THE 6 CUEGIS CONCEPTS

A major feature of the Business Management syllabus is the

integration of the CUEGIS concepts:

•Change
•Culture
•Ethics
•Globalization
•Innovation
•Strategy

The concepts are examined in Section C of Paper 2 for both

SL and HL students. You will be required to answer one of
three questions, each worth 20 marks.
CHANGE
• In the ever-more competitive business world, organizations have to
constantly review their practices and change / adapt accordingly to
remain relevant and competitive in the market.
• It is important for businesses to adapt to change if they are to survive
• For example, competition, new technologies and evolving consumer
habits and tastes lead successful organizations to adapt their
objectives, strategies and business operations.
 CULTURE
• In the context of Business Management, culture or corporate
culture refers to established institutional knowledge and code of practice
which guide behaviour and attitudes in the organization. It therefore has a
profound influence on business decision-making and the way employees
and managers conduct themselves in the workplace.
• Culture as a concept penetrates all aspects of IB Business Management,
from how budgets are set to the dominant leadership style in an
organization.
• Culture influences individuals and can be influenced by individuals.
CULTURE
Culture is often described as a way of doing things or how
things are done within the organization. It impacts on all
aspects of the organization.
Essentially, culture is about:

• People (employees and managers)

• Processes (how things are done), and
• Policies (what is important to the organization)
• Past experiences (institutional knowledge).
 Organizations can also have direct influence on regional and national
cultures. Some examples include:

• Global brands, such as Coca-Cola and McDonald's which have influenced

food and drink cultures in many countries across the world.
• Online music streaming services like Spotify and Amazon Music help to
spread music as an aspect of culture around the world.
• Similarly, commercial digital radio stations help to spread local news and
communications as an aspect of culture across the globe.
• The urban landscape, such as city centres and shopping malls, is
increasingly similar across the world, meaning a familiar ‘shape and look of
cities’ across the world.
• The business of sport, such as football (soccer) which is part of the culture
of more countries than any other competitive sport.
 A lack of understanding and appreciation can lead to branding errors for
organizations trying to sell their products in international markets.

•Bonka – Nestle brand of coffee

•Bimbo Sandwich – brand of bread from France
•Complicated Cake – brand of Chinese cookies
•Krapp - a Swedish brand of toilet paper
•Looza - a soft drinks brand commonly found in vending machines in
Luxembourg
•Nightmare - a brand of pillows found in India
•Pee Cola – soft drinks brand from Ghana
•Pipi – Yugoslavian orangeade brand
•Pocari Sweat – brand of Japanese energy drink
•Urinal – Romanian health drink
•WeePee - a Japanese child care centre
•Zit – Greek soft drinks brand
 Business Etiquette refers to the protocol of acceptable behaviour in which business is
conducted. It entails what society or an organization would deem to be good manners or
polite behaviour.

•In Chinese culture, don’t give clocks as a gift - this signifies the recipient is going into
their after-life!
•Similarly, you should not give a male Chinese colleague (especially your line manager)
a green hat as a gift, as this suggests his wife is being unfaithful!
•The Japanese like to slurp soup and noodles, to indicate they are enjoying their food
•In Japanese culture, gift wrapping is an art in itself. However, the colour white should
be avoided for gift wrapping as this is symbolic of death!
•In many cultures, it is the norm to firmly shake hands when greeting clients or
colleagues. In other cultures, physical contact is best avoided.
•It is common for Indians to greet you with a light slap on the shoulder.
•Indian people are remarkably flexible with their timing, whereas the Japanese and
Germans frown upon lateness to meetings.
•Hindus typically follow a strict vegetarian diet, so business associates should be
prepared for this (beef in particular is against their religion as cattle are considered to be
sacred animals). Muslim clients do not eat pork (as pigs are considered to be unclean
animals).
ETHICS
• Ethics can be defined as the moral codes of conduct that drive
business behaviour. Ethical business behaviour is what is deemed by
society to be morally acceptable, i.e. what is “right”. By contrast,
unethical business behaviour is what society regards as being
immoral, unjust and unfair, i.e. what is “wrong”.
• Every business decision has moral implications to some extent as this
will impact different stakeholder groups in different ways. The
consequences of business decisions can be significant for internal
and external stakeholders and society as a whole.
Ethics can affect all aspects of business management and decision-making. For
example:
• Should schools ban high sugar and high-energy drinks, such as Coca-Cola, Red Bull
and Lucozade?
• Is it ethical for professional sportspeople to earn $200,000+ per week in countries
where the average salary is around $30,000 per year?
• Is it ethical for senior executives to receive end-of-year bonuses that are more than
double their employee’s annual salary?
• Is it ethical for cinemas/theatres to raise their prices (by using surge pricing) during
school holidays? Why is it generally accepted that cinemas and theatres get away with
charging premium prices for their popcorn, drinks and snacks?
• Similarly, to what extent is it immoral that airline companies can charge customers
much higher prices for air travel during school holidays, such as during the Christmas
or the summer break?
• Should employment laws be enforced across the globe to prevent discrimination
against race, gender, marital status, age, religion and sexual orientation? Why/not?
 In July 2020, Sadio Mané, a professional footballer player who plays for
Premier League club Liverpool and the Senegal national football team was
spotted by fans carrying a cracked iPhone. Mané (born 1992) is reported to be
on a contract earning him approximately £11.5 million per year (around $15.5
million - or a stagerring $42,534 per day!)
When asked about why he hadn't replaced his iPhone, Mané's response
was this:
"Why would I want 10 Ferraris, 20 diamond watches and 2 jet planes? What
would that do for the world? I starved, I worked in the fields, I played barefoot,
and I didn't go to school. Now I can help people. I prefer to build schools and
give poor people food or clothing. I have built schools and a (football) stadium;
we provide clothes, shoes, and food for people in extreme poverty. I give 70
euros per month to all people from a very poor Senegalese region in order to
contribute to their family economy. I do not need to display luxury cars, luxury
homes, trips, and even planes. I prefer that my people receive a little of what
life has given me."
 Coca-Cola is the world’s most successful consumer drinks company, with
over $40 billion in sales revenue (which equates to $109,589,041 every day of
the year!). However, this also means the company is the planet’s largest
plastic polluter.
Although the multinational giant is often associated with fueling child
obesity, the company is increasingly being linked with plastic waste and
pollution, with more than 100 billion plastic bottles produced each year – that
is the equivalent of 273,972,602 plastic bottles every day of the year!
In response to negative media exposure, the company’s global chief
executive, James Quincey, stated that the Coca-Cola Company aims to
recover every plastic bottle that the company sells, and to use 50 per cent of
this for new bottles, by 2030. The company also announced that it would
replace the plastic shrink wraps used in multipacks with 100 per cent
recyclable cardboard.
GLOBALISATION
In the context of business management, globalization can be characterized as:
• The growing interdependence and integration of the world’s economies. This
has been brought about by the growing level of international trade across the world
as economies develop and consumers demand more goods and services.
• Customers around the world having ever-integrated habits and tastes
• A growing awareness and acceptance of cultural diversities and cultural exports.
• Growing international trade and exchange in goods and services, technology,
investment, and information.
• The ability of workers and businesses to establish themselves within other
communities or countries.
 Globalization has had an impact on different cultures around the world.
For example, cultural exports (which have resulted in and benefit from
globalization) include:

•The hamburger and cheeseburger (USA)

•Drive thru restaurants (USA)
•Dim sum (small bite-sized Chinese cuisines)
•Champagne (France)
•Hollywood and Bollywood movies
•Kung Fu movies (Hong Kong and China)
•Tae Kwon Do (Korea - an official Olympic sport since 1998)
•Anime cartoons and manga comics (Japan)
•Premier League football (England)
•NBA basketball (USA)
•K-pop (Korean pop genre of music)
•The English language!
INNOVATION

• “The biggest risk is not taking any risk... In a world that’s changing
really quickly, the only strategy that is guaranteed to fail is not taking
risks.” – Mark Zuckerberg
• “Minds are like parachutes - they only function when open.” – Thomas
Dewar (1864 – 1930)
INNOVATION
Innovation as a concept can be defined as creating a product (good or
service) that is new, better and of commercial value. It stems from
either:
• Invention - creating a product that is completely new to the market,
such as the iPhone smartphone in 2007, or
• Iteration - creating a change/improvement in a product that already
exists, e.g. the iPhone X in 2017.
In any case, invention and iteration can only be considered to be
innovative if they are new, better and of commercial value.
An innovative culture can give a business a competitive edge. Consider some of the examples:

•Airbnb has become the world’s largest property rentals company, but it does not own any properties
•Alibaba.com is the world’s largest B2B (business to business) online platform, but does not have any
inventories
•Amazon.com transformed the (online) retail industry, putting lots of traditional retailers out of business
in the process
•Apple launching the iPhone 3, the world’s first mass-market mobile phone without buttons,
revolutionised the telecommunications industry
•Ford made cars affordable to the masses, with the introduction of its innovative assembly lines back in
the early 20th Century
•iTunes and Spotify have revolutionised the music industry
•McDonald’s, under the leadership of its founder Ray Kroc, put food production in the fast lane by
using its innovative automated processes – as Kroc famously claimed, “I put the hamburger on the
assembly line”
•Skype has changed the way in which many multinational companies conduct meetings (via video
conferencing) and recruitment interviews, yet the company does not own any telecommunications
infrastructure
•Tesla’s innovative designs and products have sparked huge interest in all-electric cars
•Uber, the world’s largest taxi operator, does not own any taxis.
STRATEGY
“If you don’t drive your business you will be driven out of business.” - B.C.
Forbes (1880-1954), Founder of Forbes Magazine
Johnson, Scholes et al define strategy as:
“The direction and scope of an organization over the long-term,
which achieves advantage for the organization through its
configuration of resources within a challenging environment, to
meet the needs of markets and to fulfill stakeholder expectation.
STRATEGY
Put another way, strategy is about the ways in which an organization
intends to achieve its DREAMS:
• Direction
• Resources (HR & financial)
• External environment
• Aims (long-term targets)
• Markets
• Stakeholders
There are three stages to business
strategy:

•Stage 1: Strategic analysis –

determining the current position of
an organization (where are we
now?)
•Stage 2: Strategic choice –
determining the desired future of the
organization (where do we want to
be?)
•Stage 3: Strategic
implementation – determining the
path to get the organization to where
it wants to be (how do we get there?)
 INTERRELATEDNESS OF THE CUEGIS CONCEPTS
The six CUEGIS concepts are not mutually exclusive. For example:
• Change can be innovative and ethical
• Culture drives innovation and the ethical stance of the organization
• Ethics can be influenced by global factors and changes in social attitudes
• Globalization is both affected by and impact on change and strategy
• Innovation causes change, and is affected by strategy
• Strategy is largely dependent on the organization’s culture and its ethical
stance
 Consider the following ways that McDonald's have used to
remain competitive in the fast-food industry. In each case
identify at least two relevant CUEGIS concepts:

Q1. Opening some branches 24 hours a day, 7 days a

week.
Q2. Introduction of salads and fresh fruits to McDonald's
menus.
Q3. Launching the McDonald's Drive Thru concept in new
markets.
Q4. The launch of McCafe outlets.
Q5. Home deliveries of McDonald's meals (using its own
employees).
 Operations management strategies and practices for sustainability (Unit 5) can be examined
from the lens of all six CUEGIS concepts:

•Change - Sustainable business operations require changes to the way organizations produce
goods and deliver services. For example, the Covid-19 pandemic of 2019 - 2020 meant changes
were needed in the way people worked (from home) and how students learned (online or
distance learning).
•Culture - Sustainable business practices can be a major aspect of an organization's corporate
culture, such as Coca-Cola which no longer uses plastics in the packaging of its multipacks. In
many countries, the use of plastic straws in restaurants, such as McDonald's, or the use of
plastic bags are banned or taxed.
•Ethics - Recycling, reducing and reusing are deemed to be ethical business practices, in order
to preserve the planet's scarce resources.
•Globalization - The forces surround globalization have led to firms across the world being more
environmentally conscious and improving their own sustainable business practices.
•Innovation - Highly innovative firms, such as Tesla, have been able to improve their profits as
well as protect the planet.
•Strategy - Firms can gain competitive advantages by improving their green credentials and
corporate social responsibilities (CSR) as forms of business strategy.