Authors: Maria Jell-Ojobor, Sriteja Reddy Wudaru
Abstract:The diamond industry produces sophisticated luxury products through a global value chain with a wide variety of players, benefitting a demanding customer base but also causing several ethical issues in indigenous countries. From being formed in and mined from the deeper layers of our planet, the journey of a diamond is fascinating. It comprises many steps and involves different types of organizations. It is also a cyclical industry prone to global events such as financial crises or the ongoing pandemic. More than 90% of diamond manufacturers in the world are family-owned SMEs in India. Thus, when the global economy collapses, or the markets decline, they find their survival threatened. In this case, we focus on Samarth Diamond, one such family firm operating in the Indian diamond industry. With its headquarters located in India, the company today also has presence in various other countries through subsidiaries or stand-alone businesses. It can be considered one of the top 1% firms in the Indian industry along several criteria.
But the company’s journey has not been easy. Our teaching case will introduce the various aspects of the diamond industry, including its value chain, and outline the major problems that exist in the industry regarding sustainability and ethics. Then we present the history of Samarth Diamond, how it had faced challenges during the 2007-2008 financial crisis and how it had emerged as a successful company when the majority of the industry was closing down. From doing contract-based “job work” for other companies to becoming its own manufacturing company, the growth of Samarth Diamond can be attributed to two main factors: its approach towards technology and its attitude towards employees. With hefty investments in technology and capitalizing on their goodwill and name in the market, Samarth Diamond had succeeded to make an effective transformation. From becoming the first to introduce the famous “single package system” in the small diamond category to becoming an organization with more than 4,500 employees, 3 factories, and 3 international offices, Samarth Diamond is an example of family firms surviving and succeeding with grit, skill, and passion as well as risky decisions to adopt new technologies. We will look at how Samarth Diamond implements its human resource policies, specifically from an ethics and sustainability perspective. The company prides itself on the commitment and loyalty of its employees and considers it a core factor that helped the company survive any crisis. As such, it is interesting to see how a family owned firm manages its people and achieves a level of sustainability that does not just meet CSR definitions but also translates into strategic competencies. Moreover, both technology adoption and employee management are intricately linked in the company’s everyday operations. Given that the majority of diamond manufacturing firms are family-owned Indian SMEs, both the adoption of technology and the move towards sustainability and ethics are quite slow. Samarth Diamond is an example of how sustainability can be integrated into the company to realize the triple-bottom line goals of profits, planet, and people.
