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2. 2 BACKGROUND MONDRAGON = Network of 260+ cooperative enterprises, subsidiaries and affiliates. Employee-owned, not user-owned 7th largest business group in Spain (14B, sales)

3. 3 CONTEXT The Basque Country (Euskadi) 2.1 million inhabitants Strong industrial tradition since 16th c, esp since late 19th

4. 4 BASIC PHILOSOPHY STATUS OF FACTORS OF PRODUCTION MAXIMUM AUTHORITY INSTRUMENT Conventional Company CAPITALLABOR Cooperative Company LABORCAPITAL

5. 5 IMPLICATIONS 1.Democratic control 2.Distribution of surplus among all worker-members 3.Egalitarianism 4.Participation in decision-making

6. 6 See co-op structure chart

7. 7 The Business Today The Business Today --

8. 8 Sales, 2009 Retail & Allied Group 8.4 billion Industrial Group 5.5 billion 13.9 billion (retail & industrial only) 60% 40%

9. 9 WORK FORCE, 2009 RETAIL 48,000 (56%) MANUFACT. 33,200 (39%) FINANCE 3,000 (3%) KNOWLEDGE 1,100 (1%) TOTAL 85,300

10. MONDRAGON – Network Structure CO-OP CONGRESS Standing Committee Education, Training and Research Centres FINANCIAL GROUP RETAIL GROUP INDUSTRIAL GROUP Automotive Components Industrial Components Construction Industrial Equipment Domestic Appliances Engineering and Capital Goods Machine Tools + 5 other divisions GENERAL COUNCIL

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12. 12 Mondragon in the World Manufacturing Plants (70+) Corporate Delegations (6) Rep. Checa (5) India Rumania (2) Alemania (3) Tailandia (1) Marruecos(2) Francia (5) Brasil (6) Brasil Mexico (6) Mexico Polonia (5) China China (8) U.S.A. U.K.(4) India(2) Italia (3) Rusia Turquía (2) Sudáfrica (1) Eslovaquia (2)

13. 13 HOW WAS THIS ACHIEVED? (History)

14. 14 1936-39 Spanish Civil War Destruction, poverty, repression 1500 – 1925: Industrial tradition, then heavy industrializationiron, steel, metalworking, shipbuilding, mining 1941: Priest Arizmendiarrieta Mondragon -Technical School, 1943 - Other Education … 15 years - First co-op 1955-56

15. 15 NETWORK INSTITUTIONS Growth … and NETWORK INSTITUTIONS 1955-59 four new co-ops 1959 Caja Laboral (bank) 1964 Ularco (regional subgroup) 1967 Lagun Aro (soc. sec./insurance) 1969 Eroski (retail food) 1974 Ikerlan (technology R&D) 1984 Cooperative Congress 1991 MCC – Sectoral Restructuring / Central Services 1997 Mondragon University … ETC.

16. 16 2000s INTERNATIONALIZATION CO-OP RENNOVATION The Meaning of Mondragon Experience Participation, Cooperative Ownership Education, Social Responsibility, Other Arenas Participation, Cooperative Ownership Education, Social Responsibility, Other Arenas (Bagara) 12+ R&D CENTERS NOT JUST TECHNOLOGY, also organization, commun- ication, leadership

17. 17 FUTURE CHALLENGES

18. 18 CHALLENGES 1.Globalization Need to cooperativize operations, ensure social responsibility. The 30% policy. High pressure broad impact Work and management in other cultures 2.Non-member workers (Retail and Manufacturing) In co-ops, 20% 15% In subsidiares (> 50% total wkfce)... BUT shared ownership + COOPZN in Retail 3.Manufacturing Services, new sectors 4.Environmental Sustainability

19. 19 CHALLENGES 5.Participatory decision-making (in the face of post-modern, consumer culture) The management dimensionconventional management ideology re costs, profits, style The front-line worker dimensionwork is means not end; in 2nd generation, co-op membership seen less as activism 6.Re-creation, reinforcement ofcooperative identity via education, leadership and organizational change TE.

20. 20 Cooperative Principles

21. 21 COOPERATIVE PRINCIPLES Open and Voluntary Membership Democratic Governance Sovereignty of Labor Capital as Subordinate and Instrumental Participation in Management Solidarity in Compensation Intercooperation Social Transformation Contributing to the Social Economy Worldwide Education

22. 22 Open and Voluntary Membership Open to all those who freely and voluntarily accept our Principles. COOPERATIVE PRINCIPLES

23. 23 Democratic Governance One member, one vote to elect the Governance Bodies and define codes of behavior COOPERATIVE PRINCIPLES

24. 24 Sovereignty of Labour Rights are assigned to Labor, not capital. Labor is the engine of collective progress and the key to generating wealth COOPERATIVE PRINCIPLES

25. 25 Capital as Subordinate and Instrumental Capital is an essential resource, but it is subordinate to labor. COOPERATIVE PRINCIPLES

26. 26 Participation in Management Responsible involvement of members in management of the business COOPERATIVE PRINCIPLES

27. 27 Solidarity in Compensation Internal to the company, as well as relative to the sector and region. COOPERATIVE PRINCIPLES

28. 28 Intercooperation As a mechanism of intercooperative solidarity and business efficiency COOPERATIVE PRINCIPLES

29. 29 Intercooperation 1.Central Representative Governance Bodies 2.Central Management Services and Coordination Bodies 3.Sectoral Divisions for collaboration, synergies, mutual help 4.Shared support institutions in key activitiesbanking, venture capital, social security, education, R&D, non- profit activities COOPERATIVE PRINCIPLES Practice

30. 30 Social Transformation Commitment to egalitarian and sustainable economic and community development in the Basque Country and elsewhere COOPERATIVE PRINCIPLES

31. 31 Building the Social Economy Worldwide Collaboration and solidarity with those who work for a democratic social economy around the globe. COOPERATIVE PRINCIPLES

32. 32 Education Cooperative and professional, in order to consolidate and develop the Mondragon Experience COOPERATIVE PRINCIPLES

33. 33 The present, no matter how marvelous it may seem, sows the seeds of its own destruction if it separates itself from the future. El presente, por espléndido que fuere, lleva la huella de su caducidad, en la medida que se desliga del futuro. D. José María Arizmendiarrieta