The Basque Country town of Mondragón was suffering the aftermath of the Civil War when a local priest, Father Arizmendiarrieta, set up a technical college and subsequently a small factory making paraffin stoves – an initiative that developed into the Mondragon Corporation, the leading business group in the Basque Country. The son of one of the first technical college students, Josu Ugarte, has spent his working life with Mondragon and is now Head of Mondragon International. He spoke at LSE about the company’s experiences.
Approximate translation:
Mondragon is a company with 84,000 employees, billing $20 billion per year, with nine co-operative delegations and 84 factories abroad that supply 250 companies.
To face such a complicated situation as the crisis that we are living in, the only solution is internationalisation. This means establishing factories abroad to conquer other markets and complementing them with products manufactured at home.
We have demonstrated that those companies that have at least one factory abroad are more productive, have better results and also protect employment in a much better way than the others.
Globalisation is a great challenge and we are convinced that we have to move abroad in order to protect our employees.
Adam Austerfield: Mondragon, as cited in the excellent book on cooperatives ´From Mondragon to America´ by Greg MacLeod, is one of the world´s leading co-operatives, and technically the sixth biggest company in Spain. They have offices all around the world, and thus it was a great pleasure to have their International Head, Josu Ugarte, speak at LSE on how the Mondragon model works. This particular approach is now finding a lot more supporters than in the heady days of the 2000s, as it is employee-led (for UK readers – like John Lewis, which is a 350 company conglomerate) and its management, banking and finance and moral business philosophy are acutely relevant for today´s business age.
The talk, on 10 November 2011, was hosted by LSE Enterprise and the Cañada Blanch Centre.
