The Governance of Multistakeholder Cooperatives in Mondragon: The Evolving Relationship among Purpose, Structure and Process

Abstract

Cooperative enterprises were first founded to organize business activity in a more humane and democratic fashion than was the case in conventional firms and to promote social goals in the broader community beyond profit maximization. This orientation has led to challenges for cooperative governance as these firms seek to balance the pursuit of their social objectives with survival in competitive markets. The cooperative universe is very diverse, however, and different types of cooperatives face somewhat different versions of these governance challenges. One relatively new and growing type is the multistakeholder cooperative (MSC) which consists of more than one formal membership group. Given its relative newness and its growing importance, the MSC should be examined in greater depth. The Mondragon Cooperative Experience (MCE) is one of the most highly developed in the world. Much recognition comes from its emphasis on worker cooperatives, but Mondragon has also created MSCs, among them some of its most emblematic firms. MSCs are also much more numerous in the MCE than is generally understood. Under these circumstances, this chapter seeks to examine the MSC phenomenon in the MCE. We analyze these cooperatives, connecting our analysis to extant research and suggest avenues for future investigation.