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 ?
The rationalization process identifies the performance of every SKU in the portfolio.
Having the right products in the product portfolio requires the company to have a formalized management product rationalization process.
Continued improvements in operating performance and efficiency, asset rationalization, and debt reduction to within management leverage targets, will support credit quality in the medium term, Standard & Poor's said.
When fully complete, this production rationalization in U.
Of the many actions we have taken since the Combination, manufacturing rationalization should prove to be the most important in improving Alpharma's long-term competitive position and profitability.
Billing, Norcen's President and Chief Executive Officer, said, "Combined with the internal restructuring, these asset rationalizations have given us a solid start towards simplifying the Company's operations as well as its balance sheet.
Other achievements in the Company's ongoing asset rationalization program included the sale of a substantial portion of its investment portfolio.
In the study, rationalizations measures are described as being positive and absolutely essential in order to maintain competitive edge on the global market, and thus resources for good working conditions.