Co-ops and employee-owned businesses

At machinery supplier Ulma Packaging UK, managing director Derek Paterson points out that in the UK in particular there is widespread misunderstanding about what ‘co-operative' actually means. When it comes to dealing with co-operatives and employee-owned businesses, it seems, political and cultural preconceptions can cloud business judgement.

Parent company Ulma in Spain's Basque region is part of the large and diversified Mondragon co-operative. Nor is Ulma's status unique in southern Europe. Packaging equipment manufacturer SACMI, based in Imola, northern Italy, is another case in point.

Paterson does not discount the possibility that the co-operative model might, under certain circumstances, work in the UK. But it is no coincidence that the parent company has not stipulated that the same model be followed in its own overseas businesses. "If you need to shift direction, the co-operative model is not too quick on its feet. There is recognition that the subsidiaries need to be faster in their decision-making," says Paterson.

He also associates the co-operative ethos, and the way it ties workers into the business, with notions of "jobs for life" which he judges are more suited to other parts of Europe.

In fact, co-operatives are just one form of employee ownership. While few employee-owned companies will share the democratic rigour typical of co-operatives, most will have a far flatter structure than the majority of mainstream companies.

- Paul Gander

Co-operatives: Profit by pulling together (packagingnews.co.uk)