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University Of Lucknow
Department Of Business Administration

INDIAN ETHOS AND VALUE

Assignment On:

Amway Corporation

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Submitted To: Submitted By: Anu Kohli Maam Lalit Gautam

Section-B

MBA Sem 1st

ACKNOWLEDGEMENT
It is no longer resources that limit decisions. It is the decision that makes resources. This fundamental revolutionary change perhaps the most revolutionary, man has ever known.
For making this project I am highly thankful to Anu Kohli Maam for helping me in selection of topic Amway Corporation for my term paper assignment. I am also thankful to my family without their support I wouldnt be able to do this project. My mother gave her support so that I can work harder, my father supported financially so that I have the best

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resources and to my elder sister and younger brother who gave their ideas regarding the topic. My Friends are the encouragement to the project. The assignment is made directly and indirectly from books, articles and other publications including contents available on internet and hence, they should also be thanked. I would also thank GOD for making me a good human being and a part of this world. Lastly I would thank myself as some views expressed in this are my personal opinion. I had a great experience in making this project and gain knowledge about Amway Corporation

Amway Corporation
The History of Amway:
What does the word Amway mean? Amway is an abbreviation for "American Way" and was coined in 1959 by company founders, Jay Van Andel and Richard DeVos. Short, unique and easy to remember, Amway has been registered as a corporate name and trademark ever since. In the following decades, Amway Corporation successfully established itself as a leading multilevel marketing business, built on strong values and founding principles that continue to sustain our company today. The business is built on the simple integrity of helping people lead better lives. Today, Amway is a multibillion-dollar international business representing freedom and opportunity to millions of people in more than 88 countries and territories around the world. We offer over 3 million Business

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Owners the inspiration to grow those businesses, and we work hard to provide new and better ways for them to achieve their life goals.

Profile:
Amway is one of the worlds largest direct selling companies. Founded in 1959 by Jay Van Andel and Rich DeVos, Amway operates in more than 80 countries and territories on six continents. Amway offers the opportunity for people to have a business of their own based on retailing beauty, nutritional, wellness and household products and sharing the opportunity with others who will do the same.

People:
Amway has more than 13,000 employees worldwide. In addition, Amway distributors are part of a sales force of more than 3 million owners around the world.

Products and Services:

More than 450 unique, high-quality products carry the Amway name in the areas of nutrition, wellness, beauty and home. In addition, Amway distributors in selected markets sell additional brand-name goods through local merchandise catalogues, plus a variety of services and educational products. All products are backed by a customer satisfaction guarantee.

Vision:
Inspiring people to live better lives.

Mission:
To provide the best business opportunity. To deliver exceptional quality products to urban and semi urban homes in the areas of nutrition and wellness, cosmetics, personal care, home care, home tech and insurance.

Our Values:
Amway has established some simple shared values that unite the entire company, and all of the Business Owners that are associated with Amway. We

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believe that these values guide our actions and help us to achieve everything we are capable of without compromise or harm.

Integrity:

We will uphold the highest personal and professional integrity which demonstrates honestly, loyalty, respect and high ethical standards in all our responsibilities, obligations and other activities. We are committed to behave at all times in accordance with the ethical practices of the organization.

Trust:
Building reliability and dependability for self by displaying commitment, honesty, confidentiality and consistency in all actions.

Transparency:
We will promote a culture of openness and mutual trust by interacting objectively and without underlying personal interests.

Service Orientation:
We are committed to serve our customers to fulfill their needs by focusing efforts on discovering and thereby meeting stated and unstated requirements.

Partnership:
We will collaborate across boundaries and find common ground by sharing ideas and resources, with a wide range of stakeholders. We will develop networks and build long term alliances with internal and external customers.

Recognition:
We are committed to honor, encourage and support individuals and teams who contribute, through their behavior and actions, to the success of the organization.

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Case: Amway v/s Stakeholders

How stakeholders affect Amway
Amway is a direct selling company, selling products directly to consumers without going through traditional retail outlets or 'high street'. The supply chain

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A supply chain links the finished products to end consumers. Amway has its own distinct supply chain, placing a strong emphasis on its ABOs. They are able to focus on individual customers and their needs. This supply chain is different from a more conventional supply chain that sells goods to final consumers through retail outlets. Amway's way of working depends on building lasting connections with the end consumer. Feedback provided by consumers and ABOs helps to shape future changes in products and the service provided. Suppliers must produce quality goods that Amway ABOs can sell with confidence. The goods should offer value for money and provide guarantees that they will meet Amway standards. Suppliers may contribute to the design and appearance of Amway products. ABOs ABOs operate independently as small businesses. They develop direct supply channels and sell products to friends and customers that they know or meet. They need to have a flexible approach to business. They require Amway to provide high quality, value for money products with a 100% satisfaction guarantee. ABOs determine for themselves how they will conduct business. This is a 'self regulatory' environment. However, they sign a contract to work within Amways Rules of Conduct and Code of Ethics. If ABOs do not conduct business within these rules, their behaviour could reflect back on the company. Consumers Consumers affect how Amway develops and promotes products. They do this by indicating their preferences and requirements through feedback. Amway can then make more of particular products or change the format of others. Consumer demand also influences how much stock Amway needs to carry. Consumers can show where Amway needs to address issues or concerns to improve the business.

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With many different types of stakeholders, it is possible that different groups will have different key objectives or priorities. For example, a business needs to make a profit but customers want low prices. The company might find it difficult to support price cuts, as this would reduce its profit. These two priorities might be in conflict.

How Amway affects its stakeholders

Amway's vision is 'helping people live better lives'. Amway's business plays a key role in the communities in which it operates. Amway has a global strategy for producing, distributing and marketing its products worldwide. It also has a strategy for promoting corporate social responsibility (CSR) in a global way. CSR refers to the role that a company plays in meeting its wider commitments as a citizen. Such commitments include supporting worthy causes and always acting in an ethical, honest way. Amway operates in many different markets worldwide and has a range of affiliates and ABOs. It therefore has to devise and communicate its plans for corporate social responsibility activities carefully to take account of different priorities and interests. From the outset, Amway established some clear objectives. These were to: To build loyalty and pride among ABOs and employees To enhance Amways reputation as a caring organization To make a real difference to human lives. This helps to maintain Amway's reputation with all its stakeholders.

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Amway contributes time, effort and money to support its business communities:

It creates appropriate Amway products for ABOs to sell. It develops campaigns that support the business and social aims of the company. Getting the image right is vital in a business that relies on building relationships with individuals and the wider community. Amway regularly seeks to develop new products in line with market research aimed at finding out what customers want. Its employees volunteer at different charity organizations. It has shared $294 million (around 150 million) with non-profit organizations since the company began. Global Cause Program Amway produced its Global Cause Program in 2002 as the result of extensive research. Amway defines a global cause as 'a social issue affecting many people around the world engaged in a struggle or a plight that warrants a charitable response'. The Global Cause Program: helps Amway to bring its vision to life declares what the organization stands for builds trust and respect in Amway brands establishes corporate social responsibility as a high priority In developing its global cause strategy, Amway also listened to what its ABOs cared about. Many favoured a cause to help children. This led to Amway's partnership with UNICEFs Immunisation Plus Programme. This aims to provide vaccination against the six most serious diseases affecting children in the developing world. Amway's business image benefits from the relationship with UNICEF. UNICEF benefits from the fundraising Amway and its ABOs contribute.

Responsibility to Employees and customers

All organisations have a responsibility to serve their employees and customers, who are likely to be affected by the consequences of an organisation's activities. In today's business environment it is unacceptable

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for organisations to ignore the activities of consumers and individuals within the wider community. For Amway this means doing business ethically and taking a stance on key issues. (Ethics concern the moral principles or rules of conduct generally accepted by members of society. They constitute a guide as to what should or should not be done, and involve what one believes to be right or believes to be wrong). Over the years there has been much criticism of illegal pyramid selling and chain letter investment schemes. These proliferated in the l970s. Hard sell tactics and techniques such as 'down loading' (where the person at the bottom of the illegal pyramid buys vast amounts of unwanted and over-priced stock which he/she cannot sell), gave the whole industry a bad name. Many people invested in such schemes and lost money in dubious schemes which collapsed.

Ethical business
Ethical enterprises do more than simply provide goods and services for customers. They also make a real contribution to the communities in which they operate by:

Creating employment and job security Providing products that give consumers good value for money Contributing to creating a more caring and cared-for community.

Competitive advantage
Businesses operate in a competitive environment. They may compete on a number of factors: Price Range of products Quality Speed of service Customer service.

Amway is a global enterprise. It must comply with the laws of the many different countries in which it operates. Its business ethics provide a

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framework to guide the behaviour of the company and its stakeholders. As part of its business values, it protects its consumers through the quality of the products and by offering guarantees of satisfaction. It promotes and supports ethical selling behaviour amongst the ABOs through its codes of conduct. However, in a highly competitive market where businesses are similar, Amway needs to find a way of achieving competitive advantage. Demonstrating a positive involvement in the community and attention to environmental issues can provide a business with competitive advantage. It shows that the company behaves in an ethical way, shares its values and enhances its image as a responsible organisation. Amway recognises that to respond to CSR issues, it must base its business on the principles of 'relevance, simplicity and humanity'. For example, Amway set up the 'One by One' programme following discussions with various organisations involved in providing help to underprivileged communities worldwide. Amway is also active in a number of programmes to reduce its impact on the environment, including: Supporting organic farms to grow the plants for its vitamin and mineral products Training employees to protect the environment, for example, encouraging reuse and recycling to conserve resources Changing product formulations to be more concentrated and biodegradable, which reduces packaging and waste Using sources of renewable energy, for example, a wind farm at its World Headquarters will provide 10% of energy needs Measuring its environmental impact by auditing its activities to internationally recognised standards All these activities carry a cost, therefore Amway needs to balance the costs of its corporate social responsibility programmes against not only the benefits of doing so, but also the cost of not doing so. Business practices that do not take account of ethical behaviour might lead stakeholders to reconsider their relationship with the company. Suppliers might stop trading or customers might stop buying (which would result loss of revenues). At the company level, it might lead to infringement of the law or loss of reputation, which would influence the wider public. National Project for the Visually Challenged Amway Opportunity Foundation (AOF) is a registered non-profit organization that looks after Amway Indias Corporate Social Responsibility. Amway staff and distributors are volunteers and participate in AOF activities.

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Under the National Project for the Visually Challenged, AOF has: Ensured that around 85,000 visually challenged school-going children have had access to Braille textbooks. It was carried out in partnership with the All India Confederation of the Blind (AICB) and the National Association for the Blind (India) NAB. Celebrated the International White Cane Day for nine years running, with our NGO partners, at over 35 locations across the country each year. Celebrated Louis Braille Day for five years again with our NGO partners. Donated audio-textbooks for Bangalore University and extended support to the Karnataka Welfare Association for the Blind (KWAB) in conducting a cultural event in Bangalore. Presented a 20-volume Websters Dictionary in Braille to the Delhi Blind School and Braillon machine to the Indian Blind School at Madurai. Supported Dr Shroffs Charity Eye Hospital (Delhi) in conducting communications workshops, as well as a car rally at Surat for the visually challenged. Distributed 1000 Braille kits in Kerala and enabled a state-level chess tournament for the for the visually challenged in Tamil Nadu. Organized eye camps at Surat, Erode, Balasore, Delhi and Siliguri over 5000 persons from economically challenged sections of society have taken part in these camps. At Delhi, these camps have been held for three years running, along with Mahavir International, an NGO that runs a hospital for the visually challenged. All this work has been carried out by the active partnership with the 550,000 Amway distributors in India, who have helped raise a significant part of the funds for this work. While Amway has received a citation from the World Blind Union in Dec 03, Amway does not accept any awards for the work we do. Amway India is working to make a difference, one by one.

One by One Campaign for Children

One By One is Amways Global Campaign for Children. In each of the 80 countries and territories that Amway is present it takes up and supports these Children of Hope. In India, this work is carried out under the banner of Amway Opportunity Foundation (AOF) a registered non profit organization. All Amway employees and distributors are volunteers of AOF.

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Amway Opportunity Foundation (AOF)

Amway Opportunity Foundation (AOF) a registered non-profit organisation which looks after Amway Indias Corporate Social Responsibility (CSR). Amway distributors are also volunteers of AOF and they participate in AOF activities. AOF currently has two projects under its ambit: National Project for the Blind and National Project for Children (Project Sunrise). Globally, Amways CSR campaign is known as the One By One Campaign for Children. Vision: Enable the less privileged child to lead a better life Mission: To be the front-runner in providing opportunities for child education and health to attain economic independence, with special focus on the blind child

Corporate Social Responsibility Initiative

Former President, Dr Abdul Kalam, has recently been quoted saying that instead of addressing (them as) street children, it would be better to refer to them as children of hope. If we stretch this definition a bit, that is what we are all about reaching out to all Children of Hope in the best manner at our disposal:

And why work for children? Half of the worlds poor are children. Every year, 10 million children do not live to see their fifth birthday. More than 115 million children dont have access to the most basic education. With presence in most of the countries across the globe, Amway finds itself in a position to focuses its philanthropic efforts so as to maximize a positive and sustainable impact on society. In short, the One by One Campaign for Children is designed to assist maximum numbers of children of hope attain their full potential. The program pulls together all of our resources Business Owners, employees, affiliates and customers to make this happen. Each of Amways markets is free to decide in which sphere it would like to concentrate its resources. But in essence, One by One program is designed

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to build local partnerships, addressing issues specific to children in their community Live, Achieve, Learn, and Play.

Conclusion
Amway is a global direct selling organisation. It has to deal with many different stakeholders with different objectives. These stakeholders may be internal or external to the company and can affect or be affected by Amway in different ways. Its organisational structure is based on a network of ABOs who work independently. Therefore, it is important that Amway sets the standards of ethical business behaviour for the people who work with, and for, the company. It demonstrates these standards by setting rules of conduct and codes of ethics. In addition, it puts its ethics into practice through its various CSR programmes of activity, supporting the environment, its employees and disadvantaged children across the world. Amway is a family business. Its IBOs are people who want to make a difference in people's lives - particularly those of children. Amway's aspirations fit closely with those of UNICEF. They are both organisations with a global reach that care about people - particularly the lives of and opportunities for children. Amway's IBOs want to be part of a socially responsible organisation because they know that this is the right way for businesses to behave. Social responsibility is thus a very important aspect of business. CSR is based on a recognition that the interests of the community and of business are closely related.

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