Research Korner: Ethics Grid

Essay Instructions :Case Study – De Beers and Diamonds Assignment Questions

Diploma in Strategic Sales (Key Account/Sales Management) Unit 2 Case Study – De Beers and Diamonds READ THE FOLLOWING CASE STUDY AND THEN ANSWER THE QUESTIONS ON PAGES 4 AND 5 IN THE FORM OF A REPORT NB only Question 1 refers to the Case Study De Beers, the diamond giant, has stockpiled the world's surplus stones in its London vaults since the 1930s, but the third millennium has seen De Beers break with tradition and reverse its policy of being the buyer and seller of last resort; rather than lowering the price of diamonds to shift stock when times were tough, De Beers would hold onto it until demand increased again. De Beers decided to rely on aggressive marketing and the active selling of their diamond supply to ensure that it was the industry's "preferred supplier." Not long afterwards, De Beers received the sort of publicity its chairman Nicky Oppenheimer could only have dreamt of, indeed, Nicky Oppenheimer is reputed to have said: "If only we could do this once every six months. We could do away with the advertising department altogether" (Cockburn, 2002, p. 12) The event to which Oppenheimer referred happened on November 2000 when what would have been the biggest burglary in history was attempted in London. Police intercepted a gang who planned to smash their way into the Millennium Dome and steal diamonds worth £200 million that De Beers had put on display there. The gang had intended to escape in a speedboat on the Thames. The press compared the plot with scenes from a James Bond film. Meanwhile the failed robbery could be seen as terrific publicity for the Dome, which had struggled to achieve the hopes held for it by Tony Blair’s Labour Government. (http://tinyurl.co.uk/dtev) De Beers' change of strategy was the result of the position the firm found itself in at the start of the 21st century. Techniques of producing synthetic diamonds were improving and it became feasible to mass-produce diamonds of gem stone quality then that would be a new threat to the stability of the cartel. Much more importantly, the flood of illicit diamonds on to the market in the wake of the break-up of the Soviet Union caused the Central Selling Organisation to be significantly weakened in the 1990s by doubts about the future of the agreement between De Beers and Russian producers. The cartel had survived similar threats in the past but this time there were complicating factors. The most important threat to the future of the industry was the issue of conflict diamonds. In unspoken contrast to those blood or conflict diamonds coming from the war-torn jungles of Africa, diamonds from Canada's Ekati mine were marketed as coming ‘from a land as pure as the driven snow’. De Beers, by redirecting its efforts into marketing, could assuage the consciences of individual purchasers, as could developments in tracing the origins of diamonds (http://tinyurl.co.uk/r01f). Unit2CaseAndQs06 Page 1 of 5 ISMM©2006 Adapted with the kind permission of Peter Davies from: www.ex.ac.uk/~RDavies/arian/scandals/diamonds.html Accessed 28th August 2005 Diploma in Strategic Sales (Key Account/Sales Management) Up until now synthetic diamonds have been small and only useful for industrial purposes but in 2003 two firms – Gemesis, a Florida-based firm using Russian technology, and Apollo, a firm based in Boston, claimed that they could ‘produce diamonds of gem-stone quality’ (http://tinyurl.co.uk/zfh6). Clearly, if such diamonds can be produced at a competitive price then De Beers' monopoly would be seriously threatened. Diamond Prices – Scandalous? "... there are lots of interested parties who don't want lower prices… Apart from their romantic connotations, they are supposed to be an investment for life, the value of which might rise but never fall. Banks who finance diamond mines want to be sure that their loans will be repaid. Jewellers with large stocks want to be sure they hold their value." "Everyone who owns diamonds would suffer and there are enough hidden hoarders of diamonds from the cartel to everyone who want to have a secret and mobile source of wealth and security. The hoard of secret diamonds is vast, worth billions of dollars. A fall in the value of diamonds would be catastrophic." (Davies, 1996, p.18-19) Diamonds Are A Girl's Best Friend Individuals buying jewellery are unlikely to regard the fact that the market for gemstones has been dominated by a cartel as scandalous. (Industrial diamonds are a different matter). After all, nobody buying a diamond engagement ring would want to be regarded as a pinchpenny! Diamonds are appreciated because they are expensive as the song Diamonds Are A Girl's Best Friends, written by J. Style and made famous by Marilyn Monroe in Gentlemen Prefer Blonds, and more recently by Nicole Kidman in Moulin Rouge, demonstrates. Bibliography Cockburn, A., (2002) Diamonds: the real story. National Geographic, vol. 201, no.3, March 2002, p. 2-35. Davies, L., (1996) Wilderness of Mirrors London: Orion http://tinyurl.co.uk/dtev Accessed August 2005 http://tinyurl.co.uk/r01f Accessed August 2005 http://tinyurl.co.uk/zfh6 Accessed August 2005 Unit2CaseAndQs06 Page 2 of 5 ISMM©2006 Adapted with the kind permission of Peter Davies from: www.ex.ac.uk/~RDavies/arian/scandals/diamonds.html Accessed 28th August 2005 Diploma in Strategic Sales (Key Account/Sales Management) Unit 2 – Case Study – De Beers and Diamonds GENERAL INSTRUCTIONS • This assignment must be word-processed in the form of a report of approximately 3000 words excluding bibliography and appendices. (4 marks) • A good standard of business English is expected, clearly communicating concepts in a logical manner with well-reasoned arguments. (3 marks) • Harvard-referenced in text, supporting source list (3 marks) • Ensure that the parts of the report are well-presented and clearly labelled with the question numbers. A table of contents, discussion through the questions posed, conclusion, recommendations and a bibliography should be included, brief appendices may be used only if referred to in the report. (3 marks) • Word count 3000 – if word count exceeds 3,300 no marks awarded (3 marks) Candidates are allowed 4 weeks to complete this assignment. You should fill in the date you were initially given the assignment below and fill in the completion date on the cover sheet (Page 5 of this assignment). On completion please detach the cover sheet and attach it firmly to your eport. r QUESTIONS: Answer all three of the following questions and give recommendations for the future. For Question 1 relate your answers to the case study and give recommendations for the future. nswers for Questions 2 and 3 are to be based on the organisation for which you work. A Question 1   Using recognised theories and models identify and critically evaluate the ethical issues inherent in the De Beers case study. a. Identify ethical issues and give a clear definition of ethics (11 marks) b. Eic to cse thal theory (eg Kohlberg, Kant or similar) and applicationa (9 marks) Use of ethics grid or similar to demonstrate argument i. (3 marks) the 5Ps of ethical powe (or similar) ii. Demonstrate the interrelationship betweenr(3 marks) iii. Use of ethics check questions’ (or similar) (2 marks) Question 2 As a manager, you need to be aware of current legislative requirements in your market and organisation. Research and identify legislative requirements with due consideration to health and safety and any voluntary codes in place; what would be the consequences of breaches in the legislative requirements identified?   a. Identify and discuss current legislative requirements for own organisation (7 marks)

Essay Instructions :Case Study – De Beers and Diamonds Assignment Questions

Diploma in Strategic Sales (Key Account/Sales Management) Unit 2 Case Study – De Beers and Diamonds READ THE FOLLOWING CASE STUDY AND T...