From the Mondragón Experience towards an Inclusive Participatory Company Model


On May 3, the Chapel of Europe hosted a roundtable composed of the Bishop of Bilbao, Mgr. Joseba Segura, Professor Jon Emaldi from Deusto Business School, and Gaspar Martinez from the Basque Diocesan Institute of Pastoral Theology. Following their participation in a panel at the European Parliament, they gathered to discuss the business model of the Spanish Mondragón group.

The Mondragón case represents a unique example of the intersection of high moral values with economic efficiency, all sustained by the endless and charismatic leadership exercised by Father Arizmendiarrieta (1915-1976). Since its inception, the goal of the Mondragón group has been to improve the company model and, consequently, society as a whole. In Father Arizmendiarrieta’s words: “Create and not own. Act and not win. Progress and do not dominate.” This Chinese proverb defines his sense of service and dedication, consistent with his evangelical beliefs, and translates into the integration of social justice and the desire to humanise the world of work.

When one thinks of Mondragón, two concepts arise: cooperativism and innovation. Mondragón is a combination of several enterprises, educational institutions, and social projects connected by a common idea: working towards a fully economic system based on the human being. This was indeed the ultimate purpose of Father Arizmendiarrieta when he started envisioning a different way of doing business. He arrived in Mondragón in 1940, an 8,500-inhabitant town suffering from the socioeconomic effects of the Spanish Civil War. Most of the youth started working at the age of 14, and further education was out of reach.

How could the economic system be transformed? Is it possible to work in a more participative, humanistic, and competitive company? These questions ultimately justified Father Arizmendiarrieta’s actions. He knew that a single cooperative had no chance of survival and advocated for financial independence, suggesting the creation of a bank and an insurance company.

Although he did not know it at the time, the Parish Church of San Juan Bautista de Mondragón was his first and only destination in life. Inspired by Pope Leo XIII’s 1891 encyclical Rerum novarum, Arizmendiarrieta soon realised the urgency of professionalising education as, in his opinion, training would lead to autonomy and, ultimately, freedom. This revolution entailed three key elements: a high level of moral demand, a sense of humanity, and an interest in the common good beyond the individual. His intention was to apply the Church’s Social Doctrine in the world of work. With a clear sense of conviction, he envisioned cooperativism as the best possible model to put these values into practice and to place these values into practice. Ultimately, he aspired to make people aware of the transformative value of participation and to bring human trust to the management side of organisations.

Likewise, Arizmendiarrieta’s leadership was about inspiration. By fostering creativity and responsibility, introducing a sense of purpose, and placing the human being at the centre of society, he inspired people to be their own leaders. This vision implied a change in the traditional image of leadership, making humans fully responsible for their own lives and, consequently, embracing their own leadership. An approach that ultimately transformed the way Mondragón people viewed their own professional lives, families, and the larger society.

In practice, within a couple of decades, the town of Mondragón experienced an economic, social, and educational transformation: in 1943, Arizmendiarrieta founded the Professional School to train the younger generations under the aphorism that “education constitutes an investment that is not amortised.” In 1952, he initiated the creation of a set of companies that, within a decade, acquired the form of a cooperative organised as a constellation of several interconnected institutions to guarantee the financial, social security, and industrial development of the entire region. Likewise, in 1962, he conceived the creation of the Higher Polytechnic School which, since its inception, has allowed students to combine their technical studies with work experience at the cooperatives.

Mondragón’s present motto is “Humanity at Work,” based on a threefold dimension: technical, social, and spiritual. The group’s business model is centred on innovation, sustainability, and shared responsibility. The four keys to its success still align today with the vision that a humble and radically modern priest had in post-war Spain: transformational leadership; shared collective project based on a culture of participation, co-responsibility, transparency, and the commitment of the workers to the common project; priority given to sustainability and social concern; and emphasis on innovation and education, with Mondragón University as a top global research hub.

Mondragón has become a leadership company, leading in translating that spirit among those working at the cooperative level.

By Teresa Pallarés Ramos, ELP Fellow.