Yesterday was the first day of class for my Masters program. I was excited to finally get started. We began with an overview of the class and the structure of the program. It is basically the following: there is an initial portion that is one semester long that all students take part in. Then each student picks area of concentration either, General Management, Finance, Marketing, Supply Chain Management or Management of Athletic organizations and possibly (if enough people participate) a cooperative management one. Not sure which I wil do yet.
There are 25 five students including me, 6 of us are from other countries one Chilean, a Venezuelan woman and a Columbian and two Mexicans who haven’t arrived yet because of visa problems. The rest are from Spain. They are mostly from all over the Basque region and a few from beyond. The group seems to be a mix of those who are currently working and young people who have never worked. We also got our first assignment, which is to do a business plan in a group. I have three other people in my group, the live about an hour away in either San Sebastian and Bilbao, which should make group work interesting.
The highlight was when José Maria Ormaetxea, one of the five founders of the first Mondragón Coop, ULGOR (which later became Fagor), as well as the founder of Caja Laboral and the first director (the coop bank) and former President of MCC gave a speech about the cooperative experience to us. He 80 years old but still quite vibrant and seems to have an exceedingly clear and sharp memory of the early days of the coops. He outlined the growth of the Coops from a small group of student who were around the Priest Arizmendiarrieta to its current state.
He divided the MCC's history into three phases: 1) the Christian period from the founding of the first coop in1955 until 1973. The period when a small group of people who surrounded Arizmendi spread the coops motivated largely by christian values and because of the Dictatorship in the context often of Christian meetings etc.
2) The second phase he identified was the Romantic phase from 1973 until 1990. This period is characterized by a widening of the cooperatives to individuals who are motivated by idealistic, but now religious beliefs and is also a period of tremendous growth. When many new coops are started, when Lagun-Aro the social service coop was setup and the first research center was set up. The expansion of inter-cooperative support.
3) The third period Ormaetxea identifies is the period of Pragmatism from 1990 to the present. This is the period of increased competition, European integration and huge expansion. It is also the period when Coops begin to incorporate large amounts of non-owner workrs and operate subsidiaries internationally. The Mondragón Cooperative Corporation (although formed in 1987) takes on the leading role in defining the course of the coops.
Ormaetxea also made the point that because of globalization and increased competition that most likely in 50 years there would be no coops. That is, there would be companies with a small token amount of cooperative leadership, but in order to remain flexible and competitive they would not be able to incorporate new workers as owners and would have to do much of their work abroad. When ask about the prospect of turning subsidiaries in other countries into coops, he replied in no uncertain terms that it was impossible and would never, ever happen! Specifically, the company Fagor has a plant in Poland with 1,000 workers who seem uninterested in becoming a coop. However, Ormaetxea, a man who helped lead the fashioning of the world’s premier industrial cooperatives from an impoverished backwater, during the repressive reign of Franco believes spreading coops or even growing them at all is impossible.
He seemed to me like a man who was prone to overstatement and liked to make an impression. He is quite entertaining and it was impressive to meet him in the flesh. I will let you know how the class goes in the next few days.
5 comments:
Wow! What an experience. That's incredible that you got to meet one of Mondragon's founders... you touched history!
That's strange, what he said about co-ops not being around in 50 years.
Now, I know plenty of people that are skeptical about co-ops spreading to other places.
But he does bring up a good point about the number of members vs. the number of employees, especially when a co-op starts to own other businesses as subsidiaries.
All of the most successful co-ops in Italy are very selective in bringing new members in: you have to go through a period of education and learning the culture of the co-op, learning how to effectively participate before you get in. And it's a significant cost to become a member.
In the co-ops, for members and non-members alike, pay tends to be very good and jobs are very secure.
So, then, an employee would naturally ask herself: my job is interesting, it's secure and they pay me well, why would I want to make a big investment in becoming an owner and assume all that risk and responsibility?
I assume this is the case in Poland.
But even when the co-ops become big holding companies I think there's an essential difference between them and many other private firms: these are strategic aquisitions that go to strengthen the co-ops position in the market; these are generally high road relationships that benefit the co-op, and both communities.
Consider the SACMI subsidiary in Brazil. In addition to hiring locally, transferring technolgy to Brazil SACMI - and other partners in the NGO world - have set up a school near their factory and are training lots of people in skilled crafts, some of whom get hired by SACMI, most of whom go into business for themselves, with the assistance of the school, SACMI and the NGOs and are then encouraged to create networks of companies.
They're not all co-ops, but is this a high road development vision? I think so.
I want to see a world in which everyone participates in the management of their business as a member... but is the form or the substance more important?
I think given the current world economy, it's the company's development vision that's most important: and the Mondragon co-ops and others around the world like it are an important force on the High Road in a global economy currently dominated by the Low Road.
Also, I think there are other ways to encourage cooperative ownership.
What about spin-offs? This happens all the time in Italy: someone works for a small company and after a few years spins-off and goes into business for herself doing something that's often both complementary and competitive with the mother firm but maintains a close relationship with the firm she used to work for.
Why can't the co-ops encourage this kind of spin-off so you develop networks of equipment, service and materials suppliers that are cooperatively or locally owned throughout the world?
I know it's tough in places like Poland... but it's being done.
Oh... check out my new blog:
www.emiliaromagnablog.blogspot.com
By the way... great outline of the three historical periods.
It seems a tad discouraging to have one of the icons of the movement say emphatically that the movement has no long-term future. It would be interesting to hear his response to a question like, what value do you see in studying the coop movement? Dan is probably right in saying the man likes to make a strong impression.
What do the other students, people in your study group think about Mr. Ormaetxea's statements?
While I have little backgound in the coop movement, it seems to me that one element needed for spreading coops to other countries is the desire to do so supported by belief in coop ideals. Does Mr. Ormaetxea want to see Coops grow in other countries? Something about his emphatic tone leads me to think he may not, but I have no idea why.
The successful transplanting of coops outside the home-base depends in large part on the reason for doing so. If the creation of a new coop is driven primarily by the business needs of the home-based coop, then the new coop may not take root. For example, one reason for starting in Poland might have been to reduce labor costs in order to remain price competitive. Given that scenario, what incentive would the home coop have in starting a solid coop in the new country? It seems to me that in order for coops to spread to other countries, the home-base has to have at some level, a missionary zeal to spread the coop gospel, independent of business needs. The missionary zeal doesn't negate business needs, in fact business needs should inform and guide the other. Sound like a topic that warrants a lot more study and discussion.
Dan you refer to "non-worker owners". Who or what are they? How does a non-worker get to be an owner. Are you talking about shareholders?
I apologize for responding late to these comments. First of all, in reference to Bill´s question about ¨non-worker woners¨ I meant to put non-owner workers, I have already changed it in the original.
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