to a great extent shaped by the horrendous experience of the Spanish Civil War, from which he barely escaped with his life, and by World War II. These experiences led Arizmendi and his companions to ask: How can we create a better society, at least in part, through the way we do work together? The result was what he and the other founders called “a third way” between unbridled capitalism and centralized socialism: a worker-owned-and-governed company that elevated collective security and rewards while maintaining individual incentives. Benefits for one would be benefits for all. Seeing themselves as neither in the service of capital nor alienated from it, the co-ops aimed to subordinate the maintenance of capital to the interests of labor and human values.’ (38-39)
- ‘He was inspired by the anarchist-leaning producer co-ops of Catalonia
- ‘It must be in tune with some dominant values of the society in order to enlist sufficient support, and yet it must maintain something of a “social-movement orientation” in order to sustain energy around its own ideals (see Rothschild and Whitt 1986).’ (40)
- ‘The founding of the Mondragón cooperatives occurred in three steps: the gathering of a small group of engineers and managers around Arizmendi in 1941; the opening of a small technical training school in 1943; and finally the opening of the first cooperative business, a firm to make small paraffin-powered heaters and gas stoves, in 1956.’ (40)
- ‘ULGOR opened its doors in 1956 with just twenty-four workers; within two years the work force had grown to 143.’ (40)
- ‘Because of the rapid growth, the cooperatives had exceeded their capital sources by 1959. Recognizing the importance of the cooperatives’ independent sources of capital, Arizmendi persuaded the other founders and many community members to create the [Working People’s Bank].’ (41)
- ‘The conflict erupted when a new system of job evaluations was put into effect, resulting in 22 percent of the jobs being downgraded in ULGOR. The leaders of the revolt saw the changes in pay, which included the application of a new merit increment system to be used by supervisors, to be unreasonable and counter to the spirit of cooperativism. Ultimately more than four hundred workers struck ULGOR. The General Council of the ULGOR group expelled seventeen who were considered to be instigators and fined 397 others. Most of those expelled were women, and many of the grievances that were filed concerned charges of unfair treatment of women in matters of job classification and reevaluation. After a protracted period of conflict, the expelled workers were reinstated in 1977, three years after the strike.’ (43)
- ‘One of the most positive results of the strike and the ensuing conflict was the strengthening of the role of the co-ops social councils as mechanisms for advocating employees’ needs. It was widely perceived that the functions of the councils needed to be revisited in light of the fact that many of the strikers bypassed them in expressing their grievances. Eventually, a well-developed statement of the rights and responsibilities of the social councils was drafted and approved by the cooperatives. Discussion following the strike also put a spotlight on the role of women in the cooperatives, which continues to be a sensitive issue for many members.’ (45)
- ‘At the time, co-op law forbade women from working outside the home after marriage, even though the Spanish national law had dropped this restriction some years before.’ (46)
- ‘Another key moment in the development of the Mondragón cooperatives, especially from the standpoint of organizational structure, was their reconfiguration in 1984-85 as a centralized “Cooperative Group” with a corresponding Cooperative Congress. This transformation simultaneously weakened the autonomy of individual co-ops and allowed for a more corporate system of governance. An internal memo from the general management of the cooperatives offered the following rationale for the reorganization, in words that would be echoed in the 1990s as the cooperatives again restructured themselves in the direction of greater centralization and managerial coordination: “The configuration of the cooperative model, that has permitted us over the years to realize a rich human and social-industrial experience, is now demonstrably inadequate for responding adequately to the rapid change that implicates both technological and market-oriented activities” (MCC 1985: 44).’ (47)
- ‘Both supporters and critics within the Mondragón Cooperative Corporation point to the Third Cooperative Congress as a watershed event. First of all, the meeting occurred during the second economic recession in a decade. The cooperatives had more or less successfully weathered the previous recession, in the early to mid-1980s, through consolidating certain functions, placing a virtual halt on the creation of new cooperatives, making personnel transfers from struggling co-ops to better-positioned ones, and, for the first time, laying off some segments of their work force.’ (47)
- ‘Undeniably the Mondragón cooperatives have had tremendous success. Not only does MCC in itself constitute the tenth largest private firm in Spain
- ‘Another aspect of the cultural explanation for Mondragón’s success is the co-ops’ long-standing opposition to Franco. Having been forged during the hard years of oppression under the fascist dictatorship and within a culture that to some extent had to go underground from 1939 to 1975, the co-ops of Mondragón benefited from their distinctive identity and their vitality. Although labor unions were strictly outlawed until 1958 and carefully controlled by vertical management-worker councils from that time until Franco’s death in 1975, cooperatives were legal. An experienced union representative outside the cooperatives told me, “The co-ops derived a surprising double benefit from Franco’s regime: first, they were allowed to and in some ways even encouraged to exist through beneficial tax law; second, they could use Franco as a target of criticism and hatred so as to fortify their own internal sense of mission.” ’ (55)
- ‘A U.S. economist who has recently studied the cooperatives observes that even though it is now a powerful multinational corporation, Mondragón continues to make symbolic use of its former underdog position.’ (55)
- ‘William Whyte, perhaps the most prolific U.S. writer on the cooperatives, agrees that cultural distinctiveness has been overrated and chooses instead to feature the co-ops’ key organizational structures.’ (56)
- ‘Perhaps more important than the institutional solidarity are the “second-order” cooperatives such as the [Working People’s Bank], a social security system, and an educational system, which have allowed the cooperatives to achieve longevity and success in large part by “buffering” them from the ebbs and flows of the larger market and society.’ (56)
- ‘Another factor in Mondragón’s success story is the internal dynamism and adaptability that have resulted from a complex system of direct and representative democracy. Although these mechanisms are changing – indeed, this is one of the important points of my analysis – their long-term contribution to Mondragón’s achievement are crucial to discuss in some detail.’ (57)
- ‘Within each cooperative…there are several governing bodies. First and foremost is the general assembly, which includes all worker-members. In principle this is the highest governing body of each cooperative, and by statute it must meet at least once a year. Data collected by the Otalora Training Center
- ‘The governing/directing council is the principal governing body of each cooperative on a day-to-day basis. Members of the [council], almost always elected to four-year terms, come from the general membership of the cooperative.’ (58)
- ‘One of the most important decisions made by the governing council is the selection of a general manager. The general manager of a co-op is often brought in from the outside, and many are even hired from traditional capitalist firms. Qualifications for this position include leadership ability, technical expertise, and faith in the cooperative vision of business. Most of the general managers I met with enthusiastic, dynamic, interpersonally adept, and ambitious.’ (59)
- ‘In moderately sized to large co-ops, there is also a management council, chaired by the general manager and usually including key administrators such as the financial director, director of production, personnel director, and director of quality.’ (59)
- ‘The final important organ within each cooperative at Mondragón is the social council. U.S.
- ‘In practice, the performance and power of the social councils is highly variable across specific cooperatives, in part because they lack the clarity of purpose held by most governing councils. Also, in newer co-ops or conversions there is little tradition for the social councils to rely upon. And in some cases the governing council assumes a disproportionate amount of control because it has the statutory right to treat the recommendations of the social council as purely advisory. In two of the three co-ops I examined, for example, the social council was weak.’ (60)
- ‘This dual-governance management structure gives vitality to the cooperatives, producing a fairly strong democratic awareness. Even as worker-members complained about the performance oftheir governing bodies or leaders, they recognized that the governing bodies’ purposes were, among other things, to enlist significant participation, consult widely with the membership, and make informed decisions or at least offer credible recommendations. A middle-level manager in MAPSA was quite passionate when he said to me: “To participate in the governance of the business is a privilege that carries with it weighty responsibilities. The organs give us legitimate means for expressing ourselves, but it’s up to us to take on the roles of true socios through vigorous involvement.’ (61)
- ‘The study found it difficult to isolate personal characteristics such as education, tenure, or position as predictors. The study found, rather, that interest in and satisfaction with the current performance of the organ in question were the best predictors of an overall desire to participate. That is to say, one’s sense of “how a governing body is doing” turned out to be the single most reliable indicator of whether or not a socio wanted to be more involved than he currently was. This conclusion is important not only because it confirms what emerged from my own interviews, but also because it reminds us of the circular nature of democratic participation.’ (61-62)
- ‘Rather than presenting Mondragón as either a quaint historical footnote or as a peculiar blip on the screen of business in the twentieth century, I suggest that it deserves special attention for what its dynamics reveal for the prospects of other organizations and institutions. The study of Mondragón is relevant to other organizations precisely because it represents an especially vigorous, unusually long-lived, and perhaps fairly “pure” attempt to guide a profit-making enterprise according to social values.’ (65)
- ‘In January 1999, MCC issued a new mission statement, which begins: “MCC is a socio-economic experience with an entrepreneurial character, created by and for persons, inspired by the cooperatives’ basic principles, committed to competitiveness and customer satisfaction, in order to generate wealth in the society.’ (68)
- ‘I have noted the most important internal changes in the co-ops, many of which have become especially pronounced in the 1990s: the consolidation of corporate functions and the further strengthening of a managerial superstructure; the restructuring of MCC’s cooperatives along sectoral lines and away from reliance on regional groupings; the widening of the wage differential and the linkage of top managers’ salaries to the market’ the pursuit of corporate flexibility through the creation of new categories of employees that are not permanent socios; and particularly the introduction of new programs of quality, productivity, and participation.’ (70)
- ‘The group’s Organizational Project is an attempt to blend corporate and cooperative values, with one eye toward the traditions of the cooperatives and another on the need for greater competitiveness in the international market. But above all, the plan is designed to help us succeed as a business.’ Iñigo Agirre, ULMA general manager (74)
- ‘This place feels a lot more like a [regular private] corporation and a lot less like a cooperative than it used to. There are many layers of management to go through with a message.’ Ibid (75)
- ‘Though I have no quantitative data of the effects of Eroski on traditional family-run markets, numerous people in those markets complained to me of the “Eroski machine” and its dominance of the consumer economy in the area. Eroski’s own small neighborhood franchises, named Erosle, began disappearing from Mondragón and the surrounding towns in the early 1990s, bowing to the dominance and centralization of the massive new supermarkets. Both MCC and ULMA seem to justify their expansion in terms of two principles: first, the need to have a broader capital base so as to compete reasonably with corporate giants within Spain and without; and second, the desire to maintain and generate employment.’ (76)
- ‘In 1997 MCC signed a historic agreement with the Basque Parliament which officially made the cooperatives a key instrument in achieving the employment policies of the Department of Justice, Economy, Labor, and Social Security.’ (77)
- ‘In an effort to engage the market completely on its own terms, they may be unduly sacrificing the long-valued “buffer zone” between them and the turbulence of the international market.’ (79)
- ‘The proportions of employees who are not worker-owners and worker-owners with fixed-terms commitments from the firms, have been steadily rising. Non-socios typically make around 80 percent of the salaries of worker-owners, although the gap varies from co-op to co-op and appears to be smaller in ULMA than in MCC. In addition, of course, non-socios usually receive no dividends. Temporary socios are usually hired for a three-year term, beyond which time they may either be let go or become full-fledged worker-owners. At the end of 1998 there were about three hundred temporary socios in MCC. {This new category of employee is specifically permitted under a revised Basque cooperative law of 1993.)’ (86)
- ‘It was socios rather than contracted workers who reported less job satisfaction in an early 1999 survey. Only in the category of job security were worker-owners more positive than nonowners.’ (86)
- ‘In addition to its importance in the workplace, solidaridad has significance for Basque culture. It plays an important role in terms of the cooperatives’ dedication of 10 percent of their profits towards community projects, including educational programs – which are conducted exclusively in the Basque language – and also public health and charitable works.’ (87)
- ‘On the one hand is the official rhetoric of the Mondragón cooperatives that all socios are basically equal; on the other is the fact that “this conception does not resonate with member views” which point to “the existence of well-defined hierarchies from the work-floor to the central management offices” [cited]. Similarly, through there is a persistent cultural mythos that emphasizes the equality of the sexes and even frequently characterizes the society as “matriarchal” [cited], the concentration of decision-making power and technical knowledge is clearly in the hands of men. For the most part, women are still apparently prevented from attaining high managerial positions, even though female membership in the cooperatives is now over 40 percent of the total work force. We hear the frequent assertion of a common destiny of the various communities and groups of workers in Mondragón and in neighboring communities, yet there is a growing concern among workers, at least, about forms of segregation along lines of class.’ (87-88)
- ‘One of the cornerstones of the new system was statistical analysis of efficiency and quality. Specifically, a common efficiency index was applied on MAPSA, as in a number of other MCC co-ops, to standardize assessments of production levels. The index is calculated by a five-step process, beginning with the eight hours that a workstation is theoretically in operation for one entire shift. Time is then deducted for such things as start-up time, breaks, machinery maintenance, “micro-stops,” and defective pieces. The resulting time period is the actual percentage of time a machine or a workstation is engaged in the production of acceptable products, and overall efficiency is calculated as a proportion of the total eight hours.’ (94)
- ‘Work tasks become meticulously regulated and enforced in a manger which is indistinguishable from scientific management.” [cited] (94)
- ‘I have grouped together the terms “participation,” “communication,” and “information” because they so commonly occurred together during interviews.’ (98)
- ‘There are several factors to keep in mind as we watch Mondragón, including the responses of individual members to changes in the organizational structure, and the expressed desires of younger members with respect to participation; the development of alternative expressions of democracy, including further efforts at unionization; the relationship between understandings of participation and democratic process within the cooperatives and those in the larger social and political culture; and, of course, the cooperatives’ process of self-reflection on the future of workplace democracy.’ (111)
- ‘The existence of the cooperatives depends on their ability to make a profit, reliably and demonstrably. Additionally, as economist Melissa Moye has suggested, some of that very financial success of Mondragón may well derive from the organizations’ special qualities as cooperatives.’ (113)
- ‘Eroski’s own promotional activities, including extensive consumer education programs for adults and children, may have a double effect on the communities in which the giant supermarket chain operates: the increase of its own clientele and the reinforcement of the idea that one of the most satisfying means of “participation” today is what Eroski’s corporate magazine calls “appropriate consumption.” As I was completing this book, I asked about the local culture of the consumer. The director of Consumer Education for Eroski, Arantza Laskuria, pointed to a diversity of projects being conducted by the supermarket chain in this arena, within a program that is now over twenty-five years old. The projects include workshops, environmental campaigns, and literature aimed at a variety of audiences. Above all, Laskurian stressed to me that these educational activities are aimed at “helping the consumer to make his or her own informed decisions.” ’ (115-116)
- ‘In their studies of five co-ops in California in the late 1970s and early 1980s, sociologists Rothschild and Whitt (1986) identify value homogeneity and a social-movement orientation as two of the most important factors facilitating the success of “alternative” organizations.’ (116-117)
- ‘As it seeks legitimacy it may become institutionalized in the very way that it dreads (see especially Weber on the “routinization of charisma”).’ (118)
- ‘Our objective ought to be searching for the highest level of solidarity despite the competitiveness of the world, and not the reverse.’ José María (121)
- ‘Today the Mondragón cooperatives find themselves not only without a charismatic or visionary leader but also without a forceful commitment to their social ideology.’ (122)
- ‘There is not only a tendency toward excessive bureaucratization in a long-lived organization, but also loss of novelty to the organization’s established means of participation. These can lead to a stifling of participation, as the cherished institutions become either irrelevant of actual obstructions to genuine democratic practice. The tendency for internal organizational processes to become inflexible and lifeless helps to explain the basis for Rothschild and Whitt’s judgment “that democratic models of organization are neither impossible nor inevitable. They are conditional.” ’ (132)
- ‘Through the distribution of benefits and losses in the cooperatives is still comparatively equitable, the linkage of a top group of MCC’s managers’ salaries to the global market in 1991-92 represented not only a material change in remuneration but a huge symbolic change in the organization with respect to perceived wage solidarity.’ (133-134)
- ‘Although education in the philosophical, social, and practical aspects of cooperativism is still alive in the cooperatives of MCC and ULMA, it appears to be taking a back seat to financial, technical, and job-specific forms of training.’ (134-135)
- ‘It is difficult to assess the extent to which individual dissent is permitted within the Mondragón cooperatives today, but we can observe a tendency to contain strong objections to corporate policy through both formal and informal means of delegitimation. MCC especially remains steadfast in its opposition to intra-firm unionization, although the organizing activities of Cooperative Groups especially within the old FAGOR group are well known through the corporation.’ (136)
- ‘In marked contrast to my experiences as a researcher and consultant in U.S. organizations, I found nearly all employees of the cooperatives to be quite open in voicing their criticisms of their supervisors, managers, and elected officials; there was clearly little or no fear of reprisal.’ (139)
- ‘But at the same time that more types of organizations “speak” about their vision, values, and ethics, we may find that the range of discussion as well as access to it are actually quite narrow. The discussion of values itself may become quite ritualized and detached from active forms of engagement, especially as organizations rush to mimic one another in the use of today’s buzzwords in the hope of inspiring their employees on the one hand and their consumers on the other. Though nearly all organizations are now announcing themselves as having “core social values,” we may find that most of these are justified for their contribution to the bottom line.’ (141)
- ‘Marx recognized also that even the most abstract ideas, principles, and sacred symbols could be subject to a kind of commodification, where their market value became determined not so much by their use value or other kinds of meaning but rather by their currency of exchange. In this way, ethics itself can become a commodity that is “exchanged,” with monetary value ascribed it to [sic] by one organization or another that is trying to “sell” itself as ethical.’ (149)
- ‘It’s convenient to say that by being players in an international market the Mondragón cooperatives engage certain pressures and requirements that are beyond their control. In an economic environment where capital as well as trade is being given freer flight, the co-ops are competing with many giant multinationals whose agenda does not include strong social commitments. This it’s not surprising that Mondragón has pursued some of the same strategies as other large corporations to expand its capital base and minimize the effects of more open competition, such as joint ventures, strategic alliances, and acquisitions of factories in developing countries.’ (158-159)
- ‘The co-ops are still functioning largely as employee-owned enterprises, and a number of their socially inspired principles are still practiced. However, the judgment that the cooperatives are employee-governed needs to be modified with a complete recognition of the changing ideology and programs of participation there. The value of “participation” is rather systematically being relocated at the level of work production, redefined in terms of “continuous improvement” in production, and redirected toward the reference point of the customer.’ (159)
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