cooperation economy and the inclusive participative company model

1. Cooperation economy and the Inclusive
Participative Company Model (IPCM).
DBS – Donostia. May 3, 2021
Inclusive Participative Company Model (IPCM)

2. 1. The IPCM. Purpose and originality of the proposal
2. Background and inspirational elements
3. Specific characteristics of the Inclusive Participative
Company Model
4. Ideas on workers´participation are changing?
Inclusive Participative Company Model (IPCM)
2

3. Inclusive Participative Company Model (IPCM)
1. The IPCM. Purpose and originality of the proposal
• It is about providing concrete references for an inclusive-participatory
business model, which can be applied adapted to the specific reality of each
company.
• It was approved by the Basque Parliament unanimously by its 5 political
groups in September 2018.
✓Previously, a similar model was approved in the Navarrese Parliament,
also unanimously, by its 7 political groups in June 2018.
✓Both Parliaments asked their Goverments for a specific plan to develop
their implementation among their entreprises
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4. Inclusive Participative Company Model (IPCM)
A participative process to develop the model
▪ Discussions on:
✓two Seminars, based on the document of the Pontifical Council for Justice and Peace
"The vocation of the business leader" organized by the Arizmendiarrieta Foundation
✓A seminar on "New Business Model" carried out by Arizmendiarrietaren Lagunak
Elkartea - Arizmendiarrieta´s Friends with people from different political, economic and
social agents of the Basque Country.
• The principles and values of (Christian) humanism that make up
Arizmendiarrieta's thought
• Some experiences of MONDRAGON companies and other capitalist
companies applying succesful workers´ participative practices
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5. Inclusive Participative Company Model (IPCM)
Conclusions of the Seminars
In a competitive environment characterized by globalization and the rapid emergence
of scientific and technical discoveries, it is necessary to compete for quality and
innovation. It is necessary to arrive at a synthesis of:
• A humanistic business model, with values such as:
✓Respect for the human dignity of all people
✓Search for the common good, which implies giving priority to the needs of the collective project
over the interests of the different interest groups (workers, shareholders…)
✓Establish that your priority goal is not to obtain the maximum benefits in the short term but to
satisfy in a balanced way the needs of the different interest groups.
• An advanced business model that enhances and takes advantage of people's
knowledge and skills to achieve a more competitive and sustainable company
• A Basque business model that takes into account in its design and operation the
strengths and weaknesses of Basque culture and which is suitable to being
promoted by the public institutions of the Basque Country or Navarre. 5

6. MONDRAGON
2. Background and inspirational elements
Some experiences of MONDRAGON companies and other capitalist companies
applying succesful workers´ participative practices
The MONDRAGON Cooperative Group. Funded in 1957 by a priest, D Jose
Maria Arizmendiarrieta. His goal “to improve the business model in order to
improve the society”.
His idea: in need of application of the Church´s Social Doctrine, he saw
Cooperativism as the best possible model to put it into practice.
An innovator and a true leader:
- His model of industrial cooperativism was a significant innovation.
MONDRAGON is the 1st industrial Group in Basque land, and ranks 10th in
Spain among industrial groups, and 1st in the world among cooperative industrial
groups.
- His were also the initiatives of cooperatives in other sectors: A unique
cooperative bank, where main members are not savers but workers. Also, in
education (Mondragon University) and R+D (Ikerlan & 13 other R+D+i
specialized centres)
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7. MONDRAGON
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8. Cooperativism.
WEAKNESSES from an ethical point of view
1. Group shelfishness?
oShort Term work contracts
oWorkers who are not members. Participation in management,
profits and property?
2. Sovereignity of labour?
Capital rules when it applies to the equity belonging to the
cooperative (e.g. subsidiaries)
3. Igualitarism works against meritocracy?.
Younger generations ask for more opportunities to outstand and
higher salary differentials
4. Workers in bigger cooperatives become public servants?.
Fagor Electrodomésticos is a not so exceptional case
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9. WEAKNESSES in HRM policies in Fagor ED
Stressed market situation: Huge impact of globalization and the Great Crisis of 2007 in the household appliances market
Source: Can employee ownership and human resource management policies clash in worker
Negative outcomes in HRM
policies conditioned by
workers ownership:
- adverse selection recruiting
new members (1,000 in 1997
to 2003). Little training &
poor working attitudes
- Reverse dominance
hierarchies (chiefs lack
power and authority)
- Impoverished, taylorist, low
skill working systems.
Opposition to new methods
to control and improve
performance
Outputs:
- decision making
o Delay in moving production
from high-cost factories
(Mondragon & France) to
competitive low-cost plants
(Poland)
o Defeat at the Gen. Assembly of
HRM policies to tackle crisis
- disengagement.
o Lack of effort, values, job
satisfaction
o Absenteeism. High among
young new recruits. In 2010
8.8% among working members,
3.4% for nonowners
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10. CULTURE.
Having
cooperativists in
advance of
cooperatives
LEADERSHIP.
Arizmendiarrieta´s
transformational,
not transactional
leadership
MONDRAGON - Some keys to success - 1
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11. MONDRAGON - Some keys to success - 2
COMMITMENT of
workers with the common
project: the cooperative.
Thanks to SOLIDARITY
in salaries &
PARTICIPATION in
equity, profits & decision-
taking
STRATEGY
✓1st Education.
✓Focus on innovation &
quality &
internationalisation
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12. REINVESTMENT of profits.
Small pay-out. No dividends,
only interests on capital
FINANCIAL common
RESOURCES. LABORAL kutxa
+ corporate funds
✓ to launch new activities
✓ to restructure coops facing
difficulties, and relocate
redundancies (e.g. Fagor ED
1,200 people in 2013)
MONDRAGON - Some keys to success - 3
CO-OPERATIVE BANKING
We are partners of the institution, with democratic and
responsible management, and we engage with our customers.
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13. The succesful coop
model´s ideas are also
useful, and increase
profitablility, in capitalist
companies?
Inclusive Participative Company Model (IPCM)
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14. 3. Specific characteristics of the IPCM . It is not a rigid or definitive model
The main axes of the model:
1. A culture of cooperation, co-
responsibility and concern for people
2. A shared collective Project. Priority to
sustainability
3. The participation of workers in
management and / or profits and / or
ownership
4. Take into account the needs of the
community
As opposed to:
1. the confrontation as a
basic relationship attitude.
2. the priority of the
legitimate interests of
capital or labour.
3. the radical separation of
capital and labor.
4. the strict separation of
business activity and
social responsibility.
Inclusive Participative Company Model (IPCM)
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15. Axis 1. A culture of cooperation, co-responsibility and concern for people
A. Create a climate of trust through a
policy of information transparency
Reference: Quarterly information on
listed companies
B. Program and develop systematic
training plans with dedication goals
per worker.
Reference: a goal of 20-40 hours of
annual training per person, reaching a
minimum of 80% of the workforce each
year.
Inclusive Participative Company Model (IPCM)
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16. C. Promote remuneration policies that, while saving the necessary loyalty of
workers with critical skills for the business project, increase social cohesion.
Reference could be a salary range not exceeding 1: 6 for SMEs, always saving
cases with special circumstances.
It would be advisable, on the other hand, that the remuneration includes some
participation in profits likely to reach the entire workforce.
D. Establish periodic systems of evaluation and continuous improvement of the
satisfaction and needs of people.
Reference could be to carry out a study with a biannual frequency, seeking the
comparison of the results with an external sample.
The involvement of both the executive and the Workers Committee in its
development would be important.
Inclusive Participative Company Model (IPCM)
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17. Axis 2. A shared collective Project. The priority of the sustainability of the
collective project over the interests of any of the stakeholders
As a consequence, prioritize sustainable growth
strategies over short-term profitability
strategies, seeking growth which favors the
creation and maintenance of sustainable jobs.
A. Develop balanced incentives for
shareholders (on ROE) and workers (on
total remuneration).
B. Allocate at least 50% of annual profits to
increase Own Funds
C. Allocate a percentage of sales to R&D+i
activities higher than the sector average
Inclusive Participative Company Model (IPCM)
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18. Axis 3. Workers´ participation in management, profits and ownership
A. Implement participatory
management systems, with
procedures and tools, which
promote joint responsibility in a
shared project.
Co-responsibility that involves
consulting both the executive line and
the workers´ representatives in the
relevant decisions.
Inclusive Participative Company Model (IPCM)
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19. C. Enable collective access to company property directly or through an intermediary
company.
For the governance of this instrumental society, owned by the workers, it is
recommended to consider the alternative of “one person, one vote”
E. Prioritize (without exclusivity) internal promotion.
F. Incorporate women on equal terms.
G. Promote family conciliation.
Inclusive Participative Company Model (IPCM)
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20. Axis 4. Take into account the needs of the community in which you settle
Dedicate a minimum of 1-3%
of the profits to Social
Responsibility activities,
listening to the contributions
of the Workers Committee
Inclusive Participative Company Model (IPCM)
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21. It is, in short,
• A model of co-responsibility and participation of professionals / workers
• That seeks to improve, at the same time, the competitiveness of companies
and the satisfaction of the people who work in them
• Viable, as has been proven in the Cooperative Group, among other
companies with a similar approach
Inclusive Participative Company Model (IPCM)
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22. 4. Ideas on workers´participation
are changing?
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23. Shared
value,
2011
The coming future. Spreading humanistic concepts
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24. WASHINGTON – Business Roundtable today announced the release of a new Statement on the
Purpose of a Corporation signed by 181 CEOs who commit to lead their companies for the benefit of
all stakeholders – customers, employees, suppliers, communities and shareholders.
Since 1978, Business Roundtable has periodically issued Principles of Corporate Governance. Each
version of the document issued since 1997 has endorsed principles of shareholder primacy – that
corporations exist principally to serve shareholders. With today’s announcement, the new Statement
supersedes previous statements and outlines a modern standard for corporate responsibility.
“The American dream is alive, but fraying,” said Jamie Dimon, Chairman and CEO of JPMorgan
Chase & Co. and Chairman of Business Roundtable. “Major employers are investing in their workers
and communities because they know it is the only way to be successful over the long term. These
modernized principles reflect the business community’s unwavering commitment to continue to
push for an economy that serves all Americans.” 24
Business Roundtable Redefines the Purpose of a
Corporation to Promote ‘An Economy That Serves All
Americans’. AUG 19, 2019
Updated Statement Moves Away from Shareholder Primacy,
Includes Commitment to All Stakeholders

25. 25
ESOP (Employee Stock Ownership Plan). Facts
As of 2019, we at the National Center for Employee
Ownership (NCEO) estimate there are roughly 6,600 employee
stock ownership plans (ESOPs) covering more than 14 million
participants… …There also are about 3,800 profit sharing and (to
a much lesser extent) stock bonus plans that are substantially
invested in company stock and are like ESOPs in other ways.
Major Uses of ESOPs
About two-thirds of ESOPs are used to provide a market for the
shares of a departing owner of a profitable, closely held
company. Most of the remainder are used either as a
supplemental employee benefit plan or as a means to borrow
money in a tax-favored manner. Less than 10% of plans are in
public companies. In contrast, stock option or other equity
compensation plans are used primarily in public firms as an
employee benefit and in rapidly growing private companies.

26. OIT – Organización Internacional
del Trabajo. 2019/05/29
Cumple este año su centenario y, entre las
actividades previstas, está la edición de un
libro sobre el futuro del trabajo para el que
nos han pedido una contribución relativa al
Modelo inclusivo participativo de
empresa. La solicitud está ligada a nuestra
presencia el 5.4.2019 en la reunión de
París del think tank mundial de UNIAPAC
(federación de asociaciones de
empresarios y directivos católicos que
agrupa a instituciones de 38 países, con
30.000 miembros).
A destacar la presencia, en el centro, de
Michel Camdessus, recientemente
premiado por la Fundación Sabino Arana y
que está resultando un colaborador
destacado de nuestra Fundación
Arizmendiarrieta y del jesuita alemán
Martin Meier, consiliario mundial de la
institución. 26

27. INTERNATIONAL ONLINE EVENT:
“THE ECONOMY OF FRANCESCO - YOUNG PEOPLE, A
COMMITMENT, THE FUTURE”( 19-21 November 2020]
“The development of the event is connected to
Saint Francis, his experiences and choices, that also
have value in the economy. He chose between an
economy of egoism and an economy of devoting
himself. His spoliation in front of his father and the
Bishop of Assisi is a symbol for the event of March
and is the reason why Pope Francis decided to hold
it in Assisi. We hope that the spirit of this city will
leave a mark to all the encounters”.
Participants to “Economy of Francesco” are young
researchers and students; businessmen and
managers; social innovators, promoters of italian
and international organizations; they deal with
environment, poverty, inequalities, new
technologies, inclusive finance, sustainable
development: they deal with human being. “…the
protagonists will be the young people, who will tell
their idea about the world they’re changing
on the front of ecology, economy, development,
poverty”.
Sinde, from Arizmendiarrieta
Foundation, the only participant from
Spain, presented the Basque Inclusive
Participative Company Model 27

28. More information
On MONDRAGON Corporation
MONDRAGON Corporation | MONDRAGON Corporation (mondragon-corporation.com)
https://arizmendiarrietafundazioa.org/documentacion/the-key-factors-of-success-of-the-mondragon-experience-
teachings-for-an-inclusive-participatory-company-model-juan-manuel-sinde
On the IPCM
https://arizmendiarrietafundazioa.org/documentacion/por-un-modelo-inclusivo-participativo-de-empresa-y-una-
economia-de-cooperacion
http://arizmendiarrietafundazioa.org/articulos-noticias/la-economia-de-cooperacion-vista-desde-la-universidad-
de-deusto
On Friends of ARIZMENDIARRIETA
https://arizmendiarrieta.org/es/la-asociacion/organizacion/
On ARIZMENDIARRIETA Fundation
https://arizmendiarrietafundazioa.org/documentacion/publicaciones/presentacion-fundacion-jma
MONDRAGON &
Inclusive Participative Company Model (IPCM)
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29. Mila esker. Thanks for your interest
Education is the natural
and essential point of
support for the promotion
of a new social, human
and fair system
29