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Corporate Transparency, Motivation and Mondragon Cooperatives

Updated on November 1, 2017

Mondragon’s cooperative business strategy is different in many ways. One of the major differences is equality among employees. This democratic approach and a unique membership fee system ensure Mondragon gets the most motivated, confident, and skilled employees. This also creates employee loyalty as they are working for a company that they partly own. Although other companies create employee loyalty through benefits and wages, it seems their workers are working for those benefits not for the overall success of the company. At Mondragon employees are not working for a company that they don’t care about or one that provides CEO’s with huge compensation packages while they earn close to nothing. In a sense they are not employees at all, but entrepreneurs in a democratic system where they have a vote in company wide decisions. In traditional businesses this is thought to create inefficiencies as a democratic vote can lead to laziness and regulations that are not productive, but considering Mondragon’s 257 company’s and co-operatives, over 74000 employees, and over $14 billion in revenues it seems there is enough proof that this system works (1).

When I think of a company and its employees I see employees working for a salary with a foundation of drudgery. At Mondragon on the other hand I see cooperation, ambition, and a collective behavior that leads to a common goal and success at home and at work. It not only encourages comfort materially and socially, but the self-fulfilling work that Bob Black would call “Play” is also encapsulated in this system. Also, unlike a traditional business where managers rule and employees obey, regardless of what’s best for the company as a whole, there is absolutely no discrimination to who can become a member and minimal hierarchy, therefore employees are treated equally, paid fairly and are able to leave their egos at home. Most are neither beneath anyone nor are they above anyone. Wages are determined by many factors such as, job difficulty, complexity, interpersonal skills and experience unlike a traditional business where HR determines wages and benefits. Also, the wage gap between employees and executives or between different jobs is agreed upon, therefore eliminated any trust problems or animosity between the lowest and highest paid employees. The business environment is much more egalitarian, especially between employees and the management.

Another huge difference is the level of transparency that develops in Mondragon, “any co-op member can ask for his company’s financial statements at any time” (Lefaunte). Although many corporations provide a degree of transparency, employee ownership, education and a sense of fulfillment they do not however, allow employees to manage themselves, participate in major decisions or attempt to flatten the company’s hierarchy. Mondragon’s aim seems to be democracy with a tinge of socialism, which I believe is the most efficient method not just for a business, but for the economy as well. I think this system can be very productive, but the culture at Mondragon is based on perspective. Many think collective behavior and co-ownership for a common good is socialism and almost communism that can lead to inefficiencies and economic derailment, but what many don’t understand is just because something is “different” from our own culture, perspectives or beliefs doesn’t mean it doesn't work or is unproductive. If more Companies used Mondragon’s system I think employees would be happier, discrimination would decrease and equality would thrive. I had to include these next few sentences, because they are inspiring and encapsulate what Mondragon is doing. In “From the Ground up” it is said that “Mondragon has created a total system… (where) motivation is high because members share an overall cooperative culture which integrates material and moral incentives and which extends into every aspect of life –work, community, education, consumption, and family” (Benello). Mondragon grows faster and works in many ways better than a traditional enterprise, but often capitalist nations disregard what is out of the ordinary with the fear that it might disrupt the economy. As if the economy is not disrupted already.

Work cited

Benello, C. George, and Harry Chatten Boyte. "From the Ground Up." Google Books. Web. 4 Jan. 2016.

Lefaunte, Jose Luis, and Fred Freundlich. "Story:The MONDRAGON Cooperative Experience: Humanity at Work." The MONDRAGON Cooperative Experience: Humanity at Work. 12 May 2012. Web. 4 Jan. 2016.

References

(1) Mondragon "Economic and Financial Indicators." MONDRAGON Corporation. Web. 4 Jan. 2016.

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