Among the many rural businesses of post-communist Russia, ALVI Inc. offers a new model of self-reliance and sustainable development. By aligning community interest and business interest, the company has successfully grown into a multi-product organization with high productivity levels and a flourishing community.
Innovation
It is often said that the state of Russian development cannot be judged by its urban centers. Opulent Moscow and Saint Petersburg, in particular, are often seen as their own sovereign countries, while the rest of Russia lives in a drastically different, scarce reality. Low income, extreme alcoholism and other health epidemics, lack of self-reliance and entrepreneur spirit, degradation in the education system, lack of social infrastructure are just few of accepted characteristics of Russian rural life.
Among the many “subjects” or entities of Russian Federation, the Republic of Karelia represents the middle ground of Russian economic development. Its closeness to Europe, realized through a border with Finland, represents an advantage in terms of trade and tourism, but limited sources for economic growth create a great struggle for sustainable business development. This context is particularly important when one considers the story ALVI Inc.
ALVI Inc. (Village of Priazha) launched into the timber industry, the fifth largest source of income for the entire Republic, in 1992. Created by two brothers, Alexandr and Sergei Zaitsevs, ALVI represents the efforts of one family to take responsibility for its own well being while creating a strong future for environment in which it exists. Within the current, so-called “crisis period” in the Russian economy, ALVI Inc. has grown into a powerful and successful organization, which has its own production basis, manufacturing premises, repair and engineering workshops, Finnish forest harvest machines, and modern motor vehicles.
The striking characteristic of ALVI’s innovative approach to growth and development is its awareness of the interdependence of business interests and local community interests. Thus, business decisions are made with an eye for sustainable community benefit.
Internally, the company implemented many practices to assure the health and well-being of its employees. For the workers of ALVI a canteen was built so everyone can get a free lunch. A pig-breeding farm was purchased to provide the workers with healthier food. To promote healthy life style and provide an alternative to alcohol consumption, the company sponsors a few local sports teams, and pays a bonus to the employees who are the members of the local soccer team.
Externally, ALVI serves as a catalyst for the community building for the entire region. The company supplies Priazha’s schools and city buildings with fuel for wintertime via a newly built pollution-free boiler, which uses the production wastes of ALVI. The company delivers aid to the local schools, hospital, the elderly and veterans, and sponsors all competitions held by a local children’s sports school, both at home and abroad. ALVI also constructed a church in a Priazha settlement and a chapel in the Kindasovo village.
Impact
A wide range of positive social impacts have been achieved over the years of ALVI’s operations. The company has contributed to the creation of a flourishing village, providing over 200 new jobs, improving municipal infrastructure, strengthening secondary education system of the region, creating stipends for higher education for those interested in returning back to the community, and developing vast health and wellness programs for the entire community.
The company also achieved significant business results, and attributes its growth to its community-oriented business model. In addition to a healthy profit margin and growing sales, the company enjoys productivity per employee that is 50 to 100 per cent higher than that of neighboring companies.
In 2001 ALVI’s achievements have been recognized by a prestigious “Europe’s International Golden Prize For Quality,” and its founders have been recognized as the “Karelia Laureates of the Year” by the Chairperson of the Karelian Government.
Inspiration
The Zaitsev brothers are both native Karels, which is an indigenous minority, and have been dedicated to the revitalization of their culture and people for their entire lives. They often speak of the passion for the region, rather than profit - and have been holding back the growth of particularly profitable sections of business unless they have significant sustainable benefit for the community. “There is nothing special about our approach”, says Sergey Zaitsev. “If we contribute to a healthy and happy community, assuring well-paid jobs and a developed infrastructure, then we are guaranteed the best and most loyal employees and customers. If our region and our youth have no future, then ALVI has no future as well”.
The World Inquiry editorial team edited this profile from the original submission of the interviewer or other source. The views expressed do not necessarily represent Case Western Reserve University, the Weatherhead School of Management or the Center for Business as an Agent of World Benefit. More >>
