The managerial transformation of Italian co-operative enterprises 1946–2010

Abstract

The Italian co-operative enterprises have prospered in the last 30 years in various sectors. In this essay we analyse the role played by managerialisation in allowing Italian co-ops to compete nationally and internationally with capitalist enterprises. On the basis of a substantial set of company histories and managers interviews, we have built a three generations model of co-ops managers, which shows the changes that have allowed co-ops to become fully equipped with managerial skills. The strong leadership of umbrella organisations, the inner careers of most managers and legislation have been instrumental in avoiding demutualisation, the killer of co-ops in many other countries.

Keywords:

• co-operatives
• co-operation
• managerial change
• CMC
• CAMST
• Unicoop Tirreno

Notes

 1. Griffith, What Is a Co-operative Manager?

 2. Demutualisation has been mostly a problem of the last decades. It can be defined as a change in the ownership structure from a co-operative to a for-profit proprietary organisation. As a consequence, co-operative membership rights are converted to unrestricted common stock ownership rights in a corporate organisation. On a broad scale the movement started in the USA, spread first to the Anglo-Saxon countries and later influenced decision making in all parts of the world. Battilani and Schroeter, Demutualisation and Its Problems.

 3. Tayler, ‘UK Building Society Demutualization Motives’.

 4. Cook, Deakin and Hughes, ‘Mutuality and Corporate Governance’; Stephens, ‘Building Society Demutualization’.

 5. Hind, ‘Co-operative Life Cycle’.

 6. Alchian and Demsetz, ‘Production, Information Costs, and Economic Organization’.

 7. Rothschild-Whitt, ‘The Collectivist Organization’.

 8. Satgar and Williams, The Passion of the People; Nkhoma and Conforte Unsustainable Co-operatives; Jan et al., Indian Business and Economics.

 9. Co-operatives have received a specific mention in article 45 of our post World War Two Constitution, which was approved in 1947 and is still in force today.

10. It is interesting to note that co-operatives were supported by all the Italian political and socio-cultural traditions: socialist (and communist later), catholic and liberal. The liberal tradition was present in a party which, being in favour of changing the institutional setting of the Italian State into a republic, was named ‘republican’, keeping that name even after the monarchy was abolished in 1946.

11. Battilani and Zamagni, ‘Co-operatives (1951–2001)’.

12. The umbrella organisations basically have a representative function for the co-operative movement; they can additionally offer common services, prepare strategies for various sectors and intervene in crisis situations as lender of last resort.

13. Manufacturing is the ‘missing’ sector for co-ops in the world, at the exception of the famous Mondragon Co-operative Corporation and of some medium size Italian co-operatives, like SACMI (Società anonima cooperativa meccanici di Imola), which is specialised in machinery for the production of ceramics and machinery to bottle beverages.

14. Retail Co-operatives have been excellent in organising their wholesale level, which services also other retailers, controlling 40% of the whole Italian grocery market.

15. Zamagni and Zamagni, Co-operative Enterprise.

16. Menzani and Zamagni, ‘Co-operative Networks in the Italian Economy’.

17. Nilsson, Kihlén and Norell, ‘Are Traditional Cooperatives an Endangered Species?’; Chaddad and Cook, ‘Conversion and Other Forms of Exit; van Bekkum and Bijman, ‘Innovations in Cooperative Ownership’.

18. The fund is formed with 3% of the profits of the associated co-ops and is managed centrally by each umbrella organisation.

19. Handler, ‘Succession in Family Business’; Casson, Enterprise and Leadership.

20. Fabbri, Da birocciai a imprenditori; Battilani, La creazione di una impresa moderna; Zamagni, Camst: ristorazione e socialità; Bertagnoni, Una storia di qualità; Leonardi, Collaborare per competere; Battilani and Bertagnoni, Cooperation, Networks, Service; Battilani, Bertagnoni and Vignini, Un’impresa di cooperatori, artigiani, camionisti; Battilani, Il gruppo Coind; Zamagni, Da Ravenna al mondo.

21. It is important for our research to distinguish between generation and cohort. The cohort is an aggregate of individuals who share a given time period. The generation is something more and different, as it assumes a common experience. Mannheim, ‘On the Problem of Generations’; Ryder and Westoff, Reproduction in the United States.

22. The Comitato nazionale di liberazione was the underground political entity of Italian Partisans during the Nazis occupation of the country. It was set up on 9 September 1943 by all the anti-Fascist parties. The Committee was allowed by the Allies to take control of the local administrations of Central and Northern Italy as they were freed from the Nazis.

23. Zangheri, Galasso and Castronovo, Storia del movimento cooperativo; Menzani, La cooperazione.

24. Di Marco, ‘Uno schema di bilancio preventivo’.

25. Gherpelli, ‘Il piano dei conti’.

26. A budget model is a set of rules for arranging the elements of a budget.

27. Battilani, La creazione di una impresa moderna.

28. Ortoleva and di Marco, ‘Fare marketing con la simpatia della gente’.

29. Interview with Franco Migliori recorded by Patrizia Battilani, February 1999.

30. Granarolo Archive, Minutes of the Board of Directors.

31. Fabbri, Da birocciai a imprenditori.

32. Battilani, La creazione di una impresa moderna; interviews with Valeriano Masotti and Luciano Sita recorded by Patrizia Battilani, March 1999.

33. ‘Nasce il Mercurio Romagnolo’, COMMA – periodico di informazione del Consorzio Nazionale Dettaglianti 42 (1976), CONAD Archive.

34. Progetti di fusione fra i gruppi associati, Direzione Organizzazione e Sviluppo, May 1975, ANCD Archive; ‘Il Bilancio di un’ Assemblea’, COMMA – periodico di informazione del Consorzio Nazionale Dettaglianti 57, no. 3 (1977), CONAD Archive; ‘Produzione e Commercio’, COMMA – periodico di informazione del Consorzio Nazionale Dettaglianti 77 (1979), CONAD Archive.

35. Annual Reports, 1974–89, CONAD Archive.

36. Raineri, Le affittanze collettive.

37. Centro di documentazione sulla cooperazione e l’economia sociale Archive, Bylaws, 1985–1913.

38. Bylaw of the Società cooperativa cattolica di lavoro e produzione, 1902, Bylaws, 1985–1913.

39. Battilani, La creazione di una impresa moderna.

40. Interview with Luciano Bartolini, recorded by Patrizia Battilani, September 2006.

41. CORUM, Indagine conoscitiva e sulle dinamiche organizzative delle imprese co-operative, mimeo, 1988, COIND Archive.

42. The Hay Guide Chart Profile System had been developed in the United States in the period immediately before and after the Second World War. It was designed specifically to cover administrative and managerial jobs in large organisations. Hay was first used in the UK financial sector, then applied also to many other sectors. The scheme was amended in the late 1990s to accommodate local government manual jobs.

43. Interview with Vincenzo Alberti, COIND president, recorded by Patrizia Battilani, November 2010.

44. Human resource department, White Collar and Manager Remuneration. Mimeo, 1999, COIND Archive.

45. Interview with Luigino Franco, COIND human resource manager, recorded by Patrizia Battilani, March 1999.

46. Annual Reports, 1990–2000, COIND Archive.

47. Annual Reports, 1991–96, Granarolo Archive; Bertagnoni, Una storia di qualità.

48. Zamagni, Da Ravenna al mondo.

49. Some of these left and created another construction co-op, ACMAR, still active at present.

50. Before the 1984 agreement, what was done was to grant to the blue collar workers an additional sum on top of the standard pay for skilled workers. After 1984, in any case, remuneration of managers in CMC has never reached capitalist levels.

51. Zamagni, Camst: ristorazione e socialità.

52. Bologna is an important railways hub.

53. Mansionario discusso nel marzo 1974, Camst Archive.

54. Programmazione in Camst: Proposte di lavoro per il Piano Programma Triennale ’85–’87, Camst Archive; Bozza di riorganizzazione aziendale, September 1984, Camst Archive.

55. COOP ITALIA Archive, Annual Report 2010.

56. It was created by the steel workers of the Piombino factory, hence the name ‘The Proletarian’.

57. He complained in the interview he granted to Vera Zamagni of never having been recognised formally as ‘director general’, as a result of the egalitarian ideology prevailing inside that co-op.

58. Florence and Siena are under see the presence of another co-op, which is the largest in Italy, UNICOOP FIRENZE.

59. Direzione del 29 novembre 1984, ANCC (National Association of Consumer Co-operatives) Archive.

60. One of the IPERCOOP TIRRENO hypermarkets in Campania had to be closed down twice, because of administrative problems raised by the local ‘camorra’ affiliates. Another hyper could open up only after the entire city council of the place was removed from office and the city politics was put under a government commissioner.

61. It must be noted that the Italian legislation allows co-ops (not only consumer co-ops) to attract deposits up to a fixed amount, with a remuneration at a premium with comparison to market rates, to be used to finance co-ops development plans.

62. Amatori, ‘Entrepreneurial Typologies’.

63. Ibid., 174.

64. Hawley, ‘Human Ecology’.

65. Meyer, The Impact of the Centralization of Educational Funding; Fennell, ‘The Effects of Environmental Characteristics’.

66. Di Maggio and Powell, ‘The Iron Cage Revisited’.

67. Bager, ‘Isomorphic Processes’.

68. In the case of demutualisation, indivisible assets must be conferred to the umbrella organisations for the development of co-ops activities.