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The enigma of the Chinese diamond industry: An evolutionary perspective of business ethics

Ron Berger (Department of Business Management, Jerusalem Academic Center - Lander Institute, Jerusalem, Israel)

Chinese Management Studies

ISSN: 1750-614X

Article publication date: 28 October 2014




The purpose of this paper is to illustrate the evolution of Chinese business ethics over time and how it impacts business. While much research attention has been directed toward China and its various industries, the Chinese diamond industry has been largely neglected. This industry is the second in size and fastest growing globally. It is interesting to examine its evolution over time and how external factors affect the firms’ business ethics behavior.


Exploratory field work involving the interview of major players was undertaken, complemented by extensive desk work, was used to create a base for future in-depth research of the secretive Chinese diamond industry.


A paradox was identified in the Chinese diamond industry, namely, that while Chinese businesses tend to follow a relational governance model, China’s diamond industry tends to use rational mechanisms of governance and exchange, a paradox that is explained by mitigating factors.

Research limitations/implications

Future studies should use a quantitative questionnaire with a larger set of Chinese diamond firms to further examine the paradox found. Future studies could also examine whether the transformation from a system based on social networks to a system based on market forces as found in the Chinese diamond industry is an indicator of an ethical and business evolution of the whole Chinese industry. This may illustrate the rationalization of the Chinese economy and its progression toward Western models of exchange as it further opens up to the West.


This paper is a pioneering work on the business ethics and strategy implemented by firms in the Chinese diamond industry.



Berger, R. (2014), "The enigma of the Chinese diamond industry: An evolutionary perspective of business ethics", Chinese Management Studies, Vol. 8 No. 4, pp. 665-682.



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