The internationally recognized and flagship worker cooperative Fagor Electrodomésticos was founded in 1956 and was heralded as a success story before declaring bankruptcy in 2013. In this thesis, I examine the existing literature regarding worker cooperatives and provide historical background on Fagor Electrodomésticos. I then focus on one of the factors credited by the literature as contributing to its failure and other worker cooperatives broadly, the internal decision-making process. To analyze the role of the internal decision-making process I develop a game-theoretic model that sheds light on the dynamics of this process. This model contains three actors each of whom attempt to maximize their payoffs by advocating within a three-node game tree. This approach illustrates that in times of economic downturn actors with higher preferences for labor over profit will forestall employment cuts that are required for the firm to remain profitable or break-even and might operate at a loss to avoid necessary employment reductions. I then introduce costs when one or more actors employ their vetoes in a way that can prevent the delay of necessary unemployment reductions for firm survival.

The purpose of this dissertation is to challenge the predominant theories of the firm in economics by demonstrating that the firm can only be properly understood if the importance of cooperation based on trust and loyalty, and the ability of the firm to achieve that cooperation by influencing the social foundations of behaviour, is appreciated. Chapter 1 demonstrates that neglecting this ‘social nature’ of the firm renders the predominant theories incomplete and incompatible, with contract-based theories clinging to a rigid model of behaviour and competence-based theories failing to develop the social foundations of knowledge. The second chapter constructs a theory of the firm that rectifies these shortcomings by maintaining that the firm fulfils its purpose of developing and applying productive knowledge by achieving cooperation, which, along with the dual function of achieving coordination, involves a combination of organisational structures and organisational culture. In Chapter 3, this theory reveals that, contrary to deterministic views on organisation and economic development, a range of organisational forms are possible for any given technology or culture, and that organisation in fact shapes technology and culture. In Chapter 4, the dissertation shows that, contrary to the predominant theories of the firm, cooperative firms may have an inherent advantage in achieving cooperation based on trust and loyalty, and in maintaining that cooperation while also achieving the coordination required for advanced technologies. Although this ability may be suppressed by the prevailing institutional environment, the case of Mondragón, discussed in Chapter 5, demonstrates that it can be activated by innovations such as cooperative groups and ‘second-tier coops’. Although Mondragón’s success has been attributed to the uniquely cooperative traits of Basque culture (as opposed to its structural innovations), Chapter 6 demonstrates through primary and secondary research that Mondragón has in fact been used as model across the globe.

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Le travail de terrain s'est réalisé au cours de ces quinzes dernières années au sein du Groupe Mondragon au Pays basque espagnol, groupe qui constitue actuellement le plus grand réseau mondial d'entreprises coopératives. Ce groupe détient en plus deux particularités majeures. L'une étant de posséder un grand échantillon d'entreprises coopératives industrielles en concurrence à l'échelle mondiale avec de grandes multinationales. L'autre étant celle d'être constitué d'une très grande majorité d'entreprises coopératives aux mains de leurs travailleurs. Ce qu'on appelle couramment l'Expérience Coopérative de Mondragon est reconnue comme étant une expérience unique de plus de soixante ans d'existence. Notre question de recherche: Comment évolue dans un contexte actuel l'identité organisationnelle au sein du Groupe Mondragon?, est issue d'une problématique issue du terrain. Et c'est à partir d'une recherche-intervention sur deux cas d'entreprises coopératives industrielles que nous avons été amené à réfléchir sur l'évolution de l'identité organisationnelle au sein de ces deux coopératives et de là-même au sein du Groupe Mondragon dans son ensemble. / The field work has been carried out over the past fifteen years within the Mondragon Group in the Spanish Basque Country. Which is currently the world's largest network of cooperative enterprises. This group has also two major characteristics. One is to have a large sample of industrial cooperative enterprises competing globally with large multinationals. The other is that it consists of a very large majority of cooperative enterprises in the hands of their workers. What is commonly known as Mondragon Cooperative Experience is recognized as an unique experience of more than sixty years of existence. Our research question: How is the organizational identity evolving within the Mondragon Group in a current context?, is the result of a field issue. And it is on the basis of an intervention research on two cases of industrial cooperative enterprises that we were led to reflect on the evolution of the organizational identity within these two cooperatives and from there within the Mondragon Group as a whole. This consideration of the evolution of the organizational identity leads not only to consider the strategic directions chosen by the Group Mondragon but also the implemented policies of leadership and coaching to encourage the identification of the co-workers of Mondragon within their cooperatives. In this work, the researcher adopted a constructivist epistemology. He conducted a broad review of the literature on organizational identity in particular and its extensive nomological network.