Network Marketing: Precarious Labour and Parasite Organisations

Abstract

People often compare direct sales organizations (DSOs), such as Herbalife, Amway, Mary Kay, etc., with religious sects, but it would appear to be more fruitful to compare them with ‘new enterprises’, an approach described by L. Boltanski and E. Chiapello or A. Gorz,. The activity of distributors is characterized by fluid boundaries between work and non-work, the absence of social guarantees or demands to invest in the «whole personality» of the person. It makes multilevel marketing similar to new forms of labour activity, while the organization of direct sales resembles “the third spirit of capitalism.” Many researchers who have studied recent economic and social transformations, have mentioned that modern organizations try to shirk a part of their functions and reduce expenses on workers, and DSOs are among those following this trend. This article shows, how DSOs ‘externalize’ the functions of recruitment, socialization, education and control, how it is possible and how it influences distributors.

This article is based on data gathered from the analysis of documents, over fifty in-depth interviews and participant-observation conducted by the author between 2003 and 2013 in different DSOs in Moscow and St-Petersburg.

DSOs are opposed to ‘total’ (E. Goffman) or ‘greedy’ (L. Coser) institutions, which try to split separate from the external world, because they, on the contrary, aspire to embed in it and make the social serve economic goals. As a result of the type of employment offered by DSOs, they have become dependent on the social context. As such, rather than exploiting the people inside the firm, they target people outside it. DSOs do not invent their own values; they use those that are more popular and supported by the society. The lack of limitations to initial entry helps DSOs to pass functions of recruitment and education on to distributors, who must create a community to do this, which in turn allows DSOs to co-opt individuals with different social trajectories. Finally, DSOs leech on distributors social networks and make ties to the whole personality of the distributor (his body, physical appearance, social competences, etc.), which become another source of economic profit. It is in this manner that DSOs act as organizations-parasites.