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Corporate Social Responsibility CURRICULUM TOPICS


• Business planning/strategy
• Communication
• Business ethics/Corporate
Introduction Social Responsibility
• Stakeholders
Amway UNICEF • The business environment
is a global business. is the United Nations Children’s Fund
Amway is one of the world’s largest direct UNICEF is the world’s leading organisation
sales companies. working for children.
It has over 3 million Independent Business It is a global champion of children’s rights.
Owners (IBOs) Worldwide.
GLOSSARY

Corporate Social Responsibility (CSR) means businesses and organisations working Corporate Social
responsibly and contributing positively to the communities they operate in. It involves working Responsibility: the
responsibility of an
with employees, their families, the local community and society at large to improve their quality
organisation to wider society.
of life. 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 Vision: a picture usually set
you, partners are willing to work with you and your standing in the community. out in words of what an
organisation is seeking to
achieve.
Partners
willingness to
work with you
Customers Reputation built by
willingness to Corporate Social
buy from you Responsibility
Standing in the
Community

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
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 strategy,
works with UNICEF, the United Nations Children’s Fund.

are working with the local community


Amway and its IBOs and society at large

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’.

This case study shows how Amway is a business that does more than provide customers with
good quality products. It shows the practical realities of Amway’s global commitment and
how it plays a key role in the communities in which it operates.

Growth and responsibility


A M W AY

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.

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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
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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
GLOSSARY • skin care and cosmetics
• durables such as cookware and water treatment systems
Champions: people who • nutrition and wellness products such as food supplements, food and drinks.
enthusiastically support or IBOs play a key part in helping Amway to deliver its Global Cause Programme.
defend a person, belief,
right, cause or principle. 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. The One by One programme:
Strategy: a plan for the • helps Amway to bring its vision to life
whole of an organisation. • declares what the company stands for
• builds trust and respect in Amway brands
Values: what an • establishes Corporate Social Responsibility at a high level.
organisation stands for,
e.g. honesty and integrity. Amway encourages staff and IBOs to support its One by One campaign for children.

Since 2001, Amway Europe has been an official partner of UNICEF and has been able to
contribute over €2 million (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 life-saving 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.

• In Africa, a child dies from Malaria every 30 seconds


• Worldwide the total figure is over 1 million children per year
• Over 2.5 million children are infected with the AIDS-virus
• More than 1 billion do not have any access to clean drinking water.
• 120 million children do not attend a school
• 180 million children have to endure the hardest forms of child labour.

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 organisational 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.

Put into The means to put


Values practice through Strategy these values into practice Implementation

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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: www.thetimes100.co.uk

Global strategy European strategy UK strategy


GLOSSARY

Amway’s Global Cause strategy involves creating responsible plans that make a difference. Child mortality: the
However, the strategy is flexible. In shaping the strategy, research was carried out to find out number of child deaths in
which global causes IBOs support. The results showed that many favoured a cause that a certain age category.
helped children. There was a clear fit between Amway’s aims to help children and UNICEF’s
‘Immunisation Plus’ programme for children. Stakeholders: groups or
individuals who have an
From the outset, Amway set out some clear objectives for its strategy. These were to: interest in the decisions
• build loyalty and pride among IBOs and employees made by the business.
• 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.

The six most serious diseases are

Measles • Diptheria • Whooping Cough


Tetanus • Polio • Tuberculosis (TB)

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 (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 longer-term relationship which
benefits both partners. Working together the two parties raise money for UNICEF.

Amway Europe/UK UNICEF


Benefits from enhanced reputation and Benefits from extra fundraising for children.
motivation of IBOs and achievement of
objective of being a socially responsible
business.

Identifying stakeholders
Amway’s Corporate Social Responsibility strategy has been developed with the interests of the
following stakeholders in mind:

Stakeholder Interest in CSR


Global Headquarters, Wants to see the growth of the business and that the CSR strategy
Amway Europe matches the business strategy as a whole
IBOs Want to see Amway UK as a responsible caring organisation whilst
helping them earn money
Customers Are concerned that the producers they buy from are responsible and
produce good quality products that meet their needs
Staff Want to work for a responsible organisation that does the ‘right’ thing
A M W AY

as well as providing them with a good living


Community partners Want to partner with an organisation that shares their values and
e.g. UNICEF helps them raise funds

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Communicating the strategy


Good, clear communication is essential in making sure that the CSR strategy relates directly
www.thetimes100.co.uk to the company business objectives. Communication also helps in putting the strategy into
practice.

A number of communications media are used:


GLOSSARY 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
Public relations: objectives. It then passes the message on by meeting with IBOs. In 2005 the two
activities involved in organisations arranged a joint briefing day for IBO Leaders. They were able to hear first-
communicating with hand experiences from UNICEF staff about their roles and UNICEF’s work as well as where
different stakeholders such the money goes.
as customers, the 2. Printed material: Amway produces a monthly magazine for all IBOs called Amagram.
government, the public 3. Public relations materials are also important, particularly at launch events for the
and the media. 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: www.unicef.org.uk/amway

Amway Europe provides support for fundraising to the extent of €500,000 (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
The Times Newspaper Limited and ©MBA Publishing Ltd 2007. Whilst every effort has been made to ensure accuracy

planning of its strategy and its involvement with many stakeholders in getting the strategy
of information, neither the publisher nor the client can be held responsible for errors of omission or commission.

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
1. What do you understand by the term Corporate Social Responsibility (CSR)?

2. Explain two actions that Amway and its IBOs are currently taking that involve CSR.

3. Analyse the key ingredients in Amway’s CSR


strategy. Show how the strategy is designed to
translate the vision into practical steps on the
ground.

4. Recommend ways in which Amway could


enhance and develop its impact on making every
child matter.
www.amway.co.uk

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