...The Situation You are playing Texas Hold’em against one other opponent. • Your two down cards are 6 of (diamonds) & 7 of (diamonds). • The first three cards to come up are 3 of (diamonds), 4♣ 9♠. • The next card to come up is 10 of (diamonds). You and your opponent have both already bet $24,000 into the pot each. Your opponent now adds $10,000 to the pot. You only have $10,000 left in total. While you consider what to do, your opponent, in an effort to rattle you, reveals his down cards. They are 10♣ 10♠. The Problem Should you call his bet by tossing the rest of your money into the pot, or should you fold and give up the pot to your opponent? Remember your opponent has at least a pair of 10s. What cards could come up to make your hand better? What could come up to make your opponent’s hand better? Is there any way you could tie each other? Also look at the expected value of the game. If you fold, you are assured a loss of $24,000. Make sure this fact is used in your analysis. I would simply solve my problem by going all in and betting the $10,000.00 that I have left. I would be a winner should the next card be an eight (8) because a straight which is five (5) cards in a row (in this case 6, 7, 8, 9, and 10) beats a 3 of a kind (my opponent’s three 10’s). Another reason I would not fold is because if the next card that comes up is a diamond I would also be a winner. I would then have a flush (which is five cards of the same suit), which wouls also beat my...
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...During the time of this diamond campaign, there was a diamond rush going on in South Africa. Every diamond company raced over to start mining in South Africa. Cecil Rhodes had bought land from brothers Johannes Nicholas and Diederik Arnoldus de Beer. On March 12, 1888, De Beers Consolidated Mines Ltd. Was formed and the empire began to spread throughout Europe. Sir Ernest Oppenhiemer grew tremendous interest in the company and ended up establishing the Diamond Trading Co. in Kimberly, South Africa and London, England. Harry Oppenheimer was on the board of De Beer’s company. He took a trip to the United States to test a pilot marketing campaign but ended up with this full-fledged advertising campaign that has been successful ever since (Posnock, 2006). * In 1931, through the mist of The Great Depression and later World War 2, diamond competitors were emerging such as Gemological Institute of America (GIA), The Diamond’s Dealer Club of New York, and Diamond Manufacturers and Importers Association (Posnock, 2006). * Russia found diamond mines that were similar to the ones found in South Africa, so they became a crucial competitor to the already established diamond mining companies. Also Austraila emerged into the business of diamond mining in the 1970s and Canada shortly after in the 1990s. (Posnock, 2006). * Another competitor was synthetic diamonds. Companies started making man-made diamonds out of coal (Posnock, 2006). * New York Agency, N.W Ayer was responsible...
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...largest diamond producer. De Beers has been charged with price-fixing and other anticompetitive conduct. Under scrutiny since World War II for refusing to provide industrial diamonds for the war effort they were forced to leave the American market. In 1994, an indictment was filed against the De Beers Diamond Company for violating the Sherman Antitrust Act by fixing the price of industrial diamonds. In this indictment the Government contended that the subsidiary company General Electric (G.E.) conspired with De Beers to fix the price of industrial diamonds. These acts that De Beers were accused of were unethical because being the world’s largest diamond producer they were able to control the market and keep the prices high by making the world believe that diamonds were scarce. The purpose of DeBeers was the exploitation of diamond mines in South Africa. Along with deceiving the market on price fixing and forcing competitors to buy their products De Beers committed other 3 unethical acts towards their employees and as well as diamond consumers. The DeBeers diamonds are extracted from the South African mines and marketed in London, at the address of the Diamond Trading Company,...
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...mid-1800s diamonds were rare and only seen on monarchs. Before diamonds were discovered in South Africa the diamond trade industry was more profitable. However, the discovery of diamonds in South Africa initiated the simultaneous trading of diamonds that flooded the market with diamonds. Among the industry giants is De Beers. For over a century De Beers has controlled a significant portion of the diamond industry. De Beers Consolidated Mining, Ltd was formed in 1888. The forming of De Beers Consolidated Mining, Ltd created a monopoly for all diamonds produced and distributed from the diamond mines of South Africa. The market structure in which De Beers competes in is considered to be a monopoly. The fact that De Beers has the control over the distribution of rough diamonds clearly establishes a monopoly in the diamond industry. This market structure differentiates from other market structures uniquely because De Beers has dominated the market by having sole rights to sale rough gem quality diamonds. Even though other organizations within the same industry exist worldwide, De Beers is unique in the market because of the monopoly. A competitive strategy used by De Beers is controlling the market by limiting the supply of rough diamond to other companies because De Beers a monopoly on rough diamond distribution. In addition, De Beers controls over 60 percent of the world’s diamonds and is able to price the diamonds in any range....
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...Assignment 1: Social Performance of Organizations Business 475-Business and Society Professor-Dr. Romy Lu Student-Jose Echavarria 01/30/2014 Assignment 1: Social Performance of Organizations Specify the nature, structure, types of products or service of your chosen organization, and two (2) key factors in the organization’s external environment that can affect its success. Provide explanation to support the rationale. De Beers Diamond Company is an industry that currently produces $13 billion worth of rough diamonds each year, leading to the employment of 10 million people globally from mining to retailing. 70% of rough diamonds are sold for industrial purposes with the remaining 30% “gem quality” being distributed to experts for cutting, polishing and jewelry manufacturing (Stein, 2001). The global jewelry market has increased three-fold in the last 25 years and is currently worth $72 billion each year. Jewelry diamonds are unjustifiably expensive given that they are not actually scarce. Upon the discovery of other diamond reserves globally, De Beers set up a subsidiary called the Central Selling Organization (CSO), responsible for buying the production for all mines worldwide then selling the produce to dealers in return for a percentage fee (10 – 20 %) from producers (Stein, 2001). The CSO was able to maintain illusion of scarcity by deciding the quantity of diamonds to be supplied to the world market and in turn, allowing...
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...De Beers Diamond Company is an industry that currently produces $13 billion worth of rough diamonds each year, leading to the employment of 10 million people globally from mining to retailing. 70% of rough diamonds are sold for industrial purposes with the remaining 30% “gem quality” being distributed to experts for cutting, polishing and jewelry manufacturing (Stein, 2001). The global jewelry market has increased three-fold in the last 25 years and is currently worth $72 billion each year. Jewelry diamonds are unjustifiably expensive given that they are not actually scarce. Upon the discovery of other diamond reserves globally, De Beers set up a subsidiary called the Central Selling Organization (CSO), responsible for buying the production for all mines worldwide then selling the produce to dealers in return for a percentage fee (10 – 20 %) from producers (Stein, 2001). The CSO was able to maintain illusion of scarcity by deciding the quantity of diamonds to be supplied to the world market and in turn, allowing individual producers to produce a certain percentage of that amount (De Beers Group, 2012). De Beers have been connecting with people around the world. With one of the earth’s natural treasures, De Beers has been helping to create countless memorable moments. It takes years of searching, cutting-edge science and sophisticated technology, coupled with traditional mining know-how to find diamonds. They (De Beers Diamond Company) explore in two stages, each supported...
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...De Beers, diamonds and Angola : developing an understanding of the role of sustainable development and corporate citizenship in De Beers’ exploration strategy SUNScholar Repository SUNScholar Home Faculty of Economic and Management Sciences School of Public Leadership Masters Degrees (School of Public Leadership) View ItemDe Beers, diamonds and Angola : developing an understanding of the role of sustainable development and corporate citizenship in De Beers’ exploration strategy Show full item record Title: De Beers, diamonds and Angola : developing an understanding of the role of sustainable development and corporate citizenship in De Beers’ exploration strategy Abstract: The tensions in the definition and practical implementation of sustainable development are clear. A number of international codes outline the principles that are considered as good corporate citizenship, but are often based on the priorities of the developed ‘North’. Africa calls for a more development-orientated approach to sustainable development. The subject of this study, Angola, is emerging from a history of slavery, colonialism and civil war. Although richly endowed with natural resources and exemplifying one of the world’s fastest growing economies, Angola scores near the bottom of the Human Development and Corruption Perceptions Indices, thereby typifying the Natural Resource Curse. Understanding sustainable development in this context, multinational corporations involved in exploiting these...
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...9-700-082 DEBORA SPAR Forever: De Beers and U.S. Antitrust Law Educational material supplied by The Case Centre Copyright encoded A76HM-JUJ9K-PJMN9I Order reference F267708 CoursePack code C-788-275379-STU “As a worldwide dealer in enchanting illusions, Disney has nothing on De Beers.” - The Economist1 In 1999, a series of spectacular advertisements adorned the bus-sides and billboards of major American cities. Set against a lush black background, the ads displayed a perfect set of diamond earrings, or a single sparkling solitaire. The lettering, in white, was sparse and to the point: “What better time to celebrate the timelessness of love?” they asked. Or, “What are you waiting for, the year 3000?” Some were even more direct: “This wouldn't exactly be the year,” they noted, “to give her a toaster oven.” Coyly, the ads captured a joint fascination with the new millennium and the enduring allure of diamonds. How better to capture time than with a diamond, they urged. How better to herald eternal love? Indeed. According to analysts, U.S. diamond sales (30% of which occurred during the Christmas season) were expected to surge by more than 10%, hitting a high of over $20 billion for 1999.2 A significant portion of this windfall would flow to De Beers, one of the world’s most successful corporations and the controlling force of the international diamond market. There were many ironies behind De Beers’s millennial campaign, not least of which was that diamonds...
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...Forever: De Beers at the Millennium – Study Questions 1. Who writes the rules of the international diamond market? How are they enforced? * De Beers and the other diamond companies of the their time and specifically the Central Selling Organization (CSO) and the government partners where they are mining (?) * Their sorting process and the which went through many different grades that measured the 4 Cs: carat, color, clarity, and cuttability (?) 2. How has De Beers structured its relationship with the U.S. diamond dealers and the U.S. government? Are these relationships sustainable? * Most expensive stones were cut and polished in New York. The U.S. was the biggest market for De Beers. The Gemological Institute of America (GIA), the largest, most respected nonprofit institute in its field, had developed the widely-used D-Z color scale and the Flawless-I3 clarity scale for polished diamonds. De Beers had irked U.S. authorities by failing to appear, in 1994, in a suite by the Department of Justice alleging price-fixing in industrial diamonds in which it was a co-defendant along with General Electric. And socially, the diamond industry began to be criticized for dealing in “conflict diamonds” from African countries. (?) * These relationships cannot be sustainable (?) 3. What should the U.S. government do about the flow of diamonds from Angola, the Congo and Sierra Leone? What should De Beers do? * Continue the fight started by the...
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...A selection of rough diamonds from Voorspoed Mine ACTION ETHICS Protecting THE INTEGRITY OF DIAMONDS 33 ETHICS OUR COMMITMENT TO MEETING THE highest ethical standards IS FOUNDED ON OUR aspiration TO LIVE UP TO THE unique qualities OF DIAMONDS. THE BEHAVIOUR OF OUR EMPLOYEES, THE ROBUSTNESS OF OUR COMPLIANCE SYSTEMS and our commitment to transparency maintain stakeholder confidence in our business and play a key role in upholding ‘diamond equity’. De Beers aims to meet or exceed all applicable statutory requirements, as well as international standards on ethical issues ranging from conflict diamonds to anti-corruption. We also work with our business partners to embed ethical standards throughout the diamond value chain. 34 Report to Society 2010 Ethics The ethical provenance of diamonds is an important element of both their financial and emotional value – what we call ‘diamond equity’. To ensure that the journey from mine to finger meets the highest ethical standards, we have a mandatory, third party assured, code of ethical business conduct – the Best Practice Principles Assurance Programme (BPPs) – that applies not only to our own operations, but also to our Sightholders, contractors and suppliers. HIGHLIGHTS • All diamonds sold by De Beers are 100% conflict free. Compliance with the Kimberley Process and System of Warranties for 2010 was verified by Société Générale de Surveillance (p38) To support ethical standards more broadly we work with sectoral initiatives...
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...Conflict Diamonds and the Kimberly Process Conflict diamonds are gemstones that are mined or stolen by rebels fighting internationally recognized governments. The groups that benefited from the trade of conflict diamonds were the combatants, including the Revolutionary United Front. Diamond companies such as De Beers were hurt by the conflict diamonds. Three sectors that were concerned with the problem of conflict diamonds were the rebels, the diamond companies, and human rights organizations such as the United Nations. The rebels were interested making money. Diamond companies obviously wanted to keep their images pure. Human rights organizations wanted to keep people safe. Thus the interest was joined together and the Kimberly Process was developed. I do not think any of these three sectors would have acted unilaterally because they would not have agreed on everything. The Human Rights Organizations and the diamond companies would have been able to work together. They had the same goals in mind and were seeking the same end to the situation. The Kimberly Process will be successful to a certain point. As with anything that is put into place, there are those that will find the weaknesses and the ways to get around them. De Beers will continue to support and push for the sealed, numbered tamper proof container. The rebels will find ways to smuggle diamonds around the countries that are being monitored and into them illegally. Human Rights Organizations are...
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...DeBeers | | 1. What functions does the CSO perform as a global intermediary? How do these functions help expand the economic pie in the diamond industry? The CSO performed the following functions before the diamond market bubble collapse in 1980: * Buffering the rough diamond supply by continuing to purchase rough diamonds of even the mines which De Beers didn’t own under contract to control the supply to the downstream market and stabilize the price. * (De Beers) Interdicting unofficial routes of rough diamonds by buying smuggled rough diamonds on the open market along with other security measures. * Sorting rough diamonds into more than 3,000 grades to frame the accurately classified price structure and add value to gem-quality diamonds. * Controlling selling routine called a “sight” to make “sightholders” obey stringent rules to maintain pricing stability further downstream. * Conducting an extensive consumer survey and monitoring the inventory in the market to adjust the quantity of diamonds to be released. With these functions, the CSO (and De Beers) controlled the price and quantity of diamonds on both the supply-side and demand-side to expand the economic pie in the diamond industry. 2. How does that expanded economic pie end up getting divided among the various players in the diamond industry? Why? The expansion of economic pie in the diamond industry under the quasi-monopoly of De Beers ended up in the following situation: ...
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...that supply overtook demand, the prices for diamonds were supposed to be lower. In this case the company would not have been that profitable. Therefore Rhodes established the “London Diamond Syndicate” and Oppenheimer transformed it into the “CSO - Central Selling Organization”. Both companies were founded to prevent an oversupply. By buying the diamond supplies of other producers, the CSO controlled 90% of the world trade. In order to conceal the monopoly position externally, these subsidiaries were never named after the parent company De Beers. They were supposed to appear as independent companies of the diamond trade. The core business of the CSO was to intermediate between the purchase of the diamonds from mines and the distribution of gems to different customers, such as diamond polishers or cutters. These customers were tied to the company with exclusive contracts, which made it possible to deal with diamonds outside of De Beers. The contracts included many special conditions. For example, it was not allowed to sell diamonds to retailers who could reduce prices in the market. The contracts turned the customers to slightholders, the only people who were able to buy diamonds from De Beers. For their position as slightholders they had to pay a basic fee twice a year. Once they could no longer pay the fee, they lost their position and were expelled. Each year the company decided which amount of their material should be sold and which amount should be kept in inventory...
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...Organizations Janet Jackson Strayer University BUS475 May 1, 2014 Instructor: The De Beers Company is one of the wealthiest companies in the world. De Beers leads and dominates the diamond industry in diamond mining, diamond trading, and industrial diamond manufacturing. In 1871 a South African man named Cecil Rhodes created De Beers. Rhodes rented water pumps to miners then invested his profits by buying up small mining operations. In 2011 the De Beers Group sold their remaining stake to Anglo American for $5.1 billion in cash. (DeMarco, 2011). Before the sale the diamond company was owned by the Oppenheimer family. Now Anglo American own 85 percent of De Beers making them the primary stockholder while the Republic of Botswana owns the remaining 15 percent of the company. Mining diamonds involves a lot of factors that can effect a company’s external environment. In order for De Beers to operate it has to account for things such as: local and foreign governments, globalization and trade, the ethics of business and labor, the effect on the environment, the perception of society, and the importance of new technology. In the case of the De Beers Diamond Company the two most important factors to the organization’s external environment are globalization and trade, and the perception of society. Salient Stakeholders When producing a product as fragile such as diamonds, a company needs many factors to come in place. In actuality a diamond is just a shiny rock found in the...
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...Introduction In this paper I will be explaining how the diamond company manufacturing and importing company, De Beers, violated US antitrust laws in an effort to become the most sort after monopoly in the diamond manufacturing and importing industry. I will also be discussing how De Beers maintained their monopolistic power. Violation of Antitrust Laws De Beers was investigated for antitrust behavior because the company ended up violating antitrust laws. They violated antirust laws by importing and exporting diamonds from countries they were prohibited from buying diamonds from such as Sierra Leone. Also they purchased products from “outside producers” (Bates, 2) which were “BHP, Rio Tinto, and Alrosa” (Bates 2). Also De Beers was largely behind fixing the price of rough diamonds in order to make increase their profits and take away from other diamond companies. Pecuniary and Nonpecuiniary costs The antitrust act that was violated was the Sherman Act. Under the Sherman Act companies are prohibited from conducting any type of acts that would help to destroy healthy competition. There were several pecuniary and nonpecuiniary costs associated with antitrust behavior of the De Beers Company. Their actions cost other diamond companies millions of dollars so a settlement of “300 million”(Bates, 1) was greater to other diamond companies who substantiated a loss. Monopoly versus Oligopoly I believe that a monopoly can be bad for society...
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