MBAVB3
MAI THI THACH
DEVELOPING SOLUTIONS FOR IMPROVING
DISTRIBUTOR ETHICS COMPLIANCE AT HERBALIFE VIETNAM
MASTER PROJECT
MASTER IN BUSINESS ADMINISTRATION (PART-TIME)
TAVING DAI HQC MO TP HOM
Tutor’s Name: Dr NGUYEN QUYET THANG
Ho Chi Minh City
(2011)
Trang 2F903 áu 5ì 2 1.3.1 Generic Objectives 2
1.3.2 Specific Objectives wend 1.4 Methodology and framework oƒ the SỈUY nen Hee, 3 a9 2i? ố ccc ốe 4
1.6 The Scope and the limitation of study 5 2 CHAPTER 02 LITERATURE REVIEW 6
2.1 Definition of Direct Selling - cssSSSS se, 8
2.2 Definition of Ethics and Ethics in Direct Selling - « <- 9 2.3 Direct Selling Industry code of EthiCs -ccnnehvekerrrrrrriee 12 2.4 Necessity of Ethics within direct selling companies - 13
2.5 Unethical behavÌOrS c4 HH HH nh 15 2.6 Distributor Ethics violafiO'iS seceeceesenenecseesecnsesseaseerseereetena 15 2.7 Distributor Ethics Compliance - - Lá 11 ng HH kg 16 2.8 Benefits of Distributor Ethics Compliance in Direct Selling 17
2.9 Ethical Standards na 18
2.10 Ethics Audits and impacts ccs sscesercseneesscetteeeseeesntsneeeseaeeerennensatege 21 2.11 ConclusiOn cà 1n TH HH TH HH kh Hàn The 23 3 CHAPTER 03 HERBALIFE VIETNAM | INTRODUCTION 25 Kha n5 hố hẮ6Ằ ‹+43 25 3.2 Company Name and Business Model - Lc SH 11211 skxrre 27 3.3 COMPANY ACTIVITIES 5 ố hố ẻ 28 3.4 Business OperafÏOn Q.22 HHH H210 KH ng HH kh 29 4 CHAPTER 04 ETHICS COMPLIANCE SITUATION ANALYSIS 31
4.1 Herbalife code of Ethics nh 31 ch ? 9u na 35 XU iu 36 911i 0 6 a434 36 4.1.4 One Thousand Volume Points (1,000 VP) Lee, 37 4.1.5 Enforcement ProcedUres - - - ng HH kg 38 4.1.6 sẻ nh ẽ ẻ 40
CƯ ÔN x đA hố 41
4.2.1 Herbalife Vietnam Distributor Ethics challenges and issues 41
4.2.2 Opportunity for Unethical Behaviours at Herbalife Vietnam 42
Trang 3
5.2.1 Mandatory training Ethics Acknowledge 92
5.2.2 Reinforce ethics training 53
5.2.3 DEC training conferifS - ke nhe 54 c2 to ai nh 54
5.3 Method of investigation Ethics violations 55
5.4 Method of penalty for violation Đ6 5.5 ẽ ằ hề 58 5.5.1 Multi-Section Folders - - << 1H HH HH HH it 58 5.5.2 Two-Sided Folder 5.6 Human resource vee _ TH chan t ( .Ả 6 CHAPTER 06 RECOMMENDATION AND CONCLUSION wie? 6.1 Recommendation - - sen F1 “tố 72 7 LIST OF REFERENCES -.- SH ng HH kem 73 8 APPENDIX :ccssccerssseerscnssenensoeereesse wel 4
8.1 Herbalife Vietnam organization chart a - wld 8.2 Performmance Standards and Expectations of DEC staff 74 8.3 Tracking file sample of Ethic violafion ccc ckkrvverrerrrrerrsrer 76 8.4 Estimated Global Sales Force in millions .-. -cs-xs<sxxerverrr 79 8.5 Herbalife Code related to violated cases (source Herbalife Vietnam) 79 List of Figures
Figure 1 The Frame work of this Stud y ccccscccccscsseesseeessesseetenenscneeeeesseens Figure 2 Direct Selling Vs Direct Marketing - series Figure 3 Code of ConduCfS - - - -c HH TH TH th ng vre Figure 4 Vietnam Code Enforcements
Figure 5 Direct selling growth index from 2002-2007
Figure 6 Conditions and policies of Herbalife ee eeceesesereeeeesresnereneees Figure 7 DEC sfructure of Herbalife - - - cv re rrrrrrerrssek Figure 8 Number of acknowledgement Ethics distributor
Figure 9 Number of new distributors Vs DEC sign-off number “
Figure 10 Enforcemenf prOC@dUFG - Án “TH TT HH HH Figure 11 Method of investigation Ethics violafion c«.kresereevree Figure 12 DEC and distribution service
Figure 13 Business Investigation process “
Figure 14 Workflow of violation DFOC©SS - HH HH kh rệt
Trang 4List of Tables
Table 1 No of Distributors in VN Direct Selling companies 14 Table 2 The FSG, DSA Code of Ethics and the current Ethics audit 22 Table 3 Estimated Global Sales Force in millions s2
Table 4 Direct Selling growth index 2002-2007 30
Table 5 Case of Violation in Herbalife Table 6 Summary method of penalty for violation Table 7 Business Investigation - High priority files
Table 8 Business Investigation - Medium priority files "
Table 9 Business Investigation - Low priority files se 67 Abbreviation
APAC Asia Pacific
CSR Corporate Social Responsibility
DA Distributor Application
DB DataBase
DEC Distributor Ethics Compliance
DSA Direct Sellers Association
DS Distributors
EMEA East Middle East America
FFS Final Fact Sheet ‘
FSG Federal Sentencing Guideline
FQS Fully Qualified Supervisor
GT Global Expansion Team
HBL Herbalife
HCMC Ho Chi Minh City
HIAI Inc Herbalife International of America Incorporation
HFF Herbalife Family Foundation
HOM Herbalife Opportunity Meeting
HKRO Hong Kong regional office
IBP International Business Pack
IBO International Business Owner
Trang 5ABSTRACT
While the whole market and some traditional channels suffered the effects of the recession in the first half of 2009, the growth of modern trade channels remained significant Among those channel, Direct Selling is the most active Although those channels which offer consumers greater convenience, quality and safety are still holding a minor share of the total market, the presence and influence improved significantly over the review period, and it is expected to maintain the good performance over the forecast period, putting increasing pressure on the traditional channels
While unpopular with less than 5 year- old of industrial model, Direct Selling in Vietnam has gained more acceptances amongst Vietnamese consumers recently Besides, the Vietnam Direct Selling business, being a new and not well- understood industry, has major issues to be addressed and a great future to work for The ultimate objectives of the forum are to provide and update the important information on Direct Selling, to discuss the process and regulation applied for post-market surveillance inspection Good compliance programs must begin with good policies and procedure However, all foreign funded Direct Selling enterprises in Vietnam are facing the same implementation issues after entering Vietnam as impacted by commercial environment
The new trend in business is to achieve profitable operations ethically Companies are investing huge amount of monies to certify conformity with Ethics, corporate governance and corporate social responsibility There should be a code of business ethics which indicate how customers are to be served
Trang 6Vietnam Part of the reason for this is that Direct Selling is still misunderstood among Vietnamese people Independent Distributor Ethics audits are important to better defining the ethical environment of the organization and understanding areas in need of attention Improving distributors Ethics compliances are important to better reducing Ethics Violation, reducing the Vietnam Myth of Direct Selling model, protecting the fair business opportunity for Vietnam potential and existing truly independent distributors
In order to identify the root of the problem is the key for resolutions, the
Roundtable Discussion is organized by Vietnam’s Direct Selling Committee, in cooperation with the Ministry of Industry and Trade/Vietnam Competition Administration Department, and supported by the World Federation of Direct Selling Associations, with the objective of* calling for the involvement of all concerned parties in making the Direct Selling business a strong, healthy,
valuable, and sustainable industry in Vietnam
“Ethics And Distributors” is the core of Herbalife’s Business Herbalife Vietnam executives led the way and played a key role in strengthening the code
to further protect consumers and independent distributors in the Vietnam
market Although considered as the successful company in the Vietnam Direct Selling industry of standardized Distributor business rules, regulations and
marketing plan, Herbalife Vietnam Company has also faced with various
difficulties, particularly in the lack of Distributor Ethics Compliances After one year
Operation, the general conclusion of the TAB team and Herbalife Vietnam's
managers concerning the situation is that it is the logic consequence of the Ethics
violation resulting from misunderstanding of business policy, unfamiliar with the process of violation investigation, the interruption in the process of handling complaints as well as incomprehensive measures in combination of resolving
Ethics violation What needs to be done for reducing the violation and improving
the Ethics compliances? Clearly, Herbalife Vietnam needs development solutions
Trang 7
With the bad conception from Direct Selling in the past, consumers in Vietnam does not believe much in its methodology and quality of products It is also badly effective to government in business management The reason is that independent distributors who has been being unable to familiar with Direct Selling rules of conduct has been using the wrong method of doing business Therefore, Direct Selling has a huge obstacle in distributor development as well as business development that will cause an impact to the vision of sustainable growth in short and long-term
1.3 Objective of the study 1.3.1 Generic Objectives
Based on the analysis of existing company Ethics violation reports, current business operation and organization, impact faetors of distributor Ethics violations, this study will develop solutions for improving Distributor Ethics Compliances at Herbalife Vietnam By this solution, Herbalife Vietnam will recover and gain consumers and government belief to its brand, image and products to meet company’s vision of sustainable growth as well as to contribute on the changing people minds to the Direct Selling Vietnam market in the long term
1.3.2 Specific Objectives
This study will attempt to achieve the followings:
To demonstrate the necessity of ethical culture within Direct Selling companies and how that culture should be in line with the objectives of the enterprise Through assessing the current situation of distributor ethics violations as well as compliances of Herbalife Independent Distributors, the study will identify the limitation areas and make suggestions on how to improve solutions for the benefits of the two distributors and company under study
Trang 8cases on each thousand (1,000) distributors Failure to do so, can impact harmfully on company performance Consistency to distributor ethics compliance values does not come cheap, but the company stands more chances to succeed in its industry, to keep getting stronger in its brand and image since it will be accepted within the community for its values and good status
1.4 Methodology and framework of the study
This study will begin with a review of literature which concerns the Direct Selling Industry Code of Ethics, Herbalife Vietnam Rules of Conducts and Distributor Polices It mentions to the concepts and principles of the Direct Selling, Ethics in Direct Selling, Distributor Ethics violations and compliances, the benefit of distributors Ethics Compliance in Direct Selling Industry
Necessary data for this study were ‘collected from the actual violation reports of Herbalife Vietnam DEC after one year operation
Trang 9
State Rea sree SITUATION ANALYSIS
DEC ENFORCEMENT CASE OF ISSUES &
STRUCTURE PROCEDURE VIOLATIONS
i IMPACT & CONCLUSION Eon
Figure 1 The Frame work of this study
1.5 Flow of the study
The study is organized as follows:
Chapter 1 provides an introduction including the rationale of the study, the identification of the problem, the objectives, the scope and limitations as well as the methodology and framework of the study
Chapter 2 shows the literature review of the topic being considered Chapter 3 provides the company information and business activities
Trang 10
Chapter 5 is devoted to the expected outcome of the study to develop the solutions based on the existing procedures that will help the company achieve outstanding performance in the next few years This chapter consists with proposed solutions of control Distributor Violation and developing solutions of improving Distributor Ethics Compliance profile
Finally, Chapter 6 deals with practical recommendations on the implementation of the potential solutions
1.6 The Scope and the limitation of study
The study applies to Herbalife Vietnam Distributors only Any waiver of
the code for executive officer or directors or any other employee may be made
only by the Enterprise Human Resource Office Focusing on the developing reality solutions for improving Herbalife Vietnam Dtstributors Ethics Compliances to
adopt with Herbalife Global business Rules and this is intended for Herbalife
business purposes only The code of Ethics is not intended to describe the legal relationships
Future additions are encompassed by this study These are also applicable
to all Herbalife Distributors regardless of geographic location in Vietnam The
depth of this study depends partly on the availability of the key data of Herbalife
Vietnam in general, especially of Distributor Ethics Compliance department
Trang 11
Direct Selling is a dynamic and expanding method of marketing goods and services to consumers in person away from retail stores, In direct selling, salespeople usually personally explain and demonstrate products to consumers, generally in homes and workplaces (Direct Selling Worldwide Corporate Philanthropy Report in 2009)
Direct Selling is the sale of a consumer product or service, person-to- person, away from a fixed retail location, marketed through independent sales representatives who are sometimes also referred to as consultants, distributors or other titles (DSA)
Direct Selling is defined as “ face to face selling away from a fixed retail location” where the company offers opportunities to an independent direct seller (Peterson and Wotruba in 1996, page 2)
Anyone can do the business There are 'no required levels of education, experience, financial resources or physical condition People of over 18 ages and from all backgrounds have succeeded in direct selling Direct Selling companies use sellers to market to consumers Sellers are usually independent of the companies, and companies call this force by various titles, including consultants, representatives and independent distributors
Direct Selling provides important benefits to individuals who desire an opportunity to earn an income and build a business A net earnings statement is made available to direct seller by month or at least annually, and this statement accurately records net earnings of all members, such that members are able to see for what the true earnings are Direct sellers are independent distributors who can:
e Work part-time, perhaps supplementing family income
e Work full-time dependent on how much people want to work, perhaps building a new career
Trang 12e Receive training and support from an established company
The cost for an individual to start an independent Direct Selling business is typically very low Usually, a modestly priced sales kit is all that is required for one to get started, and there is little or no required inventory or other cash commitments to begin
Normal terminology in direct selling: e Single level compensation plan ¢ Multilevel marketing e Party Plan e independent distributor ¢ Down-iine e Up-line
e¢ Compensation Plan
Direct Selling companies predominantly use this method of marketing to consumers instead of retail stores, telemarketing, mail solicitation and other techniques Through direct selling, consumers benefit from having an alternative to department stores, shopping centers, malls and other retail stores
Direct Selling offers consumers convenience and service, including personal explanation and demonstration of products and home delivery Consumers benefit from Direct Selling because of the convenience and service it provides, including personal demonstration and explanation of products, home delivery, and generous satisfaction guarantees Moreover, Direct Selling provides a channel of distribution for companies with innovative or distinctive products not readily available in traditional retail stores, or who cannot afford to compete with the enormous advertising and promotion costs associated with gaining space on retail shelves Direct Selling enhances the retail distribution infrastructure of the economy, and serves consumers with a convenient source of quality products
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successful and effective method of compensating direct sellers for the marketing and distribution of products and services directly to consumers n level - Manufacturer ie Jobber : Direct et Purchase Distributor Les y | Wholesaler Direct Selling provide compensation to
those who actually
bring product to end user
Figure 2 Direct Selling Vs Direct Marketing
Direct selling should not be confused with terms such as direct marketing or distance selling which may be described as an interactive system of marketing that uses one or more advertising media to affect a measurable response and/or transaction at any location, with this activity stored on a database Some commonly known types of direct marketing and distance selling techniques are telemarketing, direct mail, and direct response
Trang 14
or personal presentation that is always an aspect of the Direct Selling relationship
Direct Selling is the essence of free enterprise, a business model which
utilizes a combination of direct marketing and franchising Typically, individuals
become associated with a company in an independent contractor relationship Despite the fact that the Direct Selling business model has the potential to provide enormous benefits across many areas: finance, economic, society, education and
philosophy, it has largely failed living up to its promise Thousands of Direct Selling
companies have sprouted during the last few decades Unfortunately, many are no longer in business There has been an enormous lack of real business expertise, and there has been totally insufficient debate on principles and Ethics There is a pattern that might be of help to an entreprereur wanting to build a successful Direct Selling organization in today's competitive marketplace This pattern includes business code of Ethics, regulation rules
2.2 Definition of Ethics and Ethics in Direct Selling
1 Ethics
Ethics is the practical science of conduct and is assessed on a case by case basis Ethics is a branch that deals with values relating to human conduct with respect to the rightness or wrongness of certain actions, but that does not
address the foundations of good or evil The dealing with here is the concrete
reality of human choices and not some abstraction mainly pertaining to moral
standards (by Suzanne Pontier)
Ethics is defined as moral principles that control or influence a person's behavior {t is also said to be a system of moral principles or rules of behavior Ethics is closely related to corporate governance Corporate governance is defined by the King Report (2002) as the framework of rules, relationships, systems and processes within and by which authority is exercised and controlled in corporations Wyburd (1998) tackles ethical concerns in areas, where for some
Trang 15
reasons competition is limited or restricted despite the possible intervention of the government Necessary measures need to be taken to protect the consumer
Ethics concerns itself with what is good or right in human inter-action The issue of business ethics through different perspectives called the social scientific position, the ethical control position, the managerial position, the organizational interest position and the ethical guidance position (Rossouw, 2002)
It is necessary, rather, to always refer to the higher values of human living if one wants to help the true growth and full development of the community (Gandolfo, 2004) Sir Worcester (2007) acknowledges that an ethical business has more chances to succeed than an unethical one
2 Ethics in direct selling
Direct sales involve several participants: the direct seller, sales person/independent distributors and the purchaser of the product offered The relationship between all participants must be based on fair and ethical principles The strength of direct selling in its tradition of dependence and its commitment to a free -market system This freedom of enterprise carries with it the obligation to consider not only one’s personal well being, but also that of others, and of the direct selling industry as a whole When dealing with each other under competitive condition, direct selling companies commits to ensure a high level of ethical conduct DSA has definition of ethics in direct selling in different areas to achieve one ethics goal
- Basic principle: All Direct Selling should be legal, decent, honest and truthful and every Direct Selling activity should be carried out with a due sense of social responsibility No Direct Selling should be carried out such as to impair confidence in direct selling Direct Selling activities should conform to the principles of fair competition as generally accepted in business, in particular with regard to:
se The terms of the offer, including the price and modes of payment, and the methods and form of the contact with the consumer
Trang 16e The fulfillment of any obligation arising from the offer or any operation,
including delivery, connected with it
Direct Selling companies and direct sellers should voluntarily assume
responsibility towards the consumer with respect to fair sales methods and product value, and should make every effort to ensure consumer satisfaction
Direct sellers should be fully informed by Direct Selling companies as to the characteristics of the goods or services offered, to enable the direct sellers to give
the consumer all necessary information
- Product identification: At the beginning of the sales presentation, direct sellers
should without request truthfully the prospective consumer, and should also identify company name, products In party selling, direct sellers should make clear the purpose of the occasion to the host/hostess and to the participants
Promotional literature, advertisements or mailings should contain the name and address or telephone number of the Direct Selling company or the direct
seller, ’
- Truthfulness: Presentations used in Direct Selling should not contain any product description, claim, illustration or other element which directly or by
implication is likely to mislead the consumer
- Explanation and demonstration: Explanation and demonstration of the product offered should be accurate and complete, in particular with regard to price and, if applicable, credit price, terms of payment, cooling-off periods and/or return rights,
terms of guarantee, after-sales service, and delivery
- Question to answer: Direct sellers should give accurate and understandable
answers to all questions from consumers concerning the product and the offer - Customer understanding: The direct seller should endeavor to make sure that the individual consumer clearly understands the information given The demonstration of the product should be adapted to the needs of the individual
consumer
- Data privacy: direct sellers should disclose to consumers the specific purpose(s)
for collecting and using personal data and should not use the data in a way
incompatible with those purposes The data collected should be adequate, relevant and not excessive in relation to the purpose(s), should be accurate and
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kept up to date and preserved no longer than necessary There should be adequate security measures, to prevent unauthorized access or undue disclosure of the data
Generally, Ethics in Direct Selling is the way distributors do the right, honest and Ethics things Ethics in direct selling is the guideline enterprises use to protect at high degree of affecting company’s bottom line
2.3 Direct Selling Industry code of Ethics
Ethics code is developed as mechanisms to bring some uniformity to the ethical performance (by Gatewood and Carroll in 1991) Ethics codes and implementation and enforcement are also reflective of an organization's willingness to resist those factors that can undermine the ethical behavior in an organization
The cornerstone of the Direct Sellers Association's commitment to ethical business practices and consumer service is its Code of Ethics Every member company pledges to abide by the code's standards and procedures as a condition of admission and continuing membership in DSA
The DSA Code of Ethics speaks to both the consumer and the seller It ensures that member companies will make no statements or promises that might mislead either consumers or prospective sales people Pyramid schemes are illegal and companies operating pyramids are not permitted to be members of the DSA
The DSA Code of Ethics is enforced by an independent code administrator who is not connected with any member company The code administrator will do everything possible to resolve any complaints to the satisfaction of everyone involved, and have the power to decide on remedies All member companies have agreed to honor the administrator's decisions The Code assures the independent distributors and consumers that independent distributors are dealing with a company serious about providing quality and service at the highest levels
Code of Ethics in Direct Selling companies is considered:
Trang 18e To promote consumer awareness, consumer protection and_ ethical Conduct
« Tobe self-regulatory: code of Ethics and business practices - How was the DSA Cade of Ethics developed?
At its inception in 1970 the Code of Ethics was created as a consumer Code - specifically speaking to the interests of Direct Selling customers The Code was expanded in 1978 to address the relationship between companies and sellers, but the consumer protection aspect of this self-regulatory document remains a critical component
The Code of Ethics has been developed over many years to protect distributors and consumers from unfair and deceptive business practices It addresses issues that have been identified over the years as areas for potential abuse by companies or distributors
Conclusion: the Code of Ethics is to be applied in spirit as well as to the letter, bearing in mind the varying degreds of knowledge, experience and discriminatory ability of those to whom Direct Selling is directed
2.4 Necessity of Ethics within direct selling companies
Salespeople in Direct Selling organizations are considered independent contractors versus being employees of the company Such independence might suggest that organizations would have less control or impact on the Ethics of the sales force Therefore, associational and organizational directives that have positive effects on the ethical environment of direct sellers could be seen as a greater accomplishment than in other organizations or industries with a more captivated sales force
Direct Selling is growing very fast with the number of distributors has been regularly increasing in the worldwide
Source: Euromonotor
:: Direct Selling | Forever
USD lreland USD Sweden USA
Trang 19' Year established in 2002 2004 2004 2003 2004 VN Nutrition, | Nutrition, | Nutrition, Product category PC PC PC PC P€ '# of Distributors 40,000 20,000 2,000 40,000 8,000
Table 1 No of Distributors in VN Direct Selling companies
Most corporations in the United States have established Ethics programs in compliance with the Federal Sentencing Guidelines for Organizations (Robertson and Fadil 1998) These guidelines require that organizations develop compliance programs to prevent, detect, and deter illegal and/or unethical conduct Many trade and professional associations have been active in self- regulation The Direct Selling industry has been very active in self-regulation for over two decades through the development, implementation, and enforcement of codes of ethical behavior and the promotion of ethical behavior among industry representatives In the 1960s, Direct Selling was gaining in popularity, but, because legitimate Direct Sellers represented a relatively new business methodology, there existed a need to establish new ethical guidelines (e.g the distinction between legitimate Direct Sellers and pyramids) As a result, DSA developed standards of behavior to assist direct selling member companies in complying with and exceeding regulatory and statutory requirements
Ethics and Compliance is very important in any company and especially in industries in which business are mainly generated by independent agents such as insurance or direct selling Among all the countries of Herbalife, Ethics and Compliance would be even more important in the markets which have tighter policies, as China, Vietnam and Korea (Yvonne Chan, vice president Distributor Ethics Compliance Herbalife Regional APAC and China)
Trang 20program Without a well written policy, Ethics and compliance program is bound to
fail (Sandra S.C)
Ethics or the absence of it is not that simple to distinguish all of the time
Two distributors may carry out exactly the same line of action and eventually arrive at exactly the same outcome One had completely good and upright intentions to
start with On the contrary, the other distributor had a deceitful plan from the
beginning It is not easy sometimes even impossible to actually see through the mind of the person
Generally, not everyone will actually consider the true value of the codes of
Ethics But basically, the true success of a company will always be built upon
strong foundations of Ethics and moral principles, particularly Direct Selling
companies Abiding by these values will not only ensure the long term success of
Distributor business but this will eventually enrich distributors with fulfillment and stronger relationships among down-line, potential distributor and end—customers
2.5 Unethical behaviors ‘
In this study, the methodology used by Chonko and Hunt (1985) has been
employed to ascertain how Direct Selling executives view unethical behavior in the
company and industry There have been different points of view about the unethical behavior in direct selling There is some feeling that opportunities for - unethical behavior in Direct Selling are less frequent than in other industries, other
types of selling and society as a whole Each direct selling organization has to
establish it own ethics policy to direct distributors and to protect it’s business The potential for ethical issues to occur in business increases when there is no clear moral compass to guide about what is right or wrong
2.6 Distributor Ethics violations
What about ethical problems that originate elsewhere? What happens when
ethical violations spiral from what are euphemistically called “aggressive sales
practices?”
All members shall not conform to the principles of fair competition as
generally accepted in business with particular regard to:
- Offering sale documents, methods and form of contact with the customer
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- The methods of presentation and demonstration and information about the product
- Fulfillment of any obligation arising from the offer
- Integrity and customer satisfaction are two most valued objectives
- Fair sale methods and product value and shall make every effort to ensure
customer satisfaction
- Responsibility to fully inform characteristics of product and Offering consumer
all necessary information
2.7 ~—_ Distributor Ethics Compliance
As network marketing with thousand of distributors in different education
level, Direct Selling companies have to create positive outcomes for many people, or to turn marketing plan or business development professional toward tactics that exploit trust and erode value The overwhelming majority of the decisions Direct
Selling companies make are not constrained by laws but followed by own rules of
conduct And isn’t it worth asking “what is the right thing to do?” if distributor decisions represent an unattainable ethical purity
Direct Sellers shall offer Consumers accurate and complete Product
explanations and demonstrations regarding price and, if applicable, credit terms, terms of payment, a cooling-off period, including return policies, terms of
guarantee, after-sales service and delivery dates Direct Sellers shall give
accurate and understandable answers to all questions from Consumers To the extent claims are made with respect to product efficacy, Direct Sellers shall make only those verbal or written product claims that are authorized by the Company
A written Order Form shall be delivered or made available to the Consumer at or prior to the time of the initial sale In the case of a sale made via mail, telephone, the Internet, or similar non face-to-face means, a copy of the Order Form shall have been previously provided, or shall be included in the initial order,
or shall be provided in printable or downloadable form via the Internet The Order
Trang 22duration of the guarantee; and the remedial action available to the Consumer shall be set out clearly in the Order Form or other accompanying literature provided with the Product All terms shall be clear and legible
Whether or not it is a legal requirement, direct sellers shall offer a cooling-
off period permitting the customer to withdraw from the order within a specified, reasonable period of time The cooling-off period shall be clearly stated
Companies and Direct Sellers offering a right of return, whether conditioned upon certain events or whether unconditioned, shall provide it in writing
DSA has established the Code for all active members that direct selling
company shall conform to the principles of fair competition as generally accepted in business, with particular regard to:
e The terms of the offer and the methods and form of the contact with the
consumer
e The methods of presentation and demonstration of, and information about
the product ,
e The fulfillment of any obligation arising from the offer or any operation
connected with it, including delivery
This Code is a measure of self-regulation by the Direct Sellers Association
It is not a law, and its obligations may require a level of ethical behavior which
exceeds existing legal requirements Non-observance does not create any civil responsibility
Active DSA members shall voluntarily assume responsibility toward consumers with respect to fair sales methods and product value, and shall make every effort to ensure consumer satisfaction
DSA members also recognize the responsibility to fully inform salespersons as to the characteristics of the products offered to enable to give the consumer all necessary information
2.8 Benefits of Distributor Ethics Compliance in Direct Selling
The analysis of the reasons for the development of Ethics shows that
industrialists were the first to become aware of the concept, followed more recently
Trang 23(Suzanne Pontier, 2005) Business recent interest in the concept of Ethics was first triggered by "in-house reasons," i.e., globalization and various corporate takeovers weakened corporate culture, and specifically led to the loss of collective bearings A company will justify any acts or decisions according to moral standards and values This translates into a formalization of Ethics through ethical codes or Ethics committees
As companies operate within a competitive world where trade battles are won in the field of corporate image, ethical strategies become instruments extending business power and adding value to the brand The ethical discourse enhances the brand with an axiological content (Carr 1998) This is a good way of avoiding the trivialization of the corporate discourse and of building a bulwark against the competition (by Weil in 1990)
Growing corporate interest in Ethics may be explained by emerging contemporary issues such as bio-Ethics, pollution control, and environmental awareness However, sociological and politieal or philosophical analyses reveal that religion or the ‘city’ (in the etymological meaning of the word) no longer meets the "societal demand for meaning," and that a substitute for the "missing supply" is now being sought in the business world, thus mirroring a crisis of individual and collective values The ethical wave has not bypassed the Direct Selling sector and the number of Direct Selling committed to ‘fair trade" is increasing Of course, Direct Seller/Distributors ethical concern is enmeshed with ulterior motives because of the huge stakes involved
Furthermore, consumer perceived image of the retailer stems from the behavior identified with the store Consumers satisfied with the quality of the goods and services of the store have a favorable image while dissatisfied consumers form a negative image The promotion of Ethics thus becomes a way for Distributors to improve a still negative image
However, the ethical practices of Distributors may take different forms and a precise definition of the concept is needed
2.9 Ethical Standards
Trang 24
and Direct Selling companies in Vietnam that will promote best business practices and demonstrate an unwavering commitment to consumer protection, and : promote industry self-regulation (reported by Khalruddin Yahya-Head of Legal-
_ Avon Vietnam, Malaysia, and Thailand)
Figure 3 Code of Conducts
(1) Prohibited practices - Prohibit usage of misleading, deceptive or unfair sales | practices
Identification - Identify themselves and the identity of the company ' Explanation and demonstration - prohibition purpose of solicitation
i Answers to questions - accurate and complete Product explanations, demonstrations regarding price, credit terms; terms of payment; a cooling-off | period, return policies; terms of guarantee; after-sales service; and delivery dates F Literature - deceptive or misleading advertisements, business support literatures, eo contain the name and address or telephone number of the Company and may
_ include telephone number of the Direct Seller
' Testimonials - prohibit usage of unauthorized, obsolete, untrue, misleading ' testimonials
P (2) Comparison and denigration — shall not unfairly denigrate other companies, | products
_ Cooling-off and return of goods - literature shall contain a cooling-off clause
j Guarantee and after sales services — terms of guarantee, warranty, after sales
; service be set out in the order form
_ protection of private information
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: Fairness - shall not abuse the trust/exploit the consumer
: direct Sellers’ Compliance - comply with the standard of the Code Recruiting — shall not use misleading, deceptive or unfair practices
3usiness Information — are accurate and complete
Remuneration and accounts — information available to direct sellers and all
_fiionies due to direct sellers be paid in commercial reasonable manner
: Earning claims — shall not misrepresent the actual, potential sales or earnings ' Relationship - independent third party and written agreement
Fees - shall be in accordance with the laws of Vietnam from time to time
, ifermination — buy back provisions
- ltventory — prohibition front loading
_ Other materials — prohibition against marketing or sales of materials that are : inconsistent with the company’s policies and procedures
i Education and Training - adequate training
_ {8) Principle - spirit of fair competition 9
- Enticement- systematically entices or solicits direct sellers of another Company | Denigration - products, sales/marketing plan of other companies
tisfy the complainant
as Figure 4 Vietnam Code Enforcements
L Among direct selling, there also has been a full process of regulations for
énforcement of Code of Ethics established by DSA to support member and protect direct selling customers, distributors DSA has a reason to believe that every step
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of member has a record by DSA administrator and the necessary investigation is available at any time upon receipt of a complaint from a bona-fide consumers Member can use this process to establish standard code for its own This process included receipt of complaint, cooperation with the code administrator, informal investigation and disposition procedure, appeal review panel and appeals review procedure
2.10 Ethics Audits and impacts 1 Ethics Audits
Ethics audits are important to better defining the ethical environment of the organization and understanding areas in need of attention One part of an Ethics audit is a survey administered to key internal and external constituents that have a professional relationship with the organization (by Allen in 1995) However, such audits are only a beginning and are not without difficulties In year 1999, Schaeffer and Zaller observe that Ethics training, legal inspections, codes of conduct and consistent reaction to Ethics violations ate prone to several shortcomings, called for an Ethics audit, which " must include the dimensions of the organization, the social system, and the milieu in which the organization operates” In year 2000, Harris observes that few associations have mechanisms in place that allow for audits Even though this assertion has a consultant's perspective, Harris notes that "Upon completion, weaknesses will be noted, staff will be reacquainted with the importance of procedures, improvements can be made, and risks can be reduced”
The approach used to conduct the Direct Selling industry audit is generalized to any sales organization (company or association) having a code of Ethics Since all sales organizations must comply with the broad mandate of the Federal Sentencing Guidelines (FSGs), the comparison of the DSA code provisions to the FSGs represents an early attempt at specifying a framework for study applicable to sales organizations
Simply stated, the FSGs require all organizations to develop a compliance program designed to prevent, detect and deter individuals from engaging in illegal and/or ethical misconduct
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The first audit step established that elements of the DSA code of Ethics address each of the three components of a compliance program The code has provisions for code enforcement and for specific industry related activities such as pyramid schemes As noted earlier, the code has been revised recently
Source: Journal of personal selling & sales management al Sentencing Guidelines element
ˆ Develop a code of conduct that is capable of reducing misconduct
The DSA Code provisions - The existence since 1970; appears to
be effective as evident in literate
- Discretionary authority in the organization must not be given to persons with a propensity to engage in (legal conduct
- The DAS code has served to have
companies ejected from membership
- Standards / procedures must be communicated to employees through training and other forms of
communication
- The DSA code has distributed to DAS
mefhbers through a variety of media
and program
- Organization must take reasonable steps to achieve compliance with standard by monitoring internal
auditing system to detect miscoriduct
-The DSA code specifies compliance procedures - Standards and punishment must be enforced consistently - The DSA code specifies remedies
- A plan to review/ modify the compliance program is needed to demonstrate continuous improvement
-The DSA code has a provision for
amendment and has been amended numerous times
Table 2 The FSG, DSA Code of Ethics and the current Ethics audit
Finally, the DSA code of Ethics was created because of Ethics related developments in the iridustry An effective compliance program consists of seven elements presented The next stage of the audit process required a comparison of
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2 The Impact of Corporate Industry Codes of Ethics
The first element in the FSGs is the development of a code of Ethics
Clearly, the Direct Selling industry is in compliance here as the DSA has a written code of Ethics A body of evidence still exists that codes of Ethics are effective A major criticism of codes is the lack of enforcement, the lack of a mechanism for dealing with violations (Murphy, 1995)
For any trade or professional association, a code of Ethics plays an important role It creates an environment in which members understand and respect the need for a reasonable set of guidelines for conducting business Self- regulation is a powerful commitment that speaks to many audiences internally (members and business partners) and externally (regulators, legislators and the public at large) While not wielding the power of law, codes of Ethics and specific provisions may prevent unnecessary government action if the standards are
viewed as appropriate benchmarks with a high level of compliance
Having a code of Ethics for an industry or profession is quite common, but the mere existence of a set of written statements means little unless it can adapt to changing times and is enforced effectively
2.11 Conclusion
Direct selling creates job and brings good business for everyone and not has much limitation in age called distributors Distributor is on behalf of company deliver good products and services to customer as independent retailer with enthusiasm consultancy by face-to-face communication, direct discussion before doing business On the other side, distributors are compensated up to 50% of product price as discounting and distributors can earn as much as distributors are able to, it is depend on selling performance Because of huge income, distributors have tried to sell as much as possible by any methods even though dishonest and provide wrong information about selling products to consumers These actions mean unethical behaviors or it is called ethical violation in direct selling which is defined by Direct Selling Association (DSA) Gradually, local consumers do not believe much in Direct Selling methodology and the
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consequence is company going to lose its business by failing in products and services delivery Therefore, Direct Selling association has defined ethical standard for Direct Selling Companies and distributors in Direct Selling domain to prevent and eliminate unethical behaviors for protesting consumer interest and company business
All Direct Selling member companies are required to submit to DSA, along with its application for membership or in the case of existing members along with next dues payment, a proposed program as to how the company plans on publicizing DSA’s Code of Ethics to its sales people and consumers The plan shall contain, at a minimum, one of the following:
There is an inclusion on the company’s web site of DSA’s Code of Ethics with a step-by-step explanation as to how to file a complaint or
1 a link from the company’s web site to DSA’s Code of Ethics with a clear, bold faced statement as to how to make the connection; or
2 an inclusion of the company’s Cade of Ethits, or its complainant process, in its web site, or with an explanation of how a complainant may appeal to the DSA Code Administrator in the event the complainant is not satisfied with the resolution under the company code, or the company’s complaint process, with a reference to the web site of DSA’s Code of Ethics
This Code is not law but its obligations require a level of ethical behavior from member companies and independent salespeople that is consistent with applicable legal requirements Failure to comply with this Code does not create any civil law responsibility or liability When a company leaves the DSA membership, a company is no longer bound by this Code, However, the provisions of this Code remain applicable to events or transactions that occurred during the time a company was a member of DSA The Code is a_ constantly evolving, enforceable standard of behavior for DSA members and a mechanism that does aid salespeople and customers alike in getting answers to many of complaints
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3.1 Enterprise Profile
As a leading Direct Selling firm in United State, Herbalife International of
America has been in business globally for more than 30 years, operating in 74 countries through a network of approximately 2.1 million independent
distributors Herbalife pursues mission of “changing people's lives” by providing a
financially rewarding business opportunity to distributors and quality products to
distributors and customers who seek a healthy lifestyle
Herbalife offers science-based products in four principles categories: weight management, targeted nutrition, energy, sport & fitness and Outer
Nutrition which are accounted for 63.0%, 21.2%, 4.3% and 5.5% of Herbalife net
sales in fiscal year 2009, respectively The weight management product portfolio includes meal replacement shakes, weight-loss enhancers, appetite suppressors
and a variety of health snacks The collection of targeted nutrition products
includes dietary supplements which contain‘ vitamins, minerals and natural ingredients that support total well- being and long term good health The energy, sport & fitness category includes energy and isotonic drink to support a healthy active lifestyle Outer Nutrition products include skin cleansers, moisturizers and lotions with antioxidants, as well as anti-aging products These product development efforts are reviewed by prominent doctors and world-renowned scientists who are Herbalife Nutrition Advisory Board with more than 20 members coming from 17 countries such as Louis lgnarro, Ph.D., and Nobel Laureate in
Medicine; David Heber, M.D., Ph.D., Professor of Medicine and Public Health at the UCLA School of Medicine With this cooperation, Herbalife is the first and
unique global Corporation has Nobelist in board of top management of Herbalife Institution of Nutrition
Products of Herbalife are researched and developed in under strict processing for quality assurance from inputting elements to producing Herbalife believe the quality of products and the effectiveness of distribution network,
coupled with geographic expansion, have been the primary reasons for Herbalife
success throughout 30-year operating history
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Herbalife has more opportunity today than ever before and the Herbalife branding is a better-positioned in every aspect of its business than at any time in Herbalife’s history The company has created a unique commercial, nutritional, and social environment for distributors to reach customers, new distributors and to create loyalty Let’s be known and recognized for being one of the best global company, for being easy to do business with, for customer service and satisfaction, Herbalife worldwide is continuing to educate and enforce its ethical standards for behavior with employees and distributors, especially at new market opening
Herbalife is the strongest direct selling company in the health industry It completely dominates the health, nutrition and weight loss niche The latest numbers show Herbalife is crushing its competitors and by all accounts taking
the stock markets by storm with its hard to believe positive financial numbers In a down economy, many businesses are laying off and seeing lower than expected
sales, Herbalife has grown in USA 18% Herbalife Distributors seem to embrace a "get to it” work Ethics and excel in an economy where main stream working Americans are being laid off
The value of average monthly purchase of Herbalife product by sales
leaders, who purchase most of Herbalife products for resale to other distributors and consumers, has remained relatively constant over time The table below reflects the number of sales leaders will normally be higher than it is as of re-
qualification period because sale leaders who do not re-qualify during the relevant
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Currently, Herbalife is on the high road and forever will remain there Its business opportunity will continue to be ethical, rewarding and successful, and recognized externally as such In order to preserve distributorships for _ generations, the company has a responsibility to fairly enforce rules and regulations to maintain its level playing field but always extend the helping hand before it brings down the fist Distributor Ethics and the protection of the ‘Golden Goose’ will evolve and continue to ensure Herbalife is responsive, smart and fair with enforcement of its rules of the road Herbalife will improve its business rules _ to make sure it is responsive to the times when necessary all over the world
On November 2, 2009 the company officially opened Vietnam as the next Asia market This is a country of 90 million pepulations who are entrepreneurial and eager to do part -time work as well as participate in a company like Herbalife that gives the gift of good nutrition and financial opportunity Together with other Herbalife market in the world, Herbalife Vietnam continues to take account the ethical issues to protect business and Vietnamese independent Distributors
3.2 Company Name and Business Model
Herbalife Vietnam Single Member Limited Liability Company is a newly incorporated company in Vietnam with hundred percent (100%) owned by Hérbalife International of America as Ultimate Holding (HIAI) with the head office located in Los Angeles — United State and Asia Pacific - China Regional office
located in Hong Kong The first retail outlet is located at 224 Pasteur Street, Ward
6, District 3, Ho Chi Minh City of Vietnam
Direct Selling is quite new business Model in Vietnam where it is a highly regulated country and has specific guidelines for Multi Level Sales activities The Vietnamese Government paid greater attention to the problems associated _ with direct selling, with severe consequences for companies failing to adhere to the rules Therefore, most of Direct Selling business functions are limited under Vietnam multi level marketing laws, particularly is decree 110 Also, there is still
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have limitation regarding education and understanding about Direct Selling concepts, especially Direct Selling Rules and Conduct Herbalife implemented a
precedent during its official opening in Vietnam had been heavily scrutinized by
the local authority Herbalife Vietnam allowed launching the business with the help
of independent Distributor to understand the significant meaning of direct selling activities With Herbalife, Vietnam market is one of the five main markets to have Distributor Ethics team is deeply paying attention in training and improving the Ethics compliances
Herbalife Vietnam Rules of Conduct & Distributor Policies were
established to protect the business of Distributors and Herbalife Vietnam, to represent the code of Ethics by which all Herbalife Vietnam Distributors must operate, withstand regulatory, increasing confidence of Investors, Consumers and own Distributors Ethics and distributors are also the core of Herbalife Vietnam business Independent distributor can find this information from Herbalife Vietnam Independent Business Owner four (IBO4) Independent Business Owner is a
business partner of Herbalife who is authorized to market and distribute products and services available from Herbalife Vietnam
As part of an effort to continue this achievement and protect Independent Distributor long term and stable business, Herbalife Vietnam has been developing the Distributor Ethics training in local events
3.3 Company activities
The main Herbalife Vietnam business activities are import and distribution
(wholesale and retails) of health goods included weight management, nutritional
and personal care products that are manufactured by the Herbalife Group The Company imports goods and then resells it to local independent distributors
These distributors sell the products at the prices set by the company
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Every day, Herbalife Vietnam business is making a positive impact on hundreds of people nationwide The company is bringing unique, high-quality products and services to the Vietnam market
Direct Selling was founded on helping others and today the tradition continues Research indicates that being social responsibility can help attract and
retain a quality work force as well as improve financial performance, access to
capital and brand image enhancement
On anniversary of the first year operation November 28, 2010, Herbalife Vietnam officially opened the HFF with more than VND 500 Million raised from
auction sales of Herbalife 1° anniversary gifts and donation from TAB team members This fund will transfer to children who are coming from poor families
Furthermore, the company can be added into Vietnam Direct Selling
industry profile, build a positive association in the public’s mind, and effectively brand Direct Selling companies as ones who think about more than profit
3.4 Business operation *
Nowadays consumer trends providing additional food or nutritious product
for physical health and stabilization In developing country, these products are
gradually popular and consider as intelligent-consuming Vietnam is not an
exception, therefore, Herbalife a global corporation in researching, implementing and distributing additionally nutritious foods are successful at this market
With one year operation in Vietnam, Herbalife has contributed more than
VND forty (40) billion dongs to Vietnam Government state budget and provided jobs with high income for more than twenty two (22) thousand independent distributors that other foreign companies could not do Specially, products of
Herbalife have become familiar with Vietnamese consumers
“In next five (5) years with rapid growth in Vietnamese market, Herbalife
hope introducing more essential products to local consumers Herbalife would like
to contribute a small part to improve health so much as safety foods for Vietnamese and to help Vietnamese people having healthy, fresh mind to enjoy life and looking for good opportunity in job-seeking” (PhD Doctor Vasilios Frankos- the vice president of Herbalife, said in recently Vietnamese-visiting)
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4 CHAPTER 04 ETHICS COMPLIANCE SITUATION ANALYSIS
4.1 Herbalife code of Ethics
The Herbalife Rules of Conduct are in place to protect the business for all Distributors and breaking theses rules are considered extremely serious It can be a significant devastation which impacts on the business of all Distributors as well as negative influence the opinion of regulators, the media or the public about Herbalife, its products and Distributors Furthermore, it is significantly effective to Herbalife business operation and its profit not only in any national but global prospect
1 Where Are The Distributor Policies?
The Rules of Conduct can be found in Distributor Career Book of Herbalife in the International Business Pack (IBP), online at MyHerbalife.com or obtained through Distributor Relations
In addition to the Career Book, Herbalife encourages Independent Distributors to refer to the following policy documents:
e Distributor Agreement e TAB Team Agreement
« 10 Retail Customers on 70% Rule Form e Herbalife approved literature
Herbalife’s Rules of Conduct & Distributor Policies reflect a strong commitment to stand behind the business opportunity and the products The “multi-level business model” requires Rules that provide Distributor with the necessary guardrails to ethically develop and conduct distributors business activities
As an independent business person, it is responsibility to stay informality of understand and comply with Herbalife’s Rules
The five philosophies that follow are the basis for many of the Rules
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=< cac am n _—=—-—~*x=_ Pe SS SS ¬" de = fa > ⁄ (Advertising and Branding Nu ` > Ss ; —.—=.—ˆ Ể — Protection for those interestedin - products / business opportunity, Herbalife &the „ Industry v
Figure 6 Conditions and policies of Herbalife 2 How does Herbalife act ethically?
Individuals must be allowed the time necessary to learn the business and determine at own pace what distributors deem as reasonable to develop a sound business and achieve anticipated financial goals Always provide the honest information about the business opportunity, products, sales methods, and inventory repurchases, terms of guarantee, payment methods
For example: |
e No purchase requirements « No payment for information e No undesirable selling practices e No false and misleading information
No obligation to purchase product
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To protect the integrity of Herbalife’s Sales & Marketing Plan Distributors must certify each month ten (10) customers and sold seventy percent (70%) of
the inventory purchased that month
These Rules ensure Distributors are actively working the business by retailing products, and not merely making product purchases in an attempt to
advance in the Marketing plan
Herbalife’s enforcement of these Rules developed around the philosophy of repurchase, help the “Direct Sales” industry, Distributors, and Herbalife to maintain a good reputation
Many of Herbalife’s Rules are based upon local laws, or industry standards put forth by the Direct Selling Association, the primary trade association that represents the interests of the direct sales and multilevel marketing industries
Herbalife’s Rules restate or paraphrase these laws, and are drafted to embody and protect the same concepts, capturing the key restrictions or requirements to protect distributor business operations
For example Distributors must: e Abide by Local Laws
se Always provide Retail Receipts
e Always explain and uphold the Customer Refund Policy
« Comply with Herbalife’s export policy e Always provide directions for use
« Always use appropriate disclaimers when making claims and representations
While Herbalife endeavors to assist its Distributors through its Rules,
Herbalife is never responsible for distributor's actions as Independent
businesspersons
Ultimately, it is distributor sole and absolute responsibility to know and comply with all laws that pertain to distributor business
Having rules in place that promote sound business practices lays a good foundation for a healthy business, and sets an example for down-line Distributors to develop as strong and solid organizations
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Advertising through the use of a “brand” is one of the most important aspects of any business, as it communicates a company’s products and services visually through the use of a logo, website, packaging and promotional materials, etc Successful branding efforts allow a company to make differentiation from competitors
In order to maintain Herbalife reputation in the industry and to continue the growth and longevity, it is important for Herbalife Distributors to remember “Distributors are the brand” and when advertising Herbalife products or business opportunity, Distributors must maintain consistency with the applicable Rules to project and deliver the brand’s promise
Therefore, in an effort to protect its brand many Rules have been established For Example:
e Subject to certain restrictions, Distributors may use of Trade Names, trademarks and logos
¢ Distributors may not associate Herbalife Business, with other organizations e Distributors may create personal websites provided within the confines of
the Rules
The “direct selling business model” is all about personal relationships Therefore, many of the Rules are in place to protect the relationships, a Sponsor developed to recruit, train and build organization For Example:
e Distributors may only sign an Application for Distributorship that must fulfill 12 months of inactivity prior to signing an application under a new Sponsor This required period of inactivity, protects the Sponsor's recruitment efforts e Prohibiting the purchase and sale of products to Distributors that are in
another line (cross-line) protects the sponsor's sales efforts
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35
Without these protections the “direct selling business model” would be unfavorable, because there would be little interest for a Sponsor to devote the time necessary to develop sound organizations through training
4.1.1 DEC structure
In today’s nationwide workplace, distributors will encounter unfamiliar situations where the right thing to do is not always clear Distributors may find references from Herbalife Code of Business Ethics in IBO four (4) or in Herbalife website or online training This Code of Business Ethics contains a broad overview and several scenarios that can help guide Distributor decision to avoid the violation This Code is not all-inclusive; there will be times that distributors find in situations that are not answered from the Distributor rules of conducts, DEC team of Herbalife has willing to supports