Problematizing the Cooperative Firm: A Marxian View on Paradoxes, Dialectics, and Contradictions

© 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. Problematizing the Cooperative Firm: A Marxian View on Paradoxes, Dialectics, and Contradictions Jon Las Herasa, Anjel Errastia and Ignacio Bretosb aUniversity of the Basque Country; bUniversity of Zaragoza ABSTRACT Scholars are increasingly turning their attention to cooperative firms, characterized by worker ownership and management, as a way for organizations to address the economic, societal and environmental problems posed by corporate capitalism. This renewed interest stems from the potential of cooperatives to foster an alternative economic system grounded in democratic, solidary and environmentally conscious values. However, previous studies have not provided a comprehensive analysis of the contradictory nature of cooperatives within a broader interorganizational and systemic framework. Applying a Marxian perspective on paradoxes and dialectics, we theorize that cooperative firms operating within capitalist economies must navigate the ‘solidarity paradox’ – the inherent impossibility of overcoming market competition through partial and limited solidarity strategies. Drawing on an examination of the Mondragon cooperative group, we illustrate how such a fundamental contradiction manifests itself into multiple paradoxes that are interwoven, mutually constituted and inseparable. The article contributes to critical management scholarship on cooperatives by offering a deeper understanding of how these organizations perpetuate systemic capitalist patterns. It also contributes to paradox and dialectics scholarship by theorizing that paradoxes are not timeless and universal but the result of persistent contradictions inherent to historically contingent organizational forms. Keywords: Contradiction, Cooperativefirm, Dialectics, Marx, Mondragon, Paradox Two souls, alas, dwell with in his breast; The one is ever parting from the other. Capital, Karl Marx Journal of Management Studies 0:0 Month 2024 doi:10.1111/joms.13175 Address for reprints: Jon Las Heras, Department of Economics & Management, University of the Basque Country, Leioa, Spain ([email protected]). This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. 2J. Las Heras et al. © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. INTRODUCTION In a context of growing interest in how diverse forms of organizing help tackle, or reinforce, grand societal, environmental and ethical challenges (Adler et al., 2023; Gümüsay et al., 2022; Wickert et al., 2021), management and organization scholars are increasingly focusing on cooperative firms (defined here as workerowned and managed companies) as these firms offer ideal examples for discussing how an alternative economic system, driven by democratic, solidary and environmentally conscious values, could emerge from within prevalent capitalist relations (Delbridge et al., 2024; Dufays et al., 2020; Gümüsay and Reinecke, 2022). Cooperatives have long aroused substantial scholarly interest and debate regarding their potential and limitations in shaping a postcapitalist economy (Jossa, 2005, 2020). Three major perspectives stand out: utopian, sceptical, and nuanced views of the relationship between cooperative firms and the capitalist system. The utopian perspective enthusiastically advocates the radical alternative character of cooperatives visàvis capitalowned business enterprises (De Coster and Zanoni, 2023; GibsonGraham, 2006; Jaumier, 2017; Ranis, 2019), regarding them as ‘real utopias’ (Gümüsay and Reinecke, 2022; Wright, 2010, 2019) that prefigure postcapitalist solutions ‘both by creating imaginaries of an alternative future and by showing their viability in their everyday practices’ (SchillerMerkens, 2024, p. 458). From this perspective, scholars have emphasized the role of cooperatives in emancipating the workforce from class exploitation (Kociatkiewicz et al., 2021; Ranis, 2019; Zanoni et al., 2017), reducing income and social inequality (Battilana et al., 2022), and fostering environmental sustainability (Delbridge et al., 2024). The sceptical perspective provides a deterministic critique of cooperatives, assuming that these organizations are unavoidably doomed either to bankruptcy or to degeneration into capitalist forms of organization so as to survive in a market economy (see Cornforth, 1995; Diefenbach, 2019 for reviews of the degeneration thesis). The nuanced perspective provides a more complex picture that acknowledges the particular tensions cooperatives face in realizing their principles of democratic governance, solidarity and equality while remaining competitive in a market economy (Cheney, 2002; Errasti et al., 2023; Kokkinidis, 2015; Paranque and Willmott, 2014; Siedlok et al., 2024; Varman and Chakrabarti, 2004). Under this approach, some scholars have recently portrayed cooperatives as paradoxical organizations that ‘are neither fully democratic nor oligarchic but sites of continuous and unresolved contestation between oligarchic and democratic tensions’ (Storey et al., 2014, p. 641; see also Ashforth and Reingen, 2014; Audebrand, 2017; Griffin et al., 2022; Soetens and Huybrechts, 2023; Bretos et al., 2024). We argue that the first two perspectives suffer from the methodological limitation of not relating cooperatives’ internal dynamics (i.e., their content) to their external environment (i.e., the form through which those dynamics are mediated and realized), leading to unjustified and onesided conclusions. On the one hand, utopian scholars fail to grasp that cooperatives’ solidarity practices are necessarily competitive as they operate within the constraints of market competition. On the other hand, sceptical scholars fail to grasp that competitive dynamics can persist, even through 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 3A Marxian critique of the cooperative firm © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. the expansion or the development of new forms of solidarity. In this article, we build on the nuanced view while addressing a key shortcoming within it. In particular, existing nuanced studies acknowledge the tension between competition and solidarity (e.g., Bretos et al., 2024; Paranque and Willmott, 2014; RenteriaUriarte and Las Heras, 2022; Storey et al., 2014), but often treat them as separate, opposing forces, suggesting that a sustainable balance can be achieved over time through the right strategy. Consequently, nuanced studies overlook that both competition and solidarity are simultaneously essential elements constitutive of the cooperative organizational form. This oversight leads to ambiguity and inconclusiveness in their assessment of the transformational potential of cooperatives at a systemic and interorganizational level. We draw on Marxian categories and methodology, as well as recent contributions from paradox and dialectics theories (Berti and Cunha, 2023; Farjoun, 2019; Smith and Lewis, 2011), to argue that the organizational boundaries of the cooperative firm impose their own limits on systemic societal transformation. This is because cooperatives encounter what we coin the ‘solidarity paradox’: they face the necessity to compete through partial and limited forms of solidarity in order to ensure organizational sustainability. Thus, cooperatives navigate the strategic paradox of having to improve member and community living standards while simultaneously keeping up with market labour productivity standards and capital accumulation rates to remain profitable. Drawing on a critical examination of Mondragon (a group of memberowned and managed cooperatives that is often celebrated as the most successful and influential cooperative experience in the world), we illustrate how such a fundamental tension manifests itself in five paradoxes that are interwoven, mutually constituted and inseparable. Overall, this article makes two broad contributions. First, by applying a Marxian view of dialectics and paradoxes to cooperative firms, we provide a unified framework to assess their transformational potential, moving beyond onesided analyses that focus solely on internal solidarity patterns (e.g., Ashforth and Reingen, 2014; Kokkinidis, 2015; Siedlok et al., 2024) or broader contextual factors (e.g., McNally, 1993; Schweickart, 2018). This approach reveals how organizational contradictions and values, though seemingly separate, are actually interdependent, highlighting that the cooperative structure itself impedes systemic transformation. Second, we contribute to paradox scholarship by demonstrating that dialectics is not a ‘mediumrange’ theory (Hargrave and van de Ven, 2017; Schad et al., 2019) but an open method of critique (Farjoun, 2017, 2019). Our Marxian analysis suggests that paradoxes are not universal or timeless, as many paradox scholars argue (e.g., Lewis and Smith, 2022), but are instead relatively stable symptoms of contradictions inherent in historicallycontingent organizational forms, making them open to sublation or transcendence (Aufhebung in German). The remainder of the article is organized as follows. First, we review the theoretical and methodological foundations of paradox and dialectics theories and outline several shortcomings inherent in paradox scholars’ understanding of contradictions and dialectics. Second, we build a Marxian critique of the cooperative firm by first explaining how commodityproduction makes them reproduce a particular organizational paradox, to later unfold a dynamic setting in which cooperatives are driven by market competition, the thrust for capital accumulation and sources of class struggle. Third, 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 4J. Las Heras et al. © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. we illustrate the theoretical framework by analysing the solidarity paradox through a multidimensional, multilevel and interorganizational critique of Mondragon. The final section summarizes the main theoretical contributions, proposes several avenues for further research, and concludes with important implications for management research. THEORETICAL AND METHODOLOGICAL REMARKS ON PARADOX AND DIALECTICS Scholarly literature on paradox and dialectics has gained growing relevance across a wide range of management subfields such as strategic management, leadership, international business, and human resource management (Keller and SadlerSmith, 2019; Lewis and Smith, 2022). Despite the multiple origins of paradox and dialectics approaches (Hahn and Knight, 2021; Schad et al., 2016), they all emphasize the role of contradiction as a principle of organizational change instead of ‘linear, rational binaries’ (Putnam et al., 2016). Although the theoretical and methodological similarities and differences between these two approaches remain fuzzy, recent attempts have been made to compare and integrate them (Berti and Cunha, 2023; Hargrave and van de Ven, 2017; Raisch et al., 2018; Schad and Bansal, 2018). Our Marxian approach aims to bring several new insights into this ‘vibrant and polyphonic’ debate (Cunha and Putnam, 2019, p. 97). Paradoxes have been defined as ‘contradictory yet interrelated elements that exist simultaneously and persist over time’ (Smith and Lewis, 2011, p. 382). As a metatheory, paradox scholars define several general principles that may be applied to multiple theories but, above all, they emphasize the ontological principle of contradiction or ‘unity of opposites’ as constitutive of organizational reality (Hahn and Knight, 2021; Lewis and Smith, 2014). Paradox scholarship has often been used as a problemsolving research strategy: the appropriate response to persistent contradictions being to ‘cope with’ seemingly incompatible demands (i.e., logical in isolation yet contradictory when juxtaposed) in order to achieve peak performance and longterm organizational sustainability (Lewis and Smith, 2022). Accordingly, paradox scholars have highlighted the organizational dualities between stability and change, exploration and exploitation, competition and cooperation, control and collaboration, rationality and intuition, and discourse and materiality, among others (Farjoun, 2010, 2017; Keller and SadlerSmith, 2019). Similarly, an important body of research has emphasized the irreconcilable tensions faced by hybrid organizations when they combine multiple, and often conflicting, strategic missions at their very core (Battilana et al., 2022; Jay, 2013). These include a variety of organizations that operate according to commercial requirements while simultaneously pursuing alternative goals such as the labour market integration of disadvantaged people in work integration social enterprises (Smith and Besharov, 2019), the empowerment of local producers from the Global South in fair trade organizations (Huybrechts et al., 2024), the provision of financial services to poor people in microfinance organizations (Battilana and Dorado, 2010), and the promotion of economic democracy in worker cooperatives (Audebrand, 2017; Bretos et al., 2024). 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 5A Marxian critique of the cooperative firm © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. Within paradox scholarship, dialectics has been frequently presented as a subdivision of the overall framework, particularly in relation to the classical thesisantithesis ‘struggle’ for recognition. In this view, the struggle involves seeking absolute power over the opposing pole, with the synthesis emerging as the result of one pole dominating the other (Hargrave and van de Ven, 2017; Putnam, 2015). Thus, dialectics is viewed as a ‘midrange’ method (Lewis and Smith, 2022), as well as the abrupt/nonlinear moment within a learning spiral and organizational transformation (Raisch et al., 2018). Therefore, the popular view perceives paradoxes as persistent, inherent contradictions to which a definitive response is impossible and yet indispensable, hence the paradox. In contrast, dialectics refers to specific contradictions that are contingent and surmountable (for a theoretical review cf. Berti and Cunha, 2023). However, we consider this definition of organizational contradictions and paradoxes – where dialectics is subordinated to paradox due to the perception of it being ‘less persistent’ – to be problematic. It may reflect a ‘defensive mindset’ (Cunha and Putnam, 2019) that resists reconsidering the foundations of paradox theory while undervaluing the critical and explanatory potential of the dialectical method. We agree with authors who have questioned whether what is often labelled a paradox may actually be an ‘optimization problem’, a merely interpretative dispute, or an ideological tactic to reify particular paradoxes in order to preserve a status quo (Berti and Simpson, 2021; Child, 2020; Gaim et al., 2021). There are three further methodological problems worth highlighting with the above dominant conceptions of contradictions, paradoxes and dialectics. First, paradox scholars have simplistically defined dialectics through the classical triad of thesisantithesissynthesis, but for Hegel and Marx, dialectics has no systematic method or enclosed way of thinking. In fact, Marx and Hegel actually predicate the opposite: that the correct scientific method is to scrutinize categories (if we are engaging in philosophical analysis) and historically determined relations (if we are performing materialist analysis) without bringing unjustified assumptions or external elements into the thought process (Marx, 1993b, 1999). Hence, dialectics and critical thinking are not about imposing an abstract triad, but about the manner in which the ‘thinking process develops and demands to be thought [when] we guard against the assumptions that are hidden in what appear to be the simplest and most innocent questions’ (Houlgate, 2006, pp. 34–36). Second, the organizational paradox and dialectics literature has understood contradiction as ‘the simultaneous presence of two essential elements that are connected or interrelated yet directly opposed’ (Farjoun, 2017, p. 90, emphasis added). From this perspective, contradiction is about addressing the interdependence between two essential elements that can exist independently (‘the good’ and ‘the bad’), logical in isolation but absurd or irrational when juxtaposed (Lewis and Smith, 2014; Putnam et al., 2016). This is particularly evident in the literature on hybrid organizations, which has generally considered the interplay between conflicting goals as a tradeoff, where advancing one often requires compromising the other (Battilana et al., 2022; Child, 2020; Shepherd et al., 2019; Smith and Besharov, 2019). However, our Marxian view on contradictions is about recognizing the necessity to grasp the ‘identity in difference’; that the full realization of one element cannot take 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 6J. Las Heras et al. © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. place until it incorporates the determinations of another that was initially positioned in opposition. Things come into being through their opposite because they are partial and limited when understood in isolation from the reality they emerge from. In other words, what is dialectical is not only the method but reality itself. Therefore, the ontological principle of contradiction is not about how two separate or distinct elements form a new element (i.e., an unjustified rather than organic or determined ‘unity of opposites’), but about showing how ‘every real form realises its qualitative determination by transforming itself into a more concrete form, [because] the process of determination is a process of becoming another, i.e., a movement of selfmediation’ (Starosta, 2016, p. 82). In short, contradiction is not two distinct things abstractly put together to make a new one – rather, it was already one thing with contradictory forces within it, one thing against itself, revealing its inherent potential to transform into something else through its opposite. This implies that the meaning we originally ascribed to something is expanded and transformed through its opposite – for example, solidarity can become calculating and competitive. As Todd McGowan states, there is a danger in thinking of contradiction simply as difference, because ‘difference creates the illusion of the possibility of harmonious coexistence’, but ‘contradiction, in contrast, reveals that no entity can ever harmoniously coexist with itself’, separate from the rest (McGowan, 2021, p. 145). Dialectics, then, is the research method that recognizes the contradictory nature of reality, that is, the impossibility of selfidentity. A dialectical approach to contradictions and paradoxes points to the openness of reality, and advocates for a strong processual (Langley and Tsoukas, 2017), historical (Vaara and Lamberg, 2016) and selfcritical (Grodal et al., 2021) methodology that is largely absent in paradox studies (for exceptions, see Schad et al., 2016; Farjoun, 2019). This second lesson enables us to understand how cooperatives are simultaneously competitive and solidaristic organizations. They cannot be one thing without the other, in contrast to nondialectical conceptions that perceive these two organizational values as distinct rather than as different sides of the same coin – the ‘identity in difference’ of a specific organizational form (Las Heras and Messina, 2024). Third, the examination of organizational complexity through paradox lenses has generated studies in which the relation between distinct and multiple contradictions and paradoxes is undetermined, imprecise or ad hoc (see, e.g., Audebrand, 2017; Palakshappa et al., 2024). Indeed, recent calls from paradox scholars urge us to view paradoxes as interconnected and nested across space and time, as well as to scrutinize how fundamental or underlying contradictions and paradoxes can give rise to additional ones (Jarzabkowski et al., 2019; Schad et al., 2016; Schad and Bansal, 2018). However, and although a wealth of organizational studies recognize the existence of ambiguous and contradictory forces within cooperatives (e.g., Bretos et al., 2024; Siedlok et al., 2024; Soetens and Huybrechts, 2023) and other hybrid organizations (Battilana and Dorado, 2010; Jay, 2013; Smith and Besharov, 2019), these studies have not engaged in systematically explaining how the tensions inherent in a specific organizational form can be expressed in different, more developed and complex ways. This highlights the importance of showing how multiple contradictions and paradoxes develop from a foundational one, as illustrated by the ‘solidarity paradox’ here examined. 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 7A Marxian critique of the cooperative firm © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. In summary, dialectics challenges appearances by grounding them in broader historical processes and exploring why they appear in such a form. This inverts the ontological prioritization of paradoxes over contradictions. From a Marxian perspective, paradoxes emerge when contradictions appear to be fixed in time, governing particular forms of organizational life and may disappear or mutate when substantial transformations occur. In this sense, dialectics involves recognizing how organizational tensions are historically and politically addressed, and demonstrating that certain contradictions may become paradoxes when organizational forms become reified or naturalized. The paradox then represents the practical and ideological form in which the particular contradiction appears to organizational actors and researchers as insurmountable. Nevertheless, paradoxes are real because social actors are unable to reflect on themselves and collectively transform the transitory, partial and limited nature of the relations and organizations they have created. In this sense, dialectics is an encompassing and open methodology that incorporates paradoxes within its toolbox, impelling us to question why paradoxes become fixations of an inherently open and disruptive reality. Moreover, as the case of Mondragon will demonstrate, a simple contradiction inherent to a particular organizational form manifests in multiple and different paradoxes. This implies the possibility of addressing complexity without relying on undertheorized descriptions that present paradoxes as distinct and separate, rather than as the concrete manifestation of a primary contradiction; that is, paradoxes emerge and unfold through complexity. COMMODITYPRODUCTION, THE COOPERATIVE FIRM AND THE SOLIDARITY PARADOX According to Marx, capitalism is a social order in which wealth is expressed in the form of an ‘immense collection of commodities’ (1990, p. 125). While commodityproduction and markets have existed in other social orders, Marx explains how it is possible that the product of human labour generally takes the social form of a commodity. In any complex society ‘there is implicitly a social division of labor in the diverse totality of useful labor activities’, but their products need not necessarily appear as commodities (Heinrich, 2021, pp. 85–6). Human labour has always had a social character, but ‘only the products of mutually independent acts of labor, performed in isolation [i.e., privately and independently], can confront each other as commodities’ (Marx, 1990, p. 132). Hence, it is not the separation of tasks that leads to commodity production; rather, it is the social structure underlying the division of labour that reveals the social nature of work (Marx, 1990, p. 150). Building on the first methodological lesson from the previous section, a dialectical analysis of the cooperative firm must examine its emergence within its social context. At its simplest concrete level, we can think of the establishment of a cooperative occurring when (at least) two workers combine their labours freely and independently from direct relations of dominance to mutually engender the coordinated production of commodities (cf. Pencavel et al., 2006, p. 25). Regardless of the motives for the constitution of the cooperative (e.g., political, financial, and ethical), its workers freely agree to organize their 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 8J. Las Heras et al. © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. labours collectively through a direct relationship of solidarity that bonds them legally into the production of commodities. These independent cooperativeworkers agree to bestow on each other the right to control their respective individual labourprocesses. Therefore, when cooperativeworkers establish a cooperative, they enter into a legal contract as equals, agreeing to be part of a particular political relationship in which their labours are organized directly, through solidarity rather than indirectly, through the impersonal market. These workers extend their individual freedom by sharing democratic control over their labouring capacities through a determinate institution, that is, the assembly of cooperativeworkers. This breeds a cooperative division of labour that utopian scholars conceive to be ‘radically distinct’ from traditional capitalist firms (cf. Jaumier, 2017; Kociatkiewicz et al., 2021; SchillerMerkens, 2024). There are two reasons for this: first, these workers have freely and independently entered into a democratic and solidaristic association that secures their right to intervene in the organization of their labourprocesses; and second, they retain the right to a share of the produce and potential surplus, circumventing the exploitative relationship between the capitalist and the wagelabourer (Marx, 1993a, p. 511; Paranque and Willmott, 2014, p. 616; Schweickart, 2011, p. 49–50). Therefore, utopian scholars assume wage labour and class exploitation as the fundamental relations of capitalism, rather than commodityproduction. As a result, they portray the cooperative firm as a radical alternative because it is both democratic and devoid of exploitation (e.g., Jaumier, 2017, pp. 231–5; Pansera and Rizzi, 2020, p. 22). As David Schweickart argues: ‘using the market to allocate goods and services does not make a society capitalist, [market] competition is not the antithesis of socialism’; what makes a society capitalist is that ‘the capitalist classes derive their wealth from their ownership of productive wealth, that is, from capital’ (2011, pp. 23–4). These analyses, however, fail to link the emergence of cooperatives to the market relations that mediate their reproduction, thereby normalizing the systemic contradictions inherent in them. In this context, cooperativeworkers cannot plan or consciously organize the distribution of their products to meet social needs, since it is only after – not before – market exchange occurs that their private and independent labours are recognized socially, ‘in the midst of the accidental and everfluctuating exchange relations between products’ (Marx, 1990, p. 168). Therefore, while cooperativeworkers claim that their labours are organized according to solidary values, such solidarity does not extend to other commodity producers. In fact, the organization of the societal reproduction in a market economy populated by cooperatives gives cooperativeworkers direct collective control over the content of their product (i.e., the labourprocess) but simultaneously leaves them powerless with respect to the social form it takes (i.e., market competition). Thus, even if all workers were in cooperatives, labour could not be considered fully cooperative to the extent that each individual coop would be in market competition with other coops and their workers. Here, a primary contradiction emerges, not from arbitrarily juxtaposing two opposite values, but because both are intrinsic to the organization itself. The uncertainty of whether their collective labour will meet a social need makes waste a potential outcome, along with more extreme consequences, such as unemployment, 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 9A Marxian critique of the cooperative firm © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. competition for survival, inequality, poverty, and material fallout from economic crises (cf. Heinrich, 2021, p. 122; McNally, 1993, p. 164; Vidal et al., 2015, pp. 414–6). Hence, wasteful market competition and economic crises were ‘already present’, as a social necessity when labourers maintained their onesided solidarity through market interaction. This made it ‘a matter of chance’ whether their commodities would be sold or not (Marx, 1990, p. 203). The development of a solidaristic organization that depends on market success for its survival raises an important strategic question: How much solidarity can cooperativeworkers express directly (with their coworkers) and indirectly (with the rest of society) when the product of their labours confronts them as an external power – specifically, the necessity of the commodity to be sold in a competitive market? Should they expand their solidarity to include the rest of commodityproducers, or should they instead break their political bonds in order to survive as a private and independent group of individuals? The strategic question of how solidaristic or militant cooperativeworkers may choose to be arises from the cooperative firm being simultaneously built upon solidaristic and competitive forces that together produce a contradictory unity. The reproduction of such a contradictory unity takes the form of a ‘solidarity paradox’ both objectively and in the eyes of its membership. It is a solidarity that governs the labourprocess in order to engage with other social actors competitively through market interaction. The solidarity paradox represents an ongoing strategic contradiction for the cooperativeworker: being solidary with their peers over the direct control over the labourprocess, and being equally opposed to the rest of commodity producers through a relation of competition. In other words, the paradoxical consciousness of the cooperativeworker becomes the necessary reified consciousness that preserves its collective estrangement from all other commodity producers: a faithful act of solidarity which seeks social unity in the impersonal and disorganized market. In this sense, it is precisely by clinging to this very selfgenerated ‘absurd’ or ‘irrational’ strategic situation that cooperativeworkers do not oppose capitalist relations but instead reproduce them in a specific way: by becoming a community of commodityproducers who, at one and the same time, sell commodities in the market through a calculated form of solidarity. Methodologically, dialectics has allowed us to tie what were initially conceived as selfdetermining and logical ethical values to ‘a historically determined concrete praxis’ (Starosta, 2016, p. 141), that is, that of commodityproduction. Instead of concrete elements being logical ‘inthemselves’ but paradoxical when ‘juxtaposed or interrelated’ (Lewis and Smith, 2022), dialectics demonstrates how contradictory organizational values, such as ‘solidarity’, reveal their paradoxical nature when put into practice. This reveals that these values might also embody their opposite, thus becoming selfundermining due to the environment in which they are reproduced. This underlines how the transformational strategy inherent in the organizational form of the cooperative is flawed from the outset: an organization of mutualized labours that systematically reproduces competitive relations with other social actors. Consequently, the persistent contradiction underlying this solidarity strategy appears in the form of a paradox. 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 16 J. Las Heras et al. © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. community of cooperativemembers who, in order to preserve their jobs and income, opt for developing an indirect and exploitative relation with those who only possess their labourpower. The paradox of the cooperative division of labour. From their inception, Mondragon cooperatives have imported prevailing capitalist labourprocess systems, sourced from dominant economies such as the USA, Japan, and Germany, also playing a key role in their institutionalization in the Basque Country (Cheney, 2002). Until the mid1980s, relations on the shop floor of Mondragon’s industrial cooperatives were based mainly on a Tayloristic approach (see Kasmir, 1996; Whyte and Whyte, 1991). Since then, Mondragon cooperatives have extensively adopted the dominant Lean Manufacturing and Total Quality Management managerial programs (Cheney, 2002; HerasSaizarbitoria, 2014). Implementation of these postFordist models of work organization has been instrumental in enhancing the competitive position of these cooperatives as well as ensuring higher standards of work safety, teamwork, job enrichment, and information sharing. In addition, Mondragon managers emphasize the positive effects of the establishment of less hierarchical and more flexible authority and control systems, enhancing closer management–labour relationships and promoting workers’ involvement in problemsolving, continuous improvement, and the daytoday decisions that affect their immediate area of work (see Basterretxea et al., 2019). However, it is evident that the introduction of dominant regimes of managerialism and productivity has not been devoid of authoritarian elements typical of capitalist firms, as rigid disciplinary and supervisory procedures are applied in assembly lines in order to match workers’ rhythms to those of the machines, with a clear separation being made between manual tasks and intellectual tasks, to ensure that labour productivity keeps up with market trends. Indeed, ethnographic studies have revealed how the introduction of lean production systems in Mondragon cooperatives has resulted in lower levels of employee satisfaction, with workers reporting greater stress, higher workload and exhaustion, and increased pressure (Basterretxea et al., 2019; Cheney, 2002; Kasmir, 1996). Moreover, the introduction of these prevailing managerial programs has not been in response to shopfloor workers’ aspirations to selfmanagement and autonomy at work, but rather to managerial concerns of technical efficiency, quality improvement and customer focus. Several qualitative studies have documented how the veneration of leanbased management and total quality principles has displaced Mondragon’s traditional culture of substantive selfmanagement and democratic participation in favour of shallow, manageriallydriven forms of worker participation that are confined to lowlevel decisionmaking in the work area, oriented toward reducing production costs and enhancing productivity, and assessed in terms of employee motivation and commitment to business goals (Bretos et al., 2018; Cheney, 2002; HerasSaizarbitoria, 2014). As a result, a significant number of shopfloor workermembers increasingly perceive Mondragon’s formal principles of selfmanagement and autonomy as mere rhetoric and completely detached from their daily work (see, e.g., Azkarraga et al., 2012; HerasSaizarbitoria, 2014; Basterretxea et al., 2019). 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 17A Marxian critique of the cooperative firm © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. Therefore, while cooperativeworkers have formal rights to participate in governance structures, the limits that market relations impose on the organization of the labourprocess subject them to the law of value and capitalist accumulation. This compels cooperatives to adopt management methods similar to those of their capitalist counterparts in order to maintain average productivity rates (Marx, 1993a, pp. 294–301). Crucially, contrary to the view that cooperative values are being undermined by an increasingly complex and alienating capitalist division of labour, as suggested by the ‘degeneration thesis’ (Kasmir, 1996, 2016), a Marxian critique helps us understand that it is through the firmdriven practice of cooperative values that the mutualized division of labour of cooperativeworkers has been preserved amidst global competition. What is at stake, then, is not the degree of isomorphism with capitalist firms, but the steady and gradual need to encompass management and labourprocess methods developed by their antithetical capitalist firms, that is, the real subsumption of cooperative division of labour to capital accumulation. According to Kasmir (2016, p. 57), ‘workerownership did not shield [cooperativeworkers] from factory regimes that were devised for profit maximization and workplace discipline’. However, this mimicking reveals the opposite – that the capacity of cooperatives to articulate an idiosyncratic cooperative division of labour that produces and sells commodities through the adoption and finetuning of dominant management methods actually integrates industrial cooperative employment into global competition and not despite it. Therefore, the original perception of sovereignty and direct control over the collective labours that subordinates capital to labour proves to be the reverse: private and independent practices are subsumed by market forces in the endless expansion of labour productivity and capital accumulation. Thus, this second paradox arises through the contradictory fact that cooperativeworkers must navigate the underlying forces governing the two commodities they personify (moneycapital and labour power). Consequently, the improvement of cooperativemembers’ working conditions and involvement in decisionmaking at the shopfloor level (i.e., the valorization of their labourpower) has been promoted through the reproduction of exploitative managerial methods that seek greater surpluses (i.e., the valorization of their moneycapital). The paradox of pay egalitarianism. Mondragon’s ‘pay solidarity’ principle states that wages are set according to principles of solidarity between workers within each cooperative, between cooperatives and with workers in conventional capitalist enterprises in the region. During the early development of Mondragon cooperatives, when all the workers were members, they agreed to a compensation policy that established a maximum ratio of 3:1 between the highest and the lowest salary in order to promote economic democracy. This ratio, which also applies to profit distribution, has been expanded a number of times throughout Mondragon’s history in order to ensure successful recruitment of qualified managers, engineers and analysts. In particular, it was first expanded to 4.5:1, then to 6:1, and finally to the current 12:1. Widening the pay ratio has allowed the cooperatives to attract and retain highlyskilled top managers and thus acquire the managerial capabilities necessary to thrive in global 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 18 J. Las Heras et al. © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. markets (Bretos et al., 2020; Cheney, 2002), while maintaining an internal wage distribution that is still substantially more compressed than in capitalist firms (the average CEOtoworker pay ratio is 127:1 in Spain, and 354:1 in the USA (Ferdman, 2014)). Compared to capitalist firms of similar size in the same sector, Mondragon rankandfile workers typically earn around 30 per cent above the market average, while top managers earn around 30 per cent less than the market average. The decision to align Mondragon income to that of their competing labour markets reflects the need for Mondragon cooperatives to bow to market impositions and set competitive wages for a cadre of highlevel managers. In addition, although the 12:1 ratio involves an exceptionally equitable differential compared to capitalist firms, it is a ratio for those of our kind (calculated by the members for the members) and does not include the entire workforce (e.g., subcontracted workers and foreign employees). For example, Basque wageworkers earn around 80 per cent of the wages paid to cooperativeworkers, effectively reducing labour costs and increasing labour productivity and corporate profitability as in any other capitalist firm (Bakaikoa et al., 2004). If we consider the value of ownership and the share of profits and the many perks of membership – such as job security, private health insurance, early retirement, double retirement pensions – the 12:1 ratio would be reduced among members but significantly increased compared to nonmembers. Therefore, income inequality becomes the result of concrete ‘solidary struggles’ over the determination of the price of wagelabour and moneycapital, which in no way entails a systemic transformation of capitalist relations (Marx, 1990, p. 375, 1993a, pp. 269, 361–368). In capitalism, salaries cannot be ‘fair’ because they represent the contingent form in which certain workers secure their material reproduction through competing against others. The third paradox arises from the contradiction of implementing egalitarian pay schemes to mitigate capital accumulation dynamics (i.e., equalizing the price of labourpower) by offering competitive wages (i.e., buying labourpower at market prices). This approach, however, reproduces income inequality as it seeks to retain or attract skilled workers with different capabilities and ultimately sustain the overall payment scheme. The InterOrganizational Contradictions and Paradoxes of Mondragon Mondragon cooperatives are tightly linked through various supracooperative governing bodies, elected by ownermembers of the firsttier cooperatives. These bodies play a crucial role in strengthening solidarity and intercooperation among the membercooperatives and enhancing their capacity to deal with the challenges of an increasingly competitive and globalized market economy (Bakaikoa et al., 2004; Whyte and Whyte, 1991). Unlike conventional capitalowned business groups, the Mondragon group has a series of interorganizational solidarity mechanisms and tools that are collectively funded by the membercooperatives. The most important mechanisms of intercooperative solidarity include a profitpooling system whereby part of the losses of cooperatives in crisis are covered by using surpluses from other cooperatives, and the relocation of workermembers among Mondragon cooperatives in order to preserve jobs (Azkarraga et al., 2012; Errasti et al., 2017). Despite being confederated under the umbrella of the Mondragon group, each firsttier cooperative is autonomous and its sovereignty resides legally in the general assembly, where all the memberowners are represented and can democratically decide on the 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 19A Marxian critique of the cooperative firm © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. organization’s policies, strategies, and governance. Thus, interorganizational cooperative solidarity arises from an individual commodityproducer directly relating to others through the general assembly, which then serves as the governing body through which they collectively decide to establish solidarity ties with other cooperatives. In the following sections, we articulate two paradoxes that reflect the contradictions of Mondragon’s intercooperative solidarity strategies under market competition. The first paradox, related to calculated solidarity, is illustrated by the exit of Irizar from Mondragon; the second paradox, related to competitive solidarity, is illustrated by the bankruptcy of FagorElectrodomésticos. The paradox of calculated solidarity. Throughout Mondragon’s history, several cooperatives have democratically decided to leave Mondragon and strike out on their own, mainly due to their dissatisfaction with the group’s intercooperative solidarity requirements. Some of the most prominent cases include Irizar and Ampo in 2008, and more recently in 2022, Orona (an elevator manufacturer employing 5500 workers) and Ulma (a highly diversified industrial business employing 5200 workers). The case of Irizar epitomizes several aspects of the solidarity paradox. The Basquebased manufacturer of luxury buses and coaches employs around 3400 workers in its 13 production plants in Spain, Morocco, Brazil, Mexico and South Africa. After several years of losses, in 1991, Irizar received assistance from the other Mondragon cooperatives through financial contributions and other intercooperative solidarity measures such as the relocation of 65 of its workermembers to other Mondragon cooperatives. The intercooperative assistance received, together with the adoption of various internal measures such as the introduction of a new management team and the cooperative’s reorganization under an innovative management and work organization system, led Irizar to become, in the early 2000s, the most profitable cooperative in Mondragon and the one that contributed the most economic resources to the group’s intercooperative funds. However, in 2008, Irizar’s general assembly approved the management’s proposal to detach from Mondragon, with 75 per cent of the memberowners voting in favour. Officially, Irizar cited its departure from Mondragon as a result of the differences between its organizational model, which was ‘more horizontal and participative’ and based on ‘greater flexibility and agility in decisionmaking processes’, and the more rigid and orthodox organizational culture of other Mondragon cooperatives. Nonetheless, researchers observed another, perhaps more important, underlying reason: the lack of solidarity with other cooperatives, reflected in Irizar members’ widespread perception that the cooperative could be competitive without Mondragon’s intercooperative assistance, and their reluctance to continue transferring a part of Irizar’s profits to less efficient and competitive cooperatives (see, e.g., Arando and HerceLezeta, 2023). Irizar’s strategic response to the ‘ethical’ paradox of either promoting cooperative values or maintaining their autonomy was to act ‘unethically’, ultimately undermining Mondragon’s intercooperative system. By first receiving financial aid and then separating from Mondragon’s intercooperative system, Irizar’s cooperative practices evolved, leading to the production of commercial vehicles on a global scale. As Marx put it, ‘it 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 20 J. Las Heras et al. © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. is not because he is a leader of industry that a man is a capitalist; on the contrary, he is a leader of industry because he is a capitalist’ (1990, p. 451). In essence, our argument suggests that in contexts where expanding solidarity is just one of many options, profitability calculations also become one of the primary drivers for organizational survival, with the dynamics of class struggle shaping its concrete manifestation. Hence, the ability to survive the competitive strategies of others shows the inherently expansive and surplusdriven logic that cooperatives must adhere to. In the cooperative firm, solidarity becomes a calculated decision always subject to economic considerations and the option to withdraw. Intercooperative solidarity, therefore, becomes a different form of interorganizational competition. This fourth paradox emerges from the underlying contradiction of interorganizational solidarity strategies being simultaneously restricted by profitability requirements. It reveals the provisional and instrumental nature of solidarity among competitors who must secure financial stability to survive (i.e., collectively valorizing their labourpowers and moneycapitals while remaining independent from and in competition with other cooperatives). The paradox of competitive solidarity. The bankruptcy of the home appliance manufacturer FagorElectrodomésticos (1959–2013), flagship of the Mondragon group and its largest cooperative for decades, is particularly relevant for understanding how solidarity meets the limit of capital accumulation. At its peak, in 2006, Fagor employed over 11,000 people at 18 production plants in six countries, although cooperative memberowners represented only onethird of the total workforce. In the aftermath of the global financial crisis, Fagor cut over 3000 jobs in the Basque Country and another 3500 in its French and Italian subsidiaries between 2007 and 2013. The actions taken to avoid job losses among Fagor’s memberowners relied on Mondragon’s intercooperation mechanisms: mainly, the redistribution of surpluses from other cooperatives to Fagor (surpluses that were increased by the decision of the workermembers of many cooperatives to temporarily reduce their salaries), financing from various intercooperative funds, and the temporary relocation of Fagor’s workermembers to other Mondragon cooperatives. Despite the remarkable solidarity endeavours of Mondragon cooperatives, Mondragon’s general council finally decided not to lend Fagor any more money, arguing that helping Fagor further would jeopardize the survival of the other cooperatives – Fagor’s debt with Mondragon’s cooperatives amounted to €240 million by early 2013 (Errasti et al., 2017). In October 2013, Fagor declared bankruptcy and, shortly after, the cooperative was dissolved and sold off in parts to private competitors. In an unprecedented large rescue operation, an employment solution was found for all Fagor cooperativemembers. As of 2023, 1405 of the 1736 initially redundant cooperativemembers had a definitive solution (primarily in the form of permanent relocation to other cooperatives and earlyretirement agreements), while the rest were in a transitory period of temporary relocation in other cooperatives. By contrast, salaried, nonmember employees at both the Basque and foreign plants, not eligible for Mondragon’s intercooperation mechanisms, lost their jobs. In short, Mondragon’s advanced and extensive system of intercooperative solidarity contributed decisively to Fagor’s ability to survive longer than many other capitalist 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 21A Marxian critique of the cooperative firm © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. competitors in the home appliance industry. Nevertheless, and independently of Fagor’s hefty governance and management mistakes (cf. Basterretxea et al., 2022), its demise clearly shows that unprofitable cooperatives are doomed to disappear in the long run, regardless of the strength of any intercooperative and supracooperative solidarity system. More specifically, as discussed in the section on capital accumulation, Irizar and Fagor confronted the challenge of how to allocate their resources in three ways: (i) consuming all surpluses and expanding the private wealth of the cooperativeworkers; (ii) reinvesting surpluses in their own cooperatives in order to upgrade or expand employment; or (iii) financing other cooperatives (at fixed interest rates) as required by Mondragon’s intercooperative solidarity system. To make an unequal and crisisprone system look rational at all, utopian scholars often resort to promoting unmediated (i.e., abstract and undetermined) ethical and moral principles intended to preserve the cohesion and sustainability of the cooperative (e.g., De Coster and Zanoni, 2023; GibsonGraham, 2006; SchillerMerkens, 2024). Unfortunately, none of these strategies is totally effective since the pursuit of these principles depends on the market requirements and varying factors such as interest rates, the expected return for reinvesting surpluses in their own cooperatives, and the class struggles mediating the expansion of intercooperative solidarity mechanisms over organizational sustainability. Resorting to the external involvement of statelike agencies (such as the Mondragon Corporation) in the allocation of capital investments may ‘solve the problem in theory but not in reality’ (Cornforth et al., 1988, p. 43) because state agencies are subject to capital accumulation requirements (Jessop, 2016), and face the unsolvable contradiction of how to reconcile two mutuallyundermining aims: preserving intraand interorganizational solidarity and remaining economically viable projects. The socialist state emerges, then, as the external political agent that implements reasonable regulations in order to preserve social cohesion within a crisis prone system. However, utopian (GibsonGraham, 2006; SchillerMerkens, 2024; Wright, 2019), degeneration thesis scholars (see Cornforth, 1995), and those more nuanced studies (Errasti, 2015; HerasSaizarbitoria, 2014; Varman and Chakrabarti, 2004) do not explain why the state would be a capable agent in providing a cohesive solution when it has to preserve the economic independence and sovereignty of cooperatives. However, as Devine (1989) explains using the examples of Yugoslavia and Hungary, cooperatives struggle by lobbying the state and fighting for favourable regulations and fiscal policies to protect their own private interests in relation to other cooperatives. Intercooperative solidarity mechanisms are thus contradictory in nature because they have to simultaneously suppress the disruptive tendencies of capital accumulation and intercooperative struggles (cf. Marx, 1993a, pp. 478–505). In short, preserving the solidarity for some may be to the detriment of others. The underlying contradiction of pursuing intercooperative solidarity through competitive organizational strategies suggests that while cooperation among cooperatives stands out as a basic cooperative principle (i.e., mutualizing their labourpowers and moneycapitals), it encounters a minimum capital accumulation threshold, where prioritizing collective welfare may challenge individual financial sustainability (i.e., cooperatives need to accrue and reinvest surpluses in order to keep their average productivity standards). This fifth paradox, therefore, emerges when cooperatives attempt 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 22 J. Las Heras et al. © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. to expand their solidarity externally through financial mechanisms that, driven by profitability requirements, put a strain on the sustainability of their solidarity strategy. DISCUSSION In this article, we employ the analytical framework of dialectics and Marxian analysis to examine how the ‘solidarity paradox’ expresses, in multiple ways, the contradictory consciousness of a cooperativeworker who simultaneously personifies the interests of the capitalist and the wagelabourer. We develop the critique in three steps: first, we question the general assumptions of the literature dealing with paradox and dialectics; second, we apply dialectics’ insights and Marxian categories to the study of the cooperative firm at a more general and systemic level; and third, we focus on the specific case of Mondragon. In what follows, we outline the article’s contributions to critical management scholarship on cooperatives and to the broader field of paradox and contradiction studies. We then propose three key directions for future research, and lastly conclude with some final remarks. Theoretical Contributions First, this article contributes to critical management scholarship on cooperatives by clarifying the transformational potential of these organizations within a systemic framework and by deepening the theoretical implications of considering cooperatives as contradictory organizations in which both competition and solidarity become their opposites. Cooperatives necessarily appear paradoxical to their members because they cling to this particular organizational form without being able to transform the systemic context in which they exist. The solidarity paradox emerges because commodity producers abstract their solidarity ties from the competitive relations they systematically reproduce and, thus, unconsciously perpetuate the status quo. To paraphrase Marx’s opening quote, two souls dwell within cooperativeworkers’ breasts, one ever parting from the other, since cooperativeworkers cannot reconcile their solidaritybased practices with their embeddedness in the broader dynamics of market competition. In turn, the organizational form of the cooperative firm poses its own limits to societal transformation as it does not challenge the way in which markets mediate the fulfilment of social needs. By revisiting the simplest contradiction of the cooperative firm and the paradoxical consciousness of navigating it, as well as the multidimensional, multilevel and interorganizational contradictions and paradoxes of Mondragon, we show how both utopian and degeneration scholars are mistaken in adopting a onesided view that focuses only on the good or bad aspects of an organization. An essentialist approach to both organizational solidarity and competition obviates the contradictory nature of organizations, and how these organizational values are selfundermining when articulated through particular organizational forms. In contrast, the few studies that acknowledge the contradictory nature of cooperatives (Bretos et al., 2024; Errasti et al., 2023; Siedlok et al., 2024; Storey et al., 2014), and other hybrid organizations (Battilana and Dorado, 2010; Jay, 2013; Smith and Besharov, 2019), have neither 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 23A Marxian critique of the cooperative firm © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. conducted systematic analyses nor developed encompassing theories to explain why these particular contradictions are intrinsic to such organizations, why they persist, and how they relate to other apparently distinct but somewhat similar contradictory organizations. This article explores how the paradoxical nature of cooperatives emerges from their specific historical setting within the capitalist system, which forces cooperativeworkers to sustain the existing order by maintaining relationships that are neither purely competitive nor purely solidaristic but embody both at the same time. Market competition and capital accumulation enable solidarity strategies to take concrete shape in the form of cooperatives and, vice versa, concrete solidarity strategies must be inherently calculative to survive market competition. Hence, cooperatives generate an idiosyncratic paradoxical consciousness because their members personify the forces of two mutually undermining commodities: moneycapital seeking higher profits, and labourpower seeking to secure better working conditions. By deploying a onesided analysis and not locating cooperatives within a broader ecosystem, utopian, sceptical and nuanced studies overlook how these organizations actively reproduce or transform a determinate totality. Our Marxian analysis acknowledges the potential of cooperatives in advancing class solidarity and generating positive outcomes; in particular, reducing income inequality among coworkers (Battilana et al., 2022), promoting greater workplace participation and democracy (Kociatkiewicz et al., 2021; Zanoni et al., 2017), and/or developing mechanisms for intercooperative employment and financial solidarity in the face of economic pressures (Arando and HerceLezeta, 2023; Errasti et al., 2017). Nonetheless, we also underline the importance of not considering these victories or achievements in isolation, but as solidarity strategies that enable these organizations to reproduce and expand competitively. Fundamentally, our sympathetic critique of the cooperative firm does not rest on presupposing higher ethical cooperative models, or suggesting a ‘real alternative’ could exist only if cooperativemembers simply organized better, under the aegis of ‘less egotistic’, ‘militant’ and ‘solidary values’ (e.g., De Coster and Zanoni, 2023; Pansera and Rizzi, 2020; RenteriaUriarte and Las Heras, 2022). On the contrary, we perceive the successes and failures of cooperatives as the result of the tension involved in applying cooperative values while navigating market competition. Second, our Marxian analysis of the cooperative firm also enriches scholarly debates and research methodologies that address societal grand challenges (Adler, 2019; Vidal et al., 2015) through the lenses of paradox and dialectics. Specifically, we discuss the shortcomings of prevailing approaches to paradoxes and dialectics by arguing that paradoxes emerge not as persistent and transhistorical contradictions (Schad et al., 2019; Smith and Lewis, 2011, 2022) but as historically determined ones, arising from specific and contingent social relations. In other words, a Marxian perspective to organizational paradox scholarship allows us to locate paradoxes historically rather than in a timeless and universal framework, thus opening up the possibility of their transcendence. This insight has both scholarly and socially implications (cf. Wickert et al., 2021) as it redirects attention from intraorganizational to interorganizational relations, emphasizing their mutually constitutive and contradictory nature. As our analysis reveals, adopting the dialectical method as a strong process approach (Berti and Cunha, 2023; Farjoun, 2017, 2019; Langley and Tsoukas, 2017) provides 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 24 J. Las Heras et al. © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. management and organizational scholars with a fresh perspective that critically examines the paradox scholarship’s ‘core foundations’ (cf. Schad et al., 2019). It shows that organizational paradoxes are not ‘absurd and irrational’ when contradictory forces are juxtaposed (see, e.g., Lewis and Smith, 2014; Putnam et al., 2016), but rather are the essential strategic consciousness that perpetuates organizational contradictions in specific contexts. In this sense, our Marxian engagement with paradox and dialectics literature inverts the ontological prioritization of paradoxes and contradictions, highlighting the partial and provisional nature of the former. Thus, dialectics should not be seen as a ‘middle range theory’ (e.g., Hargrave and van de Ven, 2017; Schad and Bansal, 2018) but an open method for organizational critique. This insight enables management scholarship to break free from the methodological constraint of taking certain organizational forms for granted, fostering a broader perspective – toward interorganizational and systemic patterns – that highlights the contingent and provisional nature of paradoxes. This shift places actual societal problems, rather than scholarly debates, at the forefront of our attention and questions how our analyses might be reinforcing the status quo. Our multidimensional, multilevel and interorganizational scrutiny of Mondragon strategies related to work organization, pay equity, employment and intercooperation has also revealed how a foundational paradox may manifest itself in multiple ways, that is, how the ‘solidarity paradox’ becomes complex and differentiated in its own development through concrete organizational practices. Crucially, this occurs not because paradoxes are ontologically distinct or separate from each other (e.g., Palakshappa et al., 2024), but because they are the concrete expression of an underlying contradiction realizing its potential. These insights contribute to recent calls in the management literature for a deeper understanding of the overlapping nature and complex interconnections of paradoxes and to explore how a foundational paradox can manifest itself in multiple paradoxes that are interwoven, mutually constituted and ontologically inseparable (Hahn and Knight, 2021; Jarzabkowski et al., 2019). The corollary of this argument is that addressing grand challenges and navigating systemic transformations through partial and limited organizational analyses will inevitably lead to inadequate outcomes, since the perspective from which they are approached will be unaware of its assumptions and selfposited limitations, and so, it will unconsciously remain selfdefeating. Directions for Future Research We identify three promising avenues for future research. First, we have shown how commoditymediated relations produce particular contradictions that take the form of solidarity paradoxes within the strategic management of cooperatives. The overall framework is one of capitalist relations, meaning our conclusions cannot be directly transposed to other organizational forms, such as those of a planned society (e.g., Laibman, 2022). In these socialist organizations, social actors interact through (more or less) consensual political processes, and so are mediated by direct organizational ties and procedures rather than the indirect and impersonal relations that markets necessitate. Therefore, our analysis demonstrates that it is market profitability predominantly (rather than other 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License 25A Marxian critique of the cooperative firm © 2024 The Author(s). Journal of Management Studies published by Society for the Advancement of Management Studies and John Wiley & Sons Ltd. politicallydetermined performance pressures) that ultimately informs the strategic template of organizations such as Mondragon. Further research is needed to explore how other social orders and organizational forms may navigate interorganizational political contradictions while preserving social cohesion. Second, the multiple solidarity paradoxes identified in the case of Mondragon are not necessarily universal to all cooperatives, but may be specific to large and complex networks of cooperatives operating in highly competitive and globalized markets. In fact, this singlecase analysis points to the need for further research into the variegated forms in which a simple contradiction may unfold, depending on the different strategies adopted by cooperatives. The analysis of smaller, less complex cooperatives operating in local nichemarkets could lead to the discovery of other contradictions and strategic paradoxes. In addition, historically sensitive analyses could show whether some contradictions are more salient than others, and whether the form in which certain contradictions are construed and governed may generate new contradictions and paradoxes. The International Cooperative Alliance’s heptalogue on cooperative principles (i.e., open and voluntary membership; democratic member control; members’ economic participation; autonomy and independence; education, training and information; cooperation among cooperatives; and concern for community) could serve as a point of departure to understand how different cooperatives put the cooperative principles into practice, how they prioritize certain principles over others, the specific dynamics that emerge from this, and how different paradoxes are legitimized in order to preserve organizational cohesion and sustainability. Third, our presentation of the paper’s central arguments to Mondragon’s leaders was met with some scepticism; their response was basically to emphasize that Mondragon cooperatives must pragmatically adapt to global market requirements if they are to survive. Pragmatism has been identified as a guiding principle that can contribute to reconciling competing demands in some cooperatives (Ashforth and Reingen, 2014; Audebrand, 2017; Soetens and Huybrechts, 2023). However, in its worst expression, pragmatism can lead to a lack of reflexivity and selfcritique among a majority of memberowners within cooperatives, particularly evident in Mondragon (Azkarraga et al., 2012; Bretos et al., 2020; Kasmir, 1996). Therefore, we encourage scholars to adopt critical performativityinformed research methods (Reedy and King, 2019), based on playing a critical, active, productive role aimed at transforming organizational practice within cooperatives in order to reconfigure, advance and extend solidarity practices under global market requirements. In this way, scholars may collaborate with cooperative practitioners in working through paradoxes collectively and reimagining future social arrangements for governing the cooperative firm (see Griffin et al., 2022; Wickert and Schaefer, 2015). Moreover, actionoriented, critically engaged research represents a way forward in the dialectical analysis of cooperatives, as it may lead to new, practicebased insights into the varied and distinctive contradictions faced by cooperatives and the ways and extent to which these organizations contribute to solving societal grand challenges (Gümüsay et al., 2022; Wickert et al., 2021). 14676486, 0, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/joms.13175 by Readcube (Labtiva Inc.), Wiley Online Library on [19/12/2024]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License