Study On Organizational Structure of Amway

A Study on Organizational
structure and business

management of AMWAY
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Submitted By: Nivedita Shambhavi Bcom(Hons) VI
Sem, Enrollment No:A7004612089
Under guidance of: Faculty Guide Dr. Archana Sharma,

Asst. Professor ABS, Lucknow
MAJOR PROJECT REPORT IN PARTIALL FULFILLMENT OF

THE AWARD OF FULL TIME. BCOM HONS (2012-15)
AMITY BUSINESS SCHOOLAMITY UNIVERSITY UTTAR

PRADESH LUCNOW
STUDENTS CERTIFICATE
Certified that the report is prepared based on the Major project undertaken
by me Nivedita shambhavi on A Study on organizational structure and
business management of Amway from 22.12.2014 to 23.03.2015 under the
guidance of Dr. Archana Sharma in partial fulfilment of the requirement for
award of degree of bachelor of commerce (honours) from Amity University,
Uttar Pradesh, Lucknow.
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Date
_____________
_____________ ______________ ____________
Nivedita Shambhavi Dr. Archana Sharma Prof VP sahi
STUDENT ASST PROFF DIRECTOR
FACULTY CERTIFICATE
Forwarded here with a Major project report on Organizational

structure and business management of Amway submitted by
Nivedita shambhavi Enrolment No. A7004612089, student of
Bcom (Hons) III year (2012-2015).
This project work is partial fulfilment of the requirement for the

degree of bachelors of commerce from Amity University Lucknow
Campus, Uttar Pradesh.
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______________________
Dr. Archana Sharma
Asst. Proff.
ABS, Amity University
Lucknow
STUDENT DECLARATION
I hereby declare that the project report entitled a study on
organizational structure and business management Amway. has been done
by me under the guidance of Dr. Archana Sharma Asst. proffessor. This
project report has been submitted to Amity University as a part of partial
fulfillment for the award of the degree of under Graduate Program in B.com
from Amity university Uttar Pradesh.
I also hereby declare that this project report has not been submitted at
any time to any other institute or university for the award of any degree.
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Place: Lucknow
Date:
NIVEDITA SHAMBHAVI
ACKNOWLEDGEMNT
The satisfaction and euphoria that accompany the successful completion of
any task would be but incomplete without the mention of the people who
made it possible, whose constant guidance and encouragement crowned
our efforts with success.
I wish to express my heartly gratitude and thanks to my project guide Dr
Archana sharma, asst. prof. for her help and able guidance for the
completion of the project successfully.
I am grateful to the Librarian of amity University for his support during my
study.
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Last but not the least, I would also like to thank each and everyone
especially all my friends for their cordiality & support during my project.
Place:
Date:
NIVEDITA SHAMBHAVI
TABLE OF CONTENTS
CHAPTE CONTENTS PAGE
R NO. NO.
1 1.1 Meaning of Business 9
1.2 Meaning of Management 11
1.3 Meaning of Business Administration 14
1.4 Difference between Business Management & 17

Business Administration
18
1.5 Types of Business
Organizational System (General Study)

2
2.1 Meaning of Organization 25
6
2.2 Types of Organization 37
2.3 Vision, mission & Goals of the company 38
2.4 Organization Structure & its Types 42
2.5 Functional Patterns People, policies, systems, 46
problems if any.
3 Organizational System with respect to Amway:
3.1 Introduction 51
3.2 Vision, Mission & Goals of the Amway 58
3.3 Organizational Structure & Type of Amway 65
3.4 Functional Patterns of Amway 69
3.5 Type of Ownership 71
3.6 SWOT Analysis 74
4 Summary of Findings & Conclusion
4.1 Findings 76
4.2 Conclusion 77
4.3 suggestion 78
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LIST OF TABLES AND CHARTS
TABLE CONTENTS PAGE NO.

1 Structure of Organization 65
2 Alticor and Amway Sales Growth: 1960 to 56
2008
3 Amway sell data since 1960 to 1999 57
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Executive Summary
This executive summary will give you key facts concerning the
Amway. These facts will help to find out how well the Amway opportunity
can match your business goals. Lets start from main component that is
business. A business' purpose is to attract and keep customers. Its one basic
function is to reliably solve customer problems. Management in all business
areas and organizational activities are the acts of getting people together to
accomplish desired goals and objectives efficiently and effectively. Also
Management is the act or function of putting into practice the policies and
plans decided upon by the administration. Hence Administration makes the
important decisions of an enterprise in its entirety, whereas management
makes the decisions within the confines of the framework, which is set up by
the administration.
The important factor important to study is Organization. It is the

foundation upon which the whole structure of management is built.
Organization is not an end it itself but a means to achieve an end. Whether
an organization is good or bad depends on the fact as to how much
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efficiently and promptly it is in a position to achieve the objectives. Another
important topic is A Business ownership should be structured according to
the needs of the owners and potentially liability that the business could
incur. Corporate vision describes aspirations for the future, without
specifying the means that will be used to achieve those desired ends.
The Mission of organization should represent the broadest perspective of the

enterprise's mission. The major outcome of strategic road-mapping and
strategic planning, after gathering all necessary information, is the setting of
goals for the organization based on its vision and mission statement.
The most important topic is an organizational structure is a mainly

hierarchical concept of subordination of entities that collaborate and
contribute to serve one common aim. Analysis by A SWOT Exercise is a
powerful technique for uncovering and understanding your Strengths and
Weaknesses, and for looking at the Opportunities and Threats you face.
The Amway/Amway Global, a subsidiary of Alticor, is marketing nutritional

supplements, skin and personal care products, air and water purifiers and a
line of home cleaning products. The products are sold through Independent
Business Owners (IBO). The most effective strategy for this is direct
marketing, today also known as attraction marketing. Using attraction
marketing for Amway products is the fastest way to make steady retail
profits.
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Amway already helped over 3 million people start on their path to
success. They're attracted by the unlimited potential of the opportunity, the
support of a corporation with 50 years of experience and compassion, a
global community ready to offer support, and a premier compensation plan.
The Meaning of Business:
"The simplest definition of business is you solve a customer's problem and

create sustainable profits over time. Anyone with vision should understand
the problem they're solving. The problem with business today is that people
think the meaning is about building a monument to you. The meaning of
business is having an impact on people's lives."
My definition is close:
A business' purpose is to attract and keep customers. Its one basic function
is to reliably solve customer problems...
A business is a legally recognized organization designed to provide

goods or services, or both, to consumers, businesses and governmental
entities. Businesses are predominant in capitalist economies. Most
businesses are privately owned. A business is typically formed to earn profit
that will increase the wealth of its owners and grow the business itself. The
owners and operators of a business have as one of their main objectives the
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receipt or generation of financial returns in exchange for work and
acceptance of risk. Notable exceptions include cooperative enterprises and
state-owned enterprises. Businesses can also be formed not-for-profit or be
state-owned.
The etymology of "business" relates to the state of being busy either

as an individual or society as a whole, doing commercially viable and
profitable work. The term "business" has at least three usages, depending on
the scope the singular usage (above) to mean a particular company or
corporation, the generalized usage to refer to a particular market sector, such
as "the music business" and compound forms such as agribusiness, or the
broadest meaning to include all activity by the community of suppliers of
goods and services. However, the exact definition of business, like much
else in the philosophy of business, is a matter of debate and complexity of
meanings.
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Meaning Of Management:
Management is generally defined as the art and science of getting

things done through others. This definition emphasizes that a manager plans
and guides the work of other people. Some (cynical) individuals think that
this means managers dont have any work to do themselves. As managers
have an awful lot of work to do. Management is the art and science of
getting things done through others, generally by organizing and directing
their activities on the job. A manager is therefore someone who defines,
plans, guides, assists, and assesses the work of others, usually people for
whom the manager is responsible in an organization.
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Management Define:
The efficient and effective operation of a business, and study of this
subject, is called management.
The main branches of management are financial management,

marketing management, human resource management, strategic
management, production management, operation management, service
management and information technology management.
1. The group of individuals who make decisions about how a business is run.
2. The initiation and maintenance of an investment portfolio.
Management in all business areas and organizational activities are

the acts of getting people together to accomplish desired goals and
objectives efficiently and effectively. Management comprises planning,
organizing, staffing, leading or directing, and controlling an organization (a
group of one or more people or entities) or effort for the purpose of
accomplishing a goal. Resourcing encompasses the deployment and
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manipulation of human resources, financial resources, technological
resources, and natural resources.
Because organizations can be viewed as systems, management can also be

defined as human action, including design, to facilitate the production of
useful outcomes from a system. This view opens the opportunity to 'manage'
oneself, a pre-requisite to attempting to manage others
Management can also refer to the person or people who perform the act(s) of
management.
Basic functions of management:
Planning: Deciding what needs to happen in the future (today, next

week, next month, next year, over the next 5 years, etc.) and
generating plans for action.
Organizing: (Implementation) making optimum use of the resources

required to enable the successful carrying out of plans.
Staffing: Job analyzing, recruitment, and hiring individuals for

appropriate jobs.
Leading/Directing: Determining what needs to be done in a situation

and getting people to do it.
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Controlling/Monitoring: Checking progress against plans.
Motivation: Motivation is also a kind of basic function of

management, because without motivation, employees cannot work
effectively. If motivation doesn't takes place in an organization, then
employees may not contribute to the other functions (which are
usually set by top level management).
Business Administration:
Business administration consists of the performance or management of

business operations and thus the making or implementing of major
decisions. Administration can be defined as:
The universal process of organizing people and resources efficiently

so as to direct activities toward common goals and objectives.
The word is derived from the Middle English word administracioun,

which is in turn derived from the French administration, itself derived from
the Latin administratio a compounding of ad ("to") and ministratio ("give
service").
Administrator can serve as the title of the general manager or

company secretary who reports to a corporate board of directors. This title is
archaic, but, in many enterprises, this function, together with its associated
Finance, Personnel and management information systems services, is what is
intended when the term "the administration" is used.
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In some organizational analyses, management is viewed as a subset of
administration, specifically associated with the technical and mundane
elements within an organization's operation. It stands distinct from executive
or strategic work. In other organizational analyses, administration can refer
to the bureaucratic or operational performance of mundane office tasks,
usually internally oriented and reactive rather than proactive.
As business has become more complex, so too has the oversight of

companies: their management, their growth strategies, their personnel issues,
their taxes and the role that taxes play in corporate economic strategy.
Advertising has grown to include multiple media outlets and an assortment
of targeted interest groups: new customers, repeat customers, stockholders,
investors and new geographic markets. Marketing has become the term of
choice for this entire strategically placed product exposure.
Defining business administration then means defining oversight roles

for the assortment of internal specialties that every business of any size has
come to include. Perhaps the best way to define business administration is to
look at the types of courses offered in MBA curriculums and the specialties,
or "majors," that one can opt for in an MBA program.
For a large corporation, business administration is going to include

international and global business, as well as strategy and economics. In this
instance, the definition of business administration will include requirements
of certain cultural differences and an acute understanding of the global
economy and its current fluidity. Also included in business administration at
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this scale is the art and science of acquisition: when to buy a company or
property and why.
Business administration will always include the intangible quality of

leadership; Along with leadership comes the task of negotiation and conflict
resolution, specifically with regard to personnel. Behavioral psychology
plays an important role in business administration: a misstep in an
adversarial situation with a union can take a company under, as it did
Continental Airlines some years ago. The definition of business
administration will have to include marketing; you won't have a business to
administer unless you sell your products. Ancillary to marketing is an
understanding of the new tools available for product distribution, and that
will involve understanding e-business and how it is rapidly evolving.
Business administration includes an understanding of

entrepreneurship: tax structures for small businesses along with personnel
issues at that level, inventory and cash flow, and all the other small matters
that make a big difference to a new or small business. A critical part of
business administration is the awareness of risk. This might include the risk
of launching a new product, and the costs involved; the risk of an
acquisition, the risk of a competitive strategy, the company's exposure in
opting for this health plan instead of that one. There are risks involved in
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other personnel decisions and this area is of tangible importance: company
morale is a key to productivity and the resultant profitability. The definition
of business administration includes whatever knowledge is required to make
all of these components work productively, if not in complete harmony.
Summary:
1. Management is the act or function of putting into practice the policies and
plans decided upon by the administration.
2. Administration is a determinative function, while management is an

executive function.
3. Administration makes the important decisions of an enterprise in its

entirety, whereas management makes the decisions within the confines of the
framework, which is set up by the administration.
4. Administrators are mainly found in government, military, religious and

educational organizations. Management, on the other hand, is used by
business enterprises.
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Types of business:
The following are the types of business,
1. Agriculture:
Agriculture is the production of food and goods through farming.
Agriculture was the key development that led to the rise of human
civilization; with the husbandry of domesticated animals and plants (i.e.
crops) creating food surpluses that enabled the development of more densely
populated and stratified societies. The study of agriculture is known as
agricultural science. Agriculture is also observed in certain species of ant
and termite.
Agriculture encompasses a wide variety of specialties and techniques,

including ways to expand the lands suitable for plant raising, by digging
water-channels and other forms of irrigation. Cultivation of crops on arable
land and the pastoral herding of livestock on rangeland remain at the
foundation of agriculture. In the past century there has been increasing
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concern to identify and quantify various forms of agriculture. In the
developed world the range usually extends between sustainable agriculture
(e.g. perm culture or organic agriculture) and intensive farming (e.g.
industrial agriculture).
2. Mining:
Mining is the extraction of valuable minerals or other geological
materials from the earth, usually from an ore body, vein or (coal) seam.
Materials recovered by mining include base metals , iron , uranium , coal,
diamonds, limestones , oil shale , rock salt and potash . Any material that
cannot be grown through agriculture processes, or created in a laboratory or
factory, is usually mined. Mining in a wider sense comprises extraction of
any non renewable resource (e.g., petroleum, natural gas, or even
water).Mining of stone and metal has been done since prospecting for times.
Modern mining processes involve e bodies, analysis of the Profit potential of
a proposed mine, extraction of the desired materials and finally reclamation
of the land to prepare it for other uses once the mine is closed.
The nature of mining processes creates a potential negative impact on

the environment both during the mining operations and for years after the
mine is closed. This impact has led to most of the world's nations adopting
regulations to moderate the negative effects of mining operations. Safety has
long been a concern as well, though modern practices have improved safety
in mines significantly
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3. Finance:
Finance is the science of funds management. The general areas of
finance are business finance, personal finance, and public finance. Finance
includes savings money and often includes lending money. The field of
finance deals with the concepts of time, money, and risk and how they are
interrelated. It also deals with how money is spent and budgeted.One aspect
of finance is through individuals and business organizations, which deposit
money in a bank. The bank then lends the money out to other individuals or
corporations for investment, and charges interest on the loans.
Loans have become increasingly packaged for resale, meaning that

investers buy the loan (debt) from a bank or directly from a corporation.
Bonds are debt instruments sold to investors for organizations such as
companies, governments or charities. The investor can then hold the debt
and collect the interest or sell the debt on a secondary market. Banks are the
main facilitators of funding through the provision of credit, although private
equity, mutual funds, hedge funds, and other organizations have become
important as they invest in various forms of debt. Financial assets, known as
investments, are financially managed with careful attention to financial risk
management to control financial risk.
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4. Intellectual property:
Intellectual property (IP) is a term referring to a number of distinct
types of creations of the mind for which property rights are recognizedand
the corresponding fields of law. Under intellectual property law, owners are
granted certain exclusive property to a variety of intangible assets, such as
musical, literary, and artistic works; discoveries and inventions; and words,
phrases, symbols, and designs. Common types of intellectual property
include copyrights, trademarks, patents, industrial right and trade secrets in
some jurisdictions.
Although many of the legal principles governing intellectual property

have evolved over centuries, it was not until the 19th century that the term
intellectual property began to be used, and not until the late 20th century that
it became commonplace in the United States. The British Statute tee 1710 is
now seen as the origin of copyright and patent law respectively.
5. Manufacturing:
Manufacturing is the use of machines, tools and labor to make things
for use or sale. The term may refer to a range of human activity, from
handicraft to high tech, but is most commonly applied to industrial
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production, in which raw materials are transformed into finished goods on a
large scale. Such finished goods may be used for manufacturing other, more
complex products, such as aircraft, automobiles, or sold to Wholesalers, who
in turn sell them to retailers, who then sell them to end users the
consumers. Manufacturing takes turns under all types of economic system.
In a free market economy, manufacturing is usually directed toward the mass
production of products for sale to consumer at a profit.
Modern manufacturing includes all intermediate processes required

for the production and integration of a product's components. Some
industries, such as semiconductors and steel manufacturers use the term
fabrication instead.
6. Real estate:
Real estate is a legal term (in some jurisdictions, such as the United
Kingdom, Canada, Australia , USA and Bahamas ) that encompasses land
along with improvements to the land, such as buildings, fences, wells and
other site improvements that are fixed in locationimmovable. Real estate
law is the body of regulations and legal codes which pertain to such matters
under a particular jurisdiction and include things such as commercial and
residential real property transactions. Real estate is often considered
synonymous with real property (sometimes called realty), in contrast with
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personal property (sometimes called chattel or personality under chattel law
or personal property law).
However, in some situations the term "real estate" refers to the land and
fixtures together, as distinguished from "real property", referring to
ownership of land and appurtenances, including anything of a permanent
nature such as structures, trees, minerals, and the interest, benefits, and
inherent rights thereof. Real property is typically considered to be
Immovable property. The terms real estate and real property are used
primarily in common law, while civil law jurisdictions refer instead to
immovable property.
7. Retailing:
Retailing consists of the sale of goods or merchandise from a fixed
location, such as a department stores, boutique, or by mail, in small or
individual lots for direct consumption by the purchaser. Retailing may
include subordinated services, such as delivery. Purchasers may be
individuals or businesses. In commerce, a "retailer" buys goods or products
in large quantities from manufacturers or Importers, either directly or
through a wholesaler, and then sells smaller quantities to the end-user. Retail
establishments are often called shops or stores. Retailers are at the end of the
supply chain. Manufacturing marketers see the process of retailing as a
necessary part of their overall distribution strategy. The term "retailer" is
also applied where a service provider services the needs of a large number of
individuals, such as a public utility, like electric power.
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8. Transport:
Transport or transportation is the movement of people and goods from
one location to another. Mode of transportation includes air rail, road, water,
cable, pipeline, and space. The field can be divided into infrastructure,
vehicles, and operations. Transport infrastructure consists of the fixed
installations necessary for transport, and may be roads , railways, airways,
waterways, canals, pipelines and terminals such as airports, rail stations, bus
stations, warehouses, trucking terminals, refueling depots (including fueling
docks and fuel stations), and seaports. Terminals may be used both for
interchange of passengers and cargo and for maintenance. Vehicles traveling
on these networks may include automobiles, bicycles, buses, trains, trucks,
people, helicopters, and aircrafts. Operations deal with the way the vehicles
are operated, and the procedures set for this purpose including financing,
legalities and policies. In the transport industry, operations and ownership of
infrastructure can be either public or private, depending on the country and
mode.
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Meaning of Organization:
Organization is the foundation upon which the whole

structure of management is built. Organization is related with developing a
frame work where the total work is divided into manageable components in
order to facilitate the achievement of objectives or goals. Thus, organization
is the structure or mechanism that enables living things to work together. In
a static sense, an organization is a structure or machinery manned by group
of individuals who are working together towards a common goal. Alike
'management', the term 'organization' has also been used in a number of
ways. broadly speaking,
An organization is a social arrangement which pursues collective

goals, controls its own performance, and has a boundary separating it from
its environment. The word itself is derived from the Greek word organon,
itself derived from the better-known word ergon.
In the social sciences, organizations are the object of analysis for a number
of disciplines, such as sociology, economics, political science, psychology,
management, and organizational communication. In more specific contexts,
particularly for sociologists, the term "institution" may be preferred. The
broader analysis of organizations is commonly referred to as organizational
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studies, organizational behavior or organization analysis. A number of
different theories and perspectives exist, some of which are compatible,
Organization process-related: an entity is being (re-)organized

(organization as task or action).
Organization functional: organization as a function of how entities

like businesses or state authorities are used (organization as a
permanent structure).
Organization institutional: an entity is an organization (organization

as an actual purposeful structure within a social context)
The 'organization' is used in four different senses: as a process, as a structure

of relationship, as a group of persons and as a system, as given below:
1)Organization as a Process: In this first sense, organization is treated as a

dynamic process and a managerial activity which is essential for planning
the utilization of company's resources, plant and equipment materials,
money and people to accomplish the various objectives.
2) Organization as a Framework of Relationship: In the second sense

organization refers to the structure of relationships and among position jobs
which is created to release certain objectives. The definitions of Henry,
Urwick, Farland, Northcourt, Lansburgh and Spriegel Breach, Davis,
Mooney and Reily etc., come under this group. For example: According to
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Mooney and Reily, "Organization is the form of every human association for
the attainment of a common purpose."
3) Organization as a Group of persons: In the third sense, organisation is

very often viewed as a group of persons contributing their efforts towards
certain goals. Organization begins when people combine their efforts for
some common purpose. It is a universal truth that an individual is unable
ability and resources. Barnard has defined 'Organization' as an identifiable
group of people contributing their efforts towards the attainment of goals.
4) Organization as a System: In the fourth sense, the organization is

viewed as system. System concepts recognize that organizations are made up
of components each of which has unique properties, capabilities and mutual
relationship. The constituent elements of a system are linked together in
such complex ways that actions taken by one producer have far reaching
effect on others.
In short, organizing is the determining, grouping and arranging of the

various activities deemed necessary for the attainment of the objectives, the
assigning of people to those activities, the providing of suitable physical
factors of environment and the indicating of the relative authority delegated
to each individual charged with the execution of each respective activity.
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Definitions of Organization:
Different authors have defined organization in different ways. The

main definitions of organization are as follows:
According to keith Davis, "Organization may be defined as a group of

individuals, large of small, that is cooperating under the direction of
executive leadership in accomplishment of certain common object."
According to Chester I. Barnard, "Organization is a system of co-

operative activities of two or more persons."
According to Louis A. Allen, "Organization is the process of

identifying and grouping the work to be performed, defining and
delegating responsibility and authority, and establishing relationship
for the purpose of enabling people to work most effectively together
in accomplishing objectives."
According to Mooney and Railey, "Organization is the form of every

human association for the attainment of a common purpose."
Social unit of people systematically arranged and managed to meet a

need or to pursue collective goals on a continuing basis. All organizations
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have a management structure that determines relationships between
functions and positions, and subdivides and delegates roles, responsibilities,
and authority to carry out defined tasks. Organizations are open systems in
that they affect and are affected by the environment beyond their boundaries
Characteristics of Organization:
1) Outlining the Objectives: Born with the enterprise are its long-life
objectives of profitable manufacturing and selling its products. Other
objectives must be established by the administration from time to time
to aid and support this main objective.
2) Identifying and Enumerating the Activities: After the objective is

selected, the management has to identify total task involved and its
break-up closely related component activities that are to be performed
by and individual or division or a department.
3) Assigning the Duties: When activities have been grouped according

to similarities and common purposes, they should be organized by a
particular department. Within the department, the functional duties
should be allotted to particular individuals.
4) Defining and Granting the Authority: The authority and

responsibility should be well defined and should correspond to each
other. A close relationship between authority and responsibility should
be established.
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5) Creating Authority Relationship: After assigning the duties and
delegations of authority, the establishment of relationship is done. It
involves deciding who will act under whom, who will be his
subordinates, what will be his span of control and what will be his
status in the organization. Besides these formal relationships, some
informal organizations should also be developed.
Significance of Organization:
1) It Facilitated Administration and management: Organization is an

important and the only tool to achieve enterprise goals set b administration
and explained by management. Sound organization increases efficiency,
avoids delay and duplication of work, increases managerial efficiency,
increases promptness, and motivates employees to perform their
responsibility.
2) It Help in the Growth of Enterprise: Good organization is helpful to the

growth, expansion and diversifications of the enterprise.
3) It Ensures Optimum Use of Human Resources: Good organization

establishes persons with different interests, skills, knowledge and
viewpoints.
4) It Stimulates Creativity: A sound and well-conceived organization

structure is the source of creative thinking and initiation of new ideas.
5) A Tool of Achieving Objectives: Organization is a vital tool in the hands

of the management for achieving set objectives of the business enterprise.
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6) Prevents Corruption: Usually corruption exists in those enterprises
which lack sound organization. Sound organization prevents corruption by
raising the morale of employees. They are motivated to work with greater
efficiency, honesty and devotion.
7) Co-ordination in the Enterprises: Different jobs and positions are

welded together by structural relationship of the organization. The
organizational process exerts its due and balanced emphasis on the co-
ordination of various activities.
8) Eliminates Overlapping and Duplication or work: Over lapping and

duplication of work exists when the work distribution is not clearly
identified and the work is performed in a haphazard and disorganized way.
Since a good organization demands that the duties be clearly assigned
amongst workers, such overlapping and duplication is totally eliminated.
Significance of Sound /Good Organization:
Organization is not an end it itself but a means to achieve an end.

Whether an organization is good or bad depends on the fact as to how much
efficiently and promptly it is in a position to achieve the objectives. Thus, a
sound or good or ideal and result-oriented organization must possess the
following characteristics.
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1) Realization of Objectives: Organization is tool of achieving
objectives of an enterprise. For this purpose, the organization should
be divided in several department, sub-departments, branches and units
etc.
2) Harmonious Grouping of Functions etc: For achieving the

organization objectives there must be harmonious grouping of
functions, jobs and sub-jobs in such a way so that there is action,
consultation and co-ordination without any delay and difficulty.
3) Reasonable Span of Control: Another characteristic of organization

is that it should have reasonable span of control. Ordinarily, a person
(personnel) cannot control more than five or six subordinates.
4) Clear-cut allocation of Duties and Responsibilities: There must be

clear-cut allocation of duties and responsibilities in any scheme of
sound organization. Every executive must know his scope of
activities, the ideal number is three.
5) Promotion of Satisfaction: The most important element of any

human organization is the promotion of satisfaction of workers. Man
works in a group or in an organization and hence the success or failure
of any organization depends on as to how much the organization is in
a position to provide satisfaction to individuals or group working
under him.
6) Fullest Utilization of Manpower: Another important characteristic

of an ideal organization is as to how far it is successful in making
fullest and economical utilization of the available manpower.
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7) Provision and Development and Expansion: Another important of
an ideal organization is that there exists the necessary provision for
development and expansion so that it is possible to expand and
develop any organisation according to needs and requirements and
necessary changes an alternatives may be made.
8) Coordination and cooperation: In order to achieve the objectives of

the enterprise, there must be close coordination and cooperation in the
activities of everybody working in the organization. Further, there
should also be active coordination and cooperation amongst the
various departments an sub-departments. It will also assist in
elimination the evil of red tapism.
9) Unity of Command: There must be unity of command. No one in any

organization should report to more than one line supervisor, and
everybody must know to whom he reports and who reports to him. No
subordinate should get orders from more than one supervisor;
otherwise it will lead to confusion, chaos and conflict.
10) Effective System of Communication: An ideal organization

must possess effective system of communication. The inter-
communication system should be clear and easier and there should be
no ambiguity at and level.
11) High Morale: An ideal organization is that in which the

workers possess high morale. They work with full capacity, energy,
enthusiasm, devotion and sincerity.
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12) Flexibility: The last but not the least important characteristic of
an ideal organization is that it should be flexible so that necessary
changes an modifications in the the size of the organization as well as
technology could be easily and conveniently effected.
Steps in the Process of Organization:
Organization means identifying, arranging and integrating different

elements of organization into efficient working order. It requires the
management to follow the following process of organization.
Division of work
The main function is divided into sub-functions and entrusted to the

different departmental heads. The result is the establishment of departments
like Purchase, Sales, Production, Accounts, Publicity and Public relations.
The departments can be further classified just as production department into
(1) Planning (2) Designing, (3) Operations, (4) Production Control and (5)
36
Repairs and Maintenance. The division of the work is based upon the fact
that specialization is keynote of efficient organization.
Grouping of Job and Departmentation
The second step is to group similar or related jobs into larger units, called
departments, divisions or sections. Grouping process is called
departmentation. The department may be based upon functions such as
manufacturing, marketing and financing etc. Department may also be based
on products, such as textiles, cosmetic, stationery etc. These departments
may have different sections as per requirement. Grouping jobs or
Departmentation aims at achieving coordination and facilitates unity of
efforts. The departments are linked together on the basis of interdependence.
The divided task is assigned to specific individual or group of individuals

who are supposed to be the most qualified and specialized persons for the
task.
Assigning duties
The work to be performed by every individual is clearly defined and

made known to him. Everyone must know what he is required to do in order
to avoid any misunderstanding, duplication or overlapping in the work.
Granting authorities and fixing responsibilities
Assigning of duties to individuals must coincide with the appropriate and

relevant authorities. Every employee must know, what the authorities
37
granted to him and for what and to whom he will be responsible, liable and
accountable.
Delegation of authority
Those who are made responsible for specific tasks are given due
authority. Both responsibility and authority go hand in hand together.
Reasonable powers are delegated to heads and supervisory staff to enable
them to do their work with ease and efficiency.
Effective communication
Effective communication is the keynote of efficient organization. There

should be proper arrangement of communication messages from executives
to subordinates and vice-versa. Proper communication system establishes
harmonious relationship between employees and enables execution of work
in the right manner at the appropriate time and in an atmosphere of perfect
mutual adjustment.
Co-ordination of activities for common objectives
Business activity is a team work or the group activity, so the efforts of

every employee must be co-ordinate effectively to achieve the common
objectives of the enterprise.
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Types of organization:
1) Static Organizations:
Static Organizations have fixed practices, fixed size. Like static

equations, these organizations have no variables. Time doesn't change them
significantly. They persist until some new organization occupies their niche.
2) Dynamic Organizations:
Dynamic Organizations have Fixed practices, variable size. Like

dynamic equations, these organizations vary in size over time, even though
their underlying practices don't change much. They go through a single life
39
cycle, each growing rapidly as it occupies its niche, and then declining as its
competitors implement better practices that steal away its clients.
3) Adaptive Organizations:
Variable practices, variable size. Like complex adaptive systems,

these organizations vary their practices, seeking the constant improvement
that launches life cycle after life cycle, creating new products, services, and
processes that hold on to clients generation after generation.
They will soon motivate employees to climb adaptation curves by
using ISOPs to fairly share the wealth that each innovation creates. ISOPs
ensure that the innovator, the predecessors, and each shareholder in the
corporation benefits.
Company Vision:
Corporate vision is a short, succinct, and inspiring statement of what

the organization intends to become and to achieve at some point in the
future, often stated in competitive terms. Vision refers to the category of
intentions that are broad, all-inclusive and forward-thinking. It is the image
that a business must have of its goals before it sets out to reach them. It
describes aspirations for the future, without specifying the means that will be
used to achieve those desired ends.
Warren Bennis, a noted writer on leadership, says: "To choose a

direction, an executive must have developed a mental image of the possible
40
and desirable future state of the organization. This image, which we call a
vision, may be as vague as a dream or as precise as a goal or a mission
statement."
Core values include:
Safety Safety serves as a barometer of our companys overall success and

is a specific measure of our operating excellence.
Trust Trust is the mutual respect for and confidence in people. Trust
recognizes the importance of individuals and appreciates their diverse
opinions. Trust compels us to share information and encourage new ideas. It
requires an open, honest, forthright manner.
Confidence Self-confident people take initiative, handle the unexpected,

stand behind their convictions and support the efforts of others. They take
bold, innovative, creative actions, capitalize on opportunities, make sound
decisions quickly, and mobilize the best resources for rapid action.
Teamwork Teamwork is personal involvement and collaboration in a team

environment. It includes setting a common goal in support of business
objectives, making an individual commitment to the teams success and
recognizing the success of the team.
Accountability Being accountable means every employee assumes

ownership and responsibility for his or her own work, regardless of the job
they perform. Being accountable means making decisions and holding
oneself responsible for the consequences of those choices.
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Doing Whats Right Doing whats right is being honest, ethical, and
having personal and professional integrity. It means consistently treating all
people fairly, delivering on promises, and taking personal responsibility for
your actions.
Quality Quality is the primary determinant of customer satisfaction and

loyalty, and it requires employees to continuously provide internal and
external customers with the right product or service...done right...the first
time. In todays increasingly competitive business environment, better
quality translates into better value for our customers and, subsequently,
better value for their customers-and this is the very essence of competitive
differentiation.
Mission:
Most businesses have some form of mission statement ,whether they
know it or not. For example, other names for a mission include: founder's
philosophy, statement of purpose, business philosophy. An organization's
mission describes its fundemental purpose and overall philosophy. A mission
statement (what we are) is different than a vision statement (what we want to
become).
Mission statement:
Provides thrust and direction to the organization.
Cornerstone of all strategic planning.
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A mission statement is an organization's vision translated into written
form. It makes concrete the leader's view of the direction and purpose of
the organization. For many corporate leaders it is a vital element in any
attempt to motivate employees and to give them a sense of priorities.
A mission statement should be a short and concise statement of goals

and priorities. In turn, goals are specific objectives that relate to specific
time periods and are stated in terms of facts. The primary goal of any
business is to increase stakeholder value. The most important stakeholders
are shareholders who own the business, employees who work for the
business and clients or customers who purchase products and/or services
from the business.
The mission statement should be a clear and succinct representation of

the enterprises purpose for existence. It should incorporate socially
meaningful and measurable criteria addressing concepts such as the
moral/ethical position of the enterprise, public image, the target market,
products/services, the geographic domain and expectations of growth and
profitability.
The intent of the Mission Statement should be the first
consideration for any employee who is evaluating a strategic decision. The
statement can range from a very simple to a very complex set of ideas.
Answers the question, What business are we in?
Basic guidelines in mission:

Your mission statement is about you, your company, and your ideals.
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Dont box yourself in.
Keep it short.
Ask for input.
Goals:
The major outcome of strategic road-mapping and strategic planning,

after gathering all necessary information, is the setting of goals for the
organization based on its vision and mission statement. A goal is a long-
range aim for a specific period. It must be specific and realistic. Long-
range goals set through strategic planning are translated into activities that
will ensure reaching the goal through operational planning.
Structure of Organization:
MANAGING DIRECTOR
QUALITY MANAGER
OPERATION MGR
MAREKTING MANAGER FINANCE
MANAGER
OFFICE
ADIMINSTRTOR
PROJECT ESTIMATOR
MANAGER
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BULDING SITE FOREMEN
CADETS
An organizational structure is a mainly hierarchical concept of

subordination of entities that collaborate and contribute to serve one
common aim. Organizations are a variant of clustered entities. An
organization can be structured in many different ways and styles, depending
on their objectives and ambience. The structure of an organization will
determine the modes in which it operates and performs. Organizational
structure allows the expressed allocation of responsibilities for different
functions and processes to different entities such as the branch, department,
workgroup and individual. Individuals in an organizational structure are
normally hired under time-limited work contracts or work orders, or under
permanent employment contracts or program orders.
In order to achieve the desired goals, sound and effective

organizational structure is necessary. Organizational structure, as we know is
the system of job positions, roles assigned to these positions and specifying
authority, responsibility and task of every positions. The structure
undoubtedly provides basic framework for executive and employees to
perform their task smoothly.
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Organizational structures types:
Pre-bureaucratic structures
Pre-bureaucratic (entrepreneurial) structures lack standardization of
tasks. This structure is most common in smaller organizations and is best
used to solve simple tasks. The structure is totally centralized. The strategic
leader makes all key decisions and most communication is done by one on
one conversations. It is particularly useful for new (entrepreneurial) business
as it enables the founder to control growth and development.
They are usually based on traditional domination or charismatic

domination in the sense of Max Weber's tripartite classification of authority.
Bureaucratic structures
Bureaucratic structures have a certain degree of standardization. They are
better suited for more complex or larger scale organizations. They usually
adopt a tall structure. Then tension between bureaucratic structures and non-
bureaucratic is echoed in Burns and Stalker distinction between mechanistic
and organic structures. It is not the entire thing about bureaucratic structure.
It is very much complex and useful for hierarchical structures organization,
mostly in tall organizations.
Post-bureaucratic
The term of post bureaucratic is used in two senses in the organizational
literature. One generic and one much more specific. In the generic sense the
term post bureaucratic is often used to describe a range of ideas developed
since the 1980s that specifically contrast themselves with Weber's ideal type
bureaucracy. This may include total quality management, culture
46
management and matrix management, amongst others. None of these
however has left behind the core tenets of Bureaucracy. Hierarchies still
exist, authority is still Weber's rational, legal type, and the organization is
still rule bound. Heckscher, arguing along these lines, describes them as
cleaned up bureaucracies, rather than a fundamental shift away from
bureaucracy.
Gideon Kunda, in his classic study of culture management at 'Tech'

argued that the essence of bureaucratic control - the formalization,
codification and enforcement of rules and regulations - does not change in
principle.....it shifts focus from organizational structure to the organization's
culture.
Another smaller group of theorists have developed the theory of the Post-
Bureaucratic Organization; provide a detailed discussion which attempts to
describe an organization that is fundamentally not bureaucratic. Charles
Heckscher has developed an ideal type, the post-bureaucratic organization,
in which decisions are based on dialogue and consensus rather than authority
and command, the organization is a network rather than a hierarchy, open at
the boundaries (in direct contrast to culture management); there is an
emphasis on meta-decision making rules rather than decision making rules.
This sort of horizontal decision making by consensus model is often used in
housing cooperatives, other cooperatives and when running a non-profit or
community organization. It is used in order to encourage participation and
help to empower people who normally experience oppression in groups.
Employees within the functional divisions of an organization tend to

perform a specialized set of tasks, for instance the engineering department
47
would be staffed only with software engineers. This leads to operational
efficiencies within that group. However it could also lead to a lack of
communication between the functional groups within an organization,
making the organization slow and inflexible.
As a whole, a functional organization is best suited as a producer of

standardized goods and services at large volume and low cost. Coordination
and specialization of tasks are centralized in a functional structure, which
makes producing a limited amount of products or services efficient and
predictable. Moreover, efficiencies can further be realized as functional
organizations integrate their activities vertically so that products are sold and
distributed quickly and at low cost. For instance, a small business could start
making the components it requires for production of its products instead of
procuring it from an external organization. But not only beneficial for
organization but also for employees faiths.
Functional Pattern:
Following are the main departments in any organization:
1. Finance and accounts
2. Marketing and Sales
3. Human resource and administration
4. Technical / Operations
Other departments depend on the size of the organization, like
1. Logistics
2. Procurement
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3. Treasury department- sub dept of finance and accounts
1. Finance
The definition of finance is the provision of funds or loan supplied to
an individual or company. Often this term is used for the study of economics
and how money is controlled. It can be also defined as the management of
funds and capital required by a business and private activities. Management
of finance has also developed into a specialized branch within the financial
sector and is carried out by finance managers.
Managing this involves dealing with the optimization and allocation

of funds to various areas either by borrowing or by using those available
from internal resources. The word Optimizing may sound strange but it
refers to taking measures that minimize the cost of financing while
simultaneously attempting to maximize the profits out of the employed
finance. Bad debts are poor finance management where rules have not been
followed; the result of this is depressed markets, low production and a cash
crisis. It is for this very reason that finance managers are very careful with
finance they agree too and where it is funded from.
It is not uncommon to hear finance managers referred to as bean

counters as they are looking at immediate returns and initial costs against the
potential at a later stage. Finance managers are the pessimists whereas sales
managers are the optimists who look to the future and not to the past! Often
though, problems occur with small businesses who fail to see the distinction
between a business loan and a personal one.
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Finance department goal and services:
The main goal of The Department is to provide the internal and external
users of financial statements with relevant, accurate and timely information
and to guarantee that the required financial revision is closely adhered to in
order to protect the assets of the company. The Department takes care of
finance flow to ensure that the company operates within its financial
regulations and satisfies various external financial requirements. It also
ensures that the corporate, financial records comply with internal and
external audit. If to look through the activity of The Department, there can
be picked out the following main services it renders:
Payment of invoices and expenses

Income collection and salary management
Production and assignment of budgets, capital plans, and cash flow
forecasts
Monitoring and managing financial plans
Auditing and reporting financial condition
2. Marketing:
Marketing means informing your potential clients about your products

or service, and finding ways to establish and keep a customer base. Your
target market is the specific group of people that consume your product or
utilize your service. Advertising refers to the various media used to convey
your message. Printed advertisement, radio air time, television commercials
and the Internet are all part of advertising that conveys your business
message to the public. Promotion refers to the various methods by which
50
you convey your message to customers. When you communicate with the
public, you're promoting your business. Many people will join business
associations, or set up displays in malls and craft shows for promotional
purposes.
Marketing department tasks:
The Marketing office works to raise the awareness of the company and
its prominence in the industry and market. The global aim of the department
is promoting the product/service and increasing recognition of the company
through researches and branding efforts. The department's strengths should
all be in proper understanding of consumer behavior and efficient decision-
making process. Typically, the major tasks of the marketing department are
as follows:
* Advertising & Communication
* Direct marketing
* Conducting researches and market management
* Service Marketing
* Maintaining image and brand management
* Developing new product
* Promoting and professional sales
* Retail management & technology.
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3. Human resource:
Human resources is a term used to describe the individuals who

comprise the workforce of an organization, although it is also applied in
labor economics to, for example, business sectors or even whole nations.
Human resources is also the name of the function within an organization
charged with the overall responsibility for implementing strategies and
policies relating to the management of individuals (i.e. the human
resources).
This function title is often abbreviated to the initials 'HR'. The origins of the
function arose in organizations that introduced 'welfare management'
practices and also in those that adopted the principles of 'scientific
management'. From these terms emerged a largely administrative
management activity, co-coordinating a range of worker related processes
and becoming known, in time as the 'personnel function'. Human resources
progressively became the more usual name for this function, in the first
instance in the United States as well as multinational corporations, reflecting
the adoption of a more quantitative as well as strategic approach to
workforce management, demanded by corporate management and the
greater competitiveness for limited and highly skilled workers. The general
purpose of Human Resource department is to establish proper staffing policy
and implement it on practice.
The main goals and tasks of HR department are:
* organize appropriate system of staff selection and recruitment
* organize system of effective staff training and development
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* ensure the competitiveness of the company within labor market
* establish transparent system of staff assessment and promotion
4. Entrepreneurship:
Entrepreneurship is the act of being an entrepreneur, which is a French

word meaning "one who undertakes an endeavor". Entrepreneurs assemble
resources including innovations, finance and business acumen in an effort
to transform innovations into economic goods.As an experienced
entrepreneur, you are most likely aware that there are daily duties involved
with ensuring your business is successful. Accounting: Includes budgets,
payroll, financial planning, bill payments, and credit management.
Type Private.
Industry Direct selling.
Founded 1959
Founder(s) Rich DeVos

Jay Van Andel
Headquarters Ada, Michigan, United States
Area served Worldwide
Steve Van Andel (Chairman)
Doug DeVos (President)
Key people
Al Koop (Chief Executive)
Russell Evan (CFO)
Revenue USD 8.4 billion (2009)

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Employees 13,000
Introduction:
Amway is the largest direct selling company and manufacturer in the

world that uses network marketing to sell a variety of products, primarily in
the health, beauty, and home care markets. Amway was founded in 1959 by
Jay Van Andel and Richard DeVos. Based in Ada, Michigan, the company
and family of companies under Alticor reported sales growth of 2.3%,
reaching US$8.4 billion for the year ending December 31, 2009.Its product
lines include home care products, personal care products, jewelry,
electronics, Nutrilite dietary supplements, water purifiers, air purifiers,
insurance and cosmetics. In 2004, Health & Beauty products accounted for
nearly 60% of worldwide sales. Amway conducts business through a number
of affiliated companies in more than ninety countries and territories around
the world. It is ranked by Forbes as one of the largest private companies in
the United States and by Deloitte as one of the largest retailers in the world.
54
Meaning and the History of Amway:
What does the word Amway mean? Amway is an abbreviation for
"American Way". Great companies start with great ideas, and Amway is no
exception. The idea came when two Nutralite salesmen, Rich DeVos and
Jay Van Andel were at the very top of a very successful MLM at the time;
Nutralite was sold door to door. This was the 1950s, Nutralite was a single
entity company, and by the end of the decade, Jay and Rich had built a
respectable business of their own - approximately five thousand distributors
were in their Both Mr. DeVos and Mr. Van Andel knew how to move product
- build on relationships. But what was needed was a way to expand. A way
that would allow them to multiply the efforts of what they alone could
accomplish. In 1959, the American Way Association was formed. This
would be the chance to grow and set the direction of a new entity. Rich and
Jay immediately set out to find an initial product to add to the line. They
purchased the rights to Frisk, a household cleaner (which was later renamed
Liquid Organic Concentrate or L.O.C.).
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In 1960, the American Way Association, now Amway, bought a
controlling share in the manufacturing facility in Michigan where LOC was
made. What this meant is that there were 3 companies all using the Amway
name. The Amway Sales handled product and distribution, Amway Services
did business related tasks (like insurance for distributors) and Amway
manufacturing, which produced LOC. By 1964, the three arms of Amway
were all merged into a single entity - Amway Corporation. The idea was by
handling the manufacturing and distribution of a product line, and then
allowing a network of IBOs. This seemed like the only way to offer what Jay
and Rich originally envisioned - a solid opportunity where anyone with
motivation could excel, regardless of their background and status. This is a
main part of Amway's business philosophy. Not just products and not just
sales, but a way to a better life.
Amway continued to grow under the co-ownership of Van Andel and

Devos. In 1972, the pair purchased Nutralite outright - they now owned the
company they had started as employees with.
Amway continued to expand, reaching past the borders of the US to

offer the same opportunities in other countries:
- Australia - 1971
- Europe and parts of Asia - 1974
- Japan - 1979
- Latin America - 1985
- China - 1995
- Africa - 1997
- India - 1998
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- Russia - 2005
- Vietnam -- 2008
Critics argued that the model wasn't sustainable and that growth was
mathematically limited. They cried, "Pyramid scheme!" Fifty years of steady
growth has shown this criticism has no basis in fact.
In 2008, Amway (now technically, Amway Global) reported sales of

8 billion. The company is in 58 markets worldwide and manufactures more
than 450 products. Amway Global does business in more than 98 countries.
Rich DeVos is still alive, although he has passed the Presidency of

Amway to his son Dick. DeVos was named one of the richest men in
America by Forbes magazine, with an estimated 4.2 billion dollars in
personal wealth (2009). DeVos owns the Orlando Magic basketball team
among other assets.Jay Van Andel passed away at age 80 in 2004. Mr.
Andel's place at Amway Global is now held by his son Steve. At his death,
Van Andel's net worth was estimated to be 2.4 billion dollars.
The company is still thriving and still offers opportunity to individuals who
have the desire to build their own business. MLM is a proven business
model that produces massive success for individuals.
Alticor and Amway Sales Growth: 1960 to 2008:

February 5th, 2009 by ibofightback Posted in Amway News
57
Amway global sales were reported at estimated retail until 2000
when the holding company of Alticor was formed. This means theyre
valued assuming that they were all sold at the full retail price, not at the
price they were sold to distributors/IBOs. Alticor reports actual revenue
sales at the base IBO price
Ive converted the figures so they can be properly compared. Its

important to be aware of this as many critics of the business (including some
former Diamonds who you would think know about this) have in the past
conveniently ignored the change in reporting standards and tried to claim
Amways sales peaked in 1998. Note however that Alticor sales includes
revenues from other sources such Access Business Group and Amway Grand
Plaza. In 2007 this was reported as around $100 million, so by far the
majority of the sales are through the Amway business opportunity.
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Amway Sales Data:
Estimated Estimated Estimated Estimated

Year Year Year Year
Retail Sales Retail Sales Retail Sales Retail Sales
1960 $0.5 million 1970 $120 million 1980 $1.1 billion 1990 $2.2 billion
1961 ? 1971 $165 million 1981 $1.4 billion 1991 $3.0 billion
1962 ? 1972 $180 million 1982 $1.5 billion 1992 $3.9 billion
1963 $21 million 1973 $210 million 1983 $1.13 billion 1993 $4.5 billion
Amway has grown fairly quickly since its inception. Its historic sales
data at estimated retail prices is provided below from 1959 to 2000 (in 2000
Amway switch over to Alticor. At its peak in 1997 Amway estimated retail
sales worldwide at 7 Billion USD. With the founding of Alticor, the report
methodology was changed and the actual sales to distributors instead of
estimated retail sales (ERS) have been reported since 2001. Taking the sales
data published in 2001 report into account, the ERS values are about 32%
higher than sales to distributors. The actual sales to distributors are marked
with *.
Until 1999 sales were reported at Estimated Retail. This is approximately

32% higher than actual sales revenues from sales made to Amway
distributors.
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VISION OF AMWAY:
Helping people live better lives.
Showing where the business wishes to be in the future.
MISSION OF AMWAY:
Through the partnering of Distributors, Employees, and the Founding

Families and the support of quality products and service, we offer all
people the opportunity to achieve their goals through the Amway
Sales and Marketing Plan. Broad over riding statement of purpose.
To facilitate best business opportunities.
To deliver high-quality products to semi-urban and urban homes in

diverse areas of insurance, home tech, home care, personal care,
cosmetics and wellness.
GOAL OF AMWAY:
The development of new business opportunities.

To increase the company's role in relations to social responsibility.
To provide excellent customer service.
Awards and Recognition:
Presented the Millennium Outstanding Service Award 2000, by the

Confederation for the Blind (AICB), in recognition for work carried
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out for the visually challenged.
The Indian Red Cross Society, Orissa awarded AOF a memento &
certificate for conducting a mega-Blood Donation camp of 816 units
on 4th May, 2003.
The Surat Raktdaan Kendra felicitated Amway India at their annual

function on 5th Oct, 2003, for the largest number of donors at a
Blood Donation Camp (BDC) held by any financial and commercial
institution and industry. The Mayor of Surat - Snehlata Chouhan -
presented a trophy and a certificate of appreciation.
Social responsibilities performed by AMWAY:
One by One Campaign for Children

Amway Opportunity Foundation (AOF)
National Project for the Blind:
Project Sunrise: The objective is to identify one orphanage/institution at
each location where Amway has a modestly-large office (52 cities). On-
going assistance to be provided in education, healthcare and vocational
training under the following heads:
Health care
Education and vocational training
Safe drinking water
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Childrens Day and AOF Day celebration with Amway staff & Amway
Amway Products:
Amway offers a range of exclusive, competitive brands that meet
proven customer needs around the world. From nutritional supplements to
water treatment, cosmetics to cleaning products, these brands are the solid
foundation for a successful, independent Retail business.
Active Lifestyle Artistry Atmosphere Beautycycle Body Series
Boutique Dish Drops Eddie Funkhouser Emma Page eSpring L.O.C.
Gensona Glister Hymm iCook LifeStyle Balanced Solutions NAO
Cosmetics Moiskin Skin Care Nutrilite Nutriway XS Energy Ocean
Essentials Personalized Health Peter Island Protique Positrim
Satinique SA8 Time Defiance Tolsom Trim
Amway Personal Care Products
Nutrilite is the worlds leading brand of vitamin, mineral, and dietary

supplements, grown harvested and processed on its own certified organic
farms.
Artistry is one of the worlds top five largest-selling prestige brands of

facial skin care and colour cosmetics. Our scientists and formulators have
developed the complete line of
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cosmetics,
All products of Attitude contain Skin Vitalising Complex that synergistically

combine to cleanse, Replenish & Moisturise the skin making it soft &
supple.
Dynamite's range of male grooming products, formulated internationally is

designed to deliver the ultimate grooming experience.
Glister Toothpaste is a revolutionary Multi-Action Toothpaste with Sylodent

that offers seven benefits.
Persona Premium 3 in 1 Soap is a complete soap for the entire family

promises refreshing confidence.
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Satinique Advanced Range with unique Ceramide Infusion System uses
nature's own renewing technology to rejuvenate, strengthen and protect your
hair.
SA8 Gelzyme is India's only 3-in-1 laundry detergent which pretreats, cleans
and softens.
G&H Range enriched with the goodness of Glycerine and Honey, deeply
nourishes and hydrates the skin for a healthy glow.
LOC High Suds is a multipurpose household liquid cleaner.
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Dish Drops is a concentrated hand dishwashing liquid with a powerful
"Triadic Detergency System".
Great Value Product Range offers you Great Quality, Great Performance,
Great Price and a Money Back Guarantee!
Amways competitors:
1) Direct competitors:
AVON
MARY KAY
SUNRIDER
2) Indirect competitors:
Local INDIAN companies.
Changing Political & Economic Atmosphere
Products used as samples to persuade relatives and friends to join
Amway
Focus shifted from selling products to recruiting.
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Independent Business Owner (IBO):
An IBO is, literally, an Independent Business Owner: an individual or

individuals who own and operate their own business, which is powered by
Amway North America, formerly Quixtar. IBOs are the CEOs of their own
businesses, and they make many of the same daily business decisions other
business executives make. As independent business men and women, IBOs
decide how active to be in their business, what products to sell and at what
prices, who to sponsor, what hours to keep, and other important decisions.
IBOs are independent contractors; they are not employees of Amway North
America or Amway Corporation. As independent business owners, IBOs are
free to make decisions many others in business are not free to make.
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Independent Business Owners Association International
(IBOAI) :
The IBOAI (IBOA International or Independent Business Owners

Association International) is a trade association representing Independent
Business Owners affiliated with Amway North America, formerly Quixtar. It
is the primary advocacy organization for IBOs in North America. A trade
association is an organization of business people who share common
interests or concerns, and who educate and represent their members. The
IBOAI (or IBOA International) is one example.
Role of the IBOAI Board:
The IBOAI Board is the representative body of the Association acting

on behalf of all IBOs. With IBO input, support, and participation, the IBOAI
Board listens to ideas, proposes improvements, and advises Amway on the
best way to move the business forward. Working closely with Corporate
staff, the Board advises Amway on every facet of the business, from
products and promotions to operations and business guidelines, as it has for
50 years. Together, they bring positive change to this business, to keep it
moving forward and make certain the business is better for every generation.
2010 IBOAI Board and Governance & Oversight Committee:
Steve Woods, Chairman

Brad Duncan, Vice Chairman
Bob Andrews, Past Chairman
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Other important directors:
1. Alberto Aguilera
2. Glen Baker
3. Mike Bundy
4. John Crowe
5. Howie Danzik
6. Jim Dornan
7. Jody Dutt
8. Kanti Gala
9. Bert Gulick
10.Leif Johnson
11.Shivaram Kumar
12.Pedro Lizardi
13.Doug Weir
14.Doyle Yager
15.Dan Yuen
IBOs are never alone. They have a sponsor, a line of sponsorship, and the
IBOAI their primary advocacy organization behind them all the way.
Organization type and Business Opportunity:
The Amway is private co operative organization. The Amway Sales

and Marketing Plan put you in control, allowing you the flexibility to work
where and when you want, giving you time for family and friends as well as
the opportunity to earn a good income. It adapts easily to your needs and
ambitions, and grows with them, offering you all the personal support and
assistance you require to become the Business Owner you want to be. With
Amway you are Connected to the global leader in multilevel marketing,
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with over 40 years of experience, Supported by great products and people
who will help you succeed, and finally In Control of your life.
Sales and Marketing Plan:
The Amway Sales and Marketing Plan is a low risk, low start-up cost
business opportunity that is open to everyone. It allows you to build your
business through retailing products and sponsoring other people who, in
turn, can retail products and offer the business opportunity to others. By
passing your sales and marketing knowledge to your developing team, you
not only build your own business network but also enable others to build one
of their own.
Marketing strategy:
A strategy is a plan of action designed to achieve the goals of the

organisation. In creating a marketing strategy for the Super Concentrated
Cleaning System, Amway needed to set out the key objectives it wanted to
achieve. The following objectives for the brand were set:
To increase distribute or profitability and productivity by providing a

new and exciting business opportunity
To optimize consumer convenience and value through enhanced
product differentiation with this exclusive and revolutionary cleaning
system
To provide innovative and unique products to enhance the image of
Amway Home Care.
69
A New Strategy of Amway:
Agreement with the government and company

resumed operations
Goods will be sold in retail outlets and through
sales representatives
Income of sales distributors will be based on direct selling done by
them
Same Distribution centers served as retail outlets for the company
Localization of employees
Localization of production and Raw Material
Localization of research and development
Transparency and Credibility of companys management
Functional pattern of Amway:

Following are the main departments of Amway:
1. Finance and accounts.
2. Marketing and Sales.
3. Human resource and administration.
Amway Global provides you with support like:
Customer care: If you have a question about anything - like

registration, renewal, Business, or product information - our Customer
Care Associates can help you.
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Business management: You can manage your business, check
customer Volume, order products, and renew your business, all at
Amway Global.com.
Order management: You sell the products, and we'll do the rest, like
process the order, manages your customer accounts, and handles the
shipping details.
Training: Online, video, and instructor-led training are some of the
ways we can share with you the knowledge to grow a successful
independent business.
Marketing: We support your sales efforts with DVDs, online sites,
Magazines, brochures, and free websites you can personalize. And we
help Build awareness of your products and brands with national
advertising, promotions, and event sponsorship.
Amway believe that quality improvement happens when people come
together. This core belief is what all AOF initiatives are based upon and it
holds true time and again. With a passionate and vigorous workforce ready
to contribute their bit to the well-being of society, volunteering becomes a
way of life in Amway. The 550,000 Amway distributors and 450 full-time
employees are all considered AOF volunteers. At 56 Amway offices across
India, AOF has formed a team of 6 or more distributors and employees to
form a Local Implementation Committee (LIC). LIC takes ownership of
being the face of Amways CSR at the location. They identify potential
partners, form a project, and implement this with other volunteers. The LIC
also plays a lead role in raising funds they wish to utilize. The beauty of this
system is that the LIC raises the funds, and then decides how best to utilize
this in their town or city.
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Strategic analysis to overcome problems:
Today it is a global business that, along with its parent and sister
companies, directly employs 10,000 people worldwide. The business also
operates strategically at a Global, European and National level. Amway
(UK) began operations in 1973 and has its own distribution and Product
Selection Centers.
Amway has helped millions of people around the world to start their
own independent business, through which they engage in person-to-person
marketing. This type of direct selling involves matching a consumer's needs
with the goods and services on offer. The better the match, the more lasting
the relationship between the seller and the buyer.
Ownership of Amway:
IBOs and Customers:

Amway services the needs of both Independent Business Owners and
customers. IBOs build businesses that allow them to earn income based on
sales made resulting from their efforts. To launch an Amway-powered
business, individuals must register with an existing IBO. Customers pay no
fee to shop from a large selection of products and learn from expert advice
on health, beauty, home care, and other topics. Products are shipped to their
homes and covered by Amway's Customer Satisfaction Guarantee.
72
Customers must register with the identification number of their servicing
IBO. If a new registrant Does not have a servicing IBO, Amway will assign
them one..
Personal Referrals:
Unlike most other companies, Amway's sales are not the result of
advertising. The biggest chunk of Amway's marketing budget goes directly
to rewarding IBOs for sales volume resulting from their efforts. Those
efforts include registration of new Ibos, Members, and Clients, resulting in
product sales. Amway's tiered compensation plan rewards the movement of
product through an IBO's sales organization and their ability to train others
to create their own successful organizations. When people visit Amway's
site, it is the result of a personal referral by an IBO -not as a result of some
advertisement they saw on TV. Personal referrals have proven to be much
more effective. Only 8% of respondents in the Edelman 2005Annual Trust
Barometer study indicated that information obtained in advertising was
credible, while 42% trusted information obtained from family, friends, and
colleagues.
Buzz Marketing:
Alticor pioneered buzz marketing through its person-to-person referral
model. Some companies spend millions on strategies intended to get people
to spread the word about their products. Through its Independent Business
Ownership Plan, Am-way does the same by rewarding IBOs for spreading
73
the word about the business opportunity and the exclusive products available
through Amway. This is a much targeted market spend, since IBOs are
rewarded only when their efforts actually result in product sales.
Business Systems:
IBOs employ many different approaches to build their businesses,
typically involving training systems, motivational meetings and tools, and
time-tested tactics to approach people and interest them in the business
opportunity and products. When a person registers with Amway, it typically
is the result of having been approached by an IBO already involved in one of
several large organizations that provide training and support to IBOs. Often,
a new IBO also will choose to attend optional and voluntary training
sessions or purchase professional development materials provided by that
organization - all covered by a money-back guarantee.
Independence:
The beauty of Amway's business model is that there can be as many
ways of pursuing the business as there are IBOs. If you're into health, you
can focus on Nutrilit supplements and XS Energy Drinks.
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SWOT analysis of Amway:
STRENGTH:
Based on direct selling operations. Hence it can be A home based

business. Every can participate in business. Its easy to get admission
in Amway with easy rout like intent.
Training to staff.
Functions are performed by IBOs.

Organize meetings and events time to time.
Have good customer service system.
Backed by a 100% Customer Product Refund Policy produce faith and
reselling attitude in customers.
Quality Products that Inspire Confidence. Almost no risk of money as
world class quality Minimal start up costs gives strong base to the
initiation of business. So everyone can participate in business. The
person who wants do something can be make profit with investment
of low cost.
Products are easy to sell.
A business with national and international scope gives more
opportunity to the costumers.
The possibility of financial security and freedom of time to enjoy life.
WEAKNESS:
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More power to IBOs gives critical structure to organization.
Initially high entry cost leads to somewhat restrictions for business
development.
Rumors for direct selling operations.
Focus shifted from selling products to recruiting.
OPPURTUNITIES:
Setup a manufacturing plant in all countries leads to better platform
for company.
Population of INDIA gives better opportunity to company to receive
more profit.
As the company name itself gives reliance and faith for the customer
and buyer produce greater opportunity for marketing which leads to
decrease in total expenditure of company.
THREATS:
Too much freedom to IBOs.
Change in government policy may affect to the profit and freedom of
company.
76
Competitors like AVON, MARY KAY; SUNRIDER creates lot of
competition in market which leads to strong marketing competition in
market.
Finding:
Ive written about Amway based entirely on factual, confirmable

sources. If youre researching Amway, especially on the Internet, chances
are youve encountered people who claim Amway is some kind of scam
business, its illegal, the products are poor quality, or some other information
that has made you think twice about being involved.
Skim through these finding and decide for yourself whether those
kinds of opinions really have a lot of credibility in the face of all of these
facts. Have all these major companies and organizations that have
recognized Amway for excellence been conned? For fifty years? Or perhaps
the opinions you read on the internet have been formed from limited or even
no experience from encountering some new or inexperienced Amway rep
that never bothered to learn how to act professionally or properly explain the
concept, and probably never did much more than dabble for a few months.
Or perhaps the experience was with just one of dozens and dozens of
different Amway affiliated organizations.
CONCLUSION:
77
Amway is which is one of the largest direct selling company in the
world. The main objectives of Amway are to profit there distributers by
eliminating the middlemen and provide the products to the distributers in
cheaper price. The products of Amway are world class product quality. They
are made up of natural a thing thats why they are good for health and
environment. Amway covers a wide range of products from beauty care.
Health care, to clothing, and daily use products etc. the products are costly
as compared to other branded products available in market but if we
compare the quantity while using the products require less amount and thus
can be used for longer time. Successful business today depends upon a
company's ability to quickly adapt to changes in the marketplace. At
Amway, they pride it selves on knowledge of the dynamic networking
market that is quickly becoming central to modern business. This
knowledge, and its willingness to act upon it, has enabled us to become one
of the industry's technological leaders. Through they continued pursuit of
new product ideas, and by consistently refining our existing product line,
they have become one of the top providers of cutting-edge networking
products in the global market. If you're looking for high quality products and
solid customer support at rock-bottom prices, then choosing Amway really
does make sense.
SUGGESTIONS:
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Trial packs should be used because customer must have to introduce
the product. Once customer gets idea about product he comes to know
advantages of products.
The products should be cheap the home delivery system takes at least
two days to deliver the products so the delivery should be instant.
There must be multiple options for purchasing the products for
distributers like online, tale and instant purchasing.
In every city, the Amway office should be situated in such a location
so that it is in reach of all distributers.
Bibliography:
1) www.worthwilemag.com
79
2) http://www.amway.in/
3) http://www.amway.in/Articles/Article.
4) http://en.wikipedia.org/wiki/Amway
5) http://www.authorstream.com/
6) http://www.nutrilite.com/
7) http://en.wikipedia.org/wiki/Organisation
8) http://en.wikipedia.org/wiki/Business
9) http://www.businessballs.com
10) http://en.wikipedia.org/wiki/Administration
11) http://www.business-standard.com
12) http://www.scribd.com
13) http://www.mouthshut.com
14) http://www.mouthshut.com
15) http://wiki.answers.com
16) http://dictionary.reference.com
17) http://www.thetruthaboutamway.com/
18) http://articles.bplans.com.
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Study On Organizational Structure of Amway

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A Study on Organizational

structure and business

Under guidance of: Faculty Guide Dr. Archana Sharma,

MAJOR PROJECT REPORT IN PARTIALL FULFILLMENT OF

AMITY BUSINESS SCHOOLAMITY UNIVERSITY UTTAR

_____________ ______________ ____________

Nivedita Shambhavi Dr. Archana Sharma Prof VP sahi

STUDENT ASST PROFF DIRECTOR

Forwarded here with a Major project report on Organizational

This project work is partial fulfilment of the requirement for the

I hereby declare that the project report entitled a study on

organizational structure and business management Amway. has been done

by me under the guidance of Dr. Archana Sharma Asst. proffessor. This

project report has been submitted to Amity University as a part of partial

from Amity university Uttar Pradesh.

The satisfaction and euphoria that accompany the successful completion of

made it possible, whose constant guidance and encouragement crowned

our efforts with success.

I wish to express my heartly gratitude and thanks to my project guide Dr

completion of the project successfully.

I am grateful to the Librarian of amity University for his support during my

CHAPTE CONTENTS PAGE

1 1.1 Meaning of Business 9

1.2 Meaning of Management 11

1.3 Meaning of Business Administration 14

1.4 Difference between Business Management & 17

Organizational System (General Study)

3 Organizational System with respect to Amway:

3.2 Vision, Mission & Goals of the Amway 58

3.3 Organizational Structure & Type of Amway 65

3.4 Functional Patterns of Amway 69

3.5 Type of Ownership 71

3.6 SWOT Analysis 74

4 Summary of Findings & Conclusion

TABLE CONTENTS PAGE NO.

The important factor important to study is Organization. It is the

The Mission of organization should represent the broadest perspective of the

The most important topic is an organizational structure is a mainly

The Amway/Amway Global, a subsidiary of Alticor, is marketing nutritional

The Meaning of Business:

"The simplest definition of business is you solve a customer's problem and

A business is a legally recognized organization designed to provide

The etymology of "business" relates to the state of being busy either

Management is generally defined as the art and science of getting

The main branches of management are financial management,

2. The initiation and maintenance of an investment portfolio.

Management in all business areas and organizational activities are

Because organizations can be viewed as systems, management can also be

Basic functions of management:

Planning: Deciding what needs to happen in the future (today, next

Organizing: (Implementation) making optimum use of the resources

Staffing: Job analyzing, recruitment, and hiring individuals for

Leading/Directing: Determining what needs to be done in a situation

Motivation: Motivation is also a kind of basic function of

Business administration consists of the performance or management of

The universal process of organizing people and resources efficiently

The word is derived from the Middle English word administracioun,

Administrator can serve as the title of the general manager or

As business has become more complex, so too has the oversight of

Defining business administration then means defining oversight roles

For a large corporation, business administration is going to include

Business administration will always include the intangible quality of

Business administration includes an understanding of

_ __