José Luis Ortiz Flores

We have already analyzed the importance of the Strategic Planning process during these last months (https://redintegralis.live/2021/01/10/analisis-competitivo-y-estrategia/) . This exercise should result in knowing our goals and strategies for the future, and it should also determine what resources to use for those strategies, as resources are limited. So, we must “discover and focus”. Discover our goals and our capacities as an organization and focus our resources and capacities to reach those goals.

Making an analogy of the company resources with international trade, in the XVI century the prevailing theory was “mercantilism”: sell (export) as much as you can (no matter what), and buy (import) as less as you can; itdidn´t last much until David Hume described some flaws in this theory (1752); and more clearly, Adam Smith in 1776 with his book “The Wealth of Nations” (https://www.adamsmith.org/the-wealth-of-nations) , where he described the importance of focusing the production on what countries are better producing at than the others, what was called “absolute advantage”.

This concept was fortified years later by David Ricardo (1817) with his book “Principles of Political Economy” (https://socialsciences.mcmaster.ca/econ/ugcm/3ll3/ricardo/Principles.pdf) and the explanation on how the “comparative advantage” stands that the potential world production is greater with unrestricted free trade than it is with restricted trade, by the efficient use of the production factors in each country.

These international trade concepts can be extended to the resources of your company. If you focus your human, material and financial resources in the activities, processes and projects where you are better and more efficient at, that will increase your capacities as an organization.

Remember, in these times we have to be creative and very efficient, in order to achieve our company goals.