Page 2 - RUSSIAN ENTREPRENEURSHIP :

THE ENTERPRISES VOS, established in 1925, was structured around 180 ‘enterprises’ that were training and manufacturing centres employing visually impaired workers. These enterprises also acted as the focus for the delivery of the organisation’s welfare services. The level of provision varied from enterprise to enterprise and included health services, schools, recreation and leisure facilities, housing, holidays and free or subsidised food. The enterprises were engaged in production and teaching and had both an employment and a social welfare role. The welfare activities were financed jointly by the government, VOS itself and the employees’ pension fund. They employed over 200,000 people in 1995, 50 per cent of whom were visually handicapped. Government aid was conditional on at least 50 per cent of the employees being registered as visually impaired. Thus, any change process was made even more difficult as VOS enterprise leaders were bound by the purpose and ethos of VOS: Figure 1. to provide employment and welfare services for the visually impaired to ensure their full participation in life. Consequently, strategy and strategic change were conditional on both purpose and ethos. Considering that we live in an era of evolution it is surprising how rarely people think in evolutionary terms. We tend to look at the world around us as a snapshot when it's really a movie, constantly changing. Of course we know it's changing but we behave as if it wasn't. We deny the reality of change. So change always surprises us. This happened to the majority of the VOS enterprise directors to the extent that over ninety per cent were ultimately declared bankrupt. To put it simply, in the case of the VOS enterprises their extant core competences were found wanting. The emergence of unrestricted domestic competition was augmented by that of the developed countries through both imports and foreign direct investment. The majority of the VOS enterprises failed to respond, to adapt their core competences, to see the wider picture. According to Hamel and Prahalad, Core Competences (C.C) can be defined as the combination of complementary skills and the knowledge embedded in an organization which enables it to perform better than competitors in one or more critical processes. Moreover, adding to this definition, "a Core Competence represents the sum of learning across individual skills sets and individual organizational units" (Hamel&Prahalad,1994).