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 ?
Eoee1/4EoWith the rising number complaints of high energy bills and the excessive use of electricity, it was necessary to seek new ideas that would help change the daily routine of our lives and adopt modern styles rationalise power consumption,Eoee1/4A[yen] Engineer Hamed said.
Due to the abrogation of the Real Property Tax, the Government has taken several measures targeting revenues and has continued to rationalise the business operations of budget users.
The central bank of Bangladesh is planning to rationalise forex transactions in order to attract foreign investors.
This change in ownership is part of the process to rationalise the corporate structure, making the holdings of Endesa in its Chilean subsidiaries both, simpler and more efficient.