rationalization

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Rationalization

The process of reorganizing and overhauling a company's operations, policies, and anything else needed to make the company more efficient. Rationalization is thought to be more widespread than a reorganization; it may involve closing some operations while expanding others. It usually involves a shift in investment or other policy. Rationalization is intended to improve a company's profitability.

rationalization

the restructuring of a firm or industry to enable it to become more efficient or to reduce OVERCAPACITY. In some cases this may involve the firm in closing high-cost plant and concentrating production in larger, more modern plants; or it may involve the streamlining of a firm's organizational structure and reducing overhead costs. In the context of an industry rationalization may require firms to merge, or inefficient firms to leave the industry leading to higher levels of MARKET CONCENTRATION. See PRODUCT RATIONALIZATION. DIVESTMENT.

rationalization

the reorganization of an industry (or firm) in order to enable it to use its resources more efficiently Rationalization usually involves the closure of high-cost plants (either through the merging of firms or their exit from the industry), which then allows output to be concentrated in plants of MINIMUM EFFICIENT SCALE and enables a better ‘balance’ to be achieved between industry supply and demand by eliminating EXCESS CAPACITY. Within a firm, rationalization may involve streamlining its organizational structure in order to reduce overhead costs. See also PRODUCTIVE EFFICIENCY, ORGANIZATIONAL SLACK.
References in periodicals archive ?
Nor are there any signs that this Government will be reshuffled, which suggests that its policy of rationalisation will continue.
The United Kingdom - Defence Logistics Rationalisation Initiatives
France - Defence Logistics Rationalisation Initiatives
Many of the issues touched on in the announcement regarding the series of rationalisation plans by Sumitomo Metals are not as yet formalised, and Fitch does not place credibility in the plans.
The sale of these assets continues the Group's process of rationalisation and simplification of non-core assets, with the focus firmly on building a portfolio of stronger, larger, longer life operations.
Resco has been forced to reduce activity within certain sectors due to cost rationalisation measures having been implemented by our customers.
Normandy is now in a unique position to meet the challenges of continuing rationalisation in the gold industry.
For SOL, this joint venture will generate positive commercial effects which, together with the previously announced sale and rechartering of the RoRo vessels and the ongoing rationalisation measures, will result in improved profitability in the long term.
In order to achieve these objectives, the BCP Group will identify and launch selected rationalisation, restructuring and relaunching initiatives:
The Directors, including the independent non-executive Directors of the Company, considered that the Acquisition is fair and reasonable, taking into account that the Acquisition is part of the rationalisation plan of the Group.
Peter Morris, president and COO, MTi, commented, "These results represent the end of an era of financial restructuring, management changes and product rationalisation and we can now go forward with a completely clean sheet.
Following rationalisation, a 19 per cent increase in Resins' sales in Asia Pacific resulted mainly from the commissioning of the new production facilities in Singapore.