To make a directory in the current directory:
mkdir specification
This creates a new directory specification in your current working directory.
To make a new directory in the parent directory:
mkdir ../presentations
This creates the directory presentations in the parent directory of the current working directory.
In effect, this creates a new directory at the same level of the file system as the current directory.
To make a new directory in a subdirectory:
mkdir reports/january/amy
This creates the directory amy in the subdirectory reports/january.