Abstract
The issue of growth of Social and Solidarity Economy organizations has become a focus of analysis in response to the extensive case studies documented which recount processes of degeneration (or loss of original values) of the organizations in question. In this article, the case study of a non-profit cooperative (Agintzari S. Coop.) in the field of social services in the Basque Country (Spain) demonstrates the possibility of activating ecosystemic scaling processes, by way of inter-cooperative strategies, which do not result in the growth of the organization itself. The research question seeks to inquire to what extent inter-cooperation strategies, understood as ecosystemic scaling models, help to strengthen cooperative entities without weakening the maintenance of cooperative principles. The article aims to advance some results regarding the theoretical relationships between scaling strategies, the foundational motivations (or “interest orientation”) of the organizations, and the ecosystemic structures adopted to sustain these scaling processes.
This article aims to address, from an alternative approach, one of the most recurrent study topics in the field of social, cooperative, and solidarity economies: growth. It considers the possibility of articulating alternative growth processes in order to upscale the impact of an organization while avoiding growing in size, since the latter often leads to processes of degeneration and denaturation of the cooperative model (Bretos & Errasti, 2018a, 2017; Bretos, Errasti & Marcuello, 2020; Heras-Saizarbitoria, 2014). The question that prompts our research, therefore, arises from the interest in finding out whether there is any possibility of growth based on collaborative models between Social and Solidarity Economy organizations (henceforth, SSEOs) that mitigate the risks of degeneration observed in the organizational growth processes of SSEOs.
In this article, we adopt the international definition of Social and Solidarity Economy with reference to forms of economic activity that prioritize social and often environmental objectives, and involve producers, workers, consumers, and citizens acting collectively and in solidarity (Utting, 2015). According to this author, “the broadening field of SSE involves not only traditional ‘social economy’ or ‘third sector’ organizations and enterprises (such as cooperatives, mutual associations, grant-dependent and service-delivery non-governmental organizations (NGOs), and community and other forms of volunteering and giving) but also myriad types of self-help groups organizing to produce goods and services, fair trade networks, and other forms of solidarity purchasing, consumer groups involved in collective provisioning, associations of ‘informal economy’ workers, new forms of profit-making social enterprises and social entrepreneurs, and NGOs that are having to shift from a dependence on donations and grants to sustaining themselves via income-generating activities” (Utting, 2015, p. 1).
Growth is one of the most challenging issues for SSEOs (Han & Sha, 2020). Islam (2021) concludes that within the growth strategies analyzed, the academic literature illustrates organizational growth processes much more profusely than those strategies referred to as “ecosystemic,” which base their growth processes not on making the organization bigger but rather on the articulation of “support ecosystems.” The academic literature has tended to pay less attention to the ecosystemic strategy, which is why Camargo and Ehrenhard (2021) call for the need to analyze cooperative companies from an inter-organizational approach. In order to deepen our understanding of these ecosystemic strategies, the case study analyzed in this article proposes a growth strategy based on inter-cooperation in such a way that, through the constitution of inter-organizational structures enabled by the cooperative model, a growth process can be adopted that does not weaken cooperative principles.
This article contributes to the current debate by presenting a case study in the Basque Country (Spain) on the growth of a social cooperative whose growth strategy has favored an inter-cooperative or ecosystemic model over an organizational one. The Basque cooperative movement can be distinguished at an international level for two main reasons: its predominant industrial weight (40% of all cooperative entities are industrial) and the solid ecosystemic structures (financial, educational, innovative, social provision, etc.) on which growth strategies have been based, with both these characteristics being closely linked to the experience of the Mondragon Group (Uriarte et al., 2021). Mondragon Group is the outcome of a cooperative business project launched in 1956. Organisationally, it is divided into four areas: Finance, Industry, Retail, and Knowledge. It currently consists of 81 separate, self-governing cooperatives, around 70,000 people and 12 R&D centers, occupying first place in the Basque business ranking and 10th place in Spain. It operates throughout the world, with 104 production plants in 37 countries, commercial business in 53, and sales in more than 150.
However, the large size achieved by these international industrial cooperatives has, on many occasions, led to degeneration processes, defined as processes of gradual weakening of cooperative principles in the management of these organizations (Bretos & Errasti, 2018b; Bretos, Errasti & Marcuello, 2020). In addition to the Mondragon cooperative movement, there are at least two other networks of Solidarity and Transformative Economy in the Basque Country, namely REAS-Euskadi and Olatukoop. The organizations belonging to these networks (more than 100 in the former and around 80 in the latter) also face important challenges related to growth processes but have not yet encountered degenerative dynamics such as those mentioned above due to the smaller size or different scope of activity of these experiences (Begiristain et al., 2022). The case studied in this article, therefore, analyses a Basque cooperative experience outside the Mondragon Group, whose growth strategy based on inter-cooperative structures has been able to successfully combine organizational strengthening with the mitigation of the risk of degeneration.
Studies on inter-cooperation are not uncommon. The dynamics of inter-cooperation have been widely documented for the rural environment (Meliá, 2008; Mendina, 2019; Nova, 2018), for new technologies (Mozas et al., 2020), and for the socio-health field (Morales, 2011). In reference to industrial cooperativism, with a special focus on the Mondragon cooperatives, there is abundant literature on the cooperative integration and articulation processes that assist their growth (Altuna, 2008; Bakaikoa et al., 2004; Gaminde, 2021; Smith, 2001), or that are activated as a resilience mechanism especially in situations of economic crisis (Arando & Bengoa, 2018; Basterretxea et al., 2019; Elortza et al., 2012; Santos-Larrazabal & Basterretxea, 2022). Various authors have questioned the validity of these processes of integration (Altuna & Urteaga, 2014; Bakaikoa et al., 2004) and internationalization (Bretos et al., 2019, Bretos, Díaz-Foncea & Marcuello, 2020; Errasti, 2015; Errasti et al., 2016), many of which were deployed without participation and ended up being structured as non-participatory organizations.
These processes have also been documented for solidarity economy entities, where the activated inter-cooperation resources have been analyzed from a logic of solidarity collaboration networks (Mance, 2008), local ecosystems (Arcos & Morandeira, 2020; Villalba-Eguiluz et al., 2020), or social markets (Arrillaga & Etxezarreta, 2022; Askunze & Díez, 2020; Crespo & Sabín, 2014; Díaz et al., 2020).
The research question guiding this article asks to what extent inter-cooperation strategies, understood as ecosystemic growth/scaling models, help to strengthen cooperative entities without weakening the maintenance of cooperative principles in their management approach. We understand ecosystemic growth/scaling as that which enables the scaling of social impact without maximizing organizational growth, relying on an ecosystem that includes both organizational factors and systemic level factors (Han & Sha, 2020). In order to answer this question, the research of Agintzari S. Coop.’s scaling strategies sheds some light on the different ecosystem resources activated with the objective of preserving and strengthening cooperative principles. More theoretically, we aim to facilitate through this case study a better understanding of the mechanisms of inter-cooperation as ecosystemic growth strategies, and find out what pushed these strategies to be adopted, by investigating the underlying motivational factors (Tykkyläinen, 2019; Van Lunenburg et al., 2020), as well as the scaling strategies that enable the activation of various inter-cooperation tools (Bauwens et al., 2020). In the “Discussion” section, we point out that further practical implications could be drawn from each of these strategies.
The rest of the article is structured as follows. Section 1 contains a literature review, focusing on three main aspects: (a) alternative growth strategies, (b) ecosystemic scaling strategies, and (c) inter-cooperation as an ecosystemic scaling strategy. In Section 2, the documented case study is characterized through a data analysis of the results obtained from the systematization study of the experience. Section 3 presents the findings from this analysis. Section 4 offers a discussion of these findings, framing the case study from the perspective of the theoretical debates addressed previously. Lastly, the conclusions review the original research question in light of the findings indicating some lines of future research as well as the limitations of our study.
Literature Review
In order to refine our conceptual interpretation of the analyzed experience, we aim to clarify some aspects related to: the definition of scaling (as opposed to growing) and the identified strategies for its deployment; the definition of ecosystemic scaling strategies, where we frame inter-cooperative practices as forms of ecosystem scaling focused on SSEO; and the delimitation of the motives and forms that inter-cooperation takes.
Alternative Growth Strategies for SSEOs: Scaling the Social Impact
The simultaneous search for the creation of social, economic, and environmental value turns SSEOs into hybrid organizations (Battilana & Lee, 2014; Doherty et al., 2014; Folmer, 2018) whose growth processes seek to adjust to models that do not divert them from their main objective, which is to focus on social/environmental causes. This type of organization has a certain form of “risk aversion” to growth since growth may lead to financial objectives taking precedence over social and environmental ones (Tykkyläinen, 2019).
Faced with this reactive or aversive perception of growth, most of the literature opts for the concept of “scaling of social impact” as the main motivation for development of SSEOs (Austin et al., 2006; Dees et al., 2004; Zahra et al., 2009). Initially more used in North America, this concept has been widely incorporated into European literature on SSEOs (André & Paché, 2016; Desa & Koch, 2014; Lyon & Fernández, 2012), where growth is seen to be one way to scale the social impact, but not the only one to meet the social problems faced (Bauwens et al., 2020). This approach connects with a critical vision regarding organizational growth, considering that greater growth for SSEOs does not directly imply scaling their social impact (Han & Shah, 2020).
From the perspective of the SSEO, getting bigger is not the same as scaling the social impact. This implies that there are ways to increase the social impact without expanding the organization. The main research approach that prevails in studies on scaling tends to analyze organizational growth strategies rather than other types of scaling strategies (Han & Shah, 2020; Islam, 2021; Van Lunenburg et al., 2020). Scaling of social impact, in contrast, has been interpreted to mean generating transformative social change (Han & Shah, 2020) or creating and sustaining social value through continuous learning and innovation (Verver et al., 2021).
There is a broad consensus on the main scaling strategies that exist and these can be found on a continuum established between the two extremes of breadth scaling and depth scaling (André & Paché, 2016; Bauwens et al., 2020; Desa & Koch, 2014; Lyon & Fernandez, 2012). Breadth scaling implies measuring the social value in a functional and quantitative way (number of people impacted), while depth scaling seeks to address the structural causes that underlie the social problems faced while generating processes of social change (Verver et al., 2021). Bauwens et al. (2020) consider that the former is usually presented as customer-oriented and increasingly global in scope, while the latter would appear as community-oriented and more local.
According to Verver et al. (2021), these two categories should not be considered as dichotomous (quantitative vs. qualitative) nor mutually exclusive, but rather as two extremes that make up a continuum or a spectrum where the various scaling strategies can be located. Bauwens et al. (2020) try to locate the main scaling strategies along this spectrum: breadth scaling encompasses scaling up strategies with strategies more or less controlled by the SSEOs (organizational growth, social franchises, etc.); scaling across uses approaches to replicate or spread the model through other actors (André & Paché, 2016); scaling deep includes modes of depth scaling, an approach that focuses on improving the processes that have an impact on the beneficiaries; and scaling out offers a greater range of services to the same target audience.
Another fundamental aspect, to contrast our working hypothesis, is the view that scaling models are in line with the “orientation of interests” or the founding mission of the SSEOs (Bauwens et al., 2020). The SSEOs tend to be categorized as entities of mutual interest or of general interest, depending on whether the beneficiaries of the economic activity carried out are made up of social groups equal to or different from the members of the organization (Ben-Ner & Gui, 2003). Bauwens et al. (2020) confirm that, surprisingly, entities founded under mutual interest opt for breadth strategies to the extent that membership leads organizations to seek economies of scale through organizational growth (which benefits the members themselves), while entities of general interest favor depth-scaling strategies as they are more community-oriented.
Ecosystemic Scaling Strategies: Agents Involved and Typologies of Shared Resources
Among the scaling strategies deployed, some look to activate different extra-organizational resources, thus configuring true ecosystems of support, with the participation of various actors who provide a variety of support resources through different organizational arrangements.
Islam (2021) concludes that organizational growth strategies have attracted more academic attention than ecosystemic growth strategies. However, the interest in the ecosystemic perspective is gaining ground in the literature related to SSEOs, as more and more organizations establish support ecosystems for social enterprises which, to date, remain insufficiently studied. In this sense, Han and Shah (2020) make a theoretical proposal that comprehensively considers the resources activated in these ecosystemic strategies, by including intra- and inter-organizational-level factors (where inter-cooperation strategies take place) with other systemic level factors (such as institutional infrastructures and public policies).
We understand a support ecosystem as an economic community of actors that interact, affect, and are affected by the activity of other relevant actors beyond the limits of a specific activity. Support ecosystems are composed of networks of actors engaging in a variety of activities that enhance productivity and business growth (Diaz Gonzalez & Dentchev, 2021).
From this ecosystemic thinking perspective, the uniqueness displayed by inter-cooperative mechanisms in the scaling processes of SSEOs is of particular interest. We look more in depth at what types of agents make up these “support ecosystems” for SSEOs (Diaz Gonzalez & Dentchev, 2021), and then attempt to understand under what different logics ecosystemic scaling strategies occur.
A bibliographic meta-analysis conducted by Diaz Gonzalez and Dentchev (2021) states that support ecosystems can be classified into three differentiated components: those that provide fuel to entities in terms of monetary and non-monetary resources (knowledge and information), human capital, and access to various actors (financial, research, etc.); those that provide hardware by sharing aspects such as advisory services (legal, accounting, technical), physical spaces (incubators), and research and development activities; and finally, those that reinforce an “entrepreneurial culture” (DNA) where, beyond dissemination activities, government support is conceived as a key factor, both through the application of public promotion policies and through recognition dynamics that increase the visibility and differential culture of social enterprises.
With regard to different strategies of ecosystemic scaling, Warnecke and Houndonougbo (2016) propose three models for ecosystemic scaling: (a) establish strategic networks; (b) seek affiliation/branching; and (c) build informal networks (weak) to spread the initiative. Smith and Stevens (2010), in line with Dees et al. (2004) and Lyon and Fernández (2012), identify three scaling models: (a) dissemination (open structures, where what is shared is mainly information and sometimes technical assistance); (b) affiliation (a formal relationship between two or more parties that are part of an identifiable network); and (c) branching (the local opening of an establishment of a larger organization).
Van Lunenburg et al. (2020) state that SSEOs usually opt for social franchise or network models, where multiple agents coexist with some degree of autonomy (Voltan & De Fuentes, 2016), considering these models capable of generating a greater and faster social impact than purely organizational growth strategies. They propose an open debate in the literature with conflicting views and evidence regarding whether open structures are capable of generating greater or lesser impact, but always at the expense of a loss of control of the scalable organization. They conclude that open collaboration structures are predominant in experiences that prioritize influencing the community and do not exhibit as pressing a desire for control.
Han and Shah (2020) identify in their ecosystem approach an area they call “institutional infrastructure” in reference to the networks that amplify the social impact and conclude that a greater social impact is achieved through collaborative networks, without resorting to growth of any one organization (Leadbeater, 2006). Finally, Verver et al. (2021) also establish a meso level, the inter-organizational level structured in networks, where broad and deep-scaling strategies converge through the establishment of collaborative relationships that are essential for the processes of entrepreneurship and scaling of SSEO companies.
Inter-Cooperation as an Ecosystemic Scaling Strategy: An Approach From the Basque Country
We understand inter-cooperation as an inter-organizational collaboration strategy that is framed within ecosystemic scaling strategies through particular organizational logics and structures. Inter-cooperation, included in the principles of the International Cooperative Alliance (ICA) as “cooperation between cooperatives”, is understood from the logic of better serving the partners and strengthening the cooperative movement “working together through local, national, regional and international alliances.”
Inter-cooperation thus operates as an extension of internal solidarity and requires the channeling of this cooperation through a process of external solidarity in order to align interests to meet common objectives between cooperatives (Rius, 2021). Inter-cooperation also implies a degree of formalization of external cooperation mechanisms, usually articulated through the creation of unions, federations, or confederations (Martínez Charterina, 2012).
Inter-cooperation practices are necessary to the extent that cooperatives tend to operate in a highly atomized manner and with a reduced business dimension, which becomes a limiting aspect of their competitive capacity (Sanchez, 2018) in a context where growth is required to be competitive. For cooperative companies, facing the growth process constitutes a true “litmus test” (Gaminde, 2021), which can lead to isomorphism processes that undermine the essence of the model (Bretos, Errasti & Marcuello, 2020; Bretos & Errasti, 2018a; Errasti et al., 2016). Gaminde (2021) proposes inter-cooperation mechanisms as growth models that enable growth without losing the cooperative essence.
Through inter-cooperation strategies, integration dynamics take place, and these seek greater coordination between the cooperating parties through the establishment of new shared structures. These integration mechanisms have usually been categorized according to the level of business union needed (Vargas Vasserot, 2010): mergers as a result of the creation of a new cooperative that makes the previously associated ones disappear; cooperative integration that maintains the units that are grouped in the new structure; and, at a lower level, economic collaboration agreements that are used occasionally for the joint performance of certain economic activities.
Among these mechanisms, Gaminde (2021) states that the most used are usually those that avoid merger processes in favor of mechanisms that allow the integration of different organizations resulting in two main structures: the creation of second-degree cooperative societies and the constitution of cooperative groups. Also, among other forms of collaboration, the legislation contemplates the establishment of “inter-cooperation agreement” or the creation of mixed cooperatives, where the participation of capitalist (not labor) partners is accepted, as third-party individuals, external to the cooperative who purchase a portion of the social capital and, consequently, acquire rights and obligations as collaborating partners.
There is no doubt that the group of Mondragon cooperatives is a unique experience, unparalleled globally, due to the level of cooperative integration achieved and also due to the inter-cooperative articulation mechanisms developed (Altuna, 2008). The multiple studies that relate the historical evolution of the Mondragon cooperative experience usually establish different stages that correspond to different levels of cooperative integration and inter-cooperative articulation (Altuna, 2008; Arando et al., 2018).
Interestingly, although there is a direct relationship between cooperative integration processes and the scaling of these cooperatives, inter-cooperation mechanisms have been studied more as resilience tools in times of serious economic crisis (Arando et al., 2018; Elortza et al., 2012; Gaminde, 2021).
Beyond for-profit industrial cooperativism, it is worth noting that inter-cooperation between social initiative cooperatives has tended to have a smaller presence in the sector, yet this may be essential to strengthen their position with respect to capital companies and to be able to interact with the public to defend a model of public-cooperative provision and development for the non-profit initiative (Rius, 2021). Several previous studies have addressed the issue of inter-cooperation between SSEOs associated with SSE networks in Spain. These propose different typologies of inter-cooperation, differentiating them from integration strategies (Fernandez, 2019), identifying some of a more vertical or horizontal nature (Potrony, 2017), or making a distinction between the economic and political logics of inter-cooperation (Martínez, 2018), with a special focus on social market dynamics (Hortolano, 2020). However, none of them manages to establish a relationship between inter-cooperation and scaling strategies. This is the focus, and contribution, of our study.
Case Study: The Strategy of Scaling Through Inter-Cooperation of Agintzari S. Coop
Research Context
Established as a cooperative in 1991, Agintzari S.Coop. is currently a social initiative (non-profit) cooperative that manages socio-educational, psychosocial, and consulting and training services for children, youth, and families. Its clients are mainly the Social Services areas from public institutions in Bizkaia (Basque Country), and it currently has a corporate base of around 400 member workers.
In the mid-1990s, following an improvement in the economic outlook in the Basque Country, public institutions grew, budgets for social action increased, and social policies and public care systems were developed (Alonso, 2020). From 2000 to 2007 Agintzari benefited from the acquisition of new services (Artetxe & Alonso, 2019). However, following the financial crisis of 2008, the Basque Social Services system began to destabilize with the entry of new agents, mainly capital companies, and the view that the sector was precarious and its protection systems weakened increased the perception of exposure to risk from external competition.
In this context, a new growth strategy was proposed by the boards of Agintzari with the main objective being to shield the sector from the arrival of new capital companies (Alonso, 2020). The growth model consisted of generating new mixed cooperatives by the workers of those services taken on by Agintzari becoming cooperative members, with Agintzari remaining as a partner-capitalist (with 51% of the social capital) guaranteeing the quality of the service, the values, and the work methodology in the initial years. This led to their involvement in Zabalduz S. Coop in 2014. The model was then replicated in the Hirube cooperative in 2018, and this entire network of cooperatives was structured through a second-degree cooperative, Bogan S. Coop.
Study Methodology and Data Analysis
This article summarizes the results obtained from a systematization process in the creation of Bogan S. Coop., a second-degree cooperative, carried out at the proposal of Agintzari S. Coop. The research method is a case study carried out using the methodology of the systematization, defined as a critical interpretation of one or several experiences that, from its ordering and reconstruction, discovers or makes explicit the logic of the process experienced, the various factors that intervened, how they related to each other and why it was done in a certain way (Jara, 2020, p. 56). The usefulness of a single case study is justified for two main reasons: on the one hand, because there are no processes with similar characteristics in the Basque Country, at least in the sector studied and, on the other hand, because the case study methodology allows lessons to be extrapolated from a specific case which could be valid and applicable to similar experiences in other places (Yin, 2013).
The systematization method aligns with forms of action research in that it encompasses a wide range of approaches and methods that emphasize the practical dimension of knowledge and the involvement of participating individuals in its production. According to this definition, the systematization of any experience or process requires a critical reconstruction of the meaning of the lived process that produces meaningful knowledge and learning. It aims to promote the construction of collective knowledge, make visible the knowledge of the individuals and groups involved, and analyze the experience from different perspectives to appreciate its greater complexity (Casado et al., 2022).
In this exercise of critical knowledge production from practice, the objective, the object and the approach of systematization were established from the outset and in a consensual manner between the research team and the promoters of Agintzari (Eizaguirre et al., 2004). To this end, various participatory spaces were proposed where opinions could be shared and discussed, to subsequently bring order to the disordered knowledge and scattered perceptions and record the facts and knowledge of the experience.
With respect to the collection and analysis of data, the research process was developed in four phases: (a) Agintzari identified, in the first place, the need to generate a narrative of what led to the creation of Bogan S. Coop, for which they sought assistance from the Institute of Social Economy and Cooperative Law (GEZKI) of the UPV/EHU; (b) Agintzari informed the governing council of the three entities, and the directorates, that the systematization was beginning and that part of the team would be interviewed. Over a period of 2 months (from March to April 2021), 21 interviews were carried out with people who were the protagonists of this process from various perspectives (Appendix 1); (3) at the end of June, an initial version of the narrative of Bogan was presented for validation by the interviewees through an online form so that the participants could add views and comments on the proposed narrative; (4) in July 2021, the final result was presented to, and discussed with, the entity’s management.
The work of systematization essentially involves qualitative fieldwork, where participatory observation constitutes the primary strategy for data collection. In our case, one of the researchers (currently an employee of Agintzari) was undertaking curricular internships within the organization. This allowed him to actively participate in the organization’s day-to-day affairs, including work meetings, event organization, and the drafting of new projects. This immersion in the organization enabled a favorable research positioning, as it allowed for a more precise understanding of the organization and its individuals through participatory observation. This facilitated the establishment of the necessary trust relationships to approach in-depth interviews with greater accuracy.
The project obtained data from two main sources beyond the participatory observation: (a) from extensive internal documentation where the various reflection and strategy documents are compiled, and (b) from in-depth interviews with a total of 21 members of the three cooperatives that make up the Bogan group, including people who had a relevant role in the systematized process, as well as others who did not and were sent the information through the usual communication channels of the cooperatives (Appendix 1).
Finally, the data were analyzed through different steps. Firstly, all interviews were transcribed and, in conjunction with internal documentation and the synthesis developed from the literature review, aggregate dimensions were established related to three main themes: scaling strategies, motivational factors for scaling, and ecosystemic structures and their forms. Second, first-order codes were established to identify each sub-theme, as well as second-order codes that served to group the codes structuring the themes of our analysis (Gioia et al., 2013), as can be seen in Figure 1.

First- and Second-Order Codes and Aggregated Dimensions.
This exercise was first done by two authors separately (one participant observer and another non-participant), then each one cross-checked with the other and fine-grained through the participation of the other two authors. This cross-validation exercise allowed the inclusion of new analysis categories, as well as the repositioning of the “behavior of other cooperatives” factor as an external motivational factor, as initially it had been included in the analysis of scaling structures. In the final stage of analysis, we returned to our informants to present our findings and integrated the feedback into the analysis.
Findings: Scaling Strategies of Agintzari and Its Motivational Factors
Below are the results of the systematization work that captures the scaling strategies adopted by Agintzari S. Coop. The structure of our study analyses the motivational factors (both internal and external) of scaling, as well as the structures created for this purpose.
Internal Factors: Reconnecting With Founding Motives
The prelude to the expansion period of Agintzari occurred in the context of a serious internal crisis, which is explained in part by the gradual loss of identification of the corporate base with respect to the project deployed in previous years (Agintzari, 2008). This feeling of distancing was the result of a very rapid growth process that led to a loss of participation and the distancing between management with a very vertical approach and a base that wanted to move toward a more participatory model.
The growth was so great at that time, new projects were launched in each new meeting, and with that growth driven by the 2005 reorganisation, we set our sights on services to be more in touch with people. (In2)
A process of “disordered” growth, therefore, generated an identity crisis, which forced the cooperative to rescue its founding values in order to rebuild an organizational narrative faithful to the initial impetus:
It is very important to understand the history and workings of the cooperative . . . It is also important that we all understand why we are a cooperative of social initiative of public utility, and to make it clear that we are not a cooperative like, for example, Mondragon, and this is a very important distinction. (In4)
Values linked to the strong participatory and non-profit nature of the project are notable in this narrative, as well as the ultimate goal of the organization: to professionalize the sector to provide a better service to the beneficiaries while improving the working conditions of the workers in the sector.
In 2009, the governing council of Agintzari requested the accompaniment of an external entity to stimulate a process of reflection called Zuhaitz. Around 80% of the members participated and resulted in a profound restructuring of the entity, thus passing from a vertical structure to one with greater autonomy for both people and teams, laying the foundations for the subsequent expansion process.
External Factors (I): Threats and Opportunities Arising From the Financial Crisis
The internal process of Zuhaitz was ongoing when the global financial crisis of 2008 hit, bringing with it potential threats to the social services sector. These were reflected upon by Agintzari who, as a non-profit third-sector organization, had been professionalizing for years but was now concerned about the entry of new (capital) companies in the provision of social services (Alonso, 2020).
This fact led to capital companies, seeking the stability granted by the public administration, to look to displace local non-profit entities which had insufficient financial muscle to withstand the crisis, with the former offering comparatively more competitive prices. Agintzari was determined to transform threats into opportunities through the strategy of “shield the sector, shield the territory” (Agintzari, 2013a). This strategy presented a new growth policy based on two main premises: shielding the territory by holding on to niche markets that could fall into the hands of large capital companies and shielding the sector by trying to expand its own management model by way of ecosystemic growth, through other non-profit companies.
Shield the sector against the invasion of capital companies. We spent years trying to dignify the conditions of the workers (. . .) the capital companies put this subsistence at risk; and regarding the territory, shielding the territory is to guarantee that good quality services are maintained, non-profit, with reinvestment in the territory. (In3)
The main incentive to growth, therefore, did not come from the logic of the “mutual interest” of the corporate base, but rather from a more general interest (professionalization of the service, dignifying the sectoral working conditions), understanding the process of scaling as a strategy to “shield” the sector rather than as a market expansion strategy to increase revenue.
However, the non-profit goal was not enough: a strategy was needed that would open up access to new services and markets, with greater operational capacity, technical knowledge and human resources. This could be achieved through organizational expansion of the Agintzari cooperative or, in contrast, through a “modular” or ecosystemic growth strategy, the latter being the route finally taken.
External Factors (II): Supportive Ecosystem Building
In mid-2012, the Provincial Council of Gipuzkoa requested that Agintzari take on the management of the emergency reception services of the UBA center, which was experiencing conflict between the workers and the company providing the service. Agintzari applied its cooperative management model rather than its technical professionalism since at that time it had no experience in emergency care, but it did have a participatory model for good management of the service, with the technical requirements coming from the UBA workers.
Several meetings were held with the UBA workers to introduce them to the model proposed by Agintzari and to present them with the proposal for future cooperativization if given the opportunity to manage the project.
We had meetings with the UBA workers, and we were very honest. We told them that if they were willing to form a cooperative in the future, we would be willing to work hand in hand with them, sharing a management model rather than imposing one.(In8)
Thus, a way of approaching growth was taking shape through the possibilities offered by the cooperative model (Agintzari, 2013a). Reflections included how this cooperative growth should be, the size of the new entities, and what the relationship should be between the entities. Strategic reflections emerged from these sessions that would mark the growth of Agintzari toward the subsequent constitution of Bogan in the year 2018.
The scaling strategy had to respond to the opportunity, acquiring technical and organizational competence along the way, but without forgetting the most important thing: to gain influence in changing the public policy of provision of social services (Agintzari, 2013b): “It Is Important That The Motivation For Growth Has An Ideological Basis, Of Expansion And Promotion Of The Social Economy, From A Position Of Social Construction, With A Public-Private Relationship Model, Etc.”
The scaling model was based, therefore, on a combination of growth on open structures but with a significant degree of control over the process: Agintzari assumed control at first, but with the ultimate goal of gradually reducing its weight in the participation and associating itself as part of a second degree cooperative along with the other cooperatives created.
Breadth Scaling Strategy: Spreading the Ecosystem by Replication as Best Option
In 2015, Agintzari considered the tender for the Trebatu program, a family intervention program in Gipuzkoa, which ultimately became Hirube S. Coop. It was a complex case in which, initially, Agintzari did not want to participate due to the volume of subrogation of more than 100 workers and the difficulties of managing a service of such a size. Also, the service workers felt very insecure about their future:
We were clear that we wanted to keep our jobs. We held a meeting, and decided that we wanted to support Agintzari in this project (. . .) being Agintzari workers (until the creation of Hirube) we began to see changes at all levels, even physical, new spaces (. . .). (In13)
Therefore, a management model was replicated that aligned with an “ideological base,” promoting the social economy model, which operated in this sense as the maximum guarantor of the process:
With the experience of Zabalduz, we conveyed the idea of carrying out the Social Economy model as had been done in Zabalduz (. . .) with the idea that with the support of Agintzari they could create their own cooperative. (In6)
This ideological base is a way of organizing the company (participatory) that is consistent with its form of growth: an integration in the first instance through the constitution of a mixed cooperative controlled by Agintzari, which would over time eventually withdraw from the social capital to leave the new cooperative to run itself. Hirube was finally legally constituted in 2018, also as a mixed cooperative, with the same conditions as in Zabalduz, and in 2021 the Trebatu service was transferred to Hirube, having been managed by Agintzari up until then.
Scaling Structure: The Cooperative Group as Formal Ecosystemic Scaling
In 2015, Agintzari, with the participation of Zabalduz, carried out a joint reflection (Agintzari, 2015) to give coherence to the strategy of growth and territorial expansion initiated in 2012, to create a structure with its own legal nature that would integrate all the cooperatives that worked in the network.
There was talk in this process of generating a network of interests that would allow the sharing of structural expenditure, opening up to new territories, and reaching out to others who were like-minded but who did not have the necessary driving force. The group did not want to be bigger (in size), but it did want to grow, and so a network structure was the answer. Sarea encompassed the idea of a common relational environment of all the cooperatives of the group.
Different models and management structures were considered, but it was clear that the one that allowed the greatest autonomy, identity, and equality between entities was the second-degree cooperative.
To maintain the tension of participation, it was decided that Agintzari did not want to be bigger, but we wanted to grow. And the cooperative model was compulsory, so there was no other option but to create other cooperatives, and to create a network, Sarea. (In4)
From 2015 to 2018, at the same time as supporting Zabalduz, and the creation and establishment of Hirube, steps were taken to create Bogan, which would be constituted as a second-degree cooperative a few months after the constitution of Hirube, at the end of 2018 (Agintzari, 2018, 2019).
Bogan was established with a dual purpose (Agintzari, 2019). On the one hand, it was seen as an instrumental entity and a tool for the associated cooperatives to gain economies of scale, a greater presence in the market, and greater recognition by the public administration. On the other hand, more than an instrumental entity, it was to be an example of a cooperative of reference, of “an idea” about the cooperative model, its differentiated way of growing, and the alternative model it proposes for the provision of social services in the territory (Table 1).
Summary Table of the Growth Process of Agintzari (2005–2018): Main Milestones.
Discussion
The discussion section is organized around two main debates: the relationship between scaling strategies and the “interest orientation” (or foundational motivation) of organizations, on the one hand, and the relationship between these motivations and the ecosystemic vision of scaling processes, on the other.
According to Bauwens et al. (2020), SSEOs whose founding motives respond to a general interest would be expected to adopt deep-scaling strategies, oriented toward strengthening the community that sustains them. In addition to this first causal fact (motivational factors and scaling strategies) we identify a second one as a new finding of our research: the activation of ecosystemic resources, for deep scaling, which feed fuel, hardware and ‘entrepreneurial culture’ (DNA) to the network of entities that collaborate in these growth processes (Diaz Gonzalez & Dentchev, 2021). Regarding the organizational mission, we conclude that once the mutual interest among the motivational factors has been deactivated, deep scaling is indeed the main scaling strategy, as Bauwens et al. (2020) predicted, in contrast to what has been previously established in the literature.
It is clear that the growth orientation adopted by Agintzari comes from a mainly reactive position of having to respond to various threats and opportunities perceived in the economic environment (Tykkylainen, 2019), which is in line with the social mission of the entity, that of the preservation of the general interest (Ben-Ner & Gui, 2003). Consequently, its scaling strategy is adjusted, as expected, to a scheme more focused on impacting on the local community through deep-scaling strategies (Bauwens et al., 2020).
In line with our working hypothesis that a cooperative can grow without getting bigger, the case study demonstrates this in at least two main aspects. The first aspect is in line with the approach developed by Tykkyläinen (2019) which associates growth motivations with the perception of the external environment (as threats and opportunities). SSEOs are often forced to grow, beyond a lucrative pursuit of gaining market share, to address perceived threats. Agintzari decides to grow as a reactive strategy to the crises, both internal and external, perceived during the years 2005 to 2012.
The first crisis, of an internal nature, attempts to respond to the problems generated by rapid and disorderly growth, through the Zuhaitz process, the result of which is the strengthening of the founding motives of the experience: to ratify itself as an experience of general interest in its double aspect as a model of public service provision (public and quality) and as a business model of SSE in the management of this provision. The second crisis, caused by the financial crisis of 2008 which opened the door to the entry of capital companies that “pull prices” and are driven by a profit motive, provokes a second strategic reflection in Agintzari, the result of which is a firm commitment to growth, but on a clear ideological basis: “shield the sector, shield the territory” (Agintzari, 2013).
In this sense, the results obtained by Tykkylainen (2019) are ratified in our study, finding that growth motivations are not only explained by the social mission pursued by SSEOs, but also as a response to other factors (such as unfavorable market conditions), and pursuing growth goals other than the social one, increasing the size and scope of companies, and strengthening them financially.
The second aspect, in line with Bauwens et al. (2020), is that a causal relationship is established between the founding motives and the scaling strategies of SSEOs: pursuing the general interest entails scaling deep. We identify the main contribution and singularity of our case: deep-scaling is materialized through an ecosystemic strategy, which activates various agents in the territory (public administration, research centers, companies in the sector) and which adopts various formulas for inter-cooperation. Therefore, it can be stated that the strategy of inter-cooperation as an ecosystemic scaling model operates as a strategy that enables cooperatives to grow without losing their essence (Gaminde, 2021). This forms one of the main conclusions of our study.
The ecosystemic strategy is channeled through distinct scaling paths that make it possible to deal with the main perceived risks at any given moment:
In a first stage, where the mixed cooperative is created, the scaling strategy resembles that of “branching” (Warnecke & Houndonougbo, 2016), a controlled process of acquisition of another company through its cooperativization, which enables the exchange of monetary resources (contribution to the social capital) and non-monetary resources, as well as elements linked to the hardware, such as sharing technical and legal advice or developing joint activities (Diaz Gonzalez & Dentchev, 2021.)
Once the acquired company is on its own, the strategy takes the form of affiliation (Smith and Stevens, 2010) or strategic networks (Warnecke & Houndonougbo, 2016), insofar as the acquiring company (Agintzari S.Coop) gradually loses control over the acquired one (Zabalduz S.Coop), but is networked through a second-degree cooperative (Bogan S.Coop) that makes it possible to mutualize various management tools (financial, communication, etc.).
Finally, the replication of the Zabalduz experience in Hirube three years later is a clear example of scaling across, where the model is spread through other actors (Bauwens et al., 2020).
The temporal and sequential logic of such scaling pathways shows the strategic vision of how to mitigate the risks associated with each phase of the growth process. The strategies adopted are different depending on whether the risks are internal or external. The ecosystemic strategy, therefore, takes place under two main formulas of inter-cooperation or cooperative integration: the mixed cooperative and the cooperative group. The former responds mainly to internal risks, insofar as it seeks to develop a controlled scaling process that ensures the cooperative model (participative, non-profit, etc.). The latter addresses threats of a more external nature: increasing market shares to make it more difficult for capital firms to enter the sector.
Beyond interpreting scaling strategies from a risk mitigation perspective, these could also be understood from a motivational aspect for growth. In this sense, the scaling strategy is initially built via a formal structure (the mixed cooperative) that allows greater initial control by the scaling SSEO to then progressively relinquish this control in favor of more open network affiliation structures (cooperative group) (Smith & Stevens, 2010).
Inter-cooperation through a mixed cooperative (as the first phase) would respond to the entrepreneurial profile described by Zahra et al. (2009) as a “social engineer,” whose main objective is to change the social system through a controlled structure. However, the constitution of the cooperative group, also as part of the inter-cooperation strategy, enables greater autonomy for the associated parties (Vargas Vasserot, 2010) while constituting a more open structure, less controlled by any one of the parties, as is appropriate under the profile of “social bricoleur” (Zahra et al., 2009). The hypothesis proposed by Van Lunenburg et al. (2020, p. 1018) is supported, that of “the stronger the network is, the less the actor desires control.”
This transitory model toward structures of less control by the scaling organization reflects the predominantly more social than economic motivation of the actors concerned (Van Lunengurg et al., 2020), to the extent that they pursue the general interest beyond that of mutual interest (Ben-Ner & Gui, 2000).
We end this section by summarizing the contributions made by our study in relation to previous research. In this regard, we have made progress in two areas: on the one hand, the theoretical interpretation of intercooperation as an ecosystemic scaling strategy and, on the other hand, the analysis of this strategy in relation to two other explanatory variables, that of the motivation that promotes scaling and the structure that channels this process.
Firstly, it can be deduced from the case analyzed that intercooperation enables diverse ecosystem strategies which could be sequenced, temporally and in relation to the risks perceived in each phase. This temporal sequencing could in practice facilitate other replication processes and, in theoretical terms, this could be a further contribution to the interpretation of scaling processes from a risk mitigation perspective.
Secondly, in our study, scaling strategies are correlated with the motivational aspects that drive these processes and the structures that formalize or channel these scaling strategies. In previous studies, these variables have been analyzed separately, but not interrelated. The three aggregated dimensions obtained in our data analysis could facilitate a better understanding of the relationships between the principal motivations that orient scaling strategies, as well as the adopted structures which best suit scaling reasons.
The practical implications derived from the case study point to the possibility of scaling through structures that provide greater control to address internal risks, as well as other more open structures (replication, networks) to address more external issues.
Conclusions
The concluding section addresses the research question as to what extent inter-cooperation strategies, understood as ecosystemic growth/scaling models, help to strengthen cooperative entities without weakening the maintenance of cooperative principles. The main contribution of our study, in summary, is in establishing a relationship between founding motives and inter-organizational relations.
This aspect, little studied previously (Bauwens et al., 2020), attracts particular attention in the case of non-profit cooperatives. We conclude that inter-cooperation would be the authentic form that the ecosystemic scaling strategy of cooperatives takes, by enabling types of inter-organizational relations, both open and closed, which adjust to different growth strategies (branching, affiliation, replication, etc.), and manage to preserve the founding motives and the cooperative essence (Gaminde, 2021).
After analyzing the relationship between the motivational factors and the organizational formulas that adjust to these factors, we now relate our contribution to another particularly relevant topic where further research could be oriented for the future: that of the sustainability of these ecosystemic strategies or, in other words, the aspects that urgently need to be prioritized for the maintenance of these scaling strategies over time.
At this point, our analysis is linked to the theorization made by Folmer (2018) as to why SSEOs base their growth strategies on network or ecosystemic formulas to a greater degree than commercial companies do. They do so because their hybrid nature (social and environmental as well as economic) calls for the need for a greater social legitimacy to gain access to scarce resources in the marketplace. Thus, the effective implementation of the inter-cooperation strategy could respond to both needs at the same time: the need to access resources for the “newly born” entities together with the need to generate greater confidence in the suitability of this provisioning model of the more mature entities with respect to the different stakeholders of the territory (mainly the workers and the public administration, but also society as a whole).
Cooperation between cooperatives would operate, in our case, as a two-fold strategy to strengthen the position of SSEOs vis-à-vis capital companies: this enables better access to resources, while consolidating a public-cooperative model for the provision of social services that has greater social legitimacy (Rius, 2021).
We conclude that the constitution of a cooperative group would be the most suitable cooperative formula for addressing this greater need for resources and legitimacy identified in the growth processes of SSEOs, for the following reasons. Firstl, it enables the material strengthening of the cooperatives, through mutualized tangible monetary and non-monetary resources (financial, personnel, management, innovation, joint projects, etc.). Second, it has a positive impact on the legitimization (and socialization) of the alternative model promoted, whose signs of cooperative identity are associated with a general interest widely shared by a large part of the community in which they are inserted. Lastly, the increase in “community legitimacy” makes it possible to inject new resources (new contracts, new services), which are the result of having opted for deep-scaling strategies.
Another pertinent line of study is that addressed by Paola et al. (2019), who focus on the mechanisms necessary to confront mission drift problems in SSEOs that undergo scaling processes. They affirm that trying to avoid this deviation requires greater standardization and formalization of procedures and practices, and to do so they propose the complementarity of two spaces: negotiation spaces and herding spaces. The former aims to resolve various organizational conflicts that arise from growth processes; the latter aims to connect the organization with its institutional context, more specifically in our case, with the cooperative, public and community networks of its environment.
The analysis seems to be fully applicable to our case study, since the formation of the Bogan Group, as well as the intra- and inter-cooperative processes to strengthen this growth process, are aligned with the two objectives noted above: the resolution of internal conflicts as well as the alignment of objectives with its institutional environment. Therefore, the contribution of the herding spaces, necessary to avoid the compartmentalization of the structures that grow in the scaling processes, as well as the function of reminder of ideological purpose (why we are doing this) and possible means (how we can do it) emerge as fundamental. As Paola et al. conclude (2019, p. 1033): “thanks to herding spaces, organizational members understood the normative spaces expectations and purposes of the movement of which they were part, and thus the reasons for, and the means by which to comply with these expectations and avoid mission drift.”
Beyond this internal function, these spaces must also connect the organization with its institutional environment, an approach that is similar in its design to the idea of double weaving proposed by Chatterjee et al. (2023). They propose this concept as an ideal way to address the “great challenges,” in that it seeks to connect actors and resources existing in various locations and scales. For their analysis, they focus on the asymmetric nature of the escalation processes in that the actions led by the agents of the “highest” scales have limited knowledge of the grounded realities, while the actions promoted from the “lower” scales have limited scope. The challenge would consist, therefore, in sharing the consequences of the interventions with the local community in what Chatterjee et al. (2023) call scaling down processes, to try to align agendas and resources with the institutional environment which would generate the necessary conditions for subsequent scaling up processes. The work carried out by Agintzari with various public agents and academics in the territory would fit into this proposed analytical framework.
Lastly, for our particular case study, we would add the following two elements of analysis that appear to be fundamental for meeting the challenge posed, but with greater guarantees.
On the one hand, the systematized scaling process is a relatively recent initiative, and therefore it lacks sufficient maturation to evaluate its impact on two fundamental variables: the degree of real participation of the workers (in the cooperative at the outset, and in the cooperative group later on) and the relationship between it and the improvement of the service offered. The studies carried out on the cooperative groups of Mondragon (Bakaikoa et al., 2004) show the need to carry out this evaluation with a little more perspective in order to assess whether its growth processes based on inter-cooperation formulas pass the “litmus test” (Gaminde, 2021): to enable growth without harming the cooperative essence of the experience or if, on the contrary, the cooperatives degenerate into “coopitalist” organizations with a cooperative matrix and capitalist subsidiaries (Bretos & Errasti, 2018b; Errasti, 2015; Errasti et al., 2016).
On the other hand, at a more inter-organizational level, scientific evidence also shows the existence of coopetition dynamics between organizations associated with the network (Arenas et al., 2021; Bengtsson et al., 2016; Herbst, 2019). In cooperative groups that have arisen in other areas with a more commercial orientation (textiles, for example), the appearance of simultaneous dynamics of cooperation and inter-organizational competition is observed (Arenas et al., 2021). Thus, the dynamics most dominated by the logic of cooperation appear to be linked to the transfer of resources and knowledge, to the maintenance of the quality of the product/service offered and to the shared identity that results in greater social recognition. These three categories of analysis appear as structuring elements of the construction process of Bogan S. Coop.
However, previous studies show that in these same three categories other dynamics more guided by competitive logics may arise. The possible appearance of these “coopetitive” dynamics, as well as the processes of cooperative disaffection of the workers and, in short, the way to face and resolve these tensions, constitute some of the main challenges for the future. These challenges, when addressed, would offer a better perspective for validating the hypothesis defended in this study: that it is possible to grow without getting bigger, through more open structures (cooperative networks) which enable a faster and broader impact on the territory and the intended social objective.
Footnotes
Appendix
The coding and characteristics of the interviewees.
| Code | Cooperative | Responsibility in the organization |
|---|---|---|
| In1 | Agintzari | European Projects Manager and Social Consulting Consultant |
| In2 | Bogan (Agintzari) | Director of the Technical Development Department at Bogan Group |
| In3 | Bogan (Agintzari) | Chief Financial Officer of the Bogan Group |
| In4 | Bogan (Agintzari) | Director of People Development at Bogan Group |
| In5 | Bogan (Agintzari) | President of Bogan |
| In6 | Hirube (Agintzari) | Director of the TREBATU Program |
| In7 | Zabalduz | Former President of Zabalduz, Program Manager for MENAs |
| In8 | Zabalduz | Chief Executive Officer (CEO) |
| In9 | Agintzari | Former Chair of the Board of Agintzari, Technical Development Team |
| In10 | Agintzari | Former CEO of Zabalduz, Director at Agintzari |
| In11 | Agintzari | Area Director: Bilbao |
| In12 | Agintzari | Director of Agintzari |
| In13 | External Consultant | |
| In14 | Bogan (Agintzari) | Chief Executive Officer of Agintzari and Bogan |
| In15 | Agintzari | Former President of Agintzari |
| In16 | Hirube | Member of the Board of Directors at Hirube |
| In17 | Agintzari | Former President of Agintzari |
| In18 | Agintzari | Member of the Board of Directors at Hirube |
| In19 | Zabalduz | Social Educator at UBA |
| In20 | Hirube | Social Educator at TREBATU |
| In21 | Agintzari | Social Educator at Leioa |
Declaration of Conflicting Interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
