“[…] at the end of the day, we never forget that this is business…”
Interviewee 11
1 Introduction
According to the United Nations General Assembly’s resolution on “Promoting the Social and Solidarity Economy (SSE) for Sustainable Development” (2023), the SSE encompasses “enterprises, organizations such as cooperatives, associations, mutual societies, foundations, and social enterprises that are engaged in economic, social and environmental activities to serve the collective and/or general interest, which are based on the principles of voluntary cooperation and mutual aid, democratic and/or participatory governance, autonomy and independence, equality and fairness, transparency and accountability, and the primacy of people and social purpose over capital in the distribution and use of their surpluses/profits and assets”.1
A main distinction between social and solidarity organizations is their primary concern for either “general interest” or “mutual interest”, following the continuum developed in the nonprofit economic literature (Ben-Ner & Gui, 2000). “General interest”-orientated organizations focus on creating social and environmental benefits that extend beyond the specific interests of the organization and its members. Conversely, “mutual interest”-oriented organizations primarily focus on providing benefits to their members, while also contributing to the progress and betterment of their (local) communities (Bauwens et al., 2020). The “mutual interest” SSE organizations include, among other forms of business organizations, worker cooperatives; entities historically depicted as small local businesses owned and managed by their employees who contribute to the cooperative through both capital and labour (see ICA, 2023). This highlights their commitment to democratic ownership and decision-making, resulting in cooperatives being considered to be the embodiment of the utmost form of workers’ participation.
Since the mid‐1990s, many cooperatives have been compelled to grow internationally due to the pressures of globalization (margin pressure). Many of them have established overseas capitalist subsidiaries, which leads to new tensions regarding the balance between economic success and social mission/responsibility (MacLeod & Reed, 2009; Flecha & Ngai, 2014). As the creation of capitalist subsidiaries commonly induces substantial contradictions to the practices and values of workers’ cooperatives (Cheney et al., 2014; Bretos et al., 2018 & 2019), there is an expectation that the parent company would also organize its foreign subsidiaries as cooperatives or, at least, explore alternative organizational forms such as new global multinational cooperative (Errasti et al., 2023) — as opposed to simply adopting the capitalist multinational enterprise model (Flecha & Ngai, 2014). So far, despite some viable attempts to offer practical solutions to the issue (e.g., Mondadore, 2013), internationalized cooperatives still find it challenging to meet this expectation.
Although the determinants and implications of this tension/contradiction have been firmly discussed and acknowledged across Europe (Leite & Duaibs, 2017; Bretos et al., 2019; Errasti et al., 2023), we lack empirical evidence on how key actors — day-to-day directly embedded in the contradiction — deal with it in their discourse and representations.2
Therefore, this study focuses on Mondragon Cooperative Corporation (MCC), a Basque Country-headquartered SSE organization that is affected by the home versus non-home discrepancy. Through in-depth interviews with their internationalization managers, we explore their (discursive) position on the discrepancy between Mondragon’s cooperative approach to business at home and its conventional, non-cooperative approach at subsidiaries outside the Basque Country. Considering our interest in organizational growth/development via expanding into new territories and focus on the home versus non-home discrepancy, which implies investigating power relations between the stronger and weaker party, this study is theoretically bounded by a critical inquiry into the post-WWII international development, i.e., the decolonial perspective (connected to the dependency theory). We draw primarily on the work of Aníbal Quijano (Quijano, 2000 & 2007) and Walter D. Mignolo (Mignolo, 2007a; 2007b; 2011; 2018; Mignolo & Bussmann, 2023). Contribution-wise, the study narrows the research gap by benefitting both the practitioners and the recent (academic) dialogue between SSE and critical development studies (e.g., the de/anti/post-colonial studies, subaltern studies) (see Lucas dos Santos, 2023). Second, somewhat pioneeringly, we are applying the decolonial framework in an empirical study conducted at the company/mezzo level. We aim to add to the broader “critical literature” on Mondragon (Amado-Borthayre, 2009; Kasmir, 2016; Errasti et al., 2017; Basterretxea et al., 2019; Santos-Larrazabal & Bazterretxea, 2022), which stands in contrast to the “excessively flattering and self-indulgent” hagiographic accounts (Heras-Saizarbitoria, 2014, p. 647).
The paper continues with an overview of the Mondragon Corporation’s success story (research background) and introduction to the theoretical framework. A detailed description of the methodology and interpretation of the main interview findings leads to a concluding discussion, which includes both practical and theoretical implications, followed by an examination of the research limitations.
2 The Case of Mondragon Cooperative Corporation
Among the “mutual interest” organizations, the worker-owned and -managed MCC has garnered the most attention from practitioners, academics, and the public, due to its capacity for economic growth and long-term survival while maintaining a democratic character and social commitment (Whyte & Whyte, 1991; Kasmir, 1996; Flecha & Ngai, 2014). Since its establishment in 1956, Mondragon’s extensive and diverse experiences with industrial, financial, and distribution cooperatives have yielded a wealth of concepts and instruments for cooperative development (Imaz et al., 2023). Within the Basque Country, Mondragon cooperatives have always been underpinned by cooperative values and practices. For instance, most of the workers, both locals and immigrants, have had open access to membership and, consequently, ownership. As (co)owners, worker-members are included in profit-sharing and participate in decision-making processes — through participation in the General Assembly (on a one-person/one-vote basis), in the Social Council, and at the shop-floor level. Being elected to the Governing Council is also an option (Whyte & Whyte, 1991). Extensive training on technical, leadership, and soft skills, as well as on cooperative values, is provided to both managers and worker-members. Internal wage differences are still, in the main, compressed despite co-ops expanding their bottom-to-top wage ratio from 1:3 to 1:6 or wider. If one of the cooperatives closes, their worker-members are relocated to other (similar) Mondragon cooperatives, as was the case after the closure of the largest cooperative of the group, Fagor Electrodomesticos, in 2013 (Errasti et al., 2017).
Since the early 1990s, as it happened with many other large European worker cooperatives (e.g., Up Group, Acome, Sacmi, Cefla), the pressure of a highly competitive globalized market has compelled Mondragon industrial cooperatives to expand into new territories. In 1989, shortly after Spain joined the EU (in 1986) and foreign multinationals were granted access to compete in the national market, the first subsidiary was established in Mexico (by Copreci) (Clamp, 2000; Luzarraga & Irizar, 2012; Errasti et al., 2023; Copreci, 2025). In general, Mondragon’s inter- and multi-nationalization has significantly increased the revenues of the parent companies, benefiting all cooperative worker-members (Errasti et al., 2017; Bretos et al., 2018).
At the beginning of the expansion, Mondragon’s growth model relied on acquisitions and joint ventures (particularly in culturally distant countries like China), but as cooperatives gained experience in the overseas operations, they shifted towards making fully owned greenfield investments (Luzarraga & Irizar, 2012). At the height of their global presence in 2018, before large multinational cooperatives such as Orona and Ulma left the corporation, Mondragon operated 143 subsidiaries worldwide (see Figure 1). Nowadays, the core of the group’s manufacturing business consists of 25 multinational co-ops that control nearly 104 subsidiaries across 37 countries — mostly located in emerging markets of the South, i.e., countries with low(er) labour and production costs such as China, Brazil, Thailand, and Mexico (Mondragon Corporation, 2024).
Product-wise, aiming to serve global manufacturers (e.g., the automotive industry, the solar business sector, and the household appliances industry), subsidiaries produce similar products to those supplied by their parent companies — consumer goods, capital goods, industrial components, products, and systems for construction, and services (Mondragon Corporation, 2024).
Governance-wise, the board of the subsidiary’s directors is composed of the management team members and the president of the parent cooperative’s governing council. The board is responsible for appointing the subsidiary’s manager, who, in larger subsidiaries, is often an expatriate from Mondragon. In some cases, two or three Basque managers assigned to strategic positions support the manager. In smaller subsidiaries, the headquarters may select local managers who maintain a close affiliation with the parent cooperatives (Errasti, 2015). Thus, the locus of decision-making authority and control resides within the cooperative’s headquarters. Research and development (R&D) operations are primarily centralized at the Basque facilities, where numerous multinational cooperatives’ research centers are closely linked to Mondragon University. Mondragon’s subsidiaries possess limited autonomy in strategic, technical, financial, and commercial matters (Errasti et al., 2017).
Compared to capitalist companies within the same sectors/industries, Mondragon cooperatives have not demonstrated substantially different market behavior. However, we emphasize that Mondragon’s multinational strategy remains distinct in one key aspect: its global expansion has not negatively affected local employment. On the contrary, cooperatives that expanded internationally created more local jobs and added more worker-members (in the Basque Country) compared to those that stayed locally focused, adhering to the strategy of multilocation rather than delocation (Luzarraga & Irizar, 2012; Flecha & Ngai, 2014).
Furthermore, Mondragon’s internationalization has sparked significant debate in the Basque Country, both outside and within the (broader) cooperative movement. These discussions have centered on two key issues: the necessity of expanding overseas and the reliance on affiliated subsidiaries and wageworkers. In the former, e.g., certain fractions within Mondragon cooperatives, along with the regional government, raised concerns about the rapid international expansion of Fagor Electrodomésticos. According to various authors, this aggressive strategy in the years preceding the 2008 economic crisis may have been a major factor contributing to the company’s eventual bankruptcy (Errasti et al., 2017; Ortega & Uriarte, 2015).3 The latter issue revolves around the home versus non-home discrepancy itself, i.e., the subsidiaries being capitalist companies and the foreign workforce, 9854 employees who account for approximately 36% of Mondragon’s total industrial workforce, being comprised entirely of contract-based and non-owner workers (Mondragon Corporation, 2024).
In addressing the discrepancy, at the Mondragon Congress (the sovereign organ of the group) in 2003, and then in 2020, Mondragon’s worker-members approved a “social expansion” strategy with the aim of extending their cooperative values to the subsidiaries. For instance, in 2020, they declared an objective to “manage, in the most cooperative way possible, the subsidiaries and the participating enterprises, developing and continuously improving the extension of cooperative values of the parent companies” (Mondragon, 2003 & 2020). The extent to which this objective has been achieved is less clear. According to authors such as MacLeod and Reed (2009), Luzarraga and Irizar (2012), and Flecha and Ngai (2014), the foreign affiliates have been able to replicate the cooperative model and its unique policies overseas despite not having the legal structure of a cooperative. In contrast, Bretos et al. (2019) argued that these affiliates have been effective in transferring technological and operational management skills, but the core cooperative practices that define Mondragon’s distinctive identity at home, such as membership and ownership, significant profit sharing, and participation in management, which are all essential prerequisites for developing economic democracy, have not been transferred. Clamp (2000) also raised concerns about trying to overcome the discrepancy without addressing the membership/ownership issue.
The reasons behind Mondragon failing to (fully) export the cooperative practices are of a legal, economic, and cultural nature. The legal ones refer to regulatory frameworks (in the host countries) being inadequate for establishing cooperatives. The main economic and social obstacles include Mondragon’s desire to safeguard investments of their worker-members (based in the Basque country), overall power dynamics and conflicting interests present within the headquarters, perception of overseas clients as favoring capitalist companies over cooperatives, i.e., overseas cooperatives having comparatively worse market outlook, and the absence of cooperative culture among subsidiary employees (MacLeod & Reed, 2009; Mondadore, 2013; Flecha & Ngai, 2014; Bretos et al., 2019).
3 Decolonial Perspective
The decolonial perspective advocates for “delinking” from coloniality, i.e., “the most general form of domination in the world today, once colonialism as an explicit political order was destroyed” (Quijano, 2007, p. 170; Mignolo, 2018). More elaborately, decoloniality addresses discursive and material legacies of European colonialism (Quijano, 2000); it addresses “colonial continuities”, also present in post-WWII international development (Castro-Gómez & Grosfoguel, 2007). The continuities refer to various strategies that the center commonly employs to subordinate the ways of living and being in the periphery. For example, through the invalidation of local knowledge and practices, the creation of a hierarchical system of subjectivities, and the invisibilization of historically created power relations between the Global South and North.
Latin America (the South)4 has yielded vocal critics of such development. In the 1960s and 1970s, they mainly gathered around the dependency theory (Kufakurinani et al., 2017) where the dependence referred to one’s prosperity being “conditioned by the development and expansion” of someone else, “to which the former is subjected” (Dos Santos, 1970, p. 231). As an illustration, the technological dependency of Mondragon’s foreign subsidiaries emerges from their technological prosperity being conditioned by the parent companies’ decisions. While the popularity of the theory faded in the 1980s (Kufakurinani et al., 2017), the dependency-based critique evolved to more sophisticated concepts. First discussed in the beginning of the 1990s, Quijano’s concept of coloniality makes the foundation for the decoloniality perspective (Mignolo, 2011).
To grasp the complexity of this perspective, the “modernity/coloniality” group suggests using mutually dependent analytical categories labeled as the coloniality of power, knowledge, and being. In our context, the coloniality of power refers to mechanisms that preserve colonial matrices of power and control, with the sphere of the economy being one of them (e.g., through controlling one’s prospects for improving R&D activities). The coloniality of knowledge refers to the effect of coloniality on knowledge production (e.g., evaluation of local knowledge), while the coloniality of being refers to the effect of coloniality in “lived experience and not only in the mind (of the stronger party)” (Quijano, 2000; Mignolo, 2007b; Mignolo & Bussmann, 2023; Maldonado-Torres, 2007, p. 242).
Recently, the decolonial perspective can be found as a building block for decolonial studies, as well as among the “decolonization of development” representatives who perceive, for example, the United Nations development agenda as (yet) another strategy that reproduces an ethnocentric understanding of global development issues, and whose impact ultimately solidifies exploitative structures between the South and North (Telleria, 2018 & 2022).
The internationalization of SSE organizations shows certain similarities with international development dynamics: it represents a well-intentioned expansion of a model of living and being from one territory into another. Nevertheless, it can be seen as an “invention”, as it implies development (Rist, 1999; Escobar, 2011 & 2004) that is unaware of structural power relations. According to Rist (1999), “development co-operation” emanates from the ideology of the Enlightenment5 — at the core of the Western thought lies the premise that “‘development’ of societies, knowledge and wealth corresponds to a ‘natural’ principle with its own source of dynamism, which grounds the possibility of a grand narrative” (p. 39, emphasis in original). This western-naturalized linear-progress narrative constitutes the current development ideology and is very much present in the SSE self-understanding and argumentation logics. Also, as well as the “buzzwords” in development discourse are part of a “supranational consensus narrative” (Cornwall & Brook, 2005, p. 1053), it is taken for granted in the SSE that widespread concepts such as “participation”, “democratic”, and “egalitarian” are desirable — almost mandatory — principals or values that should be expanded. From a decolonial perspective, these concepts are discursively constructed and can be understood within the logics of modernity and coloniality, e.g., as part of the grammar of coloniality (Mignolo, 2007a).
Lastly, SSE internationalization might be at risk of reproducing the logics of colonialism due to the people in charge of the process having Eurocentric interpretation patterns and being immersed in the discursive and material effects of colonialism. In other words, their repertoire of perceiving and interpreting the world is strongly determined by the construction of “otherness”. The concept of “otherness” refers to the result of discursively-constructed “othering processes” — an integral part of European colonial expansion. Early stages of colonialism have already yielded social categories such as “European versus non-European”, “civilised versus primitive”, “rational versus irrational”, “modern versus traditional”, “developed versus underdeveloped”. None of these “others” was made as such by nature. These dichotomies have been essential for the self-definition of modernity and the creation of superiority and inferiority. They clearly reflect the racial and colonial character of modernity (Boatcă, 2009).
4 Methodology
In total, our purposive sampling includes 16 in-depth interviews conducted between October 2021 and March 2023. Interview content from the first two interviewees — the head of Cooperative Dissemination at Mondragon Corporation and a professor of cooperative enterprise at Mondragon University — was used to fine-tune the initial literature review-based interview protocol. Their contribution was content analyzed solely to identify aspects of the home versus non-home discrepancy and the internationalization process (in general) that were absent/less pronounced in previous studies. The 14 interviewees subsequently interviewed included present and/or former Mondragon business executives involved in a broad range of “higher order” internationalization activities: setting up subsidiary production plants and/or running them; overseeing the region-specific overseas sales operations; lobbying to facilitate expansion into new markets; and implementing the corporate expansion strategy at the country/regional level. The participants represented Mondragon’s main internationalized cooperatives, such as Copreci, Fagor Automation, Fagor Electronica, and Mondragon Assembly. Over the course of their careers, some of them had worked at more than one cooperative and operated in multiple markets, which enabled them to make comparisons of the cases under study. Considering our research focus and theoretical lens, the interviews primarily focused on participants’ experiences related to emerging markets in the Global South, specifically China, Thailand, Mexico, and Brazil.
All the interviewees were white Basque/Spanish men with educational and professional backgrounds in (predominantly) engineering and economics/business studies. They were interviewed either online (most frequently via Zoom) or in-person (at Mondragon offices in the Basque Country). The interviews were conducted in English by the author(s) of this paper using the same interview protocol, which thematically encompassed motives for and expectations of internationalization, management practices at subsidiaries, and the HQ-parent company-subsidiary relationship. The conversations lasted on average 60 minutes, were consensually audio- and video-recorded, and transcribed using AI-powered transcription software Otter.ai. The fully anonymized transcripts were analyzed by a single researcher using critical discourse analysis (CDA), due to its “fundamental interest in analyzing opaque as well as transparent structural relationships of dominance, discrimination, power, and control as manifested in language. In other words, CDA aims to critically investigate social inequality as it is expressed, constituted, legitimized and so on, in discourse” (Wodak & Meyer, 2009, p. 10). A critical discourse analyst takes “an explicit position” in “exposing, and ultimately challenging social inequality” which makes critical discourse analysis a “discourse study with an attitude” (Van Dijk, 2015, p. 466).
Following Willig (2008) and Fairclough’s approach (2012), the present case CDA enables us to identify the discursive structure, strategies, and devices. The structure or the types of discourse Mondragon’s managers use to discursively construct the discrepancy (i.e., the research/discursive object) is based on the discourses’ purpose/function. Discursive strategies refer to the procedures used to conduct the discursive construction of discrepancy, while discursive devices/tools refer to, e.g., key words and phrases used to realize the strategies.
The ethical principles specified for collecting and analyzing data within CDA were respected — e.g., handling “interviewees’ expectations about how what they say will be used for research purposes” (Hammersley, 2013, p. 2). In the analysis, recurring information was identified after the eighth respondent, and theoretical saturation was reached by the 12th respondent.
CDA yielded three overarching types of discourse indicative of Mondragon’s position on the home versus non-home discrepancy: “Announcing the discrepancy” (Section 5.1), “Justifying the discrepancy” (Section 5.2), and “Addressing the discrepancy” (Section 5.3). The narrative in the Results section labels anonymized participants as P1–P14. Where necessary, their direct quotes were slightly reformulated to enhance the coherence of their thoughts and/or improve their English language skills.
5 Results
5.1 Announcing the Discrepancy
The internationalized Mondragon cooperatives were explicit about their motives for, and expectations of, expanding outside the Basque Country. Neither the motives nor expectations go beyond (mere) profit-making, implying that any business/working arrangement that could interfere with this objective should be omitted. As an illustration:
…for us, [Mondragon’s] international development […] is a matter of enhancing the wealth of our companies, trying to be more competitive in the world…. (P5)
…we’re seeking the wealth of our companies back in the Basque Country, rather than spreading out the cooperative movement, we have to be realistic […] for the benefit and profit of our people back in the Basque Country, rather than [aiming at] convincing people to join a [cooperative] philosophy that is completely new to them. And I think it [such philosophy-spreading attempts] would jeopardize the business overall. (P12)
The “wealth-seeking” logic is not a novelty; it has been present in earlier studies on several multinational Mondragon (Bretos et al. 2019) and Italy-based cooperatives (Leite & Duaibs, 2017), as well as at a French multinational cooperative (Errasti et al., 2023).6
Using the lens of decolonial perspective, our interviewees reasoning that finding a capitalist economic model is the (only) way to make money outside the Basque Country and, equally important, that the cooperative movement is unknown to (culturally distant) subsidiary workers might indicate the presence of coloniality of knowledge — referring to nurturing the “single way of knowing the world, the scientific-technical rationality of the Occident (that) has been postulated as the only valid episteme […] capable of generating real knowledge about nature, the economy, society, morality, and people’s happiness” (Castro-Gómez, 2007, p. 428). Second, seeking to take the wealth “back” to “our people/companies” in the Basque Country implies the adoption of the roles inherent to the occidental center-periphery setting; where the center creates its peripheries primarily to extract from them. This interpretation points to “the permanent co-presence” of coloniality of knowledge and power as “the control over domination […] comes from the creation and management of (the real) knowledge” (Mignolo & Bussmann, 2023, p. 4).
5.2 Justifying the Discrepancy
To stay within the scope of this study, the discourse justifying the home versus non-home discrepancy refers solely to people/workers-related justifications. Besides the workers’ unfamiliarity with cooperativism mentioned above, the analysis emphasized three main points.
First, from the internationalization managers’ perspective, foreign workers lack initiative at work; they lack entrepreneurial spirit in general, which makes them unlikely co-owners of the subsidiary, even if the worker-owner status was offered to them:
…they [subsidiary workers] are just thinking “Okay, I have my job, I’m happy with my job, I do what I like, the business is growing, we are making a profit, I have a salary…”. (P9)
In [anonymized non-European country], it is completely the opposite [compared to the Basque Country], every minute they [the workers] need someone to tell them what to do… of course, I’m exaggerating… but, I mean, really, “that needs to be done for tomorrow”, and then tomorrow you have to tell them what needs to be done for the day after… if you don’t do it, they won’t be very profitable, they won’t be very efficient… because they lose focus […]. [On the other hand] if you define properly what they have to do… they are good [at getting it done]. But you cannot wait for these people to make their own decisions, to take more initiative. (P2)
Having “these people” who need to be guided and instructed by someone who sets the rules of their business represents a discursive construction of otherness, meaning it reinforces a positioning practice that reproduces subalternity and superiority. The syntagm itself (“these people”) represents a powerful discursive tool for setting the distance between the parties and conveying the message of otherness. One’s mental image of subsidiary workers was also created through “an extreme case formulation” (“…every minute they need someone…”) — no matter that it was immediately followed by a disclaimer, i.e., “verbal device that anticipates and rejects potentially negative attributions”, in the form of exaggeration acknowledgement (Willig, 2008, p. 103). Furthermore, the intensifier “more”, referring to the preferred amount of workers’ initiative, suggests that the current way of doing things is deficient, probably not good enough in terms of reaching the ideal of progress (Rist, 1999). Based on such discourse, where life and subjectivity function within the logic of capitalism (Maldonado-Torres, 2007), coloniality of being can hardly be suppressed.
Second, foreign workers also exhibit a high materialistic value orientation and lack the willingness to make long-term business commitments. Again, these characteristics make them ineligible for co-owning a cooperative where a) ownership by default requires long-term commitment to the organization/cause, and b) business decisions, presumably, sometimes favour the social cohesion part at the expense of profit-making:
…we have a subsidiary in [anonymized non-European country] too… the workers are kind of reluctant towards the cooperative idea because they [only] want to talk about their money, how much they earn… here [anonymized non-European country], I think they are pretty much the same… they are only interested in their earnings… (P8)
…they [the workers] are not driven by loyalty or philosophy; they are driven by money. If someone offers them two dollars more to work for another company, they will leave you, there is no loyalty, there is no commitment… (P12).
Previous analyses of multinational cooperatives have yielded similar results. For instance, in the case of French cooperatives’ subsidiaries (Errasti et al., 2023), the employees’ individualism or self-centeredness was reported as an obstacle to their more extensive worker participation. Bretos et al.’s (2019) earlier study on Mondragon reveals resemblance even on the level of managers’ discourse — implying that our interviewees discursively constructed/positioned the object (discrepancy) and subjects (managers/themselves and subsidiary workers) by relying on the “positions within networks of meaning” that were made available beforehand (Willig, 2008, p. 116). The present positions are bounded by the meaning behind “identity”, “loyalty”, and “commitment”: “[Setting up a co-op] implies huge work in training (subsidiary) workers in these (co-op) values and practices […]. What’s more, (afterwards), I don’t think they are going to develop an identity and take on such a solid commitment to the company as ours is…” (quoted in Bretos et al., 2019, p. 599). This time, in terms of (anticipated future) workers’ commitment, the ideal of progress has failed to be met too (Rist, 1999).
Conversely, other topic-related research streams, relevant at least for the blue-collar subsidiary workers, indicate that collective self-organizing and self-committing (in the business sphere) represents a well-known and well-accepted practice in the regions our interviewees referred to — e.g., among poor trash recyclers in Brazil (Gutberlet, 2009), poor peri-urban farmers in Mexico (Méndez-Lemus & Vieyra, 2017), and rural farmers in China (Bromwich & Saunders, 2012).
In any case, the subsidiary workers’ mentality being unknown to the (Basque) business executives, which triggered the common, “unknown → unpredictable → potentially unreliable → best avoided” line of reasoning, seems to be their discourse’s strongest point against narrowing the discrepancy:
…the biggest problem is mentality […]. We [would] have to share the ownership of our company with other people, with a different mentality… not only with a different mentality, [but] a mentality we do not understand; with people we don’t know personally… because here [in the Basque Country], we know everybody here, we know… how to predict people[’s behaviour] when faced with difficult times. (P7)
More specifically, having “unknown” subsidiary worker-owners was perceived as potentially highly unfavourable for the parent companies (and, consequently, Mondragon Corporation as a whole):
…there’s always the threat… and the fear that… if they [subsidiary workers] own the company, they can maybe decide to become independent from the Mondragon Corporation. (P4)
The same “uncertainty → threat → fear → (need for) survival” argument/discourse was present among Bretos et al.’s (2019) interviewees too: “If, say, the Chinese or Slovakian subsidiary became cooperatives and had full decision-making autonomy, no one can guarantee us that they will remain in the group, and this produces uncertainty about the viability and survival of our cooperative” (p. 598). On the other hand, it seems that the unpredictability/threat is not related to the cultural distance (between the Basque Country and Slovakia vs. China) — European “others” are no different than the non-European ones.
Summing it up, these fragments reflect the structural power dynamics between the North and (less entrepreneurial, committed, loyal, and predictable) South, where the power must “remain” in the North and should not be (fairly) divided between the headquarters and its subsidiaries. In other words, these illustrate the presence of a discursive and material legacy of historically created power relations (Quijano, 2000).
5.3 Addressing the Discrepancy
The discourse on addressing the discrepancy reveals three approaches that Mondragon parent companies employed to make themselves and their subsidiaries more alike. All of them are alternative and/or substitutive to the shared-ownership solution.
The first approach refers to parent companies introducing their cooperative and socially responsible working arrangements and conditions in the subsidiaries:
…we try to enrich [the subsidiaries] with the co-op culture… and try to be quite selective with the people [responsible for running the subsidiaries] and also try to make [subsidiary] workers feel that they work for a different company, where [workers’] participation, where their emotional link with the company is different. (P5)
…the parent company exported their way of working… a more collaborative way of working… a less hierarchical way of working. (P4)
Flecha and Ngai’s (2014) earlier work on Mondragon multinational cooperatives,7 too, emphasized that “the way of working” was “identical” regardless of the place of work, but the information flow was not: “The information and communication that we [worker-members] have in the parent cooperative […] is not the same they have in the subsidiaries” (p. 677) — implying that the everyday superior → subordinate interaction is indeed co-op inspired, unlike the knowledge transfer which is overall limited. The reduced spread of Mondragon’s R&D activities outside the Basque Country, i.e., the subsidiaries’ technological dependency, further supports the latter claim. Also, in line with Telleria’s (2021, p. 460) critique of “participatory development” and “participation” (and “collaboration” that represents a discursive opposite of “hierarchy”) as development buzzword(s), if the Basque managers decide who participates/collaborates, how, and when, these two mechanisms of increasing workers’ empowerment seem more likely to “reproduce power dynamics that impede transformation”.
The second approach refers to Mondragon introducing what we define as loyalty membership, a form of organizational membership that intends to resemble elements of the proper cooperative membership, but has more in common with employee loyalty-reward programmes integral to capitalist companies:
…when we see […] really good people who we want to keep, we offer them membership, but more like a benefit, an additional benefit… (P3)
…we only do it with very valuable people who have been working for Mondragon for many years. They are valuable not only because of their technical skills, but also because of their personality […] and we do that just to make them more comfortable […] more attached to the company, you know, like belonging to a family… (P7)
The loyalty membership idea reflects the value placed on the subsidiary worker. Unlike the Brazilian/Chinese/Mexican/Thai workers mentioned in the subsection above, who were described as a generalized group of “others”, here, their individual characteristics are emphasized and evaluated as beneficial, since they resemble the “European” characteristics of the Mondragon “family” — a discursive tool tasked with closing the HQ-subsidiary distance. Nevertheless, the “really good people” have not reached the family table (the center); they were upgraded from the front yard (the periphery) to inside the house (the semi-periphery) (see Telleria, 2022; Escobar, 2011; Rist, 1999).
The final approach refers to the executives’ suggestion of introducing partial shared-ownership, i.e., a partial profit-sharing model, which is also present in many capitalist environments (e.g., US-based ESOPs such as W.L. Gore & Associates):
… if we do it [shared ownership] in the correct way, I think it could be beneficial [for the Mondragon Corporation] [The interviewer asked whether “the correct way” refers to the parent company keeping 51% ownership and the interviewee confirmed:] I think that we can make a system that works somewhere in between a normal company and a cooperative… (P9)
In addition to Mondragon’s managers, such a scenario was singled out as the most adequate one by a multidisciplinary group of external experts (practitioners and scholars) that investigated ways of possible implementation of shared ownership at the Fagor Ederlan subsidiary in Brazil (Mondadore, 2013). Aiming to comment on this proposal of unequal partnership, we use the words of one of the participants in Flecha and Ngai’s study (2014, p. 673), i.e., one of our interviewees, in-house colleagues: “…But if it is a mixed cooperative, why would they [subsidiary workers] be interested in it? If, at the end, 51% belongs to us, and they only have 49%, what decision-making power will they have?”
Thus, at the level of addressing the discrepancy, the common denominator of all these approaches is still the association with dominance (coloniality of power); they all represent control mechanisms that focus on the interests of subsidiary workers (financial compensation, decision-making role, overall job satisfaction) while keeping the initially formed power relations intact (Quijano, 2000; Mignolo, 2007b).
6 Discussion and Conclusion
Overall, Mondragon’s executives deal with the home versus non-home discrepancy through discourse that announces, justifies, and addresses it. From the decolonial perspective, two interdependent discursive strategies seem to be the most accentuated: a) Mondragon illustrating the entire economic realm through the binary cooperativism-versus-capitalism lens, indicating the presence of coloniality of knowledge, and b) them “othering” the subsidiary workers, indicating the presence of coloniality of being and implying nurturing coloniality of power.
Put simply, if “we” (the stronger party, i.e., Mondragon) is clearly separated from “them” (the weaker party, i.e., the subsidiaries) and the prosperity of “we” depends on “them”, it seems unbiasedly rational for Mondragon to want to control “them” — especially when the reason a parent company created its subsidiaries in the first place was to prosper from them. It also seems reasonable to claim that the “we-them” gap, combined with the expansion of capitalist subsidiaries being fueled by their economic success, “degenerates” the (cooperative) parent organizations’ ability to operate based on “the SSE ideals of mutualism and solidarity” (Leite & Duaibs, 2017, pp. 523 & 535). On the other hand, since narrowing this gap is on the agenda (Mondragon, 2003 & 2020) but conceptualized and operationalized through the lens of the cooperative versus capitalism dichotomy, the attempts commonly lean towards two (opposite) directions. The first one refers to converting the subsidiaries into cooperatives. This has proven not to be a viable option for various objective (let alone subjective) reasons, such as the rigidity of foreign regulatory frameworks (Mondadore, 2013; Flecha & Ngai, 2014; Bretos et al., 2019). The second direction refers to improving the workplace environment abroad, aspiring to achieve a stronger resemblance between parent companies and subsidiaries. In principle, such improvements fall under the corporate social responsibility (CSR) umbrella and fail to do much beyond turning capitalist subsidiaries into socially conscious/responsible capitalist subsidiaries (for a discussion on the differences between CSR and SSE organizations, see, e.g., Palakshappa & Grant, 2018).
Considering that both these approaches have flaws, a “third way” is called for. Our study attempts to advance the reflection on the possibility of creating new democratic multinational companies (see Bretos et al., 2019). In short, such companies require continuous education for workers whose voices are well-developed within the subsidiaries and at the cooperative headquarters (Vanek, 2007). So far, Mondragon cooperatives’ international experience with workers’ representation and workplace democratization has been mixed. In the case of Fagor Electrodomésticos, the local trade unions played a pivotal role in their acquisition of the Polish company Wrozamet in 1999. Although Fagor’s bid was not the highest, it was favoured by Wrozamet’s unions and, ultimately, by the Polish government. Apart from the fact that Fagor prioritized the preservation of jobs, a decisive factor was their introduction of the codetermination model, which allowed employees to engage in decision-making processes without requiring full cooperative membership (Altuna Gabilondo, 2008). On the other hand, in Fagor Electrodomésticos’ acquisition of the French company Brandt (in 2005), some French unionists criticized Mondragon for not offering the cooperativization option, while others opposed the idea of transforming Brandt into a cooperative, emphasizing differing views on workplace democracy and the role of unionism (Argouse & Peyret, 2007).8 In the case of Fagor Ederlan, in 2008, in collaboration with the local trade unions, they transformed their Navarrese subsidiary Victorio Luzuriaga into a “hybrid cooperative”. At that time, nearly 900 subsidiary workers were allowed to acquire partial ownership, while the parent company maintained majority ownership and control of voting rights. Remarkably, by 2023, this hybrid cooperative had transformed into an independent cooperative (TU Lankide, 2023). As illustrated, developing a “third way”, long-run democratic multinational company has not proved easy. Moreover, as these examples are Spain-based, presumably the obstacles get more challenging as the workers get more culturally distant, and the more subsidiaries get culturally distant, the more colonial it gets to have the (SSE) parent companies educating them on workers’ representation and workplace democratization.
Furthermore, our insights strengthen the key take-home messages from the recent SSE-decoloniality debate. Indeed, the decolonial perspective can offer “fine-tuned guidelines for (SSE organizations) stimulating and assessing social transformation”. Apart from empowering “shared management self-organization and minorities’ power of choice”, de-othering of subsidiaries and de-linking from the aspiration to dominate requires, first and foremost, raising awareness of coloniality, i.e., the complexity of historically created power relations. Such awareness makes the precondition for transforming current ways of doing, e.g., reducing HQ’s exploitative practices, materialized through better acknowledgement of the local “knowledge, aesthetic codes, and logics of sense-making” as well as promoting non-hierarchical forms of solidarity. Undoubtedly, this unawareness cannot be easily eradicated; the ignorance starts at a level much deeper than the SSE and Mondragon, it’s culturally induced as culture sets the scene for the formation and dissemination of “certain theoretical and epistemological perspectives instead of others” (Lucas dos Santos, 2023, p. 3). Telleria’s (2018 & 2022) studies on the UN development agenda well illustrate the West’s struggle to decolonize knowledge, i.e., to “change the terms” (basic assumptions and principles) that underpin their discourse (Mignolo, 2018, p. 144).
The next big research question is whether Mondragon is interested in enabling such social transformation or whether it prefers to proceed with toning down this discrepancy by scoring higher on the CSR scale.
To conclude this discussion, we examine how this study has been simultaneously constrained/limited and enriched by several features of both data collection and analysis. Data collection included business managers with almost exclusively engineering backgrounds. By default, compared to, for example, CSR managers, they might have been less interested in and concerned about the home versus non-home discrepancy, but (because of it) might have spoken more freely about the phenomenon. Broadening the pool of interviewees (beyond the managers) would have made our research more dispersed but could have enabled us to evaluate a wider range of internationalization processes against the “grammar of coloniality” (Mignolo, 2007a). Also, our interviewees, not being able to use their native language in the interviews, may have lacked the opportunity to optimally express themselves, but neither would they have had the ability to “hide” behind extensive verbal camouflage. Lastly, fine-tuning of the data analysis was influenced by the heterogeneity of the research group. More precisely, with our research team comprising individuals from diverse disciplines, countries, and age groups, as well as different sexes, this may have enriched the interpretation of the findings. However, on occasion, it may have led to conclusions that could benefit from having smoother edges.
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Considering the European Commission’s conceptualization of the “social economy” (European Commission, 2025) heavily overlaps with the UN’s definition of the “social and solidarity economy”, this paper understands the two concepts as referring to the same phenomenon through (somewhat) different labels.↩︎
Drawing upon Foucault (2010), discourse is understood as an ordered system that is composed and based on statements, and not on the intentionality of individuals. The circulation of discourse is determined by the conditions that regulate its production and is enabled by discursive practices and the social construction of meaning. According to Hall (1997), the concept of representation, in particular representational practices, refers to the way visual images, language, and discourse function as “systems of representation”. Relying on a constructionist approach in which meaning is constructed in and through language, Hall analyses, for example, the construction of national and cultural identities as well as the use of (cultural) stereotypes.↩︎
Apart from the internationalization strategy, Basterretxea et al. (2019, p. 585) have attributed Fagor’s failure to inherent clashes between their cooperative governance (based on employee ownership) and HR practices of nurturing “chronic nepotism when recruiting new members, failures in the training policy, impoverished and Taylorist working systems, and reverse dominance hierarchies”.↩︎
In this paper, the concepts of Global South and North are bounded primarily by the inter-group (power) relations and living conditions of people. Therefore, the geographically bounded developed North might contain many underdeveloped “Souths” (and vice versa).↩︎
Escobar (2004, p. 414) describes development as “a late and failed attempt to complete the Enlightenment in Asia, Africa and Latin America”.↩︎
The qualitative data on Mondragon’s Ederlan and Electrodomesticos cooperatives were collected between 2005 and 2015.↩︎
The qualitative data on Mondragon’s Alecop, Eroski, Maier Group, RPK,4 and Ulma Construction cooperatives were collected between 2012 and 2014.↩︎
In the years prior to their bankruptcy, Fagor Electrodomésticos’ relations with both French and Polish trade unions grew increasingly strained, including work stoppages and strikes (Amado-Borthayre, 2009; Errasti et al., 2017; Santos-Larrazabal & Basterretxea, 2022) — regardless of “Mondragon regulations prohibit strikes over in-house labor conflicts” (Kasmir, 2016, p. 54).↩︎