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 ?
Cynthia Passmore-McLaughlin, President and CEO, commented, "Our exhaustive study of the business has resulted in a plan to transform Enesco by rationalizing our product lines around our best performing and most profitable merchandise categories, and producing an organizational structure properly sized to the scale of the Company's current business.
David Gerrard, Senior Vice President, Purchasing for USF, commented "To date we've been very effective in rationalizing our supplier base, as well as in creating strong sourcing relationships.
When people are highly involved personally, rationalizing an unwanted outcome may make it easier for them to cope as individuals, Jost says.
It challenges the Michigan law school's practice of rationalizing race-based admissions policies by using the word "diversity" rather than "discrimination.
The merged company is expected to attain cost efficiencies by rationalizing its business while taking advantage of its large customer base and wide range of products and services.
As part of the company's worldwide strategy, Phillips' European Division is reviewing and rationalizing its assets in order to concentrate on its exploration and production (E&P) portfolio," said Henry McGee, president of Phillips' European Division.
CPFL has met with considerable success in rationalizing its labor force and modifying many of the work rules under which its predecessor companies operated.