Is there life after degeneration? The organizational life cycle of cooperatives under a ‘grow‐or‐die’ dichotomy

Abstract

This article provides an in-depth, longitudinal analysis combining real-time and retrospective data on a set of Mondragon's industrial cooperatives that are organized as international groups. We examine the life cycle of these international cooperative groups, which is expected to evolve differently to that of small-and mediumsized cooperatives that operate exclusively on a local scale. The article is theoretically informed by the cooperative life cycle theory, as well as by recent insights from the degeneration and regeneration theses. Our analysis yields an intricate picture of the evolution of cooperatives faced with a 'grow-or-die' dichotomy. On the one hand, our findings reject the highly simplistic and deterministic view of the degeneration thesis by demonstrating that these cooperatives can mobilize resources to revitalize cooperative values and practices. On the other, we find that regeneration may not occur in a consistent, sequential fashion as the previous literature suggests, but rather degenerative and regenerative tendencies can occur simultaneously, even leading to long-lasting, unresolvable situations. In light of this, the article asks future research to draw on power-aware and politically informed approaches for further understanding of how cooperatives manage the tensions at each organizational stage of their life cycle, and of which organizational actors benefit, and how, from reversing some degenerative tendencies while maintaining others intact.

Managing Internationalisation Tensions in Producer Cooperatives

“…In that sense, degeneration can be understood as an agentic managerial process to balance competing demands, rather than an inevitable outcome for internationalising cooperatives (c.f. Bretos et al, 2020).…”

“…Research suggests that the degeneration might be a transitory stage; cooperatives may be able to regenerate by transferring cooperative principles to overseas operations (Bretos, Errasti, & Marcuello, 2020). Yet our understanding of how these tensions can be managed remains limited, as seminal theoretical frameworks describing internationalisation focus on traditional, investor-owned MNEs (e.g., Buckley & Casson, 1976;Johanson & Vahlne, 1977).…”

Corporate governance as a key aspect in the failure of worker cooperatives

“…Some interviewees highlighted the example of ULMA, that has grown through spin-offs and creating new cooperatives, each of a size that can make democratic governance easier. A recent paper (Bretos et al, 2019) also offers interesting examples from Fagor Arrasate and Fagor Ederlan, that have achieved the involvement of members at all levels in the discussion and elaboration of strategic plans through several mini councils.…”

International Expansion of Social Enterprises as a Catalyst for Scaling up Social Impact across Borders

“…Up Group has reinforced democratic governance through different mechanisms, including the creation of a European Works Council to promote employee voice and social dialogue in the group [62]. Several Mondragon cooperatives have promoted a plethora of community projects aimed at wider societal transformation through different activities such as reinvestment of profits in the community, implementation of environmental sustainability goals and circular economy practices, and cooperation with other local organizations that work with people with disabilities and at risk of social exclusion [63]. It is particularly noteworthy that in April 2020, several Mondragon industrial cooperatives temporarily restructured their manufacturing processes to produce and supply face masks and respirators to combat the COVID-19 disease in Spain, in a context of medical equipment shortage and national emergency [64].…”