De Beers Consolidated Mines Small is a South African-based mining and trading company, which handles the movement of diamonds in america marketplace (Aurora, 2008). De Beers distributes diamonds, ships them, and distributes them to significant intermediaries, wholesalers and vendors (Atkinson, 2000).
The first unethical carry out discovered within the De Beers example is unfair trading and competition, especially in the forming of cartels. Unfair competition is unethical in terms of the Teleological Framework, as it targets the negative consequence of the do of a person or company as a juristic person, which forms the basis of self-interest (ethical egoism), therefore going from the privileges of others (Stanwick & Stanwick, 2009).
This section will briefly make clear the De Beers example of this form of unethical carry out, and appearance at ways that De Beers could redeem their reputation. We will commence with the definition of a cartel.
A cartel is a group of people, organisations, or companies that cooperate alongside one another to control development, marketing, and costs of a product (Smith, 2003). Cartels are an example of unethical carry out and are thus explicitly illegitimate under antitrust regulations in many countries of the world, as they eliminate reasonable market competition. A cartel's biggest result is driving the price of a item up and well beyond what's considered an acceptable and reasonable market value; this triggers an artificially inflated price. Since these organisations control the level of production, they are able to decide what is available for sale, and consequently they can manipulate the market by lowering development, raising prices, and rendering it difficult to obtain commodities. This may be bad for other organisations and consumers. Other organisations cannot remain competitive competitively with these cartels, and consumers think it is expensive to acquire these commodities (Smith, 2003). Cartels are a basis for self-interest alternatively than for social-interest: those who reap the benefits of cartels will be the associates of the cartel itself, and therefore the consumers - and society most importantly - miss out (Smith, 2003).
De Beers is made up of a group of producers; namely Barnato Brothers, Anglo American, CDM, JCI and other consolidated mines. These suppliers were together seen as a cartel (Atkinson, 2000), which was formed as several companies whose goals and targets were to fix prices, control and limit resource, limit competition and dominate the market for diamonds across the world (Aurora, 2008).
Over the years, De Beers has achieved these goals, and is also arguably the most effective mining company, not because of superior products, but because of monopolistic ideals. The De Beers diamonds cartel currently has hundreds of subsidiaries, which allow them to maintain a sizable market share (Algoe, 2009).
De Beers, using its goal of dominating the marketplace in order to maximise revenue and market ability, have displayed almost all of the characteristics of honest egoism, which helps bring about that all person should conduct behaviour in their own self-interest if the web effect is positive somewhat than negative (Stanwick, 2009). However, the web aftereffect of this cartel was negative alternatively than positive, as shown by the unfair market prices and the reduced competition referred to above.
The De Beers cartel is also unethical in conditions of the existentialism platform, which is dependant on the fact that the only one who can determine right from wrong is the person choosing (Stanwick, 2009). In this case, De Beers knew that their actions weren't only wrong, but outlawed, yet they still pursued this form of unethical behavior. This cartel-forming also violates the rule of utilitarianism, which can be involved with providing the greatest good for the best number of men and women (Stanwick, 2009). Since the cartel only benefitted a little volume of stakeholders, in that it set the marketplace prices of diamonds to their own gain, this theory is therefore violated (Antoninus, 2005).
De Beers may be reported to be against the liberty of enterprise, as they force possible opponents to follow the cartel directive and, often under financial or even physical risks, victimize their co-producers and suppliers (Antonius, 2005).
As Willem Landman and Khanyisa Nevhutalu of the Ethics Institute of South Africa have said, "Earnings follows an organization with a graphic of sound business ethics, and commercial governance will have better customer, vendor and regulatory relationships. " De Beers should think about ethics before considering any other factor, because it's important to know where these are going and what they are walking toward. Ethics should be embraced as a center adding factor to its success by acknowledging the following six steps: the role of trust, corporate and business reputation, investor self confidence, anticipations of ethically discerning consumers and buyers, ethics as a idea for unlocking individuals potential in organisations, and the prevalence of scam, problem and dishonesty (Vehicle Vuuren, 2002). They need to ensure that the organisation's decisions or activities constitute fairness, accountability, and responsibility towards its stakeholders. Fairness requires the managers treating other entities in a just manner. Accountability and responsibility says that all professionals should be accountable for their actions, that ought to be sensible and clear (Stanwick, 2009). De Beers should also apply the triple-bottom line principle and therefore the company should balance economical, communal and environmental performance (Vehicle Vuuren, 2002).
De Beers should give up the cartel and concentrate on more extreme marketing that will or would replace the gemstone trade's price-fixing traditions. Marketing will screen a fairer competitive market, and thus consumers will purchase products at the reasonable competitive selling price and the acceptable top quality. De Beers should work at building a bridge between egoism and utilitarianism in conditions of maximizing income for shareholders and provide the greatest best for all the stakeholders respectively. They are able to do that by offering quality products to consumers at affordable prices, thereby shopping for their own self-interests as well as the pursuits of others (Atkinson, 2000).
The second unethical behavior exhibited by De Beers is misrepresentation by means of falsifying the real meaning of an diamond in order to increase their earnings. This shows a deliberate goal to deceive as they stand to get an advantage out of this unethical behavior.
De Beers has efficiently pushed the idea that a gemstone is a sign of love, lot of money and impact (Qureshi, no date). De Beers have misled customers into buying gemstones with the theory that a diamonds is symbolic for love. For example, in 1947, their advanced advertising strategy led to the releasing of the tagline, "a diamonds is forever", which is, in truth, incorrect as gemstones can be tarnished, cracked or splintered (Edgerton, no night out). This simple, yet misleading brand was a great success, and is still in use. A few of De Beers' methods of advertising include going to schools to feed young girls false information about gemstones, and making certain well-known personalities are seen wearing the largest and most gleaming diamonds (Qureshi, no day). A few of these deceptive ideas are that the worthiness of the gemstone outweigh its cost, the size of the diamond symbolizes the level of another's love, and also to symbolise "forever" one should not resell diamond jewelry, but rather hands them right down to family, and that the only suitable gift that implies a proposal is a gemstone ring (Diamond Source, no time frame). Many problems have arisen credited to mining operations, such as blood vessels diamond jewelry and extreme working conditions, however, many consumers are still blinded by the "status" they obtain when using these diamonds.
One of the advertising expectations of De Beers is that there will be no deceptive advertising released to the general public by their advertising firm (De Beers Group, no time frame). "To keep and boost customer rely upon, and the trustworthiness of, the gem diamond industry, De Beers Band of companies are focused on combating dishonestly and fraud in all business ventures. Any do that looks for to deceive, mislead, cheat or delude the client including: any undeclared or misrepresented trade in cured Diamonds, complete or partial synthetics, or stimulants; any trade misrepresenting the color, clarity, caratage, slice and provenance of any Diamonds" (De Beers Group, no particular date: 8).
As due to De Beers' deceitful advertising, they can be no facing lawsuits in different countries. Despite the fact that De Beers declare that they are not guilty to do so, they chose to settle to prevent uncertainty and future legal action costs. The settlement deal is worth $295 million and an order is awaited by the US District Courtroom for the district of New Jersey. When you have been misled and bought diamonds immediately or indirectly up until March 31, 2006, you might claim for it (Diamond Course Action, 2011).
Examples of unethical behaviour have been illustrated by Stanwick & Stanwick. De Beers has forgotten a number of the principles. They didn't apply the transparency concept, as this basic principle expresses that employees should operate business in an honest and clear manner, and not make decisions with ulterior motives at heart. This is shown by De Beers' main focus on profits, and the lack of concern for their consumers. The dignity principle in addition has been breached, as shown by the worldwide misrepresentation that a diamonds is a position image, therefore not respecting the dignity of population at large. In conditions of the citizenship principle, employees and managers of De Beers aided the company in misleading modern culture, therefore these were not behaving as responsible citizens within the community (Stanwick & Stanwick, 2009).
De Beers had not been worried about the impact their business decisions would have on contemporary society, their actions weren't transparent and culture was unacquainted with their decisions and tactics, not witnessing the slogan as a marketing pitch but as a truthful affirmation. The business was also not bothered by the impact and results on population. Fairness was also not taken into account; it can be said that the consumers would not consider their actions fair if they were aware of their agenda, as shown by pending judge cases. Ethical responsibility is the expectation that modern culture has of the business. Society didn't expect such deceptive actions and behavior and did not see this incorrect marketing as a plot to increase revenue, but as a truthful slogan, and for that reason dropped for the plan of De Beverage (Stanwick & Stanwick, 2009).
Morality versus strategy asks whether it is more important with an excess profit or even to be morally right. If the company is principally profit-based, such as De Beers, they would not falter in behaving unethically if the computation has shown that this behavior could earn them more money, plus they would find no reason to change or enhance their behaviour (Gibson, 2007). De Beers was confronted with the question of if they must do the right thing and work ethically with the expectation that earnings will observe, or if profit should be set as the principal goal whatever moral mannerisms are overlooked. The ex - option is usually chosen when morality becomes a subordinate to strategy (Gibson, 2007). By De Beers choosing to disregard ethical behaviour, they got the chance of misled customers becoming ware of their unethical actions, resulting in falling income.
Virtue theory includes elements by which an organization should the stand by position in order to operate in the best interests of its stakeholders, namely integrity, respect, quality. In conditions of integrity, De Beers did not attempt to what is right, but instead focused on personal gain, therefore not sticking with the uppermost ethical standards. In terms of admiration, they didn't value the perceptions and expertise involved in order to merge with the best ideas and insights, as they had only one main goal in their business: profits. In terms of excellence, which is reaching a high quality result by frequent improvement and excellent implementation, De Beers trapped with their strategy, despite the fact that it was wrong to truly have a hefty income (Gibson, 2007).
De Beers displays a strong example of immoral management, shown by the fact that the company is profit-driven and has fundamentally no respect for ethical behaviours, so long as they keep large cash flow (Blakeremkus, 2010). We're able to also possibly say that they manage amorally, and therefore they don't factor ethics to their decisions and basically target their decisions on what will apply to their unique business techniques. Thus, if moral behaviours are best for the business enterprise, it will incorporate them, but if not, it will do what must be done. We are able to notify that moral management is not used within De Beers, as this calls for the situation when management shows high integrity in their business activities (Stanwick & Stanwick, 2009).
We can also look at De Beers in terms of Teleological Ideas, which are ideas that show the results of actions. Utilitarianism is a key principle included. This theory implies that if the result is good, then the action that it arrived is also good, and vice versa (Blakeremkus, 2010). If De Beers had been honest and wide open, they would have obtained a better final result. Since they weren't, an awful result is reflected in customers choosing to boycott De Beers because of the developing reputation for deceptive contemporary society. Whereas deontological theories are theories predicated on the rights and duties of people or groups, this was not really a theory utilized by De Beers as they acted unethically and created a false interpretation of diamonds so that they could earn a larger revenue (Stanwick, 2009).
Based on the talk above, our thoughts and opinions is that if De Beers have been genuine and forthcoming with their marketing of diamond jewelry, they would not be confronted with court instances and other negative outcomes today, as indicated by the utilitarianism process. If De Beers experienced shown integrity, and devotion to moral and ethical principles, they might have had a better relationship with population, and therefore retained up their sales due to a reliable reputation. This would be in series with the ethical principles detailed above.
Discrimination is defined as "unfair treatment of a person, racial group, minority, etc. ; action predicated on prejudice" (McLeod & Hanks, 1984).
The De Beers group website states that the business aims to recruit and develop employees from the countries in which De Beers is involved with and is also "dedicated to growing an equitable and empowered workforce where every individual is respected and supported irrespective of race, gender, era or disability" (The De Beers Group, 2008). Yet, regardless of the De Beers Group's promises for good treatment of its employees, there were situations of discrimination throughout the business's history, which discrimination still exists this day.
De Beers has been discriminating against its employees because the company was formed by Cecil Rhodes. Rhodes realised that the mines required a lot of cheap labour. Rhodes targeted the indegent South African blacks. To have the labour, Rhodes helped create many fees that required poor blacks to get employment, just so that they could pay these taxes. These workers could have were required to walk to the mines, and received bread and cool tea after doing work for hours (St. Antoninus Institute, 2005). As De Beers was founded in 1888, a period where racism was socially suitable, De Beers could say that that was then, and that they have since changed their views on prejudice of all varieties. During Apartheid, De Beers voiced their disgust and opposition to the politics plan, yet they shamelessly got advantage of the politics conditions to get inexpensive and compliant labour for the mines. In the meantime, opponents and smaller companies exited the South African market, in order showing their displeasure at the Apartheid system, or therefore of insolvency because of interpersonal unrest in the ranks of their employees. De Beers observed this as a home based business and bought out these smaller companies at an inexpensive price. At one point, De Beers possessed forty per cent of the companies detailed on the Johannesburg STOCK MARKET (St. Antoninus Institute, 2005). De Beers enriched itself through Apartheid, despite officially standing against the program.
The De Beers employees were always suspected by the business itself of stealing diamonds and then offering them on the black market to compensate for poor pay. This would cause a lower revenue than needed, and would not align with De Beers' perception in moral egoism and Friedman's stakeholder theory (St. Antoninus Institute).
De Beers provides impression so it supports aiding out those engaged and afflicted by the company, but it appears as though De Beers is convinced in Milton Friedman's Stakeholder Theory. Friedman assumed that the sole public responsibility a manager has is to optimise their resources in a way that enhances the amount of profitability of the business (Stanwick & Stanwick, 2009). Friedman thought that business executives should take part in acts of sociable responsibility in their own time and with their own personal money. If business executives use the business's resources for sociable responsibility, then your executives are actually stealing from the company. Friedman justified this by proclaiming that companies are not moral providers like folks are, and therefore don't have any moral work to modern culture (du Plessis, Prinsloo, and Rossouw, 2009: 131). De Beers will not seem to service that it compensates its workers hardly enough to survive, because to them that is cost-minimization, which leads to greater profits.
De Beers also seems to support honest egoism. Ethical egoism targets each individual's self-interest. It is based on the fact that each individual should act in a way to promote oneself if the net result will create positive results instead of negative results on balance (Stanwick & Stanwick, 2009). Whilst De Beers is behaving in their own self-interests, as mentioned in the cartels section, they aren't generating a standard positive result at the end of the day. Although De Beers has created jobs for the jobless and paid them, this is not their actual reason for using them. De Beers just needed visitors to mine the diamond jewelry that they sold for hundreds of thousands, whilst paying their employees the minimum wage and increasing their revenue.
Additionally, De Beers has not considered any ethical concepts, particularly the Dignity Basic principle and the Fairness Theory. The Dignity Rule is dependant on the belief that the dignity of all individuals must be respected. Protecting the dignity of individuals includes ensuring the human rights of health, security, and privateness. Furthermore, the Dignity Theory encourages the augmentation of individuals development, not only within the business, but also in contemporary society as a whole. The Dignity Concept involves making affirmative initiatives for those individuals who need help in the personal pursuits, and helps protect those who are vulnerable to unethical actions (Stanwick & Stanwick, 2009). The company was not considering individuals development in modern culture, as illustrated by the lack of healthy diet at work. Nothing was done to boost this diet or give workers the esteem they deserved.
The Fairness Rule is dependant on the belief that stakeholders who've a vested curiosity about the company should be cared for fairly. Stakeholders include any group which has a vested curiosity about the operations of the company. This consists of stockholders, customers, local areas and employees. One of these of fairness is procedural fairness, which deals with ensuring that celebrations interacting with the organization are treated rather from a anticipated process perspective. This would also include ensuring that employees would not experience retaliation, should they notify government representatives of any legal violations (Stanwick & Stanwick, 2009). The company has not cared for its employees reasonably or similarly. Although nothing has been said about just how higher management of De Beers were cured compared to miners, it doesn't give a full picture of the organization, and reflects the fact that these employees were, indeed, cured diversely. Thus, De Beers did not strive for behavior of high integrity.
De Beers should concentrate on reparation. Reparation is where the individual targets repairing the consequences of previous wrongful serves (Stanwick & Stanwick, 2009). De Beers cannot remove what has already took place, but it can ensure that it generally does not happen again, using the rules of equality, fairness and dignity.
In light of the above, in our view a vehicle should be purchased or chosen to move employees to and from work. This will ensure that workers are not tired by enough time they arrive at work. Proper food also needs to be provided to these employees. This can make them more beneficial, encouraged and careful with the works. De Beers should pay employees more than simply the minimum income, and setup jobs to help enhance the lives of casual miners, just like a $2 million job create in Tanzania (Country wide Jeweller Network, 2006). De Beers should also focus on fidelity and beneficence. If De Beers guarantees its prospective employees that it will pay them wage that will enrich their lifestyle, they need to keep that offer. De Beers also needs to disregard Milton Friedman's stakeholder theory, and use company resources to increase the lives of other stakeholders, including employees.
In India, 75% of the populace live on less than $2 a day. This is approximately R15 a day. About 42% of the Indian society live on a per-capita income of Rs 447 every month. De Beers needs benefit of these poor employees in India and create careers because of their children. De Beers need children to condition the smaller diamond jewelry as their eyes and fingers are better suited to shape the stones (Jewel Info 4 U, 2004). These children then have problems with eyestrain, repetitive motion injury and lacerated lungs from gemstone dust particles. These children should be in school, rather than working purely because their family need all the money they can get, merely to survive.