Traditional classical guitar making heavily relies on the use of precious wood and animal materials, many of which are endangered. These materials are illegal to trade under the CITES Treaty (Convention on International Trade in Endangered Species of Wild Flora and Fauna) and the U.S. Lacey Act which have unintentionally shifted material demand to countries of weak legal enforcement, resulting in environmental degradation. I would like to examine different factors involved through a production function, which comprises organization, technology, human capital, physical capital, labor, and natural resources to suggest a better institutional arrangement for classical guitar making. I will also gather historical data on Brazilian Rosewood, an essential material in guitar making. This will include its relative price to alternatives, its users, and the tree population to examine what is at stake. I predict that a better-designed international legal institution will facilitate the process of conservation while redressing the issue of resource limitation. Next, the formation of an international de facto standardizing institution will emerge to facilitate certification and ecolabeling programs, and incentivize sustainable forestry and business through market force. Furthermore, an increase in demand will lead to acoustic and construction technology advancement to remedy resource deficit. Through examining guitar making, I hope to propose a model for sustainable business and to tackle challenges in resource management for an ever increasingly populated world.