The Influence of Up Line Support on Change Success in Malaysian Health Care Products Direct Selling Industry

Article excerpt

INTRODUCTION

Change has become the driving force for perpetual future success and growth of most organizations in the world, and change success is now being treated as a major agenda by most of them. Like any other organizations, sales organizations are sometimes forced to adopt new changes that are deemed necessary to increase their sustainability and competitiveness in the marketplace. Globalization in particular has become the major reason for these organizations to employ change to enable them to achieve their organizational goals such as higher growth rate, market share and profitability.

World Federation of Direct Selling Association (WFDSA), 2011), state that direct selling is one of the industries that are experiencing high growth and high employee turnover rate, had generated a total retail sales of almost $USD 132 billion and provided employment opportunity to almost 87 million people worldwide. Out of this figure, Malaysia's direct selling industry had contributed about $USD 2.1 billion (equivalent to almost RM 6.8 billion) with 4 million salespersons increase from year to year. Thus, Malaysia was ranked at number 17 of the top direct selling producing countries in the world. Recently, according to the Ministry of Domestic Trade and Consumer Affairs (2010), there are about 545 active direct selling companies with 7 million salespersons in Malaysia. Companies of direct selling in Malaysia are Multi Level Marketing (MLM), Single Level Marketing (SLM), Mail Order (MO) and Single Level/Mail Order (SL/MO). Table 1 reveals the types of direct selling companies in Malaysia from 1997 to 2010.

Due to competitive business environment, the management of direct selling companies have to adopt some changes and properly align change initiatives with organizational objectives, while at the same time must ensure that the change can be well accepted and adapted by the salespersons. However, the success of change implementation in direct selling organization does not always come easy without any impediment. In many cases, salespersons that are readily comfortable with the existing system may resist change if they are uncertain with what the change might bring to them. In this particular situation, the "up line" or the person who introduced or brought them into the business normally plays a significant role in ensuring them the benefits of change onto themselves. Therefore, to increase the chances of change success in direct selling industry, the up line is usually anticipated to be able to increase his or her downlines' performance (Sparks and Schenk, 2006; Wotruba and Rochford, 1995), due to their closeness and high interaction throughout their sales career in the industry.

Based on the importance of change and the contribution of direct selling activity to a nation's economy, this paper will focus on the influence of up line support on sales performance and job satisfactions which have been treated as two proxies of change success in Malaysia's direct selling industry. The rest of this paper is organized as follows: First, discussion of the relevant literature followed by a discussion of the methodology used. Then, the findings are presented and discussed. This is followed by the conclusion that looks at the implications, limitations and suggestions for future research.

LITERATURE REVIEW

Change Success and Salespersons

Weeks et al. (2004) state that, firms strive to develop and implement successful change initiatives on sales. It is suggested that successful change management must be accompanied by proper selection of change initiatives. Implementing organizational change initiatives each time is included people changing themselves (Ash, 2009). Change initiative should rapidly implement change that results in the higher levels of performance that were envisioned when the decision to make the changes was made. The overall performance of direct selling industry seems to be very much dependent on the success of its business in sales which can be directly influenced by salespersons' performance and job satisfaction level. …