Various aspects of Rationalization
Essential elements of Rationalization are: 1. combination 2 standardization 3. specialization 4. simplification 5. mechanization 6. modernization 7. application of scientific management on industry wide scale and 8. social objectives!
Although rationalization owes its birth to Germany, yet it has become an integral part of different industrial organizations in various countries.
Essential elements of rationalization are enumerated as under.
1. Combination: Rationalization brings about the integration or merger of different types of inefficient and weak units for enjoying the economies of large scale. production and distribution. This also ensures the planned utilisation of available resources and removal of idle capacity.
2. Standardization – This is another important feature of rationalization which aims at removal of unnecessary varieties of standardized products. It is concerned with the production of lesser varieties of standardized products. It further reduces the utilization of available resources like materials, manpower, machinery etc.
3. Specialization- Standardization leads to specialization. The work is divided in accordance with the nature of different types of activities. In other words, specialization leads to division of labour. Specialization leads to most effective and proper utilization of available resources like materials, manpower, machinery etc.
4. Simplification- On account of standardization and specialization production processes are considerably simplified. This leads to higher production with lesser costs and ensures increased sales of each variety of products.
5. Mechanization- Mechanization is one of the important features of rationalization which aims at replacing human labour with machines. Mechanization further leads to automation which increases the speed and efficiency of production.
6. Modernization- The replacement of old and absolute machines and equipment with modern techniques of production is another distinctive feature of rationalization. The modern techniques and innovations of production are integral components of the schemes of rationalization.
7. Application of Scientific Management on Industry Wide Scale : Rationalization is concerned with replacing the old and traditional methods of production with the modern and scientific techniques applicable to different firms operating in particular industry. The methods of scientific investigation and management will unsure greater efficiency, lesser production costs and saving of time.
8. Social Objectives – Rationalization is not only concerned with the increase in the productivity but also with the overall prosperity of all the sections of the society. It has both social and human values. To the producers it reduces the cost of production and increases profits.
