MALAYSIA GENERATION Y S PERCEPTIONS AND ATTITUDES TOWARDS MULTILEVEL MARKETING (MLM) CAREER OPTION

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1 MALAYSIA GENERATION Y S PERCEPTIONS AND ATTITUDES TOWARDS MULTILEVEL MARKETING (MLM) CAREER OPTION Alexander Tay Guan Meng* taygm@utar.edu.my Goh Poh Jin* gohpj@utar.edu.my University Tunku Abdul Rahman, Selangor, Malaysia Abstract: This paper would like to investigate Generation Ys perceptions and attitudes of working as a distributor in Multilevel Marketing (MLM) companies in Malaysia as their career. The paper proposes to evaluate some of the identified determinants perception, which included career prospect, workplace flexibility, income distribution, and motivation of working as a distributor in MLM companies. From the understanding, the significant of Generation Y s attitude towards MLM companies will determine their career options. Hence, it is important for the organizations to assess the needs of Generation Y; then identify ways to fulfil their needs, wants and development in order to motivate the Generation Y. Keywords: Generation Y, Perceptions, Attitudes, Multilevel Marketing (MLM), career 2018 JHLCB 1. Introduction Multi-Level Marketing (MLM) or so call as Network Marketing is a form of direct selling distribution channel which happens to be a fast-growing phenomenon (Albaum & Peterson, 2011;Taylor, 2012). MLM companies have some uniqueness of attributes. The distribution and selling of product by the MLM companies are through direct interaction in between buyer and independent distributors. The distributors earn income from their own retail sales and from sales made by other direct and indirect recruits into the business as the form of compensation (Keep & Nat, 2014). Therefore, MLM being considered as direct selling organisation that practically have the personal selling and reward systems for the distributor/salespersons in buying and selling products, and in the purchases and sales made by individuals, they recruited to become their downline distributors (Coughlan & Grayson, 1998). Moreover, the MLM is a business that provides job opportunity as career prospect to anyone to become a distributor that enhancing the role of entrepreneurship. Individual distributors are rewarded on their sales efforts, and are motivated entrepreneurial as an independent contractor in building their sales team by recruiting and training the downline of distributors (Keep & Nat, 2014). The compensation structure provides distributors with a hierarchical reward system that emphasise 162

2 on recruitment, entrepreneurship, and retail sales in developing their own retail customer, and continuously marketing the organisation by recruiting others potential distributor (Taylor, 2012). In Malaysia, all MLM companies must be registered under direct sales licence (AJL licence) with Ministry of Domestic Trade, Cooperative and Consumerism (MDTCC, 2014) and it must also be a member of Direct Selling Association of Malaysia (DSAM) (DSAM, 2015). Meanwhile many people success in MLM companies as their career, yet the image of MLM companies were seriously tarnished because of using MLM structure to scam other people s money as an investment, provide incorrect information, and false statement on the promised return in future. Firms found to operate fraudulent schemes featured like Pyramid schemes and Ponzi schemes which the characteristics similar to MLM business model but had activities that resulted in financial losses (Keep & Nat, 2014). Most of the company implement the model of the pyramid scheme as the compensation reward scheme, with relentless recruitment and not with product sales (Lee, Lau & Loi, 2016). It always typically start with one person to recruit another person as down-line, the person recruit by the first person is required to invest some certain amount of money, and the funds collected will shift to the top of the pyramid. In order to expand the network relationship and enhance their business performance, MLM requiring existing distributors to recruit new distributors in order to grow the business, ensuring the right attitude of new distributors is necessary to motivate them to be successful. The current paper proposes to evaluate the elements of perception that affect the working attitudes among Generation Y towards MLM in Malaysia. The research purpose a better understanding of Generation Y s perceptions and attitudes of working in MLM companies as their career prospect options. 2. Literature review and research hypotheses: 2.1 Working attitude Generally, working attitudes are being described as the evaluative (cognitive) or emotional (affective) response to some features of work (Hulin, 2003). The behaviour of Generation Ys working attitudes in the workplace includes the preference for work-life balance, a flexibility of working hours and tasks, intensive use of technology, and being enthusiastic when being motivated and the desire for positive feedback (Sa aban, Ismail & Mansor, 2013). Furthermore, Generation Y looking for an opportunity to enhance their professional skills that bring advantages to their career development. Generation Y emphasize their personal lifestyle with preference on flexibility and freedom of working characteristics, capable of multitasking of work-life and team-work. Moreover, Generation Y is born in the technologically savvy era which highly relevant in their workplace behaviour in accepting Information Technology, E- commerce platform, social media communications (Twenge, 2010). In MLM business, the distributor s attitude is towards the job, workmate, supervisor, company policy and support, remuneration, and customers which determine their job satisfaction (Lee, Lau & Loi, 2016). 163

3 2.2 Factors influence on MLM career option The current research is evaluating the identified determinants perception on career prospect, workplace flexibility, income distribution, and motivation of working as towards choose MLM career a distributor in MLM companies Career prospect The career prospect as a distributor in MLM companies is a direct seller or independent business proprietor who acts as the frontline sales force (Lee, Lau & Loi, 2016). Normally MLM companies will diffuse the right business opportunity as individual career development to people in the recruitment process typically in the financial freedom offered by MLM companies (Kiyosaki, 2007). All distributors must be trained and equipped with knowledge and skill for better skilful and convincing of sales performance (Delgado, 2000). Therefore, youngsters as like Generation Y required more training during their career life to gain knowledge and positive attitude and behaviour when they are in the direct selling industry. H1: There is a positive relationship in between the Generation Y s perception of career prospect and their working attitudes towards MLM business Income distribution Income is one of the important aspects that determine the Generation Y attitudes towards their career options. As Generation Y has the attitudes of getting things more, they will have high expectation for their income salary which being perceived must as equal to their lifestyle of living and further promotion and salary increment needed. Therefore, income is the factors that attract a Generation Y to be part of the distributor who has the expectation to earn higher income from the commission scheme which is proportionate to sales performance (Koroth & Sarada, 2012). Without a specific requirement of professional and educational qualification, individual s capabilities and efforts of performance are the main determinants of earning income in MLM companies, which motivates individual to produce income from product selling and also the recruitment of new Downline distributor. In the non-salary based system, distributors received the commission from product sales and referral bonuses (Coughlan & Grayson, 1998) and also based on the proportionate on distributor s performance in recruiting and selling activities (Coughlan & Grayson, 1998; Keep & Nat, 2014). Therefore, the lucrative of the compensation plan and rewarding policy of MLM companies become the main attractive motivator in recruiting distributor an opportunity to growth individual income and entrepreneurial career development to join and stay in MLM business (Koe Hwee Nga & Wai Mun, 2011; Koroth & Sarada, 2012). H2: There is a positive relationship in between the Generation Y s perception of income distribution and their working attitudes towards MLM business. 164

4 2.2.3 Motivation Many studies had examined the relationship between motivation and Generation Y working attitudes shows that a positive attitude towards to his/her job. When one supervisor gives personal attention and praise to their Generation Y employee, he/she will be easier to approach during their work (Sa aban, Ismail & Mansor, 2013). In MLM business, motivation will influence distributor s attitude where leaders are being described as the instructor, advisor or contributor while members are the one who supported their leaders (Sparks & Schenk, 2006). Therefore those member/ employees of the MLM always motivated by their leader and to improve their sales performance. In addition, up-line distributors are expected to provide emotional support, to share information, and offer a practical suggestion to their customers and down-lines to meet their daily, monthly, or yearly target in sales and recruitment (Kiaw & De Run, 2007). Upline will always provide physically and mentally support to their Downline distributor to meet with higher achievement. Therefore, Upline motivation is being expected to have the positive effect on the attitude and satisfaction of MLM distributors. The motivation perception becomes the important recruitment factors in the process of distributor recruitment especially towards Generation Y. H3: There is a positive relationship in between the Generation Y s perception of work motivation and their working attitudes towards MLM business Workplace flexibility Generation Ys prefer freedom in their workplace flexibility where this included the working hours, workplace and the after work activities. Generation Y think that they could do more whenever they are given the freedom in the workplace even the task is challenging. Workplace flexibility can be simply defined as employees and their supervisors have some choice and control over time (when), location (place), and manner (how) works gets done, and what works tasks are assumed by which employees/work teams (Twenge, 2010). Most of the MLM companies promoting the benefits of workplace flexibility of hours and the environment in order to recruit more distributors as their part-time career, work from home, and emphasis on work-life balance (Kiaw & De Run, 2007). Such of the workplace flexibility tend to be an attractive career for Generation Y to involve in MLM business as their entrepreneurial career options. H4: There is a positive relationship between the Generation Y s perception of workplace flexibility and their working attitudes towards MLM business. 3. Research Methodology 3.1 Research Design and Sampling method With the current objective to analyse the Generation Y perception and attitudes towards MLM career, the research has been conducted with a cross-sectional design to exam the identified of variables with collecting data from the respondent s demographic background profile. 165

5 The target respondents in this study were the Generation Y who falls in between ages 18 years old to 35 years old. A total of 200 questionnaires were distributed evenly to the target respondents at four major universities in the state (50 respondents from each university) with the use of quota sampling. Moreover, the present researchers have imposed a selection criteria which is they were been invited or involved in MLM career, before the questionnaires were distributed to the respondents. 4. Data Analysis and Discussion 4.1 Sample profile Table I presents the demographic characteristics of the respondents. The respondents consisted of per cent male and per cent female. The respondents were in between age group of years old of Generation Y respondent which consisted most of years old (76%), followed by the years old group (9.5%). The youngest grouping made up 10.5% (18-21 years old) while the most senior group accounted for 4% (30-35 years old) of the total respondents. Table 1: Sample characteristics (n=200) Variable Classification (%) Gender Male 50.5 Female 49.5 Race Chinese 90.0 Malay 5.5 Indian 4.0 Others 0.5 Age Group years old years old years old years old 4.0 Current Employment Status Student 54.5 Unemployed 7.0 Part-Timer 5.5 Full-Timer Scale Reliability The data was analysed using SPSS as shown in Table II to evaluate the scale reliability on testing the coefficient alphas for the five different constructs. There is good internal consistency of the measured items as the value of Cronbach s alpha on the reliabilities of most constructs in this study fall within the acceptable range (0.75 to 0.92). The threshold of above 0.60 has been adopted for this study in line with Cavana et al. (2000, p. 320) and Hair et al. (2010, p. 125). 166

6 Table 2: Reliability Test Variables Cronbach s Alpha Number of Items Working Attitude Career Prospect Income Workplace Flexibility Motivation Model Analysis The current study employ the Multiple Linear Regression (MLR) analysis method by using SPSS output to test the indicated four hypotheses in the conceptual framework to study the working attitude in MLM companies. Therefore, the dependent construct of study the working attitude towards MLM companies which determined by the four independent constructs that consists of Career Prospect, Income, Workplace Flexibility and Motivation of respondent perception. As shown in the ANOVA Table 3a, F=58.040; p=0.000<0.05, thus, fitness for the model is confirmed. The critical value of 0.05 is adopted to access the significance of the t- values associated with each of the hypotheses of this study. The four predictors of career prospect, income, workplace flexibility and motivation has worked well in explaining the variation in working attitude. Table 3b has shown that R square is for regression of working attitudes. This means that 54.3% of the variation in working attitudes was influenced by the four independent variables. Table 3a: ANOVA a Model Sum of df Mean F Sig. Squares Square 1 Regression b Residual Total Table 3b: Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate a. Dependent variable: Working Attitude b. Predictors: (Constant), Motivation, Income, Career Prospect, Workplace Flexibility In table 4 showed that the descriptive statistics of the five construct measurement based on the Likert scale measuring the level of perception ranging from 1 as strongly disagree to 5 strongly agree. Income has been identified as the highest means of among the group, followed 167

7 by the workplace flexibility and working attitudes which is and respectively. The mean for motivation is Moreover, career prospect has the least mean among the group which is This table indicated that most of the respondents agreed that income has contributed the highest impact on working attitudes of Gen Y towards MLM. Working Attitude Table 4: Descriptive Statistics on Variables Career Prospect Income Workplace Flexibility N Minimum Maximum Motivation Mean Std. Deviation Based on the table 5, indicate the significant of relationship among the variables of construct measurement. The value of the relationship in between career prospect and working attitudes is 0.597, while income and workplace flexibility are and respectively. The value of motivation is As a result, motivation shown the strongest positive relationship with working attitudes (r=0.603), followed by workplace flexibility (r=0.599), career prospect (r=0.597) and lastly income show the weakest relationship with working attitudes (r=0.561). The table 6 indicated that the perception of career prospect on working at the MLM company exerts a significant positive influence on the working attitude of MLM career (t-statistic = 3.690; p <0.05) with standardised coefficient value of 0.244, H1 is supported. The perception of income distribution from the MLM company also has the strongest significant positive influence on working attitude of MLM career options (t-statistic = 4.886; p <0.05) with standardised coefficients of 0.209, H2 is supported. Hence, the perception of income distribution that generated by MLM company is an important predictor of working attitudes under MLM career. Furthermore, the model also support the H3 and H4 on the influence factors on the perception of work motivation and workplace flexibility respectively have significant positive relationship on the working attitude at MLM career. The workplace flexibility have the standardised coefficient value of that influence the working attitude at t-statistic = 3.152; p <0.05. However, the standardised coefficient value of work motivation factor at is the weakest to influence on working attitude. Therefore, there is a significant relationship between career prospect, income, workplace flexibility, motivation and working attitude, four independent variables have a significant relationship between dependent variable. The MLR model for the testing of the hypotheses of this study is as follows: 168

8 Working Attitudes = (career prospect) (income) (workplace flexibility) (motivation) Table 5: Component correlation matrix Working Attitude Career Prospect Income Workplace Flexibility Motivation Working 1.00 Attitude Career 0.597** 1.00 Prospect Income 0.561** 0.397** 1.00 Workplace 0.599** 0.564** 0.481** 1.00 Flexibility Motivation 0.603** 0.644** 0.445** 0.616** 1.00 ** Correlation is significant at the 0.01 level (2-tailed). Table 6: Coefficients Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta (Constant) Career Prospect Income Workplace Flexibility Motivation a. Dependent Variable: Working Attitudes 5. Significant of Study The significance of the research has focused on the career options of Generation Y working as a distributor in Malaysia MLM companies, especially targeted on the fresh-graduate from university college students, or young working experience in the job place. The research may help MLM companies to be more understandable on the perception and attitude of Generation Y towards career development in MLM workplace in order to expand and recruit their network marketing and distributors. As per the current study, majority of respondents have their perception that the prospect of career development will build their positive working attitude as the distributors in the MLM companies. The study shown that Malaysian Generation Y concerning on seeking for better working employment prospect as their career option in improving the quality of lifestyle and long term sustainability living, and have positive attitudinal perception towards MLM career prospect. There is being perceived as an entrepreneurship opportunities given in their career 169

9 development who work as fulltime distributor in MLM companies. Furthermore, the positive influence of income distribution by MLM companies are being perceived as strong relationship to build the Generation Y s interest and attitude towards choosing MLM as their career options. The respondents have confident and belief that they will be rewarded on the lucrative of compensation plan and rewarding policy as per their contribution of efforts and performance to the MLM companies. The Generation Y having attitude on seeking for higher income distribution as their main target setting on pursuing career development and living wellness in their personal life. Higher income distribution reflect their personal achievement of career. On the perception of work-life balance and personal lifestyle, Generation Y also considering on the preference of workplace flexibility in the career of MLM companies working environments. The flexibility of working environment being considered as influencer factor in selecting the MLM as their career options. The flexibility of working hours being considered to contribute to the Generation Y on more effective of work performance in their career. Additionally, Generation Y also prefer flexibility of working in less policy and standard operating procedure (SOP) of work as their career options in choosing MLM companies. Lastly, the motivational culture which implemented by most of the MLM companies are being perceived as self-confident development which contribute to the better achievement in their career development. Training workshops and senior mentor supports are being perceived as important motivational factors in their career development. 6. Conclusion This research study had satisfied its objectives to identify the determinants of perception on choosing MLM companies as the Generation Y career options. In a nutshell, the outcomes of the research indicated that the working attitude and perception of employees has become an important aspect on ensuring the organisation successful. The current research is advisable for MLM companies to be more understanding in exploring the need and perception of Generation Y in the studied factors which build more positive attitude in choosing MLM companies as their career developments. MLM company s career and working policy can be specifically designed in the area of career prospect opportunities and development plan, rewarding scheme and compensation benefits plan, working policies, and personal training and motivation development, in order to attract more potential and capabilities of young generation in helping organisation to growth mutually. Moreover, further study need to take into consideration on the personality and attitude of individual which may contribute to their working passion and higher aim engagement in achieving career development in MLM. 170

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