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What Do Mondragon Coopitalist Multinationals Look Like? The Rise And Fall Of Fagor Electrodomesticos S. Coop. And Its European Subsidiaries

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  • Anjel ERRASTI
  • Ignacio BRETOS
  • Enekoitz ETXEZARRETA

Abstract

The Mondragon Cooperative Group reflects the effort to combine the basic objectives of business development in international markets with job creation, the use of democratic methods in the organisation of the business and a commitment to the development of its surrounding community. The multi-nationalisation of Mondragon cooperatives entails new dilemmas, paradoxes and contradictions regarding these objectives. This article analyses the case of the Mondragon cooperative-multinational Fagor Electrodomesticos. Following years of international expansion via foreign direct investment, the recent recession forced Fagor to institute radical job restructuring processes, both in the plants of the parent company in the Basque Country and in its European subsidiaries: the French company Fagor-Brandt and the former communist Polish firm Wrozamet. Finally, the Basque domestic appliance company, Fagor, declared bankruptcy in November 2013. Analysing the economical and organizational problems during the downfall of Fagor, and the measures taken to downsize employment in the Basques factories and in the foreign subsidiaries, helps us further our knowledge about the organisational characteristics of the Mondragon multinationals and reflect on the possibilities of extending the cooperative model to subsidiaries.

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  • Anjel ERRASTI & Ignacio BRETOS & Enekoitz ETXEZARRETA, 2016. "What Do Mondragon Coopitalist Multinationals Look Like? The Rise And Fall Of Fagor Electrodomesticos S. Coop. And Its European Subsidiaries," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 87(3), pages 433-456, December.
    • Handle: RePEc:bla:annpce:v:87:y:2016:i:3:p:433-456
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    References listed on IDEAS

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    1. Ben-ner, Avner, 1984. "On the stability of the cooperative type of organization," Journal of Comparative Economics, Elsevier, vol. 8(3), pages 247-260, September.
    2. Saioa Arando & Fred Freundlich & Monica Gago & Derek C. Jones & Takao Kato, 2010. "Assessing Mondragon: Stability & Managed Change in the Face of Globalization," William Davidson Institute Working Papers Series wp1003, William Davidson Institute at the University of Michigan.
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    6. Izaskun AGIRRE & Pedro REINARES & Amaia AGIRRE, 2014. "Antecedents To Market Orientation In The Worker Cooperative Organization: The Mondragon Group," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 85(3), pages 387-408, September.
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    Cited by:

    1. Imanol Basterretxea & Chris Cornforth & Iñaki Heras-Saizarbitoria, 2022. "Corporate governance as a key aspect in the failure of worker cooperatives," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(1), pages 362-387, February.
    2. Mirene Begiristain‐Zubillaga & Enekoitz Etxezarreta‐Etxarri & Jon Morandeira‐Arca, 2022. "Towards the transformative social economy: Proposal of a system of indicators for cooperative social entrepreneurship," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(2), pages 457-501, June.
    3. Ignacio Bretos & Millán Díaz-Foncea & Carmen Marcuello, 2020. "International Expansion of Social Enterprises as a Catalyst for Scaling up Social Impact across Borders," Sustainability, MDPI, vol. 12(8), pages 1-22, April.
    4. Ignacio Bretos & Marie J. Bouchard & Alberto Zevi, 2020. "Institutional and organizational trajectories in social economy enterprises: Resilience, transformation and regeneration," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(3), pages 351-358, September.
    5. Ignacio Bretos & Anjel Errasti & Carmen Marcuello, 2020. "Is there life after degeneration? The organizational life cycle of cooperatives under a ‘grow‐or‐die’ dichotomy," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 91(3), pages 435-458, September.
    6. Emilie Bourlier-Bargues & Jean-Pascal Gond & Bertrand Valiorgue, 2022. "Fast and spurious: How executives capture governance structures to prevent cooperativization," Post-Print hal-03828145, HAL.
    7. Josu Santos‐Larrazabal & Imanol Basterretxea, 2022. "Intercooperation, flexicurity and their impact on workers: The case of Fagor Electrodomésticos," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 93(3), pages 607-635, September.

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