Rationalization (economics)
Encyclopedia
In economics
, rationalization is an attempt to change a pre-existing ad hoc
workflow
into one that is based on a set of published rules. There is a tendency in modern times to quantify experience, knowledge
, and work. Means-end (goal-oriented) rationality is used to precisely calculate that which is necessary to attain a goal. Its effectiveness varies with the enthusiasm of the workers for the changes being made, the skill with which management applies the rules, and the degree to which the rules fit the job.
Rationalization aims at an efficiency increase by better use of existing possibilities: A same effect can with fewer means, or with same means to be obtained. In the industry thereby frequently the replacement of manpower is designated by machines (rationalization investment). It is the reasonable, appropriate organization of operational conditions under changing conditions to increase with the goal, productivity and economy.
Julien Freund defines rationalization as "the organization of life through a division and coordination of activities on the basis of exact study of men's relations with each other, with their tools and their environment, for the purpose of achieving greater efficiency and productivity."
The rationalization process is the practical application of knowledge to achieve a desired end. Its purpose is to bring about efficiency, coordination, and control of the natural
and social environment
. It is a product of "scientific specialization and technical differentiation" that seems to be a characteristic of Western culture
. Rationalization is the guiding principle behind bureaucracy
and the increasing division of labor
, and has led to an increase in both the production and distribution of goods and services
. It is also associated with secularization
without its more positive component of humanism
, with depersonalization and with oppressive routine.
Increasingly, human behavior is to be guided by observation, experiment, and reason (zweckrational
). Change in human character is expected to be part of the process; rationalization and bureaucratization promote efficiency, and materialism
, both of which are subsumed under Weber
's concept of zweckrational.
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
, rationalization is an attempt to change a pre-existing ad hoc
Ad hoc
Ad hoc is a Latin phrase meaning "for this". It generally signifies a solution designed for a specific problem or task, non-generalizable, and not intended to be able to be adapted to other purposes. Compare A priori....
workflow
Workflow
A workflow consists of a sequence of connected steps. It is a depiction of a sequence of operations, declared as work of a person, a group of persons, an organization of staff, or one or more simple or complex mechanisms. Workflow may be seen as any abstraction of real work...
into one that is based on a set of published rules. There is a tendency in modern times to quantify experience, knowledge
Knowledge economy
The knowledge economy is a term that refers either to an economy of knowledge focused on the production and management of knowledge in the frame of economic constraints, or to a knowledge-based economy. In the second meaning, more frequently used, it refers to the use of knowledge technologies to...
, and work. Means-end (goal-oriented) rationality is used to precisely calculate that which is necessary to attain a goal. Its effectiveness varies with the enthusiasm of the workers for the changes being made, the skill with which management applies the rules, and the degree to which the rules fit the job.
Rationalization aims at an efficiency increase by better use of existing possibilities: A same effect can with fewer means, or with same means to be obtained. In the industry thereby frequently the replacement of manpower is designated by machines (rationalization investment). It is the reasonable, appropriate organization of operational conditions under changing conditions to increase with the goal, productivity and economy.
Julien Freund defines rationalization as "the organization of life through a division and coordination of activities on the basis of exact study of men's relations with each other, with their tools and their environment, for the purpose of achieving greater efficiency and productivity."
The rationalization process is the practical application of knowledge to achieve a desired end. Its purpose is to bring about efficiency, coordination, and control of the natural
Natural environment
The natural environment encompasses all living and non-living things occurring naturally on Earth or some region thereof. It is an environment that encompasses the interaction of all living species....
and social environment
Social environment
The social environment of an individual, also called social context or milieu, is the culture that s/he was educated or lives in, and the people and institutions with whom the person interacts....
. It is a product of "scientific specialization and technical differentiation" that seems to be a characteristic of Western culture
Western culture
Western culture, sometimes equated with Western civilization or European civilization, refers to cultures of European origin and is used very broadly to refer to a heritage of social norms, ethical values, traditional customs, religious beliefs, political systems, and specific artifacts and...
. Rationalization is the guiding principle behind bureaucracy
Bureaucracy
A bureaucracy is an organization of non-elected officials of a governmental or organization who implement the rules, laws, and functions of their institution, and are occasionally characterized by officialism and red tape.-Weberian bureaucracy:...
and the increasing division of labor
Division of labour
Division of labour is the specialisation of cooperative labour in specific, circumscribed tasks and likeroles. Historically an increasingly complex division of labour is closely associated with the growth of total output and trade, the rise of capitalism, and of the complexity of industrialisation...
, and has led to an increase in both the production and distribution of goods and services
Goods and services
In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility. It is often used when referring to a Goods and Services Tax....
. It is also associated with secularization
Secularization
Secularization is the transformation of a society from close identification with religious values and institutions toward non-religious values and secular institutions...
without its more positive component of humanism
Humanism
Humanism is an approach in study, philosophy, world view or practice that focuses on human values and concerns. In philosophy and social science, humanism is a perspective which affirms some notion of human nature, and is contrasted with anti-humanism....
, with depersonalization and with oppressive routine.
Increasingly, human behavior is to be guided by observation, experiment, and reason (zweckrational
Instrumental action
Instrumental action is a social action pursued after evaluating its consequences and consideration of the various means to achieve it. They are usually planned and taken after considering costs and consequences...
). Change in human character is expected to be part of the process; rationalization and bureaucratization promote efficiency, and materialism
Economic materialism
Materialism is a mindset that views the consumption and acquisition of material goods as positive and desirable. It is often bound up with a value system which regards social status as being intrinsically linked to affluence as well as the perception that happiness can be increased through...
, both of which are subsumed under Weber
Max Weber
Karl Emil Maximilian "Max" Weber was a German sociologist and political economist who profoundly influenced social theory, social research, and the discipline of sociology itself...
's concept of zweckrational.
See also
- Labor (economics)
- Managerial economicsManagerial economicsManagerial economics as defined by Edwin Mansfield is "concerned with application of economic concepts and economic analysis to the problems of formulating rational managerial decision." It is sometimes referred to as business economics and is a branch of economics that applies microeconomic...
- Max WeberMax WeberKarl Emil Maximilian "Max" Weber was a German sociologist and political economist who profoundly influenced social theory, social research, and the discipline of sociology itself...
- Scientific managementScientific managementScientific management, also called Taylorism, was a theory of management that analyzed and synthesized workflows. Its main objective was improving economic efficiency, especially labor productivity. It was one of the earliest attempts to apply science to the engineering of processes and to management...