A network of enterprises and support institutions.
Mondragon is a complex, highly integrated network of diverse enterprises and support organisation across all major sectors of the economy—manufacturing, service, retail, financial. From the earliest years of Mondragon’s history, the cooperative enterprises joined together to establish a number of common institutions aimed to support their activity, to create what are called “second degree” cooperatives. Some of these are simply subgroups of firms, but most of them are enterprises on their own right, and were created in the first place to serve the needs of the rank and file cooperatives in the group and only secondarily to engage in independent business activity. This is a critical point: several service organisations were formed not so much to pursue independent business goals but rather specifically to help to consolidate the network of cooperatives and ensure the success of its member firms.
Today, as the group’s rank and file cooperatives have become mature and successful and have less need for support organisations by comparison to younger firms of the group, each of these support organisations has evolved sustainably and has objectives far beyond those of simply supporting the industrial firms of the group. They still provide critical support and coordination functions and will surely continue to do so in the foreseeable future, albeit perhaps in somewhat different configurations.
There are 5 categories of these support institutions:
Finance & Technical Assistance – the Caja Laboral: Worker-owned firms have traditionally encountered serious difficulty in obtaining adequate financing. Without a doubt, the Caja Laboral played fundamentally important role in supporting the development of the co-ops by offering patient capital, and by understanding and catering to the financial needs of both, new cooperative enterprises and other cooperatives experiencing difficulties. The Caja fulfilled another key supporting role over the years through a unique division mentioned above, the “Business Services Division”. This division provided extensive management consulting and technical assistance to new ventures and to troubled firms in the network. Formerly via Caja Laboral, later via the central funds, Mondragon Investments and Mondragon Foundation, provide patient seed or venture capital, and other kinds of funding; while the staff of Mondragon’s sectoral divisions and other Central Departments provide technical assistance together with a new cooperative enterprise, LKS Consulting.
Regional / Sectoral Subgroups: Mondragon firms can benefit from various synergies, economies of scale and mutual support from technological R&D through new business development to volume purchasing and the provision of joint services such as strategic planning, legal, training, etc.
Social Security & Insurance – Lagun Aro: Funded by monthly contributions from co-ops and workers’ pay-checks, also created another pool of patient capital, that is, a fund that needed to be available primarily to cover retirement and illness, but partly also for financing new and existing cooperative enterprises.
Research & Development: Technological R & D cooperative Ikerlan was established in 1974 and since then other 11 similar organisations have been set up.
Education: The vocational-technical secondary school, additional technical school, two post-secondary degree programs in engineering and business administration, and engineering college were set up. Eventually, Mondragon University, a private, non-profit, cooperatively-structured university was created in 1997.