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Current Law Students / Amway
« on: August 03, 2006, 03:55:53 PM »

Amway Corporation is among the world's largest and best-known direct sales/multi-level-marketing organizations. (Amway's IBOs - 'Independent Business Owners' - who sell via the Internet instead of offline do so under the name Quixtar). Some sociologists consider many such such organizations to be 'para-religions' - movements that, while they can not be classified as religions, include some religion-like aspects (e.g. enthousiasm for the cause, recruitment and motivational rituals, positive thinking, etcetera).

Regarding Amway, others go further, claiming that certain recruitment and motivational tactics used within the Amway network make this organization something of a "corporate cult."

So-called "corporate cults" are businesses whose techniques to gain employee commitment and loyalty are in some ways similar to those used by traditional cults.

Amway is a multi-level-marketing (MLM) company in which participating sales people can earn extra income by getting others to sign up (rather than merely earn a commission on items sold). Amway produces and sells recruitment literature, audio messages, pep-rallies and incentives to help its sales force bring other distributors on board. It is said that successful Amway distributors make the bulk of their income from these motivational products, rather than from sales of Amway's other products.

It should be noted that often individual distributors become so focused on Amway's promises that they seemingly can think and talk about nothing else. They try to recruit friends, co-workers, fellow church-members, neighbors and just about anyone they meet in order to try and build their 'downline' (sales network). Many people are turned off by such an unhealthy, cult-like, 'devotion' to a business scheme. In addition, many people who join and try to make money by working for Amway (or similar MLM companies) discover that they spend more on marketing-, recruitment and training packages than they earn from actual sales and/or recruitment efforts.

Not surprisingly, Amway itself states that it is not a cult:

- I've heard rumors that Amway is a cult. Is this true?
- No, Amway Corporation is a business and, similar to other large and established companies, has a distinct environment defined by shared business goals. Shared business philosophies should not be misinterpreted as a cult.

As a part of a group of companies whose most recent fiscal year global sales totaled $4.5 billion and which manufacture and distribute quality products and services, Amway offers a business opportunity that is open to all, regardless of religious beliefs, race or gender. Amway really is a microcosm of the world, with more than 3.6 million entrepreneurs worldwide representing nearly every culture, ethnic background, and political and religious belief finding in the Amway business a way to meet their goals.

While unique as individuals, Amway IBOs share a desire to succeed in a business of their own and recognize Amway as an excellent opportunity to achieve their goals. New IBOs receive training, motivation and support in building independent businesses, and are rewarded for their achievements.

A close look at Amway will reveal that any reference to Amway as a cult is incorrect.

In an unrelated issue, Amway has been the subject of a legal fight on charges of spreading rumors about competitor Procter & Gamble's alleged involvement with Satanism. But court records show that such rumors were spread by a small number of independent, indivdual Amway distributors. Moreover, as a lawyer for Amway pointed out, "Those individuals did nothing more than the thousands of other people who innocently talked about a rumor that they did not know at the time to be false. And the Amway distributors promptly retracted and denounced the message once they learned that it was false."

Note also that the Tenth Circuit Court of Appeals has ruled that the Amway Corporation is blameless in this matter:

The Federal Court of Appeals for the 10th Circuit held Amway Corporation blameless [additional] in the spread of an old rumor about Procter & Gamble being involved with Satanism. This decision should finally put to rest Procter & Gamble's unjust efforts to hold Amway responsible for the false rumor.

The Court of Appeals, reviewing a decision by a Utah federal district court, soundly rejected P&G's accusations against Amway by ruling: "In the present case, P&G cites no facts to show that Amway told the distributors to spread the [Satanism] message.'' The court also stated that "Nothing in the record supports the conclusion that spreading ... satanic rumors regarding P&G ... was naturally and ordinarily incident to Amway's business." (...)

"If a $40-billion dollar corporate Goliath like P & G continues to pursue its case against the four individuals in Utah, P&G will only prove that it is a corporate bully," said Mohr. "Those individuals did nothing more than the thousands of other people who innocently talked about a rumor that they did not know at the time to be false. And the Amway distributors promptly retracted and denounced the message once they learned that it was false. I am confident that these individuals will prevail; P&G is picking on them just because they are Amway distributors."

Earlier this week, Procter & Gamble and its attorneys, the Cincinnati firm of Dinsmore & Shohl, were ordered to stand trial in Michigan federal court on charges that they inappropriately funneled misleading documents to an anti- Amway web site run by an individual who was also a paid consultant.

"Before filing its first lawsuit, P&G praised Amway for its efforts to quash the Satanism rumor," Mohr said. "Since then, P&G has been cynically using Amway as a publicity scapegoat for a rumor they have not been able to stop for almost 20 years, and they let things get personal. We're glad to be vindicated."

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