Trading Diamonds Responsibly: Institutional Explanations for Corporate Social Responsibility

This article identifies factors that led to a comprehensive regulatory regime for the global diamond trade, the Kimberley Process Certification Scheme (KPCS), established through negotiations among NGOs, states, and the industry. The conflict diamonds case provides important insights into the processes by which global norms redefine how corporations are expected to conduct business. First, we show that global corporate social responsibility (CSR) norms rooted in the construct of world citizenship facilitated the rapid progress of the conflict diamonds campaign. Second, we detail how these norms became institutionalized in the KPCS, stressing the importance of the legitimacy of NGOs as bearers of corporate world citizenship models and the role of moral leaders within the diamond industry itself. We consider two theoretical perspectives on CSR development: management theories, which are strong on practitioner issues but mute regarding the content and authority of CSR ideology, and institutional theories, which offer better frameworks for understanding the impact of cultural and institutional environments on company responses to the moral claims advanced by NGOs. We use the conflict diamonds case to draw conclusions about how NGOs can effectively define new social responsibilities that companies come to see as obligations they must heed as responsible world citizens.