Management training as a source of competitive advantage: The Mondragon Cooperative Group case

The origins of the Mondragon corporation go back to 1956, while today it has become a diversified business group with 103,731 employees, spread over 260 companies, half of which are cooperatives, belonging to its industrial, finance and distribution divisions.

Among other reasons that explain Mondragon’s great economic achievements, different researchers point to the existence of better managers and the development of in-group management tools (Logan, 1988; Whyte and Whyte, 1989; Thomas and Logan, 1991; Albizu and Basterretxea (1998); Cheney, 1999; Bakaikoa et al., 1999; Clamp, 2000 and 2003; Smith, 2001; Jacobsen, 2001; Irizar, 2005; Albizu et al., 2007). The present study analyzes the main role of education and training in the cooperative group, and the special efforts made in the creation and development of managers. The management training in the Mondragon group has been widely considered as a way that has enabled, on the one hand, the creation of competent managers, and on the other, the socialization in cooperative values of those managers (Ellerman, 1984; Abell, 1985; Bradley and Gelb, 1985; Asua, 1988; Meek and Woodworth, 1990; Thomas and Logan, 1982; Whyte and Whyte, 1991; Hoover, 1992; Agirre, 2001). More specifically, the object of our analysis will be to find out if the corporate training centres of Mondragon has led to competitive advantages in the attraction, development and retention of highly valuable managers.

We think that this research can throw some light on the debate around the importance of one of the principles of the cooperative movement worldwide: The education principle, and the necessity of translating this principle in specific training actions and investments aimed to create better and more socialized cooperative managers. We also think that this study constitutes a new step forward in research on training policy as a source of competitive advantage.

The fieldwork that supports this research consists of two phases. The first one is a qualitative study based on a round of in depth interviews to 12 persons in charge of Mondragón’s training structure. After this qualitative study, we have conducted a survey with the cooperatives members of Mondragon Group in the Basque Country and in Navarre (Spain) in December 2006, excluding the corporate training centres and corporate cover entities. Thus, the final population remained established by a whole of 81 cooperative companies, 66 of which have replied to the survey, that is to say, 81,5 % of the population.

The empirical contrast carried out in this study confirms that Mondragon’s cooperatives surpass the barriers to the attraction and retention of valuable managers that are common to other cooperatives; confirming also that Mondragon’s management training policy, relied on its corporate training centres, grants competitive advantages to the cooperatives in the attraction, development and retention of the managers.

Bibliography

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