“A Study on Organizationalstructure and business management of AMWAY” 1 Submitted By: Nivedita Shambhavi Bcom(Hons) VI Sem, Enrollment No:A7004612089 Under guidance of: Faculty Guide Dr. Archana Sharma, Asst. Professor ABS, Lucknow MAJOR PROJECT REPORT IN PARTIALL FULFILLMENT OF THE AWARD OF FULL TIME. BCOM HONS (2012-15) AMITY BUSINESS SCHOOLAMITY UNIVERSITY UTTAR PRADESH LUCNOW STUDENT’S CERTIFICATE Certified that the report is prepared based on the Major project undertaken by me Nivedita shambhavi on “A Study on organizational structure and business management of Amway from 22.12.2014 to 23.03.2015 under the guidance of Dr. Archana Sharma in partial fulfilment of the requirement for award of degree of bachelor of commerce (honours) from Amity University, Uttar Pradesh, Lucknow. 2 Date _____________ _____________ ______________ ____________ Nivedita Shambhavi Dr. Archana Sharma Prof VP sahi STUDENT ASST PROFF DIRECTOR FACULTY CERTIFICATE Forwarded here with a Major project report on “Organizational structure and business management of Amway” submitted by Nivedita shambhavi Enrolment No. A7004612089, student of Bcom (Hons) III year (2012-2015). This project work is partial fulfilment of the requirement for the degree of bachelors of commerce from Amity University Lucknow Campus, Uttar Pradesh. 3 ______________________ Dr. Archana Sharma Asst. Proff. ABS, Amity University Lucknow STUDENT DECLARATION I hereby declare that the project report entitled “a study on organizational structure and business management –Amway.” has been done by me under the guidance of Dr. Archana Sharma – Asst. proffessor. This project report has been submitted to Amity University as a part of partial fulfillment for the award of the degree of under Graduate Program in B.com from Amity university Uttar Pradesh. I also hereby declare that this project report has not been submitted at any time to any other institute or university for the award of any degree. 4 prof. I am grateful to the Librarian of amity University for his support during my study. Place: Lucknow Date: NIVEDITA SHAMBHAVI ACKNOWLEDGEMNT The satisfaction and euphoria that accompany the successful completion of any task would be but incomplete without the mention of the people who made it possible. whose constant guidance and encouragement crowned our efforts with success. I wish to express my heartly gratitude and thanks to my project guide Dr Archana sharma. asst. 5 . for her help and able guidance for the completion of the project successfully. Place: Date: NIVEDITA SHAMBHAVI TABLE OF CONTENTS CHAPTE CONTENTS PAGE R NO.1 Meaning of Business 9 1. 1 1.4 Difference between Business Management & 17 Business Administration 18 1.3 Meaning of Business Administration 14 1. I would also like to thank each and everyone especially all my friends for their cordiality & support during my project. NO.Last but not the least.5 Types of Business Organizational System (General Study) 2 2.1 Meaning of Organization 25 6 .2 Meaning of Management 11 1. 4 Functional Patterns of Amway 69 3. Mission & Goals of the Amway 58 3. policies.4 Organization Structure & it’s Types 42 2.3 suggestion 78 7 . 46 problems if any. 3 Organizational System with respect to Amway: 3.1 Introduction 51 3.3 Vision. mission & Goals of the company 38 2.1 Findings 76 4. systems.6 SWOT Analysis 74 4 Summary of Findings & Conclusion 4.5 Type of Ownership 71 3.5 Functional Patterns – People.2 Types of Organization 37 2.2 Vision.2 Conclusion 77 4. 2.3 Organizational Structure & Type of Amway 65 3. LIST OF TABLES AND CHARTS TABLE CONTENTS PAGE NO. 1 Structure of Organization 65 2 Alticor and Amway Sales Growth: 1960 to 56 2008 3 Amway sell data since 1960 to 1999 57 8 . Hence Administration makes the important decisions of an enterprise in its entirety. whereas management makes the decisions within the confines of the framework. These facts will help to find out how well the Amway opportunity can match your business goals. A business' purpose is to attract and keep customers. Executive Summary This executive summary will give you key facts concerning the Amway. Whether an organization is good or bad depends on the fact as to how much 9 . It is the foundation upon which the whole structure of management is built. Management in all business areas and organizational activities are the acts of getting people together to accomplish desired goals and objectives efficiently and effectively. which is set up by the administration. Also Management is the act or function of putting into practice the policies and plans decided upon by the administration. Organization is not an end it itself but a means to achieve an end. Let’s start from main component that is business. The important factor important to study is Organization. Its one basic function is to reliably solve customer problems. The Mission of organization should represent the broadest perspective of the enterprise's mission. Using attraction marketing for Amway products is the fastest way to make steady retail profits. and for looking at the Opportunities and Threats you face. The Amway/Amway Global. without specifying the means that will be used to achieve those desired ends. The most important topic is an organizational structure is a mainly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim. The most effective strategy for this is direct marketing. The products are sold through Independent Business Owners (IBO). today also known as attraction marketing. a subsidiary of Alticor. Corporate vision describes aspirations for the future. is marketing nutritional supplements. is the setting of goals for the organization based on its vision and mission statement. skin and personal care products. Another important topic is A Business ownership should be structured according to the needs of the owners and potentially liability that the business could incur. 10 . after gathering all necessary information. air and water purifiers and a line of home cleaning products. The major outcome of strategic road-mapping and strategic planning.efficiently and promptly it is in a position to achieve the objectives. Analysis by A SWOT Exercise is a powerful technique for uncovering and understanding your Strengths and Weaknesses. to consumers. or both. Anyone with vision should understand the problem they're solving. It’s one basic function is to reliably solve customer problems. and a premier compensation plan. They're attracted by the unlimited potential of the opportunity. The meaning of business is having an impact on people's lives. A business is typically formed to earn profit that will increase the wealth of its owners and grow the business itself.. a global community ready to offer support. Businesses are predominant in capitalist economies." My definition is close: A business' purpose is to attract and keep customers. Amway already helped over 3 million people start on their path to success. The owners and operators of a business have as one of their main objectives the 11 . The Meaning of Business: "The simplest definition of business is you solve a customer's problem and create sustainable profits over time. businesses and governmental entities. A business is a legally recognized organization designed to provide goods or services.. The problem with business today is that people think the meaning is about building a monument to you. Most businesses are privately owned. the support of a corporation with 50 years of experience and compassion. such as "the music business" and compound forms such as agribusiness. the generalized usage to refer to a particular market sector. However. depending on the scope — the singular usage (above) to mean a particular company or corporation. 12 . The term "business" has at least three usages. Notable exceptions include cooperative enterprises and state-owned enterprises. Businesses can also be formed not-for-profit or be state-owned. or the broadest meaning to include all activity by the community of suppliers of goods and services. like much else in the philosophy of business. the exact definition of business. is a matter of debate and complexity of meanings. The etymology of "business" relates to the state of being busy either as an individual or society as a whole. doing commercially viable and profitable work.receipt or generation of financial returns in exchange for work and acceptance of risk. As managers have an awful lot of work to do. Management is the art and science of getting things done through others.Meaning Of Management: Management is generally defined as the art and science of getting things done through others. guides. Some (cynical) individuals think that this means managers don’t have any work to do themselves. 13 . and assesses the work of others. This definition emphasizes that a manager plans and guides the work of other people. generally by organizing and directing their activities on the job. A manager is therefore someone who defines. usually people for whom the manager is responsible in an organization. plans. assists. leading or directing. operation management. marketing management. The main branches of management are financial management. Resourcing encompasses the deployment and 14 . and controlling an organization (a group of one or more people or entities) or effort for the purpose of accomplishing a goal. Management comprises planning. Management in all business areas and organizational activities are the acts of getting people together to accomplish desired goals and objectives efficiently and effectively. organizing. strategic management. service management and information technology management. The initiation and maintenance of an investment portfolio. 2. is called management”. staffing.Management Define: “The efficient and effective operation of a business. and study of this subject. 1. human resource management. The group of individuals who make decisions about how a business is run. production management. Organizing: (Implementation) making optimum use of the resources required to enable the successful carrying out of plans. Basic functions of management: Planning: Deciding what needs to happen in the future (today. etc. and natural resources.) and generating plans for action. financial resources. next month. management can also be defined as human action. and hiring individuals for appropriate jobs. to facilitate the production of useful outcomes from a system. recruitment. next year. 15 . technological resources. Leading/Directing: Determining what needs to be done in a situation and getting people to do it.manipulation of human resources. next week. over the next 5 years. Because organizations can be viewed as systems. a pre-requisite to attempting to manage others Management can also refer to the person or people who perform the act(s) of management. Staffing: Job analyzing. This view opens the opportunity to 'manage' oneself. including design. employees cannot work effectively. is what is intended when the term "the administration" is used. itself derived from the Latin administratio — a compounding of ad ("to") and ministratio ("give service"). This title is archaic. Motivation: Motivation is also a kind of basic function of management. 16 . Administrator can serve as the title of the general manager or company secretary who reports to a corporate board of directors. The word is derived from the Middle English word administracioun. Business Administration: Business administration consists of the performance or management of business operations and thus the making or implementing of major decisions. this function. Controlling/Monitoring: Checking progress against plans. If motivation doesn't takes place in an organization. which is in turn derived from the French administration. in many enterprises. Personnel and management information systems services. because without motivation. then employees may not contribute to the other functions (which are usually set by top level management). Administration can be defined as: “The universal process of organizing people and resources efficiently so as to direct activities toward common goals and objectives”. together with its associated Finance. but. their taxes and the role that taxes play in corporate economic strategy. administration can refer to the bureaucratic or operational performance of mundane office tasks. In this instance. In some organizational analyses. Advertising has grown to include multiple media outlets and an assortment of targeted interest groups: new customers. the definition of business administration will include requirements of certain cultural differences and an acute understanding of the global economy and its current fluidity." that one can opt for in an MBA program. management is viewed as a subset of administration. In other organizational analyses. their growth strategies. stockholders. It stands distinct from executive or strategic work. usually internally oriented and reactive rather than proactive. Perhaps the best way to define business administration is to look at the types of courses offered in MBA curriculums and the specialties. repeat customers. Also included in business administration at 17 . so too has the oversight of companies: their management. For a large corporation. as well as strategy and economics. Marketing has become the term of choice for this entire strategically placed product exposure. Defining business administration then means defining oversight roles for the assortment of internal specialties that every business of any size has come to include. investors and new geographic markets. As business has become more complex. their personnel issues. or "majors. specifically associated with the technical and mundane elements within an organization's operation. business administration is going to include international and global business. and the costs involved.this scale is the art and science of acquisition: when to buy a company or property and why. and that will involve understanding e-business and how it is rapidly evolving. Business administration will always include the intangible quality of leadership. you won't have a business to administer unless you sell your products. The definition of business administration will have to include marketing. as it did Continental Airlines some years ago. the risk of an acquisition. Ancillary to marketing is an understanding of the new tools available for product distribution. This might include the risk of launching a new product. Business administration includes an understanding of entrepreneurship: tax structures for small businesses along with personnel issues at that level. Along with leadership comes the task of negotiation and conflict resolution. A critical part of business administration is the awareness of risk. inventory and cash flow. and all the other small matters that make a big difference to a new or small business. There are risks involved in 18 . the risk of a competitive strategy. the company's exposure in opting for this health plan instead of that one. specifically with regard to personnel. Behavioral psychology plays an important role in business administration: a misstep in an adversarial situation with a union can take a company under. which is set up by the administration. military. Administration makes the important decisions of an enterprise in its entirety. while management is an executive function. 3. Administration is a determinative function. 4. The definition of business administration includes whatever knowledge is required to make all of these components work productively. Summary: 1. on the other hand.other personnel decisions and this area is of tangible importance: company morale is a key to productivity and the resultant profitability. 19 . 2. whereas management makes the decisions within the confines of the framework. if not in complete harmony. Management is the act or function of putting into practice the policies and plans decided upon by the administration. is used by business enterprises. Administrators are mainly found in government. religious and educational organizations. Management. In the past century there has been increasing 20 . Agriculture is also observed in certain species of ant and termite. The study of agriculture is known as agricultural science. Agriculture was the key development that led to the rise of human civilization.Types of business: The following are the types of business. Cultivation of crops on arable land and the pastoral herding of livestock on rangeland remain at the foundation of agriculture. with the husbandry of domesticated animals and plants (i. Agriculture encompasses a wide variety of specialties and techniques. 1. Agriculture: Agriculture is the production of food and goods through farming. crops) creating food surpluses that enabled the development of more densely populated and stratified societies.e. by digging water-channels and other forms of irrigation. including ways to expand the lands suitable for plant raising. extraction of the desired materials and finally reclamation of the land to prepare it for other uses once the mine is closed.g. The nature of mining processes creates a potential negative impact on the environment both during the mining operations and for years after the mine is closed. though modern practices have improved safety in mines significantly 21 . coal. usually from an ore body. is usually mined.. Any material that cannot be grown through agriculture processes.g. petroleum. natural gas. Materials recovered by mining include base metals . uranium . diamonds. analysis of the Profit potential of a proposed mine. This impact has led to most of the world's nations adopting regulations to moderate the negative effects of mining operations. rock salt and potash . perm culture or organic agriculture) and intensive farming (e. or even water). iron . limestone’s . Safety has long been a concern as well. Mining in a wider sense comprises extraction of any non renewable resource (e. In the developed world the range usually extends between sustainable agriculture (e. 2.g. Mining: Mining is the extraction of valuable minerals or other geological materials from the earth. or created in a laboratory or factory. industrial agriculture). Modern mining processes involve e bodies. oil shale .concern to identify and quantify various forms of agriculture. vein or (coal) seam.Mining of stone and metal has been done since prospecting for times. money. Banks are the main facilitators of funding through the provision of credit. Finance includes savings money and often includes lending money. Financial assets. and risk and how they are interrelated. hedge funds. The investor can then hold the debt and collect the interest or sell the debt on a secondary market. The field of finance deals with the concepts of time. personal finance. and other organizations have become important as they invest in various forms of debt. and charges interest on the loans.3. mutual funds. It also deals with how money is spent and budgeted. which deposit money in a bank. are financially managed with careful attention to financial risk management to control financial risk. The general areas of finance are business finance. The bank then lends the money out to other individuals or corporations for investment. 22 . known as investments.One aspect of finance is through individuals and business organizations. Bonds are debt instruments sold to investors for organizations such as companies. although private equity. meaning that investers buy the loan (debt) from a bank or directly from a corporation. and public finance. Finance: Finance is the science of funds management. governments or charities. Loans have become increasingly packaged for resale. Manufacturing: Manufacturing is the use of machines. industrial right and trade secrets in some jurisdictions. owners are granted certain exclusive property to a variety of intangible assets. The term may refer to a range of human activity.4. Under intellectual property law. from handicraft to high tech. literary. but is most commonly applied to industrial 23 . 5. and words. Intellectual property: Intellectual property (IP) is a term referring to a number of distinct types of creations of the mind for which property rights are recognized—and the corresponding fields of law. Common types of intellectual property include copyrights. phrases. it was not until the 19th century that the term intellectual property began to be used. trademarks. and designs. tools and labor to make things for use or sale. discoveries and inventions. such as musical. patents. and artistic works. The British Statute tee 1710 is now seen as the origin of copyright and patent law respectively. and not until the late 20th century that it became commonplace in the United States. Although many of the legal principles governing intellectual property have evolved over centuries. symbols. wells and other site improvements that are fixed in location—immovable. Australia . such as semiconductors and steel manufacturers use the term fabrication instead. Modern manufacturing includes all intermediate processes required for the production and integration of a product's components. USA and Bahamas ) that encompasses land along with improvements to the land. Real estate: Real estate is a legal term (in some jurisdictions.production. such as aircraft. such as buildings. or sold to Wholesalers. 6. automobiles. more complex products. who in turn sell them to retailers. in contrast with 24 . Manufacturing takes turns under all types of economic system. in which raw materials are transformed into finished goods on a large scale. such as the United Kingdom. In a free market economy. Canada. manufacturing is usually directed toward the mass production of products for sale to consumer at a profit. fences. Real estate is often considered synonymous with real property (sometimes called realty). Such finished goods may be used for manufacturing other. who then sell them to end users – the “consumers”. Some industries. Real estate law is the body of regulations and legal codes which pertain to such matters under a particular jurisdiction and include things such as commercial and residential real property transactions. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. a "retailer" buys goods or products in large quantities from manufacturers or Importers. in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services. Retailers are at the end of the supply chain. referring to ownership of land and appurtenances. and inherent rights thereof. and then sells smaller quantities to the end-user. either directly or through a wholesaler. including anything of a permanent nature such as structures. minerals. while civil law jurisdictions refer instead to immovable property. In commerce. and the interest. However. Retailing: Retailing consists of the sale of goods or merchandise from a fixed location. trees. such as a department stores.personal property (sometimes called chattel or personality under chattel law or personal property law). benefits. Real property is typically considered to be Immovable property. 25 . The terms real estate and real property are used primarily in common law. such as delivery. The term "retailer" is also applied where a service provider services the needs of a large number of individuals. Purchasers may be individuals or businesses. Retail establishments are often called shops or stores. boutique. like electric power. or by mail. in some situations the term "real estate" refers to the land and fixtures together. as distinguished from "real property". 7. such as a public utility. rail stations. Transport infrastructure consists of the fixed installations necessary for transport.8. buses. 26 . Mode of transportation includes air rail. Terminals may be used both for interchange of passengers and cargo and for maintenance. and space. trucking terminals. Operations deal with the way the vehicles are operated. helicopters. refueling depots (including fueling docks and fuel stations). and aircrafts. trucks. trains. operations and ownership of infrastructure can be either public or private. water. cable. pipelines and terminals such as airports. Vehicles traveling on these networks may include automobiles. people. road. In the transport industry. bus stations. and seaports. depending on the country and mode. vehicles. airways. canals. waterways. Transport: Transport or transportation is the movement of people and goods from one location to another. legalities and policies. and the procedures set for this purpose including financing. and operations. bicycles. The field can be divided into infrastructure. and may be roads . railways. pipeline. warehouses. broadly speaking. itself derived from the better-known word ergon. economics.Meaning of Organization: Organization is the foundation upon which the whole structure of management is built. controls its own performance. such as sociology. In the social sciences. organization is the structure or mechanism that enables living things to work together. and has a boundary separating it from its environment. The word itself is derived from the Greek word organon. Organization is related with developing a frame work where the total work is divided into manageable components in order to facilitate the achievement of objectives or goals. the term 'organization' has also been used in a number of ways. management. organizations are the object of analysis for a number of disciplines. The broader analysis of organizations is commonly referred to as organizational 27 . Alike 'management'. particularly for sociologists. and organizational communication. In more specific contexts. psychology. political science. the term "institution" may be preferred. Thus. In a static sense. an organization is a structure or machinery manned by group of individuals who are working together towards a common goal. An organization is a social arrangement which pursues collective goals. some of which are compatible.. Lansburgh and Spriegel Breach. Farland. as a structure of relationship.studies. Urwick. as a group of persons and as a system. For example: According to 28 . organizational behavior or organization analysis. 2) Organization as a Framework of Relationship: In the second sense organization refers to the structure of relationships and among position jobs which is created to release certain objectives. money and people to accomplish the various objectives. Organization – functional: organization as a function of how entities like businesses or state authorities are used (organization as a permanent structure). Organization – institutional: an entity is an organization (organization as an actual purposeful structure within a social context) The 'organization' is used in four different senses: as a process. The definitions of Henry. plant and equipment materials. Davis. come under this group. Mooney and Reily etc. as given below: 1)Organization as a Process: In this first sense. Organization – process-related: an entity is being (re-)organized (organization as task or action). Northcourt. A number of different theories and perspectives exist. organization is treated as a dynamic process and a managerial activity which is essential for planning the utilization of company's resources. The constituent elements of a system are linked together in such complex ways that actions taken by one producer have far reaching effect on others. organizing is the determining. In short. System concepts recognize that organizations are made up of components each of which has unique properties. It is a universal truth that an individual is unable ability and resources. 4) Organization as a System: In the fourth sense. the providing of suitable physical factors of environment and the indicating of the relative authority delegated to each individual charged with the execution of each respective activity. the assigning of people to those activities. capabilities and mutual relationship. 29 . grouping and arranging of the various activities deemed necessary for the attainment of the objectives. Organization begins when people combine their efforts for some common purpose.Mooney and Reily. "Organization is the form of every human association for the attainment of a common purpose. the organization is viewed as system." 3) Organization as a Group of persons: In the third sense. Barnard has defined 'Organization' as an identifiable group of people contributing their efforts towards the attainment of goals. organisation is very often viewed as a group of persons contributing their efforts towards certain goals. "Organization is a system of co- operative activities of two or more persons.Definitions of Organization: Different authors have defined organization in different ways. Barnard." According to Louis A. Allen." According to Mooney and Railey." According to Chester I. "Organization may be defined as a group of individuals. and establishing relationship for the purpose of enabling people to work most effectively together in accomplishing objectives. All organizations 30 . that is cooperating under the direction of executive leadership in accomplishment of certain common object." Social unit of people systematically arranged and managed to meet a need or to pursue collective goals on a continuing basis. large of small. "Organization is the form of every human association for the attainment of a common purpose. "Organization is the process of identifying and grouping the work to be performed. defining and delegating responsibility and authority. The main definitions of organization are as follows: According to keith Davis. the management has to identify total task involved and its break-up closely related component activities that are to be performed by and individual or division or a department. and authority to carry out defined tasks. Within the department. Other objectives must be established by the administration from time to time to aid and support this main objective. the functional duties should be allotted to particular individuals.have a management structure that determines relationships between functions and positions. responsibilities. and subdivides and delegates roles. 31 . A close relationship between authority and responsibility should be established. 3) Assigning the Duties: When activities have been grouped according to similarities and common purposes. 4) Defining and Granting the Authority: The authority and responsibility should be well defined and should correspond to each other. they should be organized by a particular department. Organizations are open systems in that they affect and are affected by the environment beyond their boundaries Characteristics of Organization: 1) Outlining the Objectives: Born with the enterprise are its long-life objectives of profitable manufacturing and selling its products. 2) Identifying and Enumerating the Activities: After the objective is selected. 3) It Ensures Optimum Use of Human Resources: Good organization establishes persons with different interests. who will be his subordinates. 4) It Stimulates Creativity: A sound and well-conceived organization structure is the source of creative thinking and initiation of new ideas. 32 . Significance of Organization: 1) It Facilitated Administration and management: Organization is an important and the only tool to achieve enterprise goals set b administration and explained by management. It involves deciding who will act under whom. Besides these formal relationships. skills. what will be his span of control and what will be his status in the organization. expansion and diversifications of the enterprise. increases promptness. 5) A Tool of Achieving Objectives: Organization is a vital tool in the hands of the management for achieving set objectives of the business enterprise. the establishment of relationship is done. some informal organizations should also be developed. 5) Creating Authority Relationship: After assigning the duties and delegations of authority. and motivates employees to perform their responsibility. increases managerial efficiency. Sound organization increases efficiency. knowledge and viewpoints. avoids delay and duplication of work. 2) It Help in the Growth of Enterprise: Good organization is helpful to the growth. a sound or good or ideal and result-oriented organization must possess the following characteristics.6) Prevents Corruption: Usually corruption exists in those enterprises which lack sound organization. 7) Co-ordination in the Enterprises: Different jobs and positions are welded together by structural relationship of the organization. Sound organization prevents corruption by raising the morale of employees. 33 . 8) Eliminates Overlapping and Duplication or work: Over lapping and duplication of work exists when the work distribution is not clearly identified and the work is performed in a haphazard and disorganized way. honesty and devotion. Significance of Sound /Good Organization: Organization is not an end it itself but a means to achieve an end. They are motivated to work with greater efficiency. Since a good organization demands that the duties be clearly assigned amongst workers. Whether an organization is good or bad depends on the fact as to how much efficiently and promptly it is in a position to achieve the objectives. Thus. The organizational process exerts its due and balanced emphasis on the co- ordination of various activities. such overlapping and duplication is totally eliminated. 34 . Every executive must know his scope of activities. Ordinarily. the organization should be divided in several department. 5) Promotion of Satisfaction: The most important element of any human organization is the promotion of satisfaction of workers. a person (personnel) cannot control more than five or six subordinates. Man works in a group or in an organization and hence the success or failure of any organization depends on as to how much the organization is in a position to provide satisfaction to individuals or group working under him. consultation and co-ordination without any delay and difficulty. For this purpose. 4) Clear-cut allocation of Duties and Responsibilities: There must be clear-cut allocation of duties and responsibilities in any scheme of sound organization. 3) Reasonable Span of Control: Another characteristic of organization is that it should have reasonable span of control. the ideal number is three. 2) Harmonious Grouping of Functions etc: For achieving the organization objectives there must be harmonious grouping of functions. jobs and sub-jobs in such a way so that there is action. branches and units etc. sub-departments.1) Realization of Objectives: Organization is tool of achieving objectives of an enterprise. 6) Fullest Utilization of Manpower: Another important characteristic of an ideal organization is as to how far it is successful in making fullest and economical utilization of the available manpower. 7) Provision and Development and Expansion: Another important of an ideal organization is that there exists the necessary provision for development and expansion so that it is possible to expand and develop any organisation according to needs and requirements and necessary changes an alternatives may be made. Further. 10) Effective System of Communication: An ideal organization must possess effective system of communication. and everybody must know to whom he reports and who reports to him. enthusiasm. there should also be active coordination and cooperation amongst the various departments an sub-departments. The inter- communication system should be clear and easier and there should be no ambiguity at and level. They work with full capacity. No subordinate should get orders from more than one supervisor. energy. there must be close coordination and cooperation in the activities of everybody working in the organization. devotion and sincerity. otherwise it will lead to confusion. No one in any organization should report to more than one line supervisor. 11) High Morale: An ideal organization is that in which the workers possess high morale. 9) Unity of Command: There must be unity of command. 8) Coordination and cooperation: In order to achieve the objectives of the enterprise. It will also assist in elimination the evil of red tapism. chaos and conflict. 35 . The departments can be further classified just as production department into (1) Planning (2) Designing. The result is the establishment of departments like Purchase. 12) Flexibility: The last but not the least important characteristic of an ideal organization is that it should be flexible so that necessary changes an modifications in the the size of the organization as well as technology could be easily and conveniently effected. Division of work The main function is divided into sub-functions and entrusted to the different departmental heads. arranging and integrating different elements of organization into efficient working order. (3) Operations. Sales. Accounts. It requires the management to follow the following process of organization. Production. Publicity and Public relations. Steps in the Process of Organization: Organization means identifying. (4) Production Control and (5) 36 . Grouping process is called departmentation. These departments may have different sections as per requirement. Assigning duties The work to be performed by every individual is clearly defined and made known to him. The department may be based upon functions such as manufacturing. cosmetic.Repairs and Maintenance. duplication or overlapping in the work. The divided task is assigned to specific individual or group of individuals who are supposed to be the most qualified and specialized persons for the task. called departments. marketing and financing etc. Grouping of Job and Departmentation The second step is to group similar or related jobs into larger units. Department may also be based on products. Grouping jobs or Departmentation aims at achieving coordination and facilitates unity of efforts. stationery etc. such as textiles. Granting authorities and fixing responsibilities Assigning of duties to individuals must coincide with the appropriate and relevant authorities. The departments are linked together on the basis of interdependence. divisions or sections. Everyone must know what he is required to do in order to avoid any misunderstanding. The division of the work is based upon the fact that specialization is keynote of efficient organization. what the authorities 37 . Every employee must know. Proper communication system establishes harmonious relationship between employees and enables execution of work in the right manner at the appropriate time and in an atmosphere of perfect mutual adjustment. There should be proper arrangement of communication messages from executives to subordinates and vice-versa. liable and accountable. so the efforts of every employee must be co-ordinate effectively to achieve the common objectives of the enterprise. 38 . Delegation of authority Those who are made responsible for specific tasks are given due authority.granted to him and for what and to whom he will be responsible. Co-ordination of activities for common objectives Business activity is a team work or the group activity. Both responsibility and authority go hand in hand together. Reasonable powers are delegated to heads and supervisory staff to enable them to do their work with ease and efficiency. Effective communication Effective communication is the keynote of efficient organization. these organizations vary in size over time. Like static equations. Like dynamic equations. these organizations have no variables. Time doesn't change them significantly. 2) Dynamic Organizations: Dynamic Organizations have Fixed practices. They persist until some new organization occupies their niche. fixed size. variable size. They go through a single life 39 .Types of organization: 1) Static Organizations: Static Organizations have fixed practices. even though their underlying practices don't change much. and each shareholder in the corporation benefits. seeking the constant improvement that launches life cycle after life cycle. It describes aspirations for the future. and inspiring statement of what the organization intends to become and to achieve at some point in the future. ISOPs ensure that the innovator. all-inclusive and forward-thinking. and then declining as its competitors implement better practices that steal away its clients. Company Vision: Corporate vision is a short. an executive must have developed a mental image of the possible 40 . Vision refers to the category of intentions that are broad. succinct. creating new products. each growing rapidly as it occupies its niche. a noted writer on leadership.cycle. the predecessors. It is the image that a business must have of its goals before it sets out to reach them. They will soon motivate employees to climb adaptation curves by using ISOPs to fairly share the wealth that each innovation creates. 3) Adaptive Organizations: Variable practices. and processes that hold on to clients generation after generation. says: "To choose a direction. often stated in competitive terms. services. these organizations vary their practices. Like complex adaptive systems. Warren Bennis. without specifying the means that will be used to achieve those desired ends. variable size. Trust compels us to share information and encourage new ideas. 41 . Teamwork – Teamwork is personal involvement and collaboration in a team environment." Core values include: Safety – Safety serves as a barometer of our company’s overall success and is a specific measure of our operating excellence. Trust – Trust is the mutual respect for and confidence in people. making an individual commitment to the team’s success and recognizing the success of the team. and desirable future state of the organization. make sound decisions quickly. creative actions. stand behind their convictions and support the efforts of others. handle the unexpected. and mobilize the best resources for rapid action. Being accountable means making decisions and holding oneself responsible for the consequences of those choices. Confidence – Self-confident people take initiative. It includes setting a common goal in support of business objectives. may be as vague as a dream or as precise as a goal or a mission statement. which we call a vision. regardless of the job they perform. capitalize on opportunities. innovative. It requires an open. Trust recognizes the importance of individuals and appreciates their diverse opinions. Accountability – Being accountable means every employee assumes ownership and responsibility for his or her own work. honest. They take bold. forthright manner. This image. Doing What’s Right – Doing what’s right is being honest. ethical.. Mission statement: Provides thrust and direction to the organization. For example. and it requires employees to continuously provide internal and external customers with the right product or service. and having personal and professional integrity. An organization's mission describes its fundemental purpose and overall philosophy. business philosophy. Cornerstone of all strategic planning.. Mission: Most businesses have some form of mission statement . In today’s increasingly competitive business environment. delivering on promises. Quality – Quality is the primary determinant of customer satisfaction and loyalty. subsequently. other names for a mission include: founder's philosophy.done right.the first time. and taking personal responsibility for your actions. better quality translates into better value for our customers and. A mission statement (what we are) is different than a vision statement (what we want to become).. It means consistently treating all people fairly. 42 . statement of purpose. better value for their customers-and this is the very essence of competitive differentiation.whether they know it or not.. A mission statement is an organization's vision translated into written form. The intent of the Mission Statement should be the first consideration for any employee who is evaluating a strategic decision. A mission statement should be a short and concise statement of goals and priorities. public image. 43 . For many corporate leaders it is a vital element in any attempt to motivate employees and to give them a sense of priorities. The statement can range from a very simple to a very complex set of ideas. “What business are we in?” Basic guidelines in mission: Your mission statement is about you. and your ideals. In turn. The most important stakeholders are shareholders who own the business. The primary goal of any business is to increase stakeholder value. It makes concrete the leader's view of the direction and purpose of the organization. the target market. employees who work for the business and clients or customers who purchase products and/or services from the business. It should incorporate socially meaningful and measurable criteria addressing concepts such as the moral/ethical position of the enterprise. products/services. the geographic domain and expectations of growth and profitability. your company. goals are specific objectives that relate to specific time periods and are stated in terms of facts. The mission statement should be a clear and succinct representation of the enterprise’s purpose for existence. Answers the question. Long- range goals set through strategic planning are translated into activities that will ensure reaching the goal through operational planning. after gathering all necessary information. Don’t “box” yourself in. Goals: The major outcome of strategic road-mapping and strategic planning. Ask for input. It must be specific and realistic. Keep it short. Structure of Organization: MANAGING DIRECTOR QUALITY MANAGER OPERATION MGR MAREKTING MANAGER FINANCE MANAGER OFFICE ADIMINSTRTOR PROJECT ESTIMATOR MANAGER 44 . A goal is a long- range aim for a specific period. is the setting of goals for the organization based on its vision and mission statement. In order to achieve the desired goals. Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities such as the branch. sound and effective organizational structure is necessary.BULDING SITE FOREMEN CADETS An organizational structure is a mainly hierarchical concept of subordination of entities that collaborate and contribute to serve one common aim. The structure undoubtedly provides basic framework for executive and employees to perform their task smoothly. Individuals in an organizational structure are normally hired under time-limited work contracts or work orders. as we know is the system of job positions. 45 . Organizations are a variant of clustered entities. Organizational structure. or under permanent employment contracts or program orders. An organization can be structured in many different ways and styles. roles assigned to these positions and specifying authority. The structure of an organization will determine the modes in which it operates and performs. department. depending on their objectives and ambience. workgroup and individual. responsibility and task of every positions. Then tension between bureaucratic structures and non- bureaucratic is echoed in Burns and Stalker distinction between mechanistic and organic structures. It is particularly useful for new (entrepreneurial) business as it enables the founder to control growth and development. Post-bureaucratic The term of post bureaucratic is used in two senses in the organizational literature. Bureaucratic structures Bureaucratic structures have a certain degree of standardization. It is not the entire thing about bureaucratic structure. This structure is most common in smaller organizations and is best used to solve simple tasks. The strategic leader makes all key decisions and most communication is done by one on one conversations. mostly in tall organizations. In the generic sense the term post bureaucratic is often used to describe a range of ideas developed since the 1980s that specifically contrast themselves with Weber's ideal type bureaucracy.Organizational structures types: Pre-bureaucratic structures Pre-bureaucratic (entrepreneurial) structures lack standardization of tasks. They usually adopt a tall structure. They are usually based on traditional domination or charismatic domination in the sense of Max Weber's tripartite classification of authority. This may include total quality management. The structure is totally centralized. One generic and one much more specific. culture 46 . They are better suited for more complex or larger scale organizations. It is very much complex and useful for hierarchical structures organization. in which decisions are based on dialogue and consensus rather than authority and command. in his classic study of culture management at 'Tech' argued that “the essence of bureaucratic control . for instance the engineering department 47 . describes them as cleaned up bureaucracies. provide a detailed discussion which attempts to describe an organization that is fundamentally not bureaucratic. This sort of horizontal decision making by consensus model is often used in housing cooperatives.. codification and enforcement of rules and regulations . rather than a fundamental shift away from bureaucracy. arguing along these lines. Charles Heckscher has developed an ideal type. None of these however has left behind the core tenets of Bureaucracy. Another smaller group of theorists have developed the theory of the Post- Bureaucratic Organization. amongst others.does not change in principle. the post-bureaucratic organization. legal type.the formalization. Gideon Kunda. authority is still Weber's rational.management and matrix management. other cooperatives and when running a non-profit or community organization.. Employees within the functional divisions of an organization tend to perform a specialized set of tasks.. there is an emphasis on meta-decision making rules rather than decision making rules. Hierarchies still exist. the organization is a network rather than a hierarchy.. and the organization is still rule bound.it shifts focus from organizational structure to the organization's culture”. It is used in order to encourage participation and help to empower people who normally experience oppression in groups. Heckscher. open at the boundaries (in direct contrast to culture management). Coordination and specialization of tasks are centralized in a functional structure. Human resource and administration 4. But not only beneficial for organization but also for employees faiths.would be staffed only with software engineers. For instance. Marketing and Sales 3. efficiencies can further be realized as functional organizations integrate their activities vertically so that products are sold and distributed quickly and at low cost. a functional organization is best suited as a producer of standardized goods and services at large volume and low cost. a small business could start making the components it requires for production of its products instead of procuring it from an external organization. which makes producing a limited amount of products or services efficient and predictable. Logistics 2. Finance and accounts 2. Procurement 48 . Technical / Operations Other departments depend on the size of the organization. like 1. This leads to operational efficiencies within that group. However it could also lead to a lack of communication between the functional groups within an organization. making the organization slow and inflexible. Functional Pattern: Following are the main departments in any organization: 1. Moreover. As a whole. The word Optimizing may sound strange but it refers to taking measures that minimize the cost of financing while simultaneously attempting to maximize the profits out of the employed finance. It can be also defined as the management of funds and capital required by a business and private activities. Often this term is used for the study of economics and how money is controlled. Finance managers are the pessimists whereas sales managers are the optimists who look to the future and not to the past! Often though. 49 .3.sub dept of finance and accounts 1. problems occur with small businesses who fail to see the distinction between a business loan and a personal one. It is not uncommon to hear finance managers referred to as bean counters as they are looking at immediate returns and initial costs against the potential at a later stage. Bad debts are poor finance management where rules have not been followed. Management of finance has also developed into a specialized branch within the financial sector and is carried out by finance managers. the result of this is depressed markets. It is for this very reason that finance managers are very careful with finance they agree too and where it is funded from. low production and a cash crisis. Managing this involves dealing with the optimization and allocation of funds to various areas either by borrowing or by using those available from internal resources. Treasury department. Finance The definition of finance is the provision of funds or loan supplied to an individual or company. and cash flow forecasts Monitoring and managing financial plans Auditing and reporting financial condition 2. there can be picked out the following main services it renders: Payment of invoices and expenses Income collection and salary management Production and assignment of budgets.Finance department goal and services: The main goal of The Department is to provide the internal and external users of financial statements with relevant. Advertising refers to the various media used to convey your message. Your target market is the specific group of people that consume your product or utilize your service. television commercials and the Internet are all part of advertising that conveys your business message to the public. accurate and timely information and to guarantee that the required financial revision is closely adhered to in order to protect the assets of the company. If to look through the activity of The Department. The Department takes care of finance flow to ensure that the company operates within its financial regulations and satisfies various external financial requirements. It also ensures that the corporate. Printed advertisement. radio air time. financial records comply with internal and external audit. Marketing: Marketing means informing your potential clients about your products or service. and finding ways to establish and keep a customer base. capital plans. Promotion refers to the various methods by which 50 . Many people will join business associations. the major tasks of the marketing department are as follows: * Advertising & Communication * Direct marketing * Conducting researches and market management * Service Marketing * Maintaining image and brand management * Developing new product * Promoting and professional sales * Retail management & technology.you convey your message to customers. or set up displays in malls and craft shows for promotional purposes. The global aim of the department is promoting the product/service and increasing recognition of the company through researches and branding efforts. 51 . you're promoting your business. Typically. Marketing department tasks: The Marketing office works to raise the awareness of the company and its prominence in the industry and market. The department's strengths should all be in proper understanding of consumer behavior and efficient decision- making process. When you communicate with the public. 3. Human resource: Human resources is a term used to describe the individuals who comprise the workforce of an organization, although it is also applied in labor economics to, for example, business sectors or even whole nations. Human resources is also the name of the function within an organization charged with the overall responsibility for implementing strategies and policies relating to the management of individuals (i.e. the human resources). This function title is often abbreviated to the initials 'HR'. The origins of the function arose in organizations that introduced 'welfare management' practices and also in those that adopted the principles of 'scientific management'. From these terms emerged a largely administrative management activity, co-coordinating a range of worker related processes and becoming known, in time as the 'personnel function'. Human resources progressively became the more usual name for this function, in the first instance in the United States as well as multinational corporations, reflecting the adoption of a more quantitative as well as strategic approach to workforce management, demanded by corporate management and the greater competitiveness for limited and highly skilled workers. The general purpose of Human Resource department is to establish proper staffing policy and implement it on practice. The main goals and tasks of HR department are: * organize appropriate system of staff selection and recruitment * organize system of effective staff training and development 52 * ensure the competitiveness of the company within labor market * establish transparent system of staff assessment and promotion 4. Entrepreneurship: “Entrepreneurship is the act of being an entrepreneur, which is a French word meaning "one who undertakes an endeavor". Entrepreneurs assemble resources including innovations, finance and business acumen in an effort to transform innovations into economic goods.”As an experienced entrepreneur, you are most likely aware that there are daily duties involved with ensuring your business is successful. Accounting: Includes budgets, payroll, financial planning, bill payments, and credit management. Type Private. Industry Direct selling. Founded 1959 Founder(s) Rich DeVos Jay Van Andel Headquarters Ada, Michigan, United States Area served Worldwide Steve Van Andel (Chairman) Doug DeVos (President) Key people Al Koop (Chief Executive) Russell Evan (CFO) Revenue USD 8.4 billion (2009) 53 Employees 13,000 Introduction: Amway is the largest direct selling company and manufacturer in the world that uses network marketing to sell a variety of products, primarily in the health, beauty, and home care markets. Amway was founded in 1959 by Jay Van Andel and Richard DeVos. Based in Ada, Michigan, the company and family of companies under Alticor reported sales growth of 2.3%, reaching US$8.4 billion for the year ending December 31, 2009.Its product lines include home care products, personal care products, jewelry, electronics, Nutrilite dietary supplements, water purifiers, air purifiers, insurance and cosmetics. In 2004, Health & Beauty products accounted for nearly 60% of worldwide sales. Amway conducts business through a number of affiliated companies in more than ninety countries and territories around the world. It is ranked by Forbes as one of the largest private companies in the United States and by Deloitte as one of the largest retailers in the world. 54 Meaning and the History of Amway: What does the word Amway mean? Amway is an abbreviation for "American Way". Great companies start with great ideas, and Amway is no exception. The idea came when two Nutralite® salesmen, Rich DeVos and Jay Van Andel were at the very top of a very successful MLM at the time; Nutralite was sold door to door. This was the 1950s, Nutralite was a single entity company, and by the end of the decade, Jay and Rich had built a respectable business of their own - approximately five thousand distributors were in their Both Mr. DeVos and Mr. Van Andel knew how to move product - build on relationships. But what was needed was a way to expand. A way that would allow them to multiply the efforts of what they alone could accomplish. In 1959, the American Way Association was formed. This would be the chance to grow and set the direction of a new entity. Rich and Jay immediately set out to find an initial product to add to the line. They purchased the rights to Frisk, a household cleaner (which was later renamed Liquid Organic Concentrate or L.O.C.). 55 1971 . What this meant is that there were 3 companies all using the Amway name. bought a controlling share in the manufacturing facility in Michigan where LOC was made. By 1964. Not just products and not just sales.they now owned the company they had started as employees with. Amway continued to expand. This seemed like the only way to offer what Jay and Rich originally envisioned . the pair purchased Nutralite outright .1995 . This is a main part of Amway's business philosophy. The idea was by handling the manufacturing and distribution of a product line.1974 .Australia .1998 56 . Amway continued to grow under the co-ownership of Van Andel and Devos. Amway Services did business related tasks (like insurance for distributors) and Amway manufacturing.China .1997 . reaching past the borders of the US to offer the same opportunities in other countries: . and then allowing a network of IBOs. but a way to a better life. In 1960.Japan .1979 . In 1972.Africa . which produced LOC. the three arms of Amway were all merged into a single entity .Amway Corporation.Europe and parts of Asia .India . The Amway Sales handled product and distribution. now Amway.1985 . the American Way Association. regardless of their background and status.a solid opportunity where anyone with motivation could excel.Latin America . The company is still thriving and still offers opportunity to individuals who have the desire to build their own business. Alticor and Amway Sales Growth: 1960 to 2008: February 5th.Vietnam -. Rich DeVos is still alive.Jay Van Andel passed away at age 80 in 2004. MLM is a proven business model that produces massive success for individuals. although he has passed the Presidency of Amway to his son Dick. Mr. with an estimated 4. Amway (now technically.2008 Critics argued that the model wasn't sustainable and that growth was mathematically limited. DeVos was named one of the richest men in America by Forbes magazine. DeVos owns the Orlando Magic basketball team among other assets. "Pyramid scheme!" Fifty years of steady growth has shown this criticism has no basis in fact.Russia . They cried.2 billion dollars in personal wealth (2009). 2009 by ibofightback Posted in Amway News 57 . Van Andel's net worth was estimated to be 2.2005 . At his death. The company is in 58 markets worldwide and manufactures more than 450 products. In 2008. . Andel's place at Amway Global is now held by his son Steve. Amway Global does business in more than 98 countries.4 billion dollars. Amway Global) reported sales of 8 billion. so by far the majority of the sales are through the Amway business opportunity. not at the price they were sold to distributors/IBOs. This means they’re valued assuming that they were all sold at the full retail price. 58 . Note however that Alticor sales includes revenues from other sources such Access Business Group and Amway Grand Plaza. It’s important to be aware of this as many critics of the business (including some former Diamonds who you would think know about this) have in the past conveniently ignored the change in reporting standards and tried to claim Amway’s sales peaked in 1998. In 2007 this was reported as around $100 million. Alticor reports actual revenue – sales at the base IBO price I’ve converted the figures so they can be properly compared. Amway global sales were reported at “estimated retail” until 2000 when the holding company of Alticor was formed. With the founding of Alticor.13 billion 1993 $4.5 million 1970 $120 million 1980 $1.0 billion Amway has grown fairly quickly since its inception.3 billion 1966 $40 million 1976 $300 million 1986 $1. Until 1999 sales were reported at Estimated Retail.3 billion 1965 $38 million 1975 $250 million 1985 $1. At its peak in 1997 Amway estimated retail sales worldwide at 7 Billion USD. 59 .5 billion 1992 $3.4 billion 1991 $3.2 billion 1994 $5.0 billion 1968 $65 million 1978 $500 million 1988 $1.8 billion 1998 $5.5 billion 1964 $25 million 1974 $230 million 1984 $1. the ERS values are about 32% higher than sales to distributors.2 billion 1961 ? 1971 $165 million 1981 $1.8 billion 1967 $50 million 1977 $375 million 1987 $1.5 billion 1997 $7. This is approximately 32% higher than actual sales revenues from sales made to Amway distributors.0 billion 1962 ? 1972 $180 million 1982 $1.9 billion 1999 $5.3 billion 1996 $6.Amway Sales Data: Estimated Estimated Estimated Estimated Year Year Year Year Retail Sales Retail Sales Retail Sales Retail Sales 1960 $0. Its historic sales data at estimated retail prices is provided below from 1959 to 2000 (in 2000 Amway switch over to Alticor. The actual sales to distributors are marked with *. Taking the sales data published in 2001 report into account. the report methodology was changed and the actual sales to distributors instead of estimated retail sales (ERS) have been reported since 2001.7 billion 1969 $85 million 1979 $800 million 1989 $1.1 billion 1990 $2.9 billion 1963 $21 million 1973 $210 million 1983 $1.2 billion 1995 $6. and the Founding Families and the support of quality products and service. MISSION OF AMWAY: Through the partnering of Distributors. Broad over riding statement of purpose. To provide excellent customer service. home tech. home care. To deliver high-quality products to semi-urban and urban homes in diverse areas of insurance. GOAL OF AMWAY: The development of new business opportunities. Awards and Recognition: Presented the Millennium Outstanding Service Award 2000.VISION OF AMWAY: Helping people live better lives. personal care. To facilitate best business opportunities. cosmetics and wellness. by the Confederation for the Blind (AICB). To increase the company's role in relations to social responsibility. in recognition for work carried 60 . we offer all people the opportunity to achieve their goals through the Amway Sales and Marketing Plan. Employees. Showing where the business wishes to be in the future. 2003. for the largest number of donors at a Blood Donation Camp (BDC) held by any financial and commercial institution and industry. 2003. healthcare and vocational training under the following heads: · Health care · Education and vocational training · Safe drinking water 61 . The Mayor of Surat . On- going assistance to be provided in education. Social responsibilities performed by AMWAY: One by One Campaign for Children Amway Opportunity Foundation (AOF) National Project for the Blind: Project Sunrise: The objective is to identify one orphanage/institution at each location where Amway has a modestly-large office (52 cities). Orissa awarded AOF a memento & certificate for conducting a mega-Blood Donation camp of 816 units on 4th May. out for the visually challenged. The Surat Raktdaan Kendra felicitated Amway India at their annual function on 5th Oct.Snehlata Chouhan - presented a trophy and a certificate of appreciation. The Indian Red Cross Society. and dietary supplements. From nutritional supplements to water treatment. grown harvested and processed on its own certified organic farms. Active Lifestyle • Artistry • Atmosphere • Beautycycle • Body Series • Boutique • Dish Drops • Eddie Funkhouser • Emma Page • eSpring • L. Our scientists and formulators have developed the complete line of 62 .· Children’s Day and AOF Day celebration with Amway staff & Amway Amway Products: Amway offers a range of exclusive. cosmetics to cleaning products.O. Artistry® is one of the world’s top five largest-selling prestige brands of facial skin care and colour cosmetics. mineral. competitive brands that meet proven customer needs around the world. independent Retail business.C. • Gensona • Glister • Hymm • iCook • LifeStyle Balanced Solutions • NAO Cosmetics • Moiskin Skin Care • Nutrilite • Nutriway • XS Energy • Ocean Essentials • Personalized Health • Peter Island • Protique • Positrim • Satinique • SA8 • Time Defiance • Tolsom • Trim Amway Personal Care Products Nutrilite® is the world’s leading brand of vitamin. these brands are the solid foundation for a successful. formulated internationally is designed to deliver the ultimate grooming experience. Dynamite's range of male grooming products. All products of Attitude contain Skin Vitalising Complex that synergistically combine to cleanse. Persona Premium 3 in 1 Soap is a complete soap for the entire family promises refreshing confidence.cosmetics. Glister Toothpaste is a revolutionary Multi-Action Toothpaste with Sylodent that offers seven benefits. Replenish & Moisturise the skin making it soft & supple. 63 . LOC High Suds is a multipurpose household liquid cleaner. G&H Range enriched with the goodness of Glycerine and Honey.Satinique Advanced Range with unique Ceramide Infusion System uses nature's own renewing technology to rejuvenate. deeply nourishes and hydrates the skin for a healthy glow. SA8 Gelzyme is India's only 3-in-1 laundry detergent which pretreats. 64 . cleans and softens. strengthen and protect your hair. Great Price and a Money Back Guarantee! Amway’s competitors: 1) Direct competitors: AVON MARY KAY SUNRIDER 2) Indirect competitors: Local INDIAN companies. Great Performance. Changing Political & Economic Atmosphere Products used as samples to persuade relatives and friends to join Amway Focus shifted from selling products to recruiting. Great Value Product Range offers you Great Quality. 65 .Dish Drops is a concentrated hand dishwashing liquid with a powerful "Triadic Detergency System". who to sponsor. what hours to keep. and other important decisions. IBOs are the CEOs of their own businesses. Independent Business Owner (IBO): An IBO is. As independent business owners. IBOs decide how active to be in their business. IBOs are free to make decisions many others in business are not free to make. which is powered by Amway North America. an Independent Business Owner: an individual or individuals who own and operate their own business. and they make many of the same daily business decisions other business executives make. As independent business men and women. formerly Quixtar. 66 . what products to sell and at what prices. IBOs are independent contractors. they are not employees of Amway North America or Amway Corporation. literally. The IBOAI (or IBOA International) is one example. and advises Amway on the best way to move the business forward. Working closely with Corporate staff. and participation. Past Chairman 67 . to keep it moving forward and make certain the business is better for every generation. A trade association is an organization of business people who share common interests or concerns. formerly Quixtar. Chairman Brad Duncan. proposes improvements. from products and promotions to operations and business guidelines. they bring positive change to this business. Vice Chairman Bob Andrews. Role of the IBOAI Board: The IBOAI Board is the representative body of the Association acting on behalf of all IBOs. With IBO input. Independent Business Owners Association International (IBOAI) : The IBOAI (IBOA International or Independent Business Owners Association International) is a trade association representing Independent Business Owners affiliated with Amway North America. 2010 IBOAI Board and Governance & Oversight Committee: Steve Woods. It is the primary advocacy organization for IBOs in North America. Together. support. the Board advises Amway on every facet of the business. and who educate and represent their members. the IBOAI Board listens to ideas. as it has for 50 years. Other important directors: 1. 68 . It adapts easily to your needs and ambitions. and grows with them. Organization type and Business Opportunity: The Amway is private co operative organization. a line of sponsorship. Bert Gulick 10.Pedro Lizardi 13.Shivaram Kumar 12. Mike Bundy 4. The Amway Sales and Marketing Plan put you in control.Leif Johnson 11. Howie Danzik 6. and the IBOAI – their primary advocacy organization – behind them all the way. Kanti Gala 9. John Crowe 5.Doyle Yager 15.Doug Weir 14. Jody Dutt 8.Dan Yuen IBOs are never alone. They have a sponsor. With Amway you are Connected to the global leader in multilevel marketing. offering you all the personal support and assistance you require to become the Business Owner you want to be. Jim Dornan 7. Alberto Aguilera 2. Glen Baker 3. allowing you the flexibility to work where and when you want. giving you time for family and friends as well as the opportunity to earn a good income. Sales and Marketing Plan: The Amway Sales and Marketing Plan is a low risk. Supported by great products and people who will help you succeed. The following objectives for the brand were set: To increase distribute or profitability and productivity by providing a new and exciting business opportunity To optimize consumer convenience and value through enhanced product differentiation with this exclusive and revolutionary cleaning system To provide innovative and unique products to enhance the image of Amway Home Care. Amway needed to set out the key objectives it wanted to achieve.with over 40 years of experience. In creating a marketing strategy for the Super Concentrated Cleaning System. can retail products and offer the business opportunity to others. in turn. It allows you to build your business through retailing products and sponsoring other people who. low start-up cost business opportunity that is open to everyone. you not only build your own business network but also enable others to build one of their own. and finally In Control of your life. 69 . By passing your sales and marketing knowledge to your developing team. Marketing strategy: A strategy is a plan of action designed to achieve the goals of the organisation. or product information . 2. Business.like registration. 3. Finance and accounts. renewal. 70 .our Customer Care Associates can help you. Amway Global provides you with support like: Customer care: If you have a question about anything . Marketing and Sales. Human resource and administration.A New Strategy of Amway: Agreement with the government and company resumed operations Goods will be sold in retail outlets and through sales representatives Income of sales distributors will be based on direct selling done by them Same Distribution centers served as retail outlets for the company Localization of employees Localization of production and Raw Material Localization of research and development Transparency and Credibility of company’s management Functional pattern of Amway: Following are the main departments of Amway: 1. At 56 Amway offices across India.000 Amway distributors and 450 full-time employees are all considered AOF volunteers. LIC takes ownership of being the face of Amway’s CSR at the location. like process the order. Order management: You sell the products. The 550. form a project. and event sponsorship. and free websites you can personalize. online sites. all at Amway Global. manages your customer accounts. and we'll do the rest. and renew your business.com. and implement this with other volunteers. 71 . Amway believe that quality improvement happens when people come together. volunteering becomes a way of life in Amway. The LIC also plays a lead role in raising funds they wish to utilize. This core belief is what all AOF initiatives are based upon and it holds true time and again. and instructor-led training are some of the ways we can share with you the knowledge to grow a successful independent business. video. AOF has formed a team of 6 or more distributors and employees to form a Local Implementation Committee (LIC). and then decides how best to utilize this in their town or city. The beauty of this system is that the LIC raises the funds. They identify potential partners. And we help Build awareness of your products and brands with national advertising. promotions. With a passionate and vigorous workforce ready to contribute their bit to the well-being of society. Training: Online. Business management: You can manage your business. check customer Volume. brochures. Marketing: We support your sales efforts with DVDs. and handles the shipping details. order products. Magazines. through which they engage in person-to-person marketing. home care. along with its parent and sister companies. IBOs build businesses that allow them to earn income based on sales made resulting from their efforts. directly employs 10. individuals must register with an existing IBO. Ownership of Amway: IBOs and Customers: Amway services the needs of both Independent Business Owners and customers. Customers pay no fee to shop from a large selection of products and learn from expert advice on health. Products are shipped to their homes and covered by Amway's Customer Satisfaction Guarantee. 72 . This type of direct selling involves matching a consumer's needs with the goods and services on offer. To launch an Amway-powered business. and other topics. beauty. The business also operates strategically at a Global.000 people worldwide.Strategic analysis to overcome problems: Today it is a global business that. European and National level. Amway has helped millions of people around the world to start their own independent business. The better the match. the more lasting the relationship between the seller and the buyer. Amway (UK) began operations in 1973 and has its own distribution and Product Selection Centers. The biggest chunk of Amway's marketing budget goes directly to rewarding IBOs for sales volume resulting from their efforts.. resulting in product sales. Only 8% of respondents in the Edelman 2005Annual Trust Barometer study indicated that information obtained in advertising was credible. Am-way does the same by rewarding IBOs for spreading 73 . friends. while 42% trusted information obtained from family. Through its Independent Business Ownership Plan. and colleagues. Personal Referrals: Unlike most other companies. Those efforts include registration of new Ibos. Buzz Marketing: Alticor pioneered buzz marketing through its person-to-person referral model. it is the result of a personal referral by an IBO -not as a result of some advertisement they saw on TV. Members. If a new registrant Does not have a servicing IBO. and Clients.Customers must register with the identification number of their servicing IBO. Some companies spend millions on strategies intended to get people to spread the word about their products. When people visit Amway's site. Personal referrals have proven to be much more effective. Amway will assign them one. Amway's tiered compensation plan rewards the movement of product through an IBO's sales organization and their ability to train others to create their own successful organizations. Amway's sales are not the result of advertising. you can focus on Nutrilit supplements and XS Energy Drinks. If you're into health.the word about the business opportunity and the exclusive products available through Amway. This is a much targeted market spend. Independence: The beauty of Amway's business model is that there can be as many ways of pursuing the business as there are IBOs. typically involving training systems. 74 . and time-tested tactics to approach people and interest them in the business opportunity and products. Business Systems: IBOs employ many different approaches to build their businesses. motivational meetings and tools. Often. it typically is the result of having been approached by an IBO already involved in one of several large organizations that provide training and support to IBOs. since IBOs are rewarded only when their efforts actually result in product sales. a new IBO also will choose to attend optional and voluntary training sessions or purchase professional development materials provided by that organization . When a person registers with Amway.all covered by a money-back guarantee. So everyone can participate in business. Products are easy to sell. Training to staff. Every can participate in business. Functions are performed by IBOs.SWOT analysis of Amway: STRENGTH: Based on direct selling operations. WEAKNESS: 75 . Quality Products that Inspire Confidence. Backed by a 100% Customer Product Refund Policy produce faith and reselling attitude in customers. The possibility of financial security and freedom of time to enjoy life. The person who wants do something can be make profit with investment of low cost. Have good customer service system. It’s easy to get admission in Amway with easy rout like intent. Hence it can be A home based business. A business with national and international scope gives more opportunity to the costumers. Almost no risk of money as world class quality Minimal start up costs gives strong base to the initiation of business. Organize meetings and events time to time. Change in government policy may affect to the profit and freedom of company. 76 . Population of INDIA gives better opportunity to company to receive more profit. Focus shifted from selling products to recruiting. Initially high entry cost leads to somewhat restrictions for business development. THREATS: Too much freedom to IBOs. Rumors for direct selling operations. As the company name itself gives reliance and faith for the customer and buyer produce greater opportunity for marketing which leads to decrease in total expenditure of company. More power to IBOs gives critical structure to organization. OPPURTUNITIES: Setup a manufacturing plant in all countries leads to better platform for company. confirmable sources. and probably never did much more than dabble for a few months. it’s illegal. SUNRIDER creates lot of competition in market which leads to strong marketing competition in market. CONCLUSION: 77 . Have all these major companies and organizations that have recognized Amway for excellence been conned? For fifty years? Or perhaps the opinions you read on the internet have been formed from limited or even no experience – from encountering some new or inexperienced Amway rep that never bothered to learn how to act professionally or properly explain the concept. chances are you’ve encountered people who claim Amway is some kind of scam business. Finding: I’ve written about Amway based entirely on factual. the products are poor quality. Skim through these finding and decide for yourself whether those kinds of opinions really have a lot of credibility in the face of all of these facts. MARY KAY. If you’re researching Amway. Or perhaps the experience was with just one of dozens and dozens of different Amway affiliated organizations. especially on the Internet. or some other information that has made you think twice about being involved. Competitors like AVON. to clothing. they have become one of the top providers of cutting-edge networking products in the global market. the products are costly as compared to other branded products available in market but if we compare the quantity while using the products require less amount and thus can be used for longer time. Successful business today depends upon a company's ability to quickly adapt to changes in the marketplace. then choosing Amway really does make sense. and daily use products etc. Health care. SUGGESTIONS: 78 . If you're looking for high quality products and solid customer support at rock-bottom prices. The products of Amway are world class product quality. Through they continued pursuit of new product ideas. At Amway. The main objectives of Amway are to profit there distributers by eliminating the middlemen and provide the products to the distributers in cheaper price. Amway is which is one of the largest direct selling company in the world. They are made up of natural a thing that’s why they are good for health and environment. and its willingness to act upon it. This knowledge. Amway covers a wide range of products from beauty care. and by consistently refining our existing product line. they pride it selves on knowledge of the dynamic networking market that is quickly becoming central to modern business. has enabled us to become one of the industry's technological leaders. There must be multiple options for purchasing the products for distributers like online. Once customer gets idea about product he comes to know advantages of products. The products should be cheap the home delivery system takes at least two days to deliver the products so the delivery should be instant.com 79 .worthwilemag. Bibliography: 1) www. tale and instant purchasing. Trial packs should be used because customer must have to introduce the product. the Amway office should be situated in such a location so that it is in reach of all distributers. In every city. com 14) http://www.in/Articles/Article.com 15) http://wiki.com 16) http://dictionary.reference.businessballs.authorstream.com 10) http://en.wikipedia.in/ 3) http://www.thetruthaboutamway.com/ 18) http://articles.mouthshut. 4) http://en.com.org/wiki/Business 9) http://www.com 12) http://www.nutrilite.2) http://www.com 13) http://www.org/wiki/Organisation 8) http://en.wikipedia.wikipedia.com/ 6) http://www.com 17) http://www.com/ 7) http://en.answers.bplans.scribd.mouthshut.org/wiki/Amway 5) http://www. 80 .business-standard.amway.org/wiki/Administration 11) http://www.wikipedia.amway.
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