Corporate Social Responsibility An Amway case study Introduction
Companies that operate in a socially responsible way strengthen their reputations. In business, reputation is everything. It determines the extent to which customers want to buy from you, partners are willing to work with you and your standing in the community.
The company Amway is one of the world's largest direct sales organisations with over 3 million Independent Business Owners (IBOs) in over 80 markets and territories worldwide. It is a family-owned family-owned business with a strong emphasis on family values. Its IBOs are often couples. Many of these are raising families. They therefore have a strong bond with children. These families are more than happy to partner with Amway, who, as part of its Corporate Social Responsibility Responsibility strategy, works with UNICEF, the United Nations Children's Fund.
As a family company, Amway is committed to playing a part in improving the lives of children in need across the globe. In this way, the company is able to show its commitment to the support of global causes. Amway defines a global cause as 'a social issue affecting many people around the world engaged in a struggle or plight that warrants a charitable response'.
Growth and responsibility An understanding of how Amway operates as an organisation gives a clearer picture of the contribution it can make to help children in need across the globe. Amway's vision is to help people live better lives. It does this every day by providing a low-cost low-risk business opportunity based on selling quality products.
What does Amway do? Amway distributes a range of branded products. These products are sold to IBOs worldwide. The IBOs are Amway's links with consumers and the communities in which they operate. The IBOs are self-employed and are highly motivated. They work within the guidelines of Amway's Rules of Conduct and Code of Ethics, which are about being honest and responsible in trading. IBOs sell to people that they know or meet. They can introduce others to the Amway business. Typical products that IBOs sell include: personal care fragrances, body care skin care and cosmetics durables such as cookware and water treatment systems nutrition and wellness products such as food supplements, food and drinks. IBOs play a key part in helping Amway to deliver its Global Cause Programme.
Amway programmes
In order to give many of the world's children a chance to live a better life, Amway launched the global One by One campaign for children in 2003. Amway encourages staff and IBOs to support its One by One campaign for children. The One by One programme: helps Amway to bring its vision to life declares what the company stands for builds trust and respect in Amway brands
Establishes Corporate Social Responsibility at a high level. Since 2001, Amway Europe has been an official partner of UNICEF and has been able to contribute over 2 million euros (about £1.4 million). The focus is on supporting the worldwide 'Immunisation Plus' programme. This involves, for example, providing measles vaccines to children across the globe. The 'Plus' is about using the vehicle of immunisation to deliver other lifesaving services for children. It is about making health systems stronger and promoting activities that help communities and families to improve child-care practices. For example the 'Plus' could include providing vitamin A supplements in countries where there is vitamin A deficiency.
Since 2001, Amway and its IBOs across Europe have been supporting UNICEF's child survival programme. The need is great. One out of ten children in Kenya does not live to see its fifth birthday, largely through preventable diseases. Malaria is the biggest killer with 93 deaths per day. Only 58% of children under two are fully immunised. The work of the One by One programme is illustrated by a field trip undertaken by Amway IBOs to Kenya. The IBOs travelled to Kilifi in 2006 to meet children and to find out what the problems are in various communities. They act as champions spreading the message throughout their groups. In Kilifi, the focus is on trying to reach the most vulnerable children and pregnant mothers. The aim is to increase immunisation from 40% to 70%. Other elements of the programme involve seeking to prevent the transmission of HIV/AIDS to infants. As the Amway organisation grows and prospers, it is able through CSR actions to help communities to grow and prosper too.
Developing a strategy
A strategy is an organizational plan. Implementing a strategy involves putting that plan into action. In other words a strategy shows how a business will achieve its goals. The strategy thus enables an organisation to turn its values into action. Values are what a company stands for. An important value for Amway is being a caring company. Amway believes in demonstrating this caring approach and this is why it has partnered with UNICEF. All Directors design strategies for the whole of an organisation. Effective strategies involve discussion and communication with others. The views of IBOs are influential in creating strategies for Amway. Amway's strategies for corporate social responsibility are cascaded through the organisation as shown below.
Amway's Global Cause strategy involves creating responsible plans that make a difference. However, the strategy is flexible. In shaping the strategy, research was carried out to find out which global causes IBOs support. The results showed that many favored a cause that helped children. There was a clear fit between Amway's aims to help children and UNICEF's 'Immunisation Plus' programme for children.
Objectives From the outset, Amway set out some clear objectives for its strategy. These were to: build loyalty and pride among IBOs and employees enhance Amway's reputation as a caring organisation make a real difference to human lives. Child mortality is particularly high in developing countries because of infectious diseases. Many children could still be alive if they had been vaccinated.
For under £12 a child can be vaccinated against these diseases and has a fighting chance to reach adulthood. UNICEF's world child 'Immunisation Plus' programme is a fitting focus for the activities of Amway UK and its IBOs.
The UK initiative is part of a European-wide fundraising campaign for children. It recognises the importance of building good working relationships with UNICEF in each market in order to launch fundraising programmes through Amway's IBOs and their customers. The objective is to raise 500,000 euros (about £350,000) every year until 2010 across Amway Europe. In 2005 Amway UK's partnership was deepened through becoming an official Corporate Partner of UNICEF UK. The Corporate Partnership is a closer longerterm relationship which benefits both partners. Working together the two parties raise money for UNICEF.
Identifying stakeholders
Amway's Corporate Social Responsibility strategy has been developed with the interests of all its stakeholders in mind:
Communicating the strategy Good, clear communication is essential in making sure that the CSR strategy relates directly to the company business objectives. Communication also helps in putting the strategy into practice.
A number of communications media are used: 1. Face-to-face communication: Regular meetings take place between UNICEF, Amway and its IBOs. Through meetings with UNICEF staff, Amway is able to discuss the vision and objectives. It then passes the message on by meeting with IBOs. In 2005 the two organisations arranged a joint briefing day for IBO Leaders. They were able to hear firsthand experiences from UNICEF staff about their roles and UNICEF's work as well as where the money goes. 2. Printed material : Amway produces a monthly magazine for all IBOs called Amagram. 3. Public relations materials are also important, particularly at launch events for the initiative (e.g. in Milton Keynes in 2006). 4. Email communication: Email is very important in the company it plays a significant part in keeping IBOs up-to-date. 5. Online activities: There is a micro-site dedicated to the Amway UK/UNICEF partnership on the UNICEF UK website
Fundraising
Amway Europe provides support for fundraising to the extent of 500,000 euros (about £350,000) per year through selling items such as: greetings cards
multi-cultural gifts and cards stationery and wrapping paper toys for children.
However, Amway UK's support goes well beyond these activities. In addition, it involves staff fundraising events and raffles organised by the IBOs.
UNICEF attends IBO major events (usually supported by 1,000 or more IBOs) where requested. A UNICEF stand outlines the work with speakers, literature and merchandise.
Conclusion Amway is a family business with family values. Its IBOs are people who want to make a difference to the communities in which they operate and to the wider world community. This is Corporate Social Responsibility (CSR) in action. The clue to Amway's success is the careful planning of its strategy and its involvement with many stakeholders in getting the strategy right. Of course, it is early days in the latest chapter of a strong relationship between Amway and UNICEF. Evaluation is taking place to measure the success of the initiative in terms of meeting fundraising goals. Customer research is carried out to test customers' views on the relationship and to find out how aware the general public is about what Amway is doing in the field of CSR.
Questions for Discussion: 1. What is CSR? What is your view about social responsibility of corporate? 2. What are the Corporate Social Responsibilities of Amway and how it helps the company to fulfill its commitment? 3. Explain how Amway plays a key role in the communities?
