Creative destruction describes the deliberate dismantling of established processes to make way for improved production methods.
Creative destruction is most often used to describe disruptive technologies such as railroads or, nowadays, the Internet.
The term was coined in the early 1940s by economist Joseph Schumpeter, who observed real examples of creative destruction such as Henry Ford’s assembly line.
An economist is an expert who studies the relationship between a society’s resources and its production or output, using a number of different indicators to predict future trends.
An absolute advantage is when a manufacturer can provide a greater quantity of a product or service for the same price or the same quantity at a lower price than its competitors.
Animal spirits come from the Latin spiritus animalis: “breath that awakens the human mind.” It was introduced by the British economist John Maynard Keynes in 1936.
Evaluation costs are the fees a company pays for discovering defects in its products before they are delivered to customers; they are a form of quality control.
The articles of association can be seen as a user manual for the company, defining its purpose and outlining the methodology for carrying out the necessary day-to-day tasks.