Maryn Jensen

Collin Hull
English 1010
12/1/2014
Is the network-marketing organization platform effective in achieving its goals?
Hicken, Melanie. The Money behind Herbalife, Mary Kay and Others. CNN (2013): Web. 22
Oct. 2014.
Summary:
In her article, Melanie Hicken presents facts and evidence that show the numbers behind multilevel marketing companies. She does not aim to persuade her audience one way or the other; she
just gives the statistics backing these companies. She begins with citing a recent attack on
Herbalife, a company that enlists independent salespeople to market a weight-loss drug. She
states that Bill Ackman (hedge fund manager) called Herbalife a pyramid scheme. Although
Herbalife retaliated, claiming it is not a pyramid company, according to Hicken, this brought
Herbalife (and other MLM companies) into the public eye. She goes on to explain how these
companies work. She talks about the difference between a regular MLM platform and a pyramid
scheme, citing the Federal Trade Commissions definition of the two. She explains the process of
independent salespeople paying an initial starter fee, and creating networks of individual
salespeople underneath them. She discusses the rewards for high performance in these
companies. After going through the mechanisms of MLM companies, she gives research on
whether or not they actually work as a viable source of income. She references statistics given on
average annual incomes of various MLM companies. She concludes with sources saying that the
multi-level marketing model is unsustainable.

Assess:
Melanie Hicken is a personal finance reporter for CNN who has written several pieces about
money management and finance. She has experience and knowledge in this field. She gives
many facts and statistics to support her point, so it is fairly reliable in that aspect. Her examples
are relatable, which adds to the credibility of the piece. The sources she cites are people or
organizations who have expertise in the subject, so that makes her article more reliable.
However, it seems a little bit biased against MLM companies, and ultimately persuades against

them. This source could be used for factual information but it needs to be examined with the bias
in mind. The only other weakness it has is its length; it is just over 2 pages, so it doesnt give
much room to go into greater detail. Nevertheless, considering the length, this source is overall
fairly reliable.

Reflect:
This source is helpful to my research because it gives fairly current statistics about several MLM
companies, and cites many quotations from experts in the field. These expert opinions are
effective in extending my research, because they are very reliable. It gives many great examples
that people can understand. It is also helpful because it gives an opinion on the subject from
somebody who is an expert in finance, which is a great perspective to have on the topic. It packs
many facts into a small article, so it will be primarily useful for citing quick facts or figures.

Gabbay, Shaul, and Roger Th. A. J. Leenders. Creating Trust Through Narrative Strategy.
Rationality & Society 15.4 (2003): 509-539. Academic Search Premier. Web. 22 Oct.
2014.
Summary:
Shaul Gabbay and Roger Leenders discuss the components of trust and belief, and how they play
into multi-level marketing companies. They begin with explaining the rationality of trust. The
trust relationship, they say, has three parties: the trustor, the trustee, and the object of trust.
They go on to discuss the manipulation of beliefs, which, they say, is a frequent tactic used in
multi-level marketing. According to Gabbay and Leenders, there are three common ways to
manipulate beliefs that involve changing ones perception of costs (vs. benefits). First, they say,
you can add favorable information to the equation. They give the example of recruiters
discussing the improvements in quality of life that their product will give you. The second way
they say you can manipulate beliefs is to make negative information seem less relevant, and their
third tactic is to redefine negative information such that it becomes positive information. They go
on to explain how multi-level marketing works, and how levels of trust play into recruiting
salespeople for these positions. Next, they discuss the role of trust in selling the product. After
giving extensive information on each component, they talk about rationalizing trust. They say
this involves the concept of trust in two ways: establishing trust in the potential recruit, and re-

establishing trust held by the actual independent salesperson. They conclude by restating that
trust and belief both have a significant role in MLM companies.

Assess:
This is a reliable source because it comes from an expert and has been peer-reviewed. Shaul
Gabbay has a PhD in Sociology and has written extensively on topics relating to his degree.
Roger Leenders is a professor at Tillburg University. The piece does give an extensive
sociological background of MLM, which the authors have ample experience in, so that aspect of
it is quite reliable. It goes into great length, which gives room for a closer examination of the
subject. It cites several reliable sources, which further bolsters the credibility.

Reflect:
This source will be relatively helpful to my research. It does go into great detail, and has
extensive research behind it, so that is useful. However, it isnt specifically on the success of
MLM companies or platforms; it more so goes into the sociology behind them. Neither of the
authors have specific expertise in multi-level marketing, so that needs to be taken into
consideration. This is still somewhat helpful; it will make my research more effective if I
understand and apply the sociological principles that are at play in multi-level marketing. It also
gives an interesting, unique opinion on the subject, which will be useful in providing multiple
perspectives.

Bhattacharya, Patralekha, and Krishna Kumar Mehta[*]. "Socialization In Network Marketing

Organizations: Is It Cult Behavior?."Journal Of Socio-Economics 29.4 (2000):
361. Academic Search Premier. Web. 24 Oct. 2014.
Summary:
In this article, Bhattacharya and Mehta explain controversies surrounding network-marketing
organizations, contesting critics accusation of NMO cult behavior. They begin with
explaining what an network-marketing organization is: sales representatives recruiting others
into their network. They go on to discuss how people are astonished with the rapid growth and
success of many of these NMOs. According to them, this has led many to attack NMOs as
cults. To disprove this cult theory, they first define NMOs, then discuss the fundamentals of

how these companies are structured. They logically and mathematically analyze the NMO
model, evaluating components such as company activity, social activity, production rates, and
social effort. After explaining this, they show you that the reason for the cult accusations comes
directly from the NMO model. They say that this model by nature creates tight-knit, sometimes
exclusive groups, which mimics cult behavior. They conclude that NMOs may be evolving into
tighter, social groups.

Assess:
This article primarily revolves around mathematical analysis and proof. Bhattacharya is the
founder and chief executive of an analytical organization, which gives her knowledge and
background in this area, so this source is reliable. It cites many other valid sources, which
bolsters its own credibility. The only real weakness it has is its length. It is only about 12 pages
of information, which does not give room for them to fully explain the complex ideas that they
have presented.

Reflect:
This source can help my research because it gives opposition to the traditional NMOs/MLMs
are bad view. It provides mathematical facts that support its claims, and having numerical proof
is useful. Although it doesnt give an opinion, solution, or answer to the issue, it is a great aid
in further explaining the topic. Overall, I will probably just use this article to pull small pieces of
evidence from.