MONDRAGON CO-OPERATIVE FEDERATION: AN ETHICS ANALYSIS
Value Differences From Typical Western Business Organizations
Although the value-related differences between the Mondragon Co-Operative Federation (Mondragon) and the typical business organization found in Western economies are many (Gilman, 1993, pp. 44-47), only four such differences are identified and discussed. These four differences are associated with ownership, participation, compensation, and control.
With respect to the value of ownership, Mondragon is a true cooperative in which each employee make an equal contribution to equity from earnings during their initial two years as members of the cooperative (Tseo & Ramos, 1995, pp. 25-31). The value of this ownership stake follows the fortunes of the cooperative as long an individuals remain with the organization. When individuals leave the organization, they are required to relinquish their ownership stake. Employee-owned firms are not rare in other Western economies; however, neither are such firms prevalent in any Western economy. A more common approach to some degree of employee ownership in Western economies are employee stock ownership programs (ESOPs), which tend to be much more limited in concept than is the Mondragon approach.
With respect to the value of participation, the employee owners and only those individuals elect the Board of Directors at Mondragon (Tseo & Ramos, 1995, pp. 25-31). Further, each member of the Board of Directors also must by a Mondragon employee owner. Under the Mondragon approach, thus, the employee owners truly are empowered (Magnum & Magnum, 1993, pp. 29-37). Participation in most firms in Western economies is a much more limited process. In only a few firms in Western societies does the concept of participation extend beyond the areas of the immediate functional responsibilities of employees. In those instances, where employees are entitled to elect members to a firm's ...