Socialization Communication,Organizational Citizenship Behaviors,and Sales in a Multilevel Marketing Organization

Multilevel marketing organizations (MLMs) are a rapidly growing but often controversial marketing organizational type boasting nearly 10 million members and over $20 billion in annual sales. The success of the MLM business model rests largely on forming cooperative social networks of member distributors. Socialization of new members to the norms and values of the MLM plays a key role in eliciting that cooperative behavior. However, the member cooperation that produces successful networks may inhibit the financial performance of individual distributors. Drawing upon social identity theory, this study investigates whether communication of the MLM’s behavioral norms during the socialization of members affects the degree to which members cooperate with each other and how that cooperation affects the sales performance of individual distributorships. The results of a survey of MLM members suggest that both effects occur. Socialization communication positively affects member cooperation, which produces direct and indirect effects on sales. Cooperation, measured by several organizational citizenship behaviors, exerts a positive direct effect on sales, but a negative indirect effect when the relationship is mediated by group cohesion.