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Comparative Advantage Dimension

 

Description

We succeed to the extent we apply the principle of division of labor by comparative advantage, resulting in superior application of individual abilities, cooperation and teamwork.

To maximize results, supervisors at every level continually revisit comparative advantages as team members, business conditions and opportunities change. Leaders apply comparative advantage across Koch, not just in their organization. They continually ensure everyone is in a role where they can best contribute, with the right responsibilities and decision rights, and receives feedback that helps them grow, develop and self-actualize.

People become increasingly motivated as they have opportunities to develop personal knowledge in their roles and earn greater decision rights.

Authorities are dispersed according to each person’s comparative advantage. They are not centralized or decentralized, rather, they flow to and from individuals based on the profitability and timeliness of decisions. People become increasingly motivated as they have opportunities to develop personal knowledge in their roles and earn greater decision rights.

Decision-makers seek input and challenge from those with diverse perspectives, experiences and knowledge who can contribute to better decisions.

Highlighted Principles

Accountability

Short Description
Accountability, properly understood, is to take account of what happened and appropriately recognize those who contributed positively or negatively to results…
Principle in Brief Page
/content/koch/language-masters/en/principles-in-brief/accountability

Cooperation and Teamwork

Short Description
A fundamental principle of human progress is the division of labor by comparative advantage and the resulting increase in cooperation. Learn more through “Division of Labor by Comparative Advantage.”
Principle in Brief Page
/content/koch/language-masters/en/principles-in-brief/division-of-labor-by-comparative-advantage

Diversity

Short Description
Coming soon
Principle in Brief Page

Division of Labor by Comparative Advantage

Short Description
Employees have a comparative advantage in a group when they can perform an activity at a lower opportunity cost than others…
Principle in Brief Page
/content/koch/language-masters/en/principles-in-brief/division-of-labor-by-comparative-advantage

Multiple intelligences

Short Description
Coming soon
Principle in Brief Page

Overcoming Entropy and Bureaucracy

Short Description
At Koch, our approach to overcoming entropy is to create and deploy energy and knowledge through our principle-based framework…
Principle in Brief Page
/content/koch/language-masters/en/principles-in-brief/overcoming-entropy-and-bureaucracy

Overcoming entropy and bureaucracy

Short Description
Coming soon
Principle in Brief Page

Partnerships

Short Description
The more people with different and advantaged capabilities join together the more successful they and their organizations will be…
Principle in Brief Page
/content/koch/language-masters/en/principles-in-brief/partnership

Personal Knowledge

Short Description
We only truly know something when we can apply it to get results …
Principle in Brief Page
/content/koch/language-masters/en/principles-in-brief/personal-knowledge

Principle-Based vs. Rule-Based

Short Description
Setting expectations according to general principles without prescribed, detailed directives or rules is core to our culture and long-term success…
Principle in Brief Page
/content/koch/language-masters/en/principles-in-brief/principle-based-vs--rule-based

Principled Entrepreneurship™

Short Description
We depend on the entrepreneurial contributions of our employees…
Principle in Brief Page
/content/koch/language-masters/en/principles-in-brief/principled-entrepreneurship-

Property Rights

Short Description
Clear and protected property rights stimulate beneficial investment. To encourage a strong sense of ownership and entrepreneurship, employees are held accountable for a set of responsibilities and their results.
Principle in Brief Page
/content/koch/language-masters/en/principles-in-brief/property-rights

Stewardship and Compliance

Short Description
The essence of stewardship is recognizing our obligation to always act in a manner that respects the rights of others…
Principle in Brief Page
/content/koch/language-masters/en/principles-in-brief/stewardship-and-compliance

Talents

Short Description
Principle in Brief Page
/content/koch/language-masters/en/principles-in-brief/talents
 

What has changed

The name of this dimension has changed from Decision Rights, since the division of labor by comparative advantage is the principle that guides how we organize and how we allocate decision rights.