Difference between revisions of "Controversies"

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(1990s)
(1980s)
Line 47: Line 47:
  
 
==1980s==
 
==1980s==
* Canadian Fraud Case
+
* '''Canadian Fraud Case'''
* Directly Speaking
+
 
 +
* '''Directly Speaking'''
 +
In the early 1980's tapes was the simplest and easiest way to disseminate information to a large group of people. And Amway distributors were in the habit of listening to them on a regular basis. Therefore [[DeVos, Rich]] made a tape titled Directly Speaking, that was given to [[Diamond]] and above in the US market in 1983.
 +
 
 +
The tape was made in part to a 60 minutes documentary which like any good TV documentary had some controversial parts. Rich wanted to make sure that Amway did all the little things right, so that they maintained a positive reputation in the market place. And so he made 10 statements about things to make sure that they were done right, and HAD to be done right, these were:
 +
 
 +
1. Respect the line of Sponsorship [LOS]. Basicly only deal with your team, and don't mess with other peoples team. Today this is known today as no cross lining. And is held almost as a mantra
 +
 
 +
2. Only use Amway approved literature and numbers in showing the plan. This stopped people making unrealistic claims about income earning potential
 +
 
 +
3. That you need to work with any sponsored distrubtor irrespective of if they purchase tapes. Rich states "It is a sponsor's responsibility to train, motivate and supply their people. That's for the privilege of being the sponsor; not whether they buy some extra things you've decided to sell."
 +
 
 +
4. That [Professional Development Programs] are optional. "If I offer tapes, books and rallies, they will always be presented on a voluntary basis. No strings, no pressure, and no force.
 +
And by 'force' I mean such as....  You must subscribe to Tape of the Week, or I won't work with you.
 +
 
 +
5.If the curiosity approach is to be used, it must be done appropriately. "you must tell them they are coming to a business-type opportunity meeting. You may not tell 'em it's a social event or a coffee or a church event or a fund-raising event or a how-to-save-money-on-taxes event. All that is deception. You must tell 'em it's a business opportunity meeting. If they ask you if it's Amway, you say 'yes.'"
 +
 
 +
6. That no distributor is to make tapes about the plan or the products. That is all plan material, and all product material is the responsibility of the company.
 +
 
 +
7. Not allowed to hid behind the group names. That is no saying "Oh, we're in X-Y-Z organization. We're not in Amway."
 +
 
 +
8. Treat people with respect, and truely care about each person. "making sure we do not diminish those who choose to do less or make them feel like losers.... There's winners and losers. Are you a winner? Are you a loser?" Almost insulting people who don't sign up. You even got bad terminology. "We're the winners. Over here are the losers in life." They're not losers. They may have a richer, fuller life than those of you that got fancy cars and new clothes or big rings have got. You know, they -- Life is not geared by materialism. You do not decide who's a winner or a loser. There's too -- Life is too complicated for that. We must make sure we always speak of everybody being a winner, even though they may have different goals."
 +
 
 +
9. Money is the not the end point. Again quoting the tape "While recognizing the importance of financial goals, we will attempt to use tact... so as not to create an image of just money, money, money. Together we will create an organization, which loves and cares for each distributor, regardless of level, and an organization which will be of service in our communities."
 +
 
 +
And quoting at length "I don't mind you're making money. I don't mind your enjoying the things that money will buy. But I do have a problem of presenting an image of an organization that has nothing in it but greed, that has no concern for the poor or the hungry or for what's going an in their community. It is time, folks, we changed our image and showed an image of a company and of individuals who care about other people, no matter where they are economically. And that while you may want to quietly talk about your new cars or your fancy rings, you also talk to people about the other values that the Amway business brings, such as the wonderful idea of being associated with people who are positive, the great and good things that happen by"
 +
 
 +
10. No excessive product purchases. That is purchasing large volumes to make a pin or promotion. that is "that you will not inventory load, that you will not push a bunch of stuff on somebody to win a pin or to earn a trip; but that they will, indeed, have not only bought the Amway products, but have, in turn, sold them so that they got retail and the money came back in."
 +
 
 +
Therefore these 10 points were about respecting and caring for other people. And making sure that people are honest and have others best interest at heart. It is classed as a controversy as it is the first acknowledgment by Amway that there were issues with the tool business, and some people were not operating in the market place in the most honorable way. 
 +
 
 +
A full script of the tape, and down loadable MP3 is found [http://www.amquix.info/amway_directly_speaking.html here]
  
 
==1970s==
 
==1970s==

Revision as of 01:52, 8 May 2008

It is unsurprising that Amway being such a large company, ($US5 billion + sales, 60 countries) and having been in existence for nearly 50 years, that there would be some controversies.

Timeline

Current

  • TEAM vs Quixtar

Like any business there senior figures who disagree. This leads to at times senior pins quiting Amway, or Amway terminating senior pins for rules violations. The latest example of this is TEAM issue.

  • DTI vs Amway UK
  • Andra Pradesh Police vs Amway India

2000s

  • TIF vs Quixtar
  • Dateline NBC
  • Internet Critics

1990s

  • Sidney Schwartz

When the public interaction with the web was in its infancy in 1996, Schwartz set up a web site titled "Amway: The Untold Story". He did this to bring to light some of the issues that he perceived around the Amway business. These were mainly centered about tool issues. However as the aim was clearly anti Amway it degenerated into criticism anything that Schwartz disagreed with, ranging from personal religious beliefs of senior pins to non core products that are more expensive through Amway.

Clearly Amway did not take kindly to having its name dragged through the mud. There was multiple legal actions against Schwartz by Amway, including three subpoenas and adding him as a defendant in a lawsuit. After this Schwartz "choose" to shut down his web site in 1999. In a clever marketing move he claimed that he as a little guy didn't have the ability to stand up to the big company with the deep pockets.

Now the perception of "big and powerful company" shutting down "the little guy" created an uproar in some parts of the web community who perceived this as a suppression of free speech. Therefore before his removal of his own web site it was mirrored around the world in multiple different sites around the world. Thus effectively allowing the web site to stay active.


  • Proctor & Gamble

Proctor and Gamble sued Haugen, Randy & Valorie, and other diamonds for spreading urban myth in 1995 that P & G were involved in satanic worship, see full blog comment. It would appear at this stage that the 12 year court battle would be over. And Randy and Haugen are no longer associated with the Amway business.


  • Amway Korea

In 1997 Amway Korea was ordered to pay approximately US$30 000 for unlawfully criticizing Korea's detergent makers and making exaggerated claims in its newspaper ads, by the Fair Trade Commission (FTC). This charged were brought against Amway Korea by the Korea Soap & Detergent Industry Cooperative (KSDIC). The FTCfound that Amway Korea had violated fair trading regulations by making misleading claims about its dish washing liquid, called dish drops. The breach occured around the following:

That Amway had run advertising that claimed scientific experiments proved the superiority of Dish Drops to any Korean-made detergent and that a bottle of Dish Drops is equivalent to six bottles produced by local makers. The FTC stated that "Neutral experiments showed that there is little difference in quality between Amway's Dish Drops and Korean-made detergents"

The FTC also accused Amway Korea of exaggerating a United Nations Environment Program (UNEP) award. The FTC stated: "Our findings showed that the award given to Amway was merely a corporate achievement award by the North American office of the UNEP, being recognized for sponsoring environmental organizations," Clearly more than this was being claimed.

The source for this article also stated "The business watchdog body also charged Amway distributors for engaging in unfair business practices, insisting that the distributors had conducted comparative tests between Dish Drops and local products, an act deceiving consumers, while educating prospective sales persons."

and "It also termed groundless distributors' claim that Amway products are more environmentally friendly than local products."

However the Korea Soap & Detergent Industry Cooperative (KSDIC) who brought this action against Amway was also fined approximately US$8 000 for for attempting to damage the image of Amway Korea in an advertising campaign

Both groups were ordered to publish a written apology in a daily newspaper.

The article also stated "With regard to Amway's allegations that its multi-level marketing system would return gains to both distributors and consumers by abolishing marketing ladders, FTC's probe showed that supply prices for distributors contained 25 percent in sponsoring allowances and 25 to 35 percent of retail prices were allocated to distributors."

Source: The Korea Herald News (11-05-97: FTC Fines Amway Korea, KSDIC for False Ads) and Korea Time (971105 PAGE:10 SECTION:CULTURE) via this web site this web site

1980s

  • Canadian Fraud Case
  • Directly Speaking

In the early 1980's tapes was the simplest and easiest way to disseminate information to a large group of people. And Amway distributors were in the habit of listening to them on a regular basis. Therefore DeVos, Rich made a tape titled Directly Speaking, that was given to Diamond and above in the US market in 1983.

The tape was made in part to a 60 minutes documentary which like any good TV documentary had some controversial parts. Rich wanted to make sure that Amway did all the little things right, so that they maintained a positive reputation in the market place. And so he made 10 statements about things to make sure that they were done right, and HAD to be done right, these were:

1. Respect the line of Sponsorship [LOS]. Basicly only deal with your team, and don't mess with other peoples team. Today this is known today as no cross lining. And is held almost as a mantra

2. Only use Amway approved literature and numbers in showing the plan. This stopped people making unrealistic claims about income earning potential

3. That you need to work with any sponsored distrubtor irrespective of if they purchase tapes. Rich states "It is a sponsor's responsibility to train, motivate and supply their people. That's for the privilege of being the sponsor; not whether they buy some extra things you've decided to sell."

4. That [Professional Development Programs] are optional. "If I offer tapes, books and rallies, they will always be presented on a voluntary basis. No strings, no pressure, and no force. And by 'force' I mean such as.... You must subscribe to Tape of the Week, or I won't work with you.

5.If the curiosity approach is to be used, it must be done appropriately. "you must tell them they are coming to a business-type opportunity meeting. You may not tell 'em it's a social event or a coffee or a church event or a fund-raising event or a how-to-save-money-on-taxes event. All that is deception. You must tell 'em it's a business opportunity meeting. If they ask you if it's Amway, you say 'yes.'"

6. That no distributor is to make tapes about the plan or the products. That is all plan material, and all product material is the responsibility of the company.

7. Not allowed to hid behind the group names. That is no saying "Oh, we're in X-Y-Z organization. We're not in Amway."

8. Treat people with respect, and truely care about each person. "making sure we do not diminish those who choose to do less or make them feel like losers.... There's winners and losers. Are you a winner? Are you a loser?" Almost insulting people who don't sign up. You even got bad terminology. "We're the winners. Over here are the losers in life." They're not losers. They may have a richer, fuller life than those of you that got fancy cars and new clothes or big rings have got. You know, they -- Life is not geared by materialism. You do not decide who's a winner or a loser. There's too -- Life is too complicated for that. We must make sure we always speak of everybody being a winner, even though they may have different goals."

9. Money is the not the end point. Again quoting the tape "While recognizing the importance of financial goals, we will attempt to use tact... so as not to create an image of just money, money, money. Together we will create an organization, which loves and cares for each distributor, regardless of level, and an organization which will be of service in our communities."

And quoting at length "I don't mind you're making money. I don't mind your enjoying the things that money will buy. But I do have a problem of presenting an image of an organization that has nothing in it but greed, that has no concern for the poor or the hungry or for what's going an in their community. It is time, folks, we changed our image and showed an image of a company and of individuals who care about other people, no matter where they are economically. And that while you may want to quietly talk about your new cars or your fancy rings, you also talk to people about the other values that the Amway business brings, such as the wonderful idea of being associated with people who are positive, the great and good things that happen by"

10. No excessive product purchases. That is purchasing large volumes to make a pin or promotion. that is "that you will not inventory load, that you will not push a bunch of stuff on somebody to win a pin or to earn a trip; but that they will, indeed, have not only bought the Amway products, but have, in turn, sold them so that they got retail and the money came back in."

Therefore these 10 points were about respecting and caring for other people. And making sure that people are honest and have others best interest at heart. It is classed as a controversy as it is the first acknowledgment by Amway that there were issues with the tool business, and some people were not operating in the market place in the most honorable way.

A full script of the tape, and down loadable MP3 is found here

1970s

  • FTC vs Amway

1960s

?

1950's and before

  • Nutrilite

The concept of Amway grew out of problems that occurred between the distributor organization of Nutrilite and the company that produced this product.



Ongoing controversies would include the tools business. The profit, if any, in the tools. And what proportion of larger pins income does the tools business make up. This debate on this issue was kick started by a memo in the early 1980's titled Directly Speaking, above. It continues today with with the business restructure in the Amway UK & ROI market.