Changing Corporate Reputations: A Case Study in Progress
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Volume 3 Number 1
Changing Corporate Reputations: A Case Study in Progress Mark Bain Amway Corp.
INTRODUCTION Amway Corp., a leading multinational direct selling company, has begun an ambitious program to enhance its reputation worldwide. This program is one of the most comprehensive corporate eorts of its type in the world today. Although it has just started, the company has already learned a great deal about the art and science of reputation management in a large, highly decentralized global organization. This article is adapted from a presentation by the Chairperson of Amway's Global Reputation Team at a recent conference. AMWAY BACKGROUND There are two primary aspects to Amway's business. First, it sells some 6,000 quality products and services, including products for the home, personal care and health/ nutrition. Secondly, it oers an opportunity for people to own their own business selling these products and services. This dual nature of the business presents unique positioning challenges. Amway was founded in 1959 by two extraordinary entrepreneurs, Rich DeVos and Jay Van Andel. They started Amway in an age when big manufacturing companies dominated the business landscape. At a time when most people dreamed of climbing the corporate ladder, DeVos and Van Andel were encouraging aspiring entrepreneurs to start a small business of their own selling Amway products. To get started, the Amway co-founders
needed to ®nd suitable products to support the business opportunity they planned to oer. The ®rst product they selected was a liquid organic cleanser, and they quickly added other soap and detergent products Ð usually, products that people would use and replace on a regular basis. In the 1970s, after focusing primarily on domestic growth through product line expansion, Amway moved overseas, initially focusing on other English-speaking countries. But the most notable event of the decade was the US Federal Trade Commission's (FTC) investigation into the legality of the Amway Sales and Marketing Plan, the basis for the Amway business opportunity. In 1979, after several years of intense investigation and considerable publicity, the FTC ruled that Amway's plan had adequate consumer protections and met established legal standards. In the 1980s, Amway continued to face legal, regulatory and media challenges in the United States and other markets. Several American states moved to enact legislation speci®c to direct selling. There were Amway stories on `60 Minutes' and `The Phil Donahue Show,' and articles ran in several prominent publications. There was extensive coverage of a customs dispute between Amway and the Canadian government. With all this contributing to a business downturn, the ®rst in company history, Amway reduced its workforce for the ®rst time in 1983. Toward the end of the 1980s, it expanded internationally at a rapid pace,
Corporate Reputation Review, Vol.3, No. 1, 2000, pp. 69±74 # Henry Stewart Publications, 1363±3589
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Changing Corporate Reputations: A Case Study in Progress
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