The diamond industry as a virtual organisation

Isaac Mostovicz writes that De Beers' past market dominance in the diamond industry must be replaced with a new form of management ...

Having previously dominated diamond supply and exercised near total control over diamond distribution, the diamond industry market leader De Beers now accounts for just 40% of global diamond production and 45% of distribution. In the face of competitive and regulatory pressures, De Beers has recently sought to adapt its role from being the custodian of the industry to acting merely as a major player. However, its retreat from a position of industry dominance is creating tensions within De Beers and among industry participants.

This paper seeks to explain De Beers’ behaviour and the reaction of the industry in terms of paradox management and identifies the requirement for a new form of leadership to replace the previous monopoly situation and guide the diamond industry into a better future.

Mostovicz, I., Kakabadse, N. and Kakabadse, A. (2007), ‘The diamond industry as a virtual organisation: Past success and challenging future’ Strategic Changes, December 16(8), 371-384. http://doi.wiley.com/10.1002/jsc.809

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