Posts by mjmedlock:
Absolute advantage is a theory of trade that was first developed by Adam Smith. The theory demonstrates that countries can benefit from specializing in producing and trading goods in which they have an absolute advantage.
Smith identified the sources of absolute advantage as coming from efficiency in production and/or natural advantages, such as climate or geography.
The video below gives a brief overview of the topic, including a simple calculation to demonstrate the concept.
Mercantilism is one of the first, if not the first, trade theories. The idea was popular in the 16th, 17th and 18th centuries. The intellectual argument for mercantilism was lost when Adam Smith introduced the world to the theory of absolute advantage. David Ricardo’s work on comparative advantage further discredited the idea. Unfortunately, despite centuries […]
The DISC personality test is used by organisations to classify personality types. Why do they need to do this? Sometimes it is used in the selection process. Firms attempt to analyse top performers and then recruit candidates with similar DISC profiles. This is a somewhat controversial use of the tool as it might lead to […]
IKEA case studies are very popular in international management classes. Here are a couple of extra resources I came across recently that can help you understand more about this company. The first is a podcast from the BBC in which reporter Peter Day interviews Anders Dahlvig, the former CEO of the company. In the interview […]
Purchasing Power Parity – If we lived in a world of truly efficient markets then the price of a basket of goods would be the same in all countries. However, anyone who has taken a trip abroad knows that this is not the case. In fact prices for identical items vary quite widely across nations. […]
Hofstede: 5 Cultural Dimensions Geert Hofstede is one of the most influential researchers in the field of national culture. His model of culture is comprised of five dimensions: Power distance Uncertainty avoidance Individualism vs.. collectivism Masculinity vs.. femininity Long- vs.. short-term orientation Power distance All societies have inequalities and hierarchies. These stem from such things […]
I’ve just come across an article in Strategy & Business about merger and acquisition fallacies. This is a topic that always comes up in strategy lessons because it is such a common strategy and yet has such I high failure rate. I’ll write more about mergers and acquisitions in future posts. In the meantime, this […]
Three Generic Strategies For Competitive Advantage Michael Porter came up with the idea that companies could compete using three generic strategies. This idea can be further developed into a five generic strategies framework. These frameworks provide a useful way of thinking about strategy. However they should not be thought of as the only possibilities as […]
Hall added several important ideas to cross-cultural analysis. His first contribution was the idea that cultures could be put into broad categories that he called high context and low context cultures. His is idea was that people show different characteristic styles of communication and relationship building depending on whether they grew up in a high […]
Kluckhohn & Strodtbeck were two early pioneers in theories about culture. They identified five, and later a sixth, orientations that they claimed culture groups tended towards. The importance of their work lies in the influence that it has had on the development of theories by later researchers. The Kluckhohn & Strodtbeck Model Orientations Range of […]