Dissemination of the cooperative values and organizational practices in foreign subsidiaries: The case of the multinational co-op Fagor Ederlan

Abstract

In today's global economy, cooperatives are being forced to grow internationally through foreign direct investment strategies so as to remain competitive and survive in markets. Drawing on a qualitative study of Fagor Ederlan, one of the largest multinational cooperatives of the Mondragon Group, this article examines the contradictions posed by internationalization in cooperatives, as well as the tensions and opportunities they face to replicate the cooperative model’s idiosyncratic practices in foreign subsidiaries. The case study is based on the analysis of several internal documents provided by the company and 23 in-depth interviews carried out in the domestic and international plants with staff from different organizational areas and hierarchical ranks. The findings suggest that internationalization can trigger degenerative tendencies in cooperatives, which primarily affect the participation of workers in the company. Moreover, they reveal the influence of institutional barriers, as well as of factors related to the strategic role of subsidiaries and power relationships between headquarters and subsidiaries, that hamper the transformation of foreign subsidiaries into cooperatives. The article also discusses some essential aspects to make progress in the implementation of policies that bring the management model in such subsidiaries closer to the cooperative principles and values.