LEADERSHIP STYLES IN MULTI-LEVEL MARKETING: A CONCEPTUAL MODEL FOR BUSINESS SUSTAINABILITY AND NETWORK RETENTION IN MALAYSIA
DOI:
https://doi.org/10.35631/AIJBES.828036Keywords:
Business Sustainability, Contingency Theory, Leader-Member Exchange Theory, Leadership Styles, Malaysia, Multi-Level Marketing, Resource-Based View TheoryAbstract
The Multi-Level Marketing (MLM) industry plays an important role to Malaysia economy, but yet faced some challenges likewise instability of MLM network and high turnover rate among distributors. Due to the lack of formal employment contracts among dispersed distributors, traditional command-and-control leadership styles are ineffective, necessitating a shift towards a people-centric Leadership 5.0 model. This paper proposes a comprehensive theoretical framework to explain how different leadership styles influence the long-term sustainability of networks and distributor retention. By integrating the Resource-Based View (RBV), Leader-Member Exchange Theory (LMX), and Fiedler’s contingency theory, this paper categorizes ten major leadership styles into a structured classification system (relational, developmental, and directional), built within an Input-Process-Output (IPO) framework. This paper presents five testable hypothesiss, demonstrating that while directional leadership styles can improve short-term sales metrics, the long-term sustainability of networks highly depends on high-quality LMX relationships, which act as mediators. Furthermore, the Resource-Based Value (RBV) perspective suggests that leader’s relational assets and ethics, including the Islamic leadership dimension are scarce, inimitable, and irreplaceable resources that buffer networks against market shocks, while pay equity and product quality serve as situational moderating factors. While future quantitative validation using structural equation modelling (SEM) is needed, this model provides a strategic roadmap for MLM executives to restructure training around relationship coaching and offers a clear compliance benchmark for regulators such as the Ministry of Domestic Trade and Cost of Living (KPDN) to distinguish legitimate MLM networks from predatory scams.
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