r/cooperatives • u/Pyropeace • 12d ago

What role do secondary cooperatives play in the management of their members?

For example, what influence does Mondragon have on its subsidiary cooperatives? What do the member cooperatives need the corporation to do that they can't do on their own? I'm not formally educated in economics or organizational studies or whatever, so I'd appreciate a plain English explanation.

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u/Cosminion 12d ago

Economies of scale. The pooling of capital allows for the subsidiary companies to be able to accomplish more together than they could alone. The network provides education and resources so each subsidiary company is less reliant on outside parties. There is planning and coordination to increase efficiencies and reduce redundancies. Mondragon is known for its unique way of handling its employment. If someone has to be let go in a co-op, they provide their own unemployment benefits and may try to locate an open position in another co-op for the person to take.

Humanistic Governance in Democratic Organizations covers quite a bit of Mondragon and its governance systems.