When the Linux shell executes commands, it first looks to see if you specified an explicit path name. If the shell doesn't see a path name, it searches in the PATH environment variable (Look in /usr/local/bin, then /usr/bin, etc).
This is a very unintuitive piece of Unix, and confuses many people. Some people get around this by setting PATH to include the current working directory, '.':
export PATH=".:$PATH"
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