Diamond industry can provide tips to IIMs

A survey conducted by the Indian Institute of Management-Ahmedabad has suggested that it is time for the premier B-school to study from the Indian diamond industry: the lessons of its rise, the recession and the recovery.

It is time to bring lessons of management from the unorganised sector to business schools to survive difficult times, a research study on the Indian diamond industry, by IIM-A post doctoral fellow Indu Rao, said.

"The Indian diamond industry has for long been labeled as an unorganised sector of the economy," the study said.

"However, it resembles a close-knit community composed of thousands of small-, medium- and large-sized cut and polished diamonds (CPD) units and has grown to become one of the highest foreign exchange earners for the country," the study added.

The industry exports cut and polished diamonds worth $14 billion annually and enjoys a 95 per cent market share of global exports of cut and polished diamond pieces, it said.

"While many in the corporate business and the world economy in general continue to struggle with the aftermath of the recession, the so-called unorganised sector (diamond industry) has shown laudable resilience to bounce back so quickly," the study said.

According to Rao, the study of the Indian diamond industry, its rise, recession and recovery will provide useful insights to the field of management.

"An outcome of this study is that industries and companies with a close-knit community culture are likely to make use of their people management skills to survive the difficult times," it said.

"The unorganised sector is in fact highly organised and has great potential to offer useful insights to the field of management in terms of new forms of organising, networking, business processing and for doing international trade," it said.

According to the study, during the recession, the Indian diamond industry was one of the worst-affected export-oriented industries in the country.

The diamond industry is composed of a network of thousands of family-run units of different sizes, employing more than a million people -- most of whom have little formal education.

Most of these units are concentrated in Gujarat, mainly in the city of Surat.

According to industry estimates, nearly 11 out of every 12 diamonds sold worldwide are cut and polished in India.