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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.

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.

The Chinese diamond industry is dominated by SMEs. The purpose of this paper examines which of the three business strategies prevalent in the global diamond industry is utilized by Chinese diamond SMEs compared to those used in other western countries. In so doing, it maps the major actors in the Chinese diamond industry and identifies the challenges faced by SMEs when entering the highly competitive but very lucrative Chinese diamond industry.

A two stage approach was undertaken. Step 1 involved exploratory field work with leading institutions. In the second stage a qualitative questionnaire was administered to members of 54 small to medium-sized international diamond SMEs operating in China. The difficulty of acquiring information on this secretive industry was further hindered by the equally secretive nature of Chinese culture.

Guanxi was found not to be prevalent in the Chinese diamond industry. This is an interesting finding as China is a socially embedded and highly networked society. Chinese diamond SMEs conduct business by implementing a transactional-based approach to business strategy that centers on short-term cash-based transactions.

Future studies should use a quantitative questionnaire with a larger set of Chinese SME diamond firms. 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 has been transposed to other Chinese industries dominated by SMEs. This may show the rationalization of the Chinese economy and its progression toward western models of exchange.

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

The diamond industry used to be a stable sector. However, the market for diamonds is changing rapidly due various developments, putting margins in the entire diamond industry under severe pressure. Consequently diamond retailers have begun to search for new methods that could help them improve their performance. This paper aims to evaluate whether the high-performance organization (HPO) framework can be used to help diamond retailers achieve better results.

The HPO framework was applied at two actors in the diamond industry value chain, a dealer and an intermediate, in order to identify the HPO factors that most influence the results of these companies. Special attention was paid to the matching of the characteristics of the HPO framework and the characteristics influencing the success of partnerships.

The research results show that the HPO framework can be used to identify the improvements needed to increase the level of performance of all players in the diamond industry value chain.

The results of this study fill a gap in current academic and management literature on the diamond industry as little research has been done into the factors that cause sustainable high performance in this sector. The results can also be used by managers of diamond retailers to increase company results and to cooperate more closely in the diamond industry value chain.

The primary purpose of this paper is to fill the research gap regarding the evolution of managerial processes within (largely family) diamond industry firms, especially over the past seven decades.

Qualitative data were gathered from interviews with 100 managers in the diamond industry in Israel, together with data from Israeli Government, industry and academic sources.

Over the recent life cycle of the diamond industry, with its changing structures and dynamics, participant firms have evolved through seven stages of engagement, from one based on trust and personal connections to more impersonal, standardized connections that exist today.

In seeking to tell the story of industry participants as a group, the differences in behaviours between the family firms and the non-family firms have not explored. This should be the work of future research, which, if aimed at teasing out the results of this study, may help shed additional light on the strategic processes that occur within family firms.

Although the firms examined in this study were from one industry (and an arguably narrow cultural base), their development over time was not dissimilar to the experience reported in other industries and cultures. This suggests that the components of the evolution of the strategic process that ensues within family firms may be generalizable throughout cultures. In the absence of kin relationships, the importance of trust in their dealings cannot be overstated.

The findings demonstrate how one group of participants in the global diamond industry has responded to the changing economic, social and political contexts of their operations, where trust and personal connections have been replaced by more impersonal, standardized dealings.

Recognizing the significant impact of guanxi (the Chinese network of reciprocal business relations) and its influence on everyday dealings in China is important for Western firms. Researchers argue that social capital has limits and is not a commodity that has a place in China aspiring to be a global business hub. Accordingly, the purpose of this paper is to deal with the question of whether guanxi still matters in the Chinese business arena, and if so, to what extent.

To illustrate the evolutional direction of the Chinese institutional system, the authors compare it to a similar system that went through the evolutionary cycle from a social to a rational institutional base of exchange and discuss what one can learn from the institutional evolution process of the global diamond industry and its implications for the current evolution of Chinese institutions. The authors compare two similar cultures/religions, Judaism and Confucianism.

This study found parallels between the evolution of the Israeli diamond industry, dominated by Orthodox Jews, from a social exchange mechanism to a transactional mechanism and the present ongoing rationalization of the Chinese economy, dominated by the Confucianism culture from a social to a transactional business mechanism.

Despite the vast efforts of researchers in the area of guanxi, there is very little published knowledge about its limitations and its usefulness in today's changing business environment. This paper contributes to the existing literature on the future aspects of guanxi from a unique perspective – the evolution of the Israeli diamond industry.

The diamond industry has been subject to significant change. There is increased competition from low-wage countries such as India and China, the concern about blood diamonds, and policy issues affecting the viability of trading diamonds. In this case, we study how Antwerp's dominant position in the diamond trade is being challenged and eroded. The case offers a good opportunity to introduce and discuss comparative advantage and relate it to Heckscher-Ohlin type of trade.

In this paper, we aim to understand why consumers often prefer products made using traditional practices even when products made using new practices are not of lower quality. We argue that this resistance, which we call “production process conservatism,” is heightened when the product is used in the performance of a social ritual.

We develop this argument in the context of diamond jewelry, as consumers have generally been resistant to diamonds that are produced in laboratories, i.e., lab-created diamonds. Hypotheses were tested using experiments conducted with an online sample (Experiment 1) and with an MBA student sample (Experiment 2).

In Experiment 1, we find that married female respondents significantly prefer mined diamonds to lab-created diamonds when they are used as part of an engagement gift as opposed to a more routine gift. In Experiment 2, we find the same effect among women; in addition, the perceived risk associated with the ritual is found to mediate this production process conservatism.

This paper contributes to the understanding of a macrosocial phenomenon – acceptance of an innovation – by examining microinteractive processes in groups.

This paper develops an original theory that when individuals deviate from traditional aspects of rituals, they risk signaling a lack of commitment or cultural competence to the group even when such aspects are not explicitly stated.

This research aims to examine the smelter industry’s investment competitiveness in Indonesia as well as to find solutions to improve its competitive advantage for the nation.

This research applies a sequential mixed-methods approach with a second quantitative phase building on an initial first qualitative phase. The qualitative phase is conducted by interviews to find the root causes of problems as well as solutions to gain smelter industries’ competitiveness. The quantitative phase is conducted by a system dynamics model. A descriptive causal loop diagram is created based on interviews and focus group discussions to describe the problems. The concept of competitive advantage of a nation from Porter’s diamond model is applied in this research.

The results reveal the complexity of smelter industries in Indonesia. The paper also addresses the causes of problems and interaction of variables using a causal loop diagram. To gain the smelter industry’s competitiveness, this paper suggests the potential policy development to increase competitiveness of the smelter industry such as policy for different fiscal incentives to each different mineral, effective export duty and exploration obligation.

The result of this study provides a good basis for government in making policy to improve the competitive advantage of the smelter industry investment in Indonesia.

This is the first research on smelter industry competitiveness that applies Porter’s diamond model and system dynamics model to find solutions in designing appropriate policy to gain competitiveness.