Horizontal groups and consortia: an important instrument to support innovation and competitiveness
13 December 2016
The grouping among cooperatives can be achieved in different ways: it may start with simple networks and evolve towards consortia (cooperatives of cooperatives), up to larger and more closely-knit groups. They share the characteristic of being horizontal structures that reflect the democratic governance system found in individual cooperatives. The experiences of the MONDRAGON Corporation, the largest business group in the Basque Autonomous Region and the tenth in Spain, and Libera terra (“Freed Land”) a consortia of social cooperatives created in southern Italy to give dignity to territories with a strong mafia presence, are shared in the article.
The MONDRAGON Corporation groups more than 110 cooperatives located mainly in the Basque Autonomous Region of Spain, and in their majority SMEs. Its origins go back to 1956, when the first industrial worker cooperative was established. It is a cross-sectoral group organized into four major areas: industry, distribution, finance and knowledge. The group has been conducive to SMEs’ development thanks to a sophisticated set of instruments such as the pooling of results, common management of unemployment, common financial and social funds, R&D, services, training and education, etc. Its innovation capacity is mainly channeled through its 15 technology centres, involved in numerous national and international projects or research and technological development.
Some specific measures to maintain employment during periods of crisis in the MONDRAGON Corporation are the redeployment of workers from one cooperative of the same group to another. This means that hundreds of workers from cooperatives active in one industrial sector undergoing the brunt of the crisis (eg the automobile industry) have been temporarily redeployed in cooperatives from other enterprise sectors which, at the same moment, were less affected, before being re-absorbed by their cooperative of origin once the economic situation of the latter has improved. This type of jobs restructuring is also a way to respond better to fast-changing sectors, market or economic transformations while guaranteeing employment security for workers and maintaining industrial knowledge in the enterprise and in the region in which it is embedded.
MONDRAGON is an excellent example of a horizontal and democratic enterprise group, legitimizing all decisions and involving over a hundred enterprises and tens of thousands of worker-members through democratic procedures. It provides both complete autonomy to each cooperative, and a say for each cooperative and each cooperative member in all the overall strategic decisions of the group as a whole.
Libera Terra (“Freed Land”) is a consortium established in 2001 grouping 9 social cooperatives integrating disadvantaged groups and working on mafia confiscated lands primarily in the agro-food industry. Its social cooperatives manage 1,400 hectares of confiscated lands and give work to 140 people. They produce ethical, organic products and sell them under the brand Libera Terra.
The consortium was created with the purpose of bringing together the farming activities of the different cooperatives in order to penetrate the market in a united and efficient manner. It is organized into different sectors, with, among others, product/market divisions. The consortium coordinates the production phases of its individual cooperatives and oversees the transformation from raw materials to finished product, looking for the best way to boost its products’ qualities and ensuring economic value.
Libera Terra guiding principle is always to stay true to its fundamental mission: the social re-use of confiscated property. The creation and safeguarding of farms with a promising future, which provide stable employment, is made possible by producing and selling goods.