Analysis On The Social Performance Of De Beers

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Corporate social performance, referred to as CSP, originated in the early 70s of last century, it is in a period of discussion of social issues. At that time, there were two different views about what the enterprise should bear the social responsibilities, the first was the traditional economics view that the only responsibility of corporate was to create profits for shareholders and relevant stakeholders; the other views was that company should voluntarily bear social responsibility, a kind of the social consciousness beyond economic responsibility. Soon after, researchers began to try to use the different concepts to explain the definitions of corporate social responsibility, and its content and scope. According to different aspects involved in social performance, people developed corporate social performance model in order to help managers can comprehensively recognize the importance of CSP, and better fulfill the duties and evaluate it ( Y.C. Law and J.H.M. Lee, 2002).

De Beers is the largest and oldest diamond mining company, which was founded in 1888. Its business involves all areas of diamond supply chain, included prospecting, exploration, and mining, cutting, grinding, designing and selling customers at last. De Beers Group has a diamond mine in South Africa, and the local diamond mine which are mined by the De Beers and Botswana, Namibia and Tanzania government together, the gem diamonds production are about half of global output in value (

In fact, CSP is very important for corporate sustainable development in future, the aim of this essay is to analyze the social performance of De Beers by all aspects involved by the CSP model, and analyze much influence on society and stakeholders, highlight the areas of achievement and the further improvement of the De Beers.

The case analysis against De Beers

Carroll was generally considered an advocate for CSP, he created three-dimensional CSP model, including corporate social responsibility, corporate social issues, and the corporate social responsiveness. Soon later, Wood further interrelated and amended Carroll's model

(STEVEN L. WARTICK, PHILP L.COCHRAN, 1985). In fact, each dimensional of CSP was clearly included into several aspects, so as to make specific and clear evaluation for CSP.

According to Carroll's views, corporate social responsibility included economic and legal responsibilities, ethical responsibility and corporate discretionary responsibility (STEVEN L. WARTICK, PHILP L.COCHRAN, 1985).De Beers, as the largest diamond mining company all over the world, manages worldwide nineteen diamond mines, produces more than half of global diamond. Actually De Beers is the overall title of the huge diamond group; it has five affiliates. Actually, it is no doubt that De Beers has created huge economic interests for stakeholders and society. In 2005, the revenue of De Beers Group was US $6.5 billion, and its net profit was to US$554 million. And in 2009, diamond production decreased by 49 percentage points, but De Beers still paid $3.4 billion to stakeholders around the world ( In the addition, when De Beers Group created huge profits for the stakeholders, it also created huge and non-negligible value for the society and people. Africa is a country that economic was underdeveloped, but with the many labors. De Beers and its partners employed more than 21,000 people in 25 countries, so this reduced unemployment rate ( In recent years, De Beers is always making a lasting contribution to Botswana, Namibia, South Africa and Tanzania. De Beers and related companies support and encourage sustainable working to ensure long term positive outcomes for Africa, and spend more than US $10 million per year on more than 600 Corporate Social Investment (CSI) activities globally ( At the aspect of ethical responsibility and safety, De Beers also planned many policies about safety, and consistent with local national security policy and the Occupational Health Law. In eighty years, De Beers created zero fatalities for the first time, and the severity rate reduced to 6.52 per 200,000 hours in 2009 ( In the same year, the company invested about $29.3 million into community, including measures stipulated in the contract and in-kind contributions ( De Beers also provided anti-retroviral treatment and defensive consciousness to 1,820 employees and their partners in Botswana, Namibia and South Africa (Yellowknife, September 20, 2001). In fact, among the four responsibilities of CSP, economic responsibilities occupy a large of portion in CSP, but they are not mutually independent, but interpenetration between each other (STEVEN L. WARTICK, PHILP L.COCHRAN, 1985). From above description, every action of De Beers reflects in several aspects of social responsibility.

Diamond, a lot of people know that it is beauty, luxury, expensive and rare, but existing a very heavy price behind her beauty. Because of special nature of the diamond industry, some aspects have been criticized by the outside world, for example mining, labor and employment, charity environment etc. Most diamond mines located in the underground and underwater, the diamond mining process will inevitably affect the local ecology ( For the corporate that businesses, sales diamond products, how to make up for the social problems caused by the source, must be the important issue of the diamond industry in the new decade. For these reasons, De Beers must face the pressure from public opinion, and also cannot ignore social issues discussed. Corporate social issues will become an important aspect as evaluating the enterprise social performance. In fact, De Beers has not ignored these responsibilities, especially in Africa, it made a significant contribution to AIDS prevention and publicity. AIDS in Africa is high (Helen Epstein and Julia Kim). It was a huge trouble and disaster not only to people and family, but also to the De Beers mine in South Africa, the cost of employment has increased. For this case, every year De Beers paid about form 2.4% to 2.7% profits for the local development and education, particularly in terms of contribution to the prevention and treatment of AIDS has outstanding performance (Terry Macalister, 2002). In addition, De Beers also made a great help for SOS Children's Villages (Helen Epstein and Julia Kim 2007). De Beers since the process of diamond mining have many negative effects in the environment, such as: carbon dioxide and sulfur dioxide emissions are too high and excessive consumption of water, etc ¼ˆEpstein, Edward Jay (1982)¼‰. Because of recognizing that the sustainable development of natural environment is also the key for enterprises sustainable operating, De Beers has made many relevant environmental protection projects, such as: biodiversity, energy and climate care programs and water management technologies research, etc. while De Beers is also working with governments and other stakeholders for environmental issues, and hoped protecting the environment from damage cases, but the difficulty is very high. De Beers, while recognizing the importance of the environment, but to improve and protect the environment, should make further efforts.

The third dimension of CSP is the corporate social response strategies, which generally can be divided into four modes: reactive, defensive, adaptive and proactive response (Diara, M., M. Alilo, and D. McGuire. 2004). Found from the collected information and data about De Beers, the company has made a lot of positive strategies for the social response, such as: faced economic crisis in recent years, De Beers' diamond production and sales had a serious impact. For such scenarios, in terms of production and operation, De Beers accurately set production capacity according to the market demand for rough diamonds, ensure the lowest production costs, and reduce redundant labor; in a safe performance, De Beers continued to keep zero harm, to ensure the safety first; in business management, in order to Improve efficiency and be free from economic crisis, De Beers developed business decisions against crises, and employee performance management and incentive programs. To make the economic recovery of the diamond industry, De Beers adopted the following policies: to maximize rough diamond demand and prices, and to search, optimization, and investment in mining; created downstream value investment opportunities; embedded costs and cost-effectiveness solution, cost reduction cross-business unit; improve operational efficiency, and so on (De Beers issues annual Report to Society for 2009). In addition, in order to achieve maximum benefits, the company actively wide the sales market, took the initiative to enter the developing countries, carried out the international publicity activities to promote the diamond, especially China and India are good prospects for emerging markets(Lloyd C. Harris and Kai Yi Cai). In fact, De Beers has a diamond supply chain involved in all areas, from the diamond exploration, mining, cutting, grinding, design, and ultimately reach consumers in the process. And De Beers has become the leader in the diamond industry.

In fact, De Beers is needed in many areas for further improvement and enhancement. For example, in the community, since De Beers in Africa and other regions had made the impact and people ggenerated the higher expectations, De Beers needs to create the higher economic benefits for local staff and family members and provide better benefits, and make further contribution to local people in improving the local living conditions and treatment of AIDS, also should actively cooperate with local government agencies to provide better social services, so as to enable enterprises to sustainable development in the local forever (Chaim Even-Zohar). In addition, in the face of the economic crisis hit, De Beers should take more effective measures to prevent the decline of interest. And as for the environment improvement respect, while De Beers keep rapid and last development, environmental protection measures should be further strengthened. We must know how to return the natural, returns social, and creating social value that higher than the economic aspects.

Concluding Remarks

De Beers based on the above analysis of social performance, and more in many areas of the enterprise made a great contribution, and took a lot of positive and effective response strategy, but also have many deficiencies and the areas that need to improve and enhance, and need a deeper level good understanding that the enterprise's social performance has the important impact for sustainable development and the promotion of the brand (Bovee, C. L., and J. V. Thill. 2005.¼‰. De Beers responded in terms of social responsibility and social responsiveness made a positive strategy does have a good response, create huge economic and social benefits, not only for the enterprise stakeholders, more social, and natural. De Beers is famous brand; "A diamond lasts forever" the well-known advertising slogan left a deep impression in the hearts of the people. De Beers should be on this basis, efforts to overcome the difficulties and trials from aspects, in order to keep sustainable development of enterprises and create higher value for stakeholders and social.