Internal Structure

Structure of a Cooperative Corporation

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Worker cooperatives may have a wide variety of internal structures. Many co-ops use a hierarchical structure similar to that of a conventional business, with a board of directors and various grades of manager, with the difference that the board of directors is elected. Some co-ops, however, use a structure based on activist collectives and civic organizations, with all members allowed and expected to play a managerial role - and sometimes using consensus decision-making.

MCC Basic Structure

When we look at the Internal Structure of the Mondragon we must first take the business culture of the Mondragon Corporation. The business culture is what defines a company’s outlook, the way it responds to management opportunities and problems and the way in which it adapts to internal and external changes and requirements, which are internalized in the form of collective beliefs and trends and are transmitted and taught to new members as a cohesive way of thinking, living and acting.

These basic beliefs, with their corresponding commitments and trends, form the business culture that, under the auspices of the company leadership, defines the target identity and develops internal mechanisms for dealing with the challenges of management in an individual way.

The business culture is expressed in the contents of the mission, in the values, the vision, the feeling of belonging, the flexible ability to agree upon common goals and the comprehensive management of the company, including its strategic objectives and assessment criteria for measuring results.

The shared language and individual conceptual contents of the culture of each particular business or organization are vital elements for defining the limits of the group identity and establishing the rules of play for everyone involved.

From a business point of view, the MCC’s activities are divided into three areas -Financial, Industrial and Distribution- which function independently within a global strategy co-ordinated by the Corporate Center.

The Financial Area includes activities such as banking, social welfare and insurance. The Industrial Area comprises 12 Divisions dedicated to the production of goods and services. The Distribution Area is made up of various commercial distribution and agricultural-food enterprises. There are also a number of Research, Vocational Training and Teaching centers, including a University which has 4,000 students.

The individual co-operatives constitute the basic level of the MCC’s organizational structure, with the General Assembly acting as the supreme body for the expression of the will of the members and the sovereignty of the co-operative and the Governing Council acting as the ultimate body for management and representation, being responsible for appointing the Managing Director.

The eight Vice Presidents, along with the three Heads of Department at the Corporate Center, together constitute the General Council, which is chaired by a President. The General Council is responsible for drawing up, co-ordinating and applying corporate strategies and objectives.

The Standing Committee of the Co-operative Congress is the governing body responsible for giving impetus to and controlling the carrying out of the policies and agreements adopted by the Congress, continually monitoring the MCC’s business performance and the management of the Presidency of the General Council. The Committee consists of 20 elected members representing the 14 Divisions of the Corporation.

The Co-operative Congress is the supreme body of the Mondragón Corporación Cooperativa, in terms of sovereignty and representation, equivalent to its main General Assembly. It is comprised by 650 delegates who represent all member co-operatives, and its decisions are binding on all of them.

(Taken from Mondragon Web Site)

Corporate Structure

Internal Responsibilities

Spanish law prescribes three organs of government for all industrial cooperatives: The general assembly of Members; the Supervisory Board – a governing, non-executive board – and the Watchdog Council. The general assembly of members meets at least once a year in ordinary session and can be called when necessary for an extraordinary meeting. It is empowered in an ordinary session to examine and approve the accounts and balance sheets of the previous financial year. It is also empowered to deal with matters concerning initial capital contributions of new members. When a new cooperative is setup the general assembly elect those who serve on the Supervisory Board, and who can be dismissed if they are considered incompetent in the performance of their duties.

• The Supervisory Board is composed of a Chairman, Vice-Chairman, Secretary and six ordinary members. Each member on the board serves for a four-year term; half the board must step down every two years.

The Supervisory Board’s nine members must meet at least once a month, or at the request of the Chairman or of two of its members. Decisions are taken by vote, with the Chairman having the casting vote in the case of a tie.

• The Chairman of the Supervisory Board, who is empowered to delegate specific tasks to others, represents the cooperative legally. He also has the authority to convene the General Assembly and the Supervisor Board, over both of which he presides.

Appointed by the board, management is responsible and accountable to the board. The indirect accountability of management has proved to be one of the strengths of the Mondragon cooperative formula. Member’s of management can never belong to the Supervisory Board, but may attend its meetings ‘with a voice but without a vote’ , at the Board’s discretion. Managers are appointed for a minimum of four-years, and are directly responsible for all those administrative tasks which re typically carried out by managers and middle level executives in private sector enterprises. Responsibilities include the commercial and financial aspects of cooperative performance; implementation of production plan; coordination of the programmes and plans of various divisions, sections and workshops in accordance with the general plans outlined and approved by the Supervisory Board.

• The Management Council is an advisory board and consultative body, reporting to both Management and the Supervisory Board, and is made up of managers and high executives of the company. The Social Council reporting to Management and Supervisory Board is elected voice of members of the cooperative, and has a wide prescriptive and advisory powers in all aspects of personal management. Social Council decisions are binding in such matter as accident prevention, work safety and work hygiene, social security, wage level, administration of Social Funds, and welfare payments. Representatives are elected for three-year term and can offer themselves for re-election, with one-third being required to step down each year.

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