Analysing The Psychographic And Structural Determinants Of Success And Ethical Concerns In The Multi-Level Marketing Industry In Kerala

Abstract

Background: The Multi-Level Marketing (MLM) industry in India has witnessed exponential growth, particularly in the state of Kerala, a region characterized by high literacy, financial aspiration, and significant youth unemployment. Despite its penetration, the industry is mired in controversy regarding its ethical foundations, sustainability, and actual economic benefits for participants. This study aims to develop and test a comprehensive model to identify the key psychographic and structural factors influencing an individual's perceived success within MLM organizations in Kerala and to measure the latent construct of ethical concerns associated with the business model. A cross-sectional research design was employed, collecting data from 412 active MLM participants across three major districts in Kerala (Ernakulam, Thiruvananthapuram, Kozhikode) using a structured questionnaire. The data were analyzed using Structural Equation Modelling (AMOS v.28) to test the hypothesized relationships between constructs: Financial Motivation, Social Influence, Entrepreneurial Self-Efficacy, Training & Support, Perceived Success, and Ethical Concerns. The model demonstrated a good fit (CFI = .942, RMSEA = .056). The analysis revealed that Entrepreneurial Self-Efficacy (β = 0.38, p < .001) and Training & Support (β = 0.32, p < .001) were the strongest direct predictors of Perceived Success. While Financial Motivation was a significant driver for enrolment, its direct effect on success was mediated by self-efficacy. A significant negative correlation was found between Perceived Success and Ethical Concerns (r = -0.45, p < .01). The model explains 58% of the variance in Perceived Success. The study concludes that in the unique socio-cultural context of Kerala, MLM success is less about the promise of quick money and more about the development of entrepreneurial capabilities and robust organizational support. However, the high level of ethical concerns presents a significant risk to the industry's long-term viability. Regulatory bodies and companies must prioritize ethical transparency and participant skill development over aggressive recruitment.