Professional Documents
Culture Documents
net/publication/340520557
CITATIONS READS
0 124
3 authors:
SEE PROFILE
Some of the authors of this publication are also working on these related projects:
Organizational Intrinsic Factor as a Contributor to Job Satisfaction among Non-Executive Employee in Private Sector. View project
Examining green consumerism motivational drivers: Does premium price and demographics matter to green purchasing? View project
All content following this page was uploaded by Shaierah Ghulabdin on 28 October 2020.
Abstract: This paper aims to explore the influence of personality traits on the agent’s
performance in the MLM industry based in Malaysia, taking into consideration the mediating
role of interpersonal identification. Method or approach used is the Big Five Factors (BFF)
of personality traits used in this paper. Previous research and literature reviewed to establish
current practices and point to gaps to be filled with meeting the market needs. This paper
proposed an interpersonal identification as a mediating factor of the agent’s performance.
Findings of this study are the Multilevel Marketing (MLM) industry faces challenges in
attracting and maintaining agents in their roles. The big five factors alone cannot adequately
explain agents. The agent’s interpersonal identification can play a significant mediating role
in the big five-factor framework in predicting the agent’s performance. Industry and
academia need to work collaboratively to educate the general public on the rewards and
benefits of working in the MLM industry. As a practical implication, adopting strategies
described in this study may contribute to social change by increasing the success rate among
multilevel marketers, thus reducing unemployment, and producing a positive effect on the
economy. This paper adds value and contributes to the MLM industry and academia, as it
represents current research and thought processes from both the academic community and
the practitioners (sales managers, executives, supervisors, human resources managers). The
proposed framework in this paper helps the researcher by providing a tool for systematic
evaluation and testing of the real empirical situation of the agent’s performance.
1. Introduction
17
Copyright © 2020 ASIAN SCHOLARS NETWORK - All rights reserved
Asian Journal of Entrepreneurship
e-ISSN: 2716-6635 | Vol. 1, No. 2, 17-25, 2020
http://myjms.moe.gov.my/index.php/aje
MLM become so popular because it offers everyone the chance to become a successful self-
employed opportunity with the freedom to win and little lose. The MLM industry projected to
gain attention in the year 2020 and contribute to the growth of the Malaysian economy.
Despite its contribution, there are some significant challenges, too; the MLM industry, in
particular, depends on access to their reliable and productive labour. It validated the data
gained from the direct selling sales statistics and supporting literature. Recent statistics of the
MLM sales show there is an inconsistency of sales and negative flows where there were 55%
declined in the total sales of the MLM business each year (KPDNKK, 2018). Besides, the
attrition rate or drop-out rate of distributors is also very high in this industry (Loke & Ilham,
2015). Hence, the aim of this paper is:
to explore the influence of personality traits on the agent’s performance in the MLM
industry based in Malaysia, taking into consideration the mediating role of interpersonal
identification.
There was a previous study has shown that personality is vital to a salesperson. But so far,
there was less attention given to this factor towards the MLM agents, specifically in
Malaysia. Besides, interpersonal identification acknowledged as one of the factors that
influenced performance. However, the context so far lies in the organizational identification,
which neglecting the interpersonal identification processes in the relational level (Mahlamaki
et al., 2018). Notably, having numerous and active agents are the key to their business
success. To enhance the network relationship among the agents of MLM and improve their
agent’s performance, they require the existing agents to recruit new agents to grow their
business. By ensuring the right agent with the strong personality of new agents is necessary to
influence their performance to be successful.
2. Literature Review
Many empirical findings in psychology, have so far established that human personality
always reflects his or her behaviour generally and specifically in job-related action.
Performance as an outcome of behaviour is proven to be predicted by individual personality
characteristics. In their meta-analysis of personality and job performance, Hurtz et al. (2000)
revisited the big five-factor and find a substantive argument for the relationship between the
big five personality traits dimension and job performance. Meanwhile, another research has
18
Copyright © 2020 ASIAN SCHOLARS NETWORK - All rights reserved
Asian Journal of Entrepreneurship
e-ISSN: 2716-6635 | Vol. 1, No. 2, 17-25, 2020
http://myjms.moe.gov.my/index.php/aje
expressly confirmed the predictive validity of the big five personality traits toward predicting
overall salespeople’s performance (Thoresen et al., 2004). The big five model remains the
most dominant model for measuring personality, which is why it selected for use in the
present study. Personality embraces moods, attitudes, and opinions and most clearly
expressed in interactions with other people (Janjua, 2016). Besides, it includes behavioural
characteristics, both inherent and acquired, that distinguish one person from another, and that
can observe in people’s relations to the environment and the social group. Roberts and
Woodman (2017) suggested that researchers need to give more attention to personality
concerning performance by using the big five factors as well.
MLM challenges or issues have, according to several authors, become the focus of concern.
The researcher’s review includes recent news, academics papers, articles from previous
researches, and also from Malaysia’s government plan on the MLM industry. Although the
researcher’s attention focused on the Malaysian perspective, given the global nature of the
MLM industry, the researcher also incorporated articles with an international scope to
validate the fact that issues related to the MLM industry challenges are of general interest.
This approach also helped the researcher demonstrate that the discussion regarding attracting
and retaining a productive agent is well-grounded in existing literature as one of the
challenges on a scale that extends beyond the Malaysian borders.
MLM is a thriving business in the global and national markets. In Malaysia, the direct selling
industry has a turnover of US$4.7 Billion in 2014, and it is ranked ninth in the worldwide
selling markets with a total of 4.3 million salespeople or 14.3% of the population involved in
direct selling (World Federation of Direct Selling Association, 2015). Kwang (2014) cited
that as of August 1, 2014, there are 443 direct sales licenses issued by the Ministry of
Domestic Trade, Co-operatives and Consumerism in Malaysia. Hence, there are many direct
selling companies to opt for by people who are interested in joining a direct selling business.
Further to that, the attrition rate or drop-out rate of distributors is also very high in this
industry (Loke & Ilham, 2015a). Hence, it is compelling to know what factors influence and
motivate individuals to become a dealer in direct selling companies.
There are relevant data about the statistics of direct selling companies in Malaysia that
annually published by the Ministry of Domestic Trade, Co-operatives and Consumerism or
also known as Kementerian Perdagangan Dalam Negeri, Koperasi dan Kepenggunaan
(KPDNKK). It published the total number of licensed direct selling companies based on the
statistics, which includes the MLM Company in Malaysia. The analysis of data presented
here affords an overview of the industry, including the marketing plan’s division, such as the
Multilevel Marketing (MLM), Single-level Marketing (SLM), and SLM and Mail Order
(MO) total sales from the year of 2012 until 2018.
The data after probing to the MLM Company showed there are inconsistencies and unsteady
growth in the sector in the years, as mentioned above. It shows that there are negative flows
where there were 55% declined in the total sales of MLM business each year (KPDNKK,
2018). It has demonstrated the need to take more attention and focus on the MLM industry
expansion. To ensure the development of the MLM industry’s movement each year according
to the plan the action plan Phase 3 (2019 – 2020) that was introduced by the Malaysian
government under 2013 - 2020 Pelan Hala Tuju Industri Jualan Langsung document by
KPDNKK needs to be referred to:
19
Copyright © 2020 ASIAN SCHOLARS NETWORK - All rights reserved
Asian Journal of Entrepreneurship
e-ISSN: 2716-6635 | Vol. 1, No. 2, 17-25, 2020
http://myjms.moe.gov.my/index.php/aje
It shows that it is particularly essential for long-term relationships between consumers and
the agents, which will have high value-added to the products and services. These are some of
the social factors that industry players need to consider.
Today, research has shown how an individual’s characteristics influence their behaviour,
perception of risk and willingness to take risky decisions. However, the extent to which these
personal characteristics influence the sales agent’s behaviour and performance have remained
mainly uninvestigated in a particular context. This research tries to answer this question by
investigating the personality of individual agents, particularly in the MLM industry.
The researcher literature review considered several topical issues: Tay and Goh (2018)
discuss career prospects, income distribution, motivation, and workplace flexibility, and its
effect on working attitude. They identified a significant relationship between these attributes
and concluded that the working position and perception of employees had become an
essential aspect of ensuring the organization successfully. The authors observe that the
understanding of the Generation Y career option has been investigated mainly in the MLM
industry. However, the personalities of an individual which may contribute to their working
passion have attracted less research attention. Therefore, further study needs to take into
consideration.
To expand the scope of the literature review, Roberts and Woodman (2017) identify
personalities of individual and performance as the critical issue and also an emerging area of
discussion in the context of MLM industry in which the author suggested to give more
attention to personality concerning performance.
Furthermore, the researcher highlights the MLM business’s role, factors and its effect on
employment (Kumar & Satsangi, 2018). The objective of this research was to study the part
of MLM in examining factors joining the MLM business and for analyzing the effect of
MLM business on employment. The study reveals that 35% of people are unemployed in the
example they generate their income only from MLM business, hence it could be a substitute
for full-time employment. Based on the data analyzed from the previous study, MLM has a
significant effect on employment opportunities, and this determined as a result. MLM is a
prominent business model of direct selling, which is helpful in the economic and social
development of the country. Therefore, it suggested spreading awareness among people.
20
Copyright © 2020 ASIAN SCHOLARS NETWORK - All rights reserved
Asian Journal of Entrepreneurship
e-ISSN: 2716-6635 | Vol. 1, No. 2, 17-25, 2020
http://myjms.moe.gov.my/index.php/aje
Another relevant research paper discussed the strategies for building and retaining a
productive MLM downline (Williams, 2018). The article explores the concept of the specific
business problem that some multilevel marketers lack approaches to build and retain a
productive downline during the five years of operations. The paper draws on
entrepreneurship theory and three emergent themes of a method used by multilevel marketers
to build and retain a productive downline. These themes are (1) entrepreneurial mindset,
including the associated personality traits and skills, (2) strong leadership and support, and
(3) training and development. According to Williams (2018a), multilevel marketers who
employ these strategies and train their downline in these areas can build and retain productive
downline, resulting in the growth and sustainability of their MLM business.
As noted earlier, the MLM industry, especially the agents, continue to struggle to attract
people that willing to work in this profession as a productive downline. The solutions to this
issue require that the root causes identified so that remedial action is taken to increase future
participation and indirectly increase the total sales of direct selling companies. However,
given the recent total sales that declined and resulted in shortages of agents in the MLM
industry, indeed, it is time to view this issue more seriously.
Besides, other studies have looked into the influence of personality characteristics on
salespeople’s performance. For example, Rothmann and Coetzer (2003) observed the direct
relationship between personality characteristics and job performance in general. Specifically,
other studies evaluated the influence of personality on salesperson’s performance (Furnham
& Fudge, 2008; Hurtz & Donovan, 2000; Smith & Tennessee, 2000; Verbeke, 1994) in which
most of them use the big five-factor model as a theoretical underpinning. It has observed that
an individual’s thinking and behavioural patterns primarily determined by their personality
(Allport, 1961). Eysenck (1991) suggested that personality traits are composed of five
principles, namely; replicability, comprehensiveness, external correlates, source traits and
multiple levels. The five principles were later renamed as the Big Five Factors (BFF) or five-
factor model (FFM), which classify personality traits into extraversion (E), conscientiousness
(C), agreeableness (A), neuroticism (N), and openness to experience (O).
Thus, the researchers suggest the implementation of the same concept towards finding out the
results of the agent’s performance in MLM context by using the previous study done.
Besides, the researcher tends to include the interpersonal identification as the other
motivational aspect as a mediator that belief could influence individual personality towards
achieving high performance of an agent. Interpersonal identification is the point which an
individual defines his or her self-concept based on another person. Performance is affected by
a manager, the team, culture, as well as the processes—each of these impacts the agent’s
performance and ability to get things done. Besides, interpersonal identification influences
how an individual internalizes the values and beliefs of the organization he or she joins. As
refers to the results found by Vieira and Silva (2018), there are the positive impact of
21
Copyright © 2020 ASIAN SCHOLARS NETWORK - All rights reserved
Asian Journal of Entrepreneurship
e-ISSN: 2716-6635 | Vol. 1, No. 2, 17-25, 2020
http://myjms.moe.gov.my/index.php/aje
Individuals can be differentiated based on their personality traits. These traits will make them
more or less suitable for a particular job. Therefore, it is crucial to know how big five-factor
personality as factors can contribute to the agent’s performance. The role of personality in job
performance of an agent is essential, as certain personality variables contribute to the
organization success. There are results of various studies including showed that big five
personality dimensions are related to job performance (Hough, Eaton, Dunnette, Kamp &
McCloy, 1990; Barrick & Mount, 1991; Tett et al., 1991; Salgado, 1997; Vinchur,
Shippmann, Switzer & Roth, 1998). A large scale study using data from thousands of
employees on the relationship between big five personality traits and job performance have
found that certain personality traits significantly predict the job performance (Barrick &
Mount, 1991). In the same year, both researchers Barrick and Mount also been investigated
the relationship of the big five personalities with three job performance criteria; job
proficiency, training proficiency, and personnel data among five occupational groups. The
entire professional’s group is the experts, police, managers, and sales, skilled or semiskilled
employees. The result of the study shows that conscientiousness has reliable relations with all
the three job performance criteria for all occupational groups. For other personality
dimensions, the correlations diverse by job criteria and professional group.
To expand the network relationship and enhance their business performance, MLM requiring
existing agents to recruit new distributors to grow the business, ensuring the right attitude of
new distributors is necessary to motivate them to be successful (Tay & Goh, 2018).
Moreover, at the same time, it can boost the agent’s performance. It supported a previous
study by Koroth (2012), active recruiting is essential for the very existence of the majority of
direct selling companies including MLM organizations because the survival of these
organizations depend on the ability to make more and more recruits to replace those who
have discontinued. Indicates study by previous researcher Espegren and Panicker (2015), the
managers advised being aware of personality dimensions of the people when recruiting them
and placing them into the sales function, where the motivation and performance of a
salesperson are significantly affected by personality.
22
Copyright © 2020 ASIAN SCHOLARS NETWORK - All rights reserved
Asian Journal of Entrepreneurship
e-ISSN: 2716-6635 | Vol. 1, No. 2, 17-25, 2020
http://myjms.moe.gov.my/index.php/aje
It is generally agreed that interpersonal behaviours are influenced by personality, and that
understanding relationships between personality and behaviours offers insights useful to
achieving desired group outcomes (Jeong, Bozkurt & Sunkara, 2012; Forrester, Tashchian &
Shore, 2016).
The study is in the very preliminary stage and has to analyze in the multilevel marketing
(MLM) industry. Yet, this paper has highlighted the fact that productive agents’ shortages
confront the MLM industry in particular. This problem is unlikely to diminish, and action is
needed by practitioners and academics to create solutions that can mitigate this challenge.
This paper proposed to elevate the general public awareness of what the industry is genuinely
about to attract and retain qualified individuals in the dynamic and exciting MLM industry,
further research, new strategies and tactics must be engaged. Therefore, insights from this
study suggest that agents of MLM should look at their individual team member’s personality
traits while making recruitment decisions.
To this end, communication, collaboration and cooperation must continue to exist between
academics, government and the MLM industry practitioners. The impact for positive social
change is the potential to offer success strategies to modern and aspiring multilevel
marketers, which may cause in more income-generating opportunities for those who have
been choosing this path as their source of income.
References
Azmi, A., Hasri, M., Nazri, A. S. A., Radzali, S., Azman, M., Abdullah, R., Jamal, I., Noor,
A. M., & Fatimah, S. (2016). Consumer Behaviour: Case Study on Avon Malaysia.
International Journal of Humanities and Social Science Invention, 5(12), 31-34.
Bencsik, A., Machova, R., & Hevesi, E. (2016). The Relation between Motivation and
Personality Types. International Business Management, 10(3), 183-193.
Bentley, RA., Earls, M., & O’Brien, MJ. (2011). I’ll Have What She’s Having: Mapping
Social Behavior.
Bhattacharjee, D. (2016). Problems and Prospects of Network Marketing in Assam (India).
International Journal of Business and Management Studies, 167-182.
Blignaut, L. (2011). Personality as a Predictor of Performance for Customer Service Centre
Agents in the Banking Industry. 1-84.
23
Copyright © 2020 ASIAN SCHOLARS NETWORK - All rights reserved
Asian Journal of Entrepreneurship
e-ISSN: 2716-6635 | Vol. 1, No. 2, 17-25, 2020
http://myjms.moe.gov.my/index.php/aje
Espegren, Y., & Panicker, S. (2015). Salesperson’s Personality, Motivation, and Selling
Performance. 1-40.
Franco, W., & Gonzalez, M. A. (2016). International Expansion Opportunities for Multilevel
Marketing Via Personal Networks: an Ethnographic Study from Colombia. International
Journal of Business and Society, 17(1), 28-46.
Girish S. N., & Dipa, D. (2015). Multilevel Marketing: Comparative Perspectives and Indian
Dilemma. International Journal of Advanced Research in Management and Social
Sciences, 105-123.
Hogan, R., & Foster, J. (2016). Rethinking personality. International Journal of Personality
Psychology, 2(1), 37-43.
Hogan, J., & Holland, B. (2003). Using Theory to Evaluate Personality and Job-Performance
Relations: A Socioanalytic Perspective Journal of Applied Psychology, 88(1), 1-43.
Holloway, A. N. (2017). Sustainability of Direct Sellers in Marketing. 1-17.
Jain, S., Singla, B. B., & Shashi, S. (2015). Motivational Factors in Multilevel Marketing
Business: a Confirmatory Approach. Management Science Letters, 905-912.
Janjua, N. (2016). Impact of Personality Type on Job Productivity. Journal of Hotel and
Business Management, 1-9.
Kerr, S. P., Kerr, W. R., & Xu, T. (2017). Personality Traits of Entrepreneurs: A Review of
Recent Literature. 1-37.
Kim, H. L. (2018). Factors that influence Direct Selling in the Cosmetic Market. 1-31.
Kumar, A., & Satsangi, A. K. (2018). A study of Multilevel Marketing Business with
Specific Reference to Amway India. IRJMST, 9(3), 101-107.
Kwee, F. L., & Kai, Y. L. (2016). Towards Satisfying Distributors in Multilevel Marketing
Companies. International Journal of Management and Applied Research, 3(1), 49-62.
Kwee, F. L., Teck, C. L., & Kai, Y. L. (2016). Driving Distributors’ Satisfaction in
Multilevel Marketing (MLM) Companies. International Journal of Academic Research
in Business and Social Sciences, 6(2), 105-120.
Loke, K. P., & Ilham, S. (2015). A mediating effect of customer satisfaction on the
relationship between joining network marketing factors and customer loyalty in
Malaysia. Proceedings of Kuala Lumpur International Business and Social Science
Research Conference.
Mahlamaki, T., Rintamaki, T., & Rajah, E. (2018). The Role of Personality and Motivation
on Key Account Manager Job Performance. Industrial Marketing Management, 1-11.
Mather, R. D., Belden, D., & Sherwood, H. (2017). Social Cognitive Factors of Persuasion
for Multi-. Journal of Scientific Psychology, 44-51.
Miller, C. R. (2015). Depth of a Salesman: Exploring Personality as a Predictor of Sales
Performance in a Multilevel Marketing Sample. All Theses, Dissertations, and Other
Capstone Projects, 1-37.
Mullins, R., & Syam, N. (2014). Manager-salesperson congruence in customer orientation
and job outcomes: the bright and dark sides of leadership in aligning values. Journal of
Personal Selling and Sales Management, Vol. 34 No. 3, 188-205.
Ng, K. L. (2015). Factors Influencing Consideration of Multilevel marketing (MLM)
Enrollment. 1-122.
Pelan Hala Tuju Industri Jualan Langsung Mengemudi Masa Hadapan Jualan Langsung
(2013-2020). Kementerian Perdagangan Dalam Negeri Koperasi dan Kepenggunaan.
Roberts, R., & Woodman, T. (2017). Personality and Performance: Moving Beyond the Big
5. Current Opinion in Psychology, 104-108.
Santiago, J. R. D. (2016). A Study of Direct Selling in the Philippines: Marketing Strategies
for the Sustainability of Direct Sellers.
Sulong, R. S., Caneza, C., & Geetha, C. (2017). Factors influencing Intention to become
24
Copyright © 2020 ASIAN SCHOLARS NETWORK - All rights reserved
Asian Journal of Entrepreneurship
e-ISSN: 2716-6635 | Vol. 1, No. 2, 17-25, 2020
http://myjms.moe.gov.my/index.php/aje
25
Copyright © 2020 ASIAN SCHOLARS NETWORK - All rights reserved