Indupalma and the Associated Labor Cooperatives

This is the third case in this series about a company’s relations with its workers and its social, economic and political environment. Associated labor cooperatives surfaced as part of Indupalma´s transformations as a result of the crisis caused by over ten years of a misguided handling of union relations. Workers and farmers came together to build independent business units (e.g., cooperatives, micro-ventures, associations) to offer their services to other parties, including Indupalma. The company invested sizable resources in technical, managerial and personal training for these entrepreneurs. As a result of its work with cooperatives, Indupalma was able to return to financial feasibility. In turn, cooperatives became a development engine for the entire region. As emerging entrepreneurs and community leaders, cooperative members started to face multiple social and business challenges, and Indupalma’s role in their performance (intervention, paternalism, empowerment, indifference) would put its learning process to the test.

This case illustrates a number of ways to promote grassroots partner development, to create value in alliances with grassroots groups, to analyze income and productivity, and to manage outsourcing-associated risks.