The concept of co-operative as a business model is unique and constructive. It is influenced by the same economic circumstances and factors, but differs from the other business models due to such key constituent elements of its paradigm as the form of governance, type of ownership, and beneficiary aspect (McDonnell, Macknight & Donnelly 2012). The feasibility of co-operative business model is proved by the results of an actual co-operatives’ activity, especially in the course of the economic downturn, recession process, and dramatically increasing rates of unemployment. In such cases, the major target of co-operatives is to provide sustainability and consistent development to the community, in which it functions. Moreover, co-operatives demonstrate efficient business performance on the global scale, and this fact increases their significance and perspective. Therefore, the aim of the paper is to investigate and evaluate the role the co-operatives play in the contemporary economy. An exemplary co-operative that the present analysis relies on is "The Mondragon Cooperative Corporation” (MCC) as far as it is a successful entrepreneur of international significance in the current course of time.
The consistent analysis requires proper identification of the key terms. In the given context, the crucial notion is the concept of co-operative. McDonnell, Macknight, and Donnelly (2012) interpret a co-operative enterprise as a form of entrepreneurship that relies on such priorities as equality in all dimensions of the corporate activity, democracy, and fairness. Moreover, the investigators of the issue in question highlight that the peculiar and obligatory feature of the co-operative organizations predetermines that there is more than one head of the venture. Therefore, the form of entrepreneurship is a joint one (McDonnell, Macknight & Donnelly 2012). Hancock (2005a) emphasizes that the concept of co-operative predetermines that its roots are localized, and the employees of the establishment may be compared with the temporary guardians. Therefore, a co-operative organization is very strong and perspective. Finally, McDonnell, Macknight, and Donnelly (2012) contribute to the formation of the objective concept of co-operative company by the following statement, “Co-operative entrepreneurship becomes possible when there is a group of like-minded individuals who have a need that is not being met by other companies. Co-operative entrepreneurs work together, not in isolation” (5). The overall picture of the co-operative organization justifies its efficiency and constructiveness. One of the most vivid and successful examples of the currently functioning co-operative organization with the global significance and excellent perspectives for the further development is "The Mondragon Cooperative Corporation” (MCC).
In order to realize the uniqueness of the MCC, as well as to comprehend the exceptional role the properly structured and efficiently run co-operatives play in the economy of both local and global scales, it is relevant to dwell on the origins and structural peculiarities of the aforementioned corporation. The MCC is currently headquartered in the Basque Country of Spain. This corporation is regarded as an exemplary company that has managed to incorporate the philosophy of co-operative structure into practice and proved that the workers as heads of the company are a smart and constructive business option.
According to McDonnell, Macknight, and Donnelly (2012), “The purpose of a co-operative is to provide maximum benefit to its members by engaging in economic activities or, to put it another way, by intervening in the market” (p. 6). The MCC follows this ultimate target properly and consistently. The co-operative has succeeded in proving the vision that the company is capable of achieving its primary aims only collectively, not individually. Therefore, all the tasks of each corporate department tend to be oriented to the global purpose proclaimed by the head of an organization. In such a way, the co-operative business models form a solid basis for the relevant business development contributing to the level of sustainability of the developing countries and stabilization of the international economy enhancement.
In fact, the significant role of co-operatives in the global economy may be also illustrated vividly and persuasively on the basis of other successful exemplary companies. Such examples confirm that there is no monopoly in the currently discussed sector of the business activity; according to this business model, the quality of corporate performance is confirmed by sufficient number of its adherents. As far as the economic difficulties and profound crisis are the ramifications of the Word War II, many modern co-operatives appeared and started working at that time with the aim of sustaining and developing the destroyed economy (Carini, Costa, Carpita & Andreaus 2012). One of the most successful and renowned co-operative ventures of such a type is Trentino (Deperdi & Salvatori 2012). This organization has 227,000 co-operative society members (‘The cooperative movement in Trentino’ n.d.). In such a manner, it is apparent that it is not a big temporary business venture, but the corporation with considerable experience, sufficient number of participants, and global recognition. Moreover, the venture is considered a unique one as far as it provides high results and operates in the province area. All the aforementioned criteria mold the general image of the co-operative that is a constituent element of a stable and sustainable economy. It guarantees not only a good number of working places, high level of income, and overall efficiency of the business activity but also perspectives for the further expansion and international cooperation. Furthermore, such an approach to the business model guarantees profound concern of the employees since they may become not simply average staff members, but co-founders, co-owners, and heads of the company, in which they work. Such a strategy inspires and motivates the corporate personnel and, as a direct consequence, leads to high rates of performance, escalated competitiveness, and feasibility of the venture. The following statistical data supports the proclaimed stance on the co-operatives’ essential role in the global economy, “The turnover of Trentino cooperative societies, which guarantee stable employment to more than 15,000 people, is 2 billion euro, while overall assets amount to 2.4 billion euro” (‘The cooperative movement in Trentino’ N.d.). Furthermore, Trentino also features such exceptional achievements as 90% of the market share in the area of agriculture, and “38% in terms of consumption” (The cooperative movement in Trentino n.d.). Other constructive examples of predetermining the role of co-operatives in the current course of time are presented in the report ‘The large Italian cooperatives in 2010’ (2012). The given report highlights that the significance of co-operatives is also in the aspect of diversity of the scope of their functioning since nowadays, the co-operative companies are created almost in every sphere of business. Therefore, they provide gradual and versatile development of an economy. The factual data provided in the report are as follows, “In 2010, the total production of the 126 cooperatives amounted to €41.534 billion, employing, in the same year, 125,678 workers […] the largest cooperatives accounted for 45.2% of the total production for 2008 and 10.9% of total employment” (‘The large Italian cooperatives in 2010’ 2012). In the given context, it is crucial that the co-operatives have tremendous opportunities for the further development and improvement due to sustainable business model and innovative approaches they incorporate in the modern organizations.
Hancock (2005b) underlines the significance of the alignment and balance between the investment made by the co-operative members and their wages, which may be accompanied by dividends of up to 30% on a yearly basis. Imola is a vivid example of such a tendency in the financial aspect of the internal business activity. In fact, the MCC also demonstrates an efficacious and rational correlation between the factors of risk and reward.
The co-operative model contributes to the contemporary global economy in different dimensions such as versatility, sustainability, enhancement, constructive alignment of motivation, and efficient performance, as well as a significant investment and considerable reward. Nevertheless, there are particular drawbacks and disadvantages, which should be taken into consideration as far as they also have an impact on the modern economy, but this impact is entirely negative. Therefore, they should be either eliminated, or transformed into the new perspectives and opportunities. First, the issue of employment should be discussed. On the one hand, it is a huge prerogative to employ the co-operative members only. Nonetheless, such an approach becomes irrelevant when it comes to big enterprises. Therefore, it is considered that in such cases, the lack of flexibility concerning employment policy may become a destructive factor that tends to interfere with the efficiency rates and improvement course. The limited employment criteria meet the requirements of homogeneity and dedicated participation. Nevertheless, Hancock (2005a) emphasizes the potential obstacle to such an approach, “There is also the fact that many workers simply aren't interested in making the kind of commitment, in terms of investment, risk and responsibility, that is expected of a member” (p. 11). The same stance is supported in the work by Wright, Greenwood, and Boden (2011). Second, the threat of lack of sufficient control may also be a drawback in terms of a co-operative business activity. To be more precise, this drawback also originates from one of the basic advantages of the co-operative business model as it is outlined by Logue (2006), “Why be in the co-op? ‘It’s important to be my own boss,’ replied one member” (p. 7). Though, the considerable amount of independence and absence of permanent strict control over the course of professional performance, as well as lack of direct motivating and constructive guidance, may impact the overall co-operative activity negatively. The employees should have a significant background, both experiential and theoretical, as well as are expected to aim at constant improvement, efficient cooperation with the colleagues, and concern for the global corporate targets. Third, Harding (n. d.) emphasizes the crucial importance of the change policy that should be incorporated into the course of co-operative performance, whereas this type of a business model is well-known for its conservative approach. Therefore, it is a serious challenge for the modern co-operatives to align the innovative vision of the business and its traditional paradigm of the business activity.
The co-operative business model is considered to be unique, constructive, and perspective relying on the outcomes of the recent analysis of the most prominent co-operative organizations’ performance. Its significance and relevance in the business world of the current course of time may be explained by means of high level of efficiency, excellent motivation, and solid resistance to the crisis and recession processes. Co-operatives provide numerous working places; in such a way, they decrease the unemployment rate. Moreover, they function in diverse areas and, therefore, contribute to the development of versatile scopes of an industry. Nevertheless, there are some serious drawbacks such as resistance to the change policies, lack of flexibility in the employment criteria, and possible insufficient control. Therefore, co-operatives play a crucial role in the contemporary economy, but they should orient on the qualitative improvement in order to guarantee sustainability and feasibility in the future.