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
Dr Al Leem added that over 2,300 individuals and establishments took part in the rationalisation hour initiative last year.
The programme, which will primarily target Swedish and Danish operations, aims at an annual rationalisation effect of approximately SEK100m.
It is estimated that the rationalisation measures will result in EUR7-9m in non-recurring costs, which will be recognised in the second-quarter results for 2006.
The solutions will be augmented by Kognitio's expert consultancy services in data management and analysis, platform rationalisation, and managed services administered within focused Service Level based Agreements (SLA).
The Swedish industrial group Trelleborg Group said on Thursday (1 July) that it had completed the rationalisation measures within its North American automotive business.
As a consequence of this, purchasing practices are undergoing a process of rationalisation and reform across Europe.
Sampo said that it had already reduced its personnel by over 100 persons in the first half of 2003 due to voluntary solutions outside the rationalisation process, such as early retirement.
On November 14, 2002 Sumitomo Metals announced a steel works rationalisation plan, a capital increase plan through private placement, and a de-leveraging scheme.
The negotiations were due to the company's rationalisation programme that aims at productivity enhancements by means of investment and structural rationalisation.