Term Paper on Dee beers and their Unethical practises
Fanshawe College
International Business Management
Course- Ethics, Social Responsibility and Sustainability
Professor- Nimish Shukla
Date- 22 November 2013
By-Abbas Merchant
Student I.D no- 0693196
Email Address - abbasmerchant90@gmail.com
190 Fleming Drive, Unit no. 3
Postal code- N5V B58
Introduction
De Beers is a family of companies that dominate the diamond trade and every category of industrial diamond mining. Mining takes place in Botswana, Namibia, South Africa, Sierra Leon and Canada. Today, over two thirds of the world’s diamonds come from one company, De Beers. Cecil Rhodes the founder of De Beers created a monopoly in the diamond trade by forming a cartel, the London Diamond Syndicate, who become the biggest diamond traders in the world. A cartel is formed when there is an agreement between the producers who offer the same resource or product to fix minimum price levels for that product. The main purpose of the cartels were to artificially control and limit supply, fix prices, limit competition and dominate the diamond market all over the world. The company did achieve its goals and is notably the most powerful mining company, not because of their superior product but because of their monopolistic values. According to Stanwick and Stanwick (2009) the company has shown many characteristic traits of ethical egoism which promotes that each person should promote behaviour that is beneficial to one’s own interest and the net output achieved would always be positive. However the outcome of this cartel was negative as it affected the natural market forces and created unfair competition. The sale of a product or service through a cartel is highly unfair, as the customers suffer because of artificial increase in prices. De Beers also crossed the ethical boundaries by the use of Deceitful Advertising. If the prices of diamonds are fixed artificially with an unfair price tagged to
International Business Management
Course- Ethics, Social Responsibility and Sustainability
Professor- Nimish Shukla
Date- 22 November 2013
By-Abbas Merchant
Student I.D no- 0693196
Email Address - abbasmerchant90@gmail.com
190 Fleming Drive, Unit no. 3
Postal code- N5V B58
Introduction
De Beers is a family of companies that dominate the diamond trade and every category of industrial diamond mining. Mining takes place in Botswana, Namibia, South Africa, Sierra Leon and Canada. Today, over two thirds of the world’s diamonds come from one company, De Beers. Cecil Rhodes the founder of De Beers created a monopoly in the diamond trade by forming a cartel, the London Diamond Syndicate, who become the biggest diamond traders in the world. A cartel is formed when there is an agreement between the producers who offer the same resource or product to fix minimum price levels for that product. The main purpose of the cartels were to artificially control and limit supply, fix prices, limit competition and dominate the diamond market all over the world. The company did achieve its goals and is notably the most powerful mining company, not because of their superior product but because of their monopolistic values. According to Stanwick and Stanwick (2009) the company has shown many characteristic traits of ethical egoism which promotes that each person should promote behaviour that is beneficial to one’s own interest and the net output achieved would always be positive. However the outcome of this cartel was negative as it affected the natural market forces and created unfair competition. The sale of a product or service through a cartel is highly unfair, as the customers suffer because of artificial increase in prices. De Beers also crossed the ethical boundaries by the use of Deceitful Advertising. If the prices of diamonds are fixed artificially with an unfair price tagged to
Bibliography: Ethics. (2010). Retrieved from Debeersgroup: www.debeersgroup.com/ImageVaultFiles/id_646/cf_5/RTS10_Ethics_June_2011.PDF Institute, S. A. (2005). SOUTH AFRICA 'S DE BEERS: THE MOST UNETHICAL CORPORATION IN THE WORLD. Retrieved from ewtn: http://www.ewtn.com/library/business/antdebrs.htm Johnson, E. (2002, December 2). Blood Diamonds: The Conflict in Sierra Leone. Retrieved from Stanford: http://www.stanford.edu/class/e297a/Conflict%20in%20Sierra%20Leone.htm Soggot, M. (2002, November 8). Conflict diamonds are forever. Retrieved from icij: http://www.icij.org/project/making-killing/conflict-diamonds-are-forever Stanwick, P. A. (2011, November 4). De Beers and the Diamond Industry: Squeezing Blood Out of a Precious Stone. Retrieved from Proquest: http://search.proquest.com.ezpxy.fanshawec.ca/docview/914721891 Unethical Values Within De Beers Consolidated Mines Limited. (n.d.). Retrieved from http://www.ukessays.com/essays/economics/unethical-values-within-de-beers-consolidated-mines-limited-economics-essay.php