Rationalization

Meaning of Rationalization The rationalization is a concept that was created by Max Weber.  Rationalization means thinking reasonably in a practical way. In other words, instead of human behavior being motivated by customs and traditions, rationalization led to behaviors, that were guided by reason and practicality.

Definition of Rationalization Rationalization refers to the replacement of traditions, values, and emotions as motivators for behavior in society with thoughts and actions which appear to be more rational. Sociologist Max Weber used the term rationalization to refer to the way in which daily life is organized socially to accommodate large numbers of people, and not necessarily to accommodate the way that individuals actually think. The rise of scientific study, development of capitalism and introduction of bureaucracy are the examples.

In a very simple way, rationalization is a process whereby thought and action rooted in emotion; superstition and respect for mysterious forces, and tradition are replaced by value- rational thought and action. In the context of industrialization, "the most efficient way" means the fastest and most cost-effective way to achieve a profit. As Weber argued, once people identify a valued goal and decide on the means (actions) to achieve it, they seldom consider less profitable or slower ways to reach the goal.

Characteristics of Rationalization Rationalization refers to the process by which modern society has increasingly become concerned with: Efficiency: achieving the maximum results with a minimum amount of effort Predictability: a desire to predict what will happen in future Calculability: a concern with numerical data i.e. statistics and scoring Dehumanization: employing technology as a mean to control human behavior.

Types of Rationality There are four types of rationality as described by Max Weber. Practical Rationality: practical rationality involves systematically deciding the best way to achieve a desired end based on what is practical. Tasks and activities done in a practical way. Theoretical Rationality: involves understanding the world through abstract concepts. To understand the world around us deductively and inductively. Substantive Rationality: involves deciding the best choice a mean to an end as guided by all of your collective values. Choosing between right and wrong based on our own values and morality. Formal Rationality: involves making choices based on universal rules, regulations and larger structure of your society. Choosing between right and wrong based on rules and laws.

Aims / Objectives of Rationalization Reduce costs and improve service with a systematic approach. To eliminate waste and inefficiency of every kind.  To ensure maximum allocation and utilization of available resources. To introduce a system of scientific selection, training, promotion and wage payments for workers.

To provide better working conditions like ventilation, lighting, proper working hours, absence of noise, drinking water, canteen, rest-rooms, toilets etc. Securing to the community greater stability and a higher standard of living. To institute various schemes like unemployment or sickness accident insurance, housing facilities etc.

Advantages of Rationalization A society more efficient and fair, has rationalized laws and procedures. Rationalization leads to lesser production costs on account of lesser variety of products and introduction of specialization and simplification of production processes. Lesser cost of production leads to higher profits. In fact, it converts uneconomical units into profitable and efficient ones.

Rationalization checks the growth of unhealthy and cut throat competition among various producers in an industry. It considerably reduces the wasteful expenditure on advertising, transportation, distribution and marketing of products. Rationalization brings about economies of large scale production and distribution. By achieving mutual cooperation between various firms operating in an industry, economies of bulk purchasing, centralized advertising, production and distribution policies etc. are ensured.

Different firms or units operating an industry can have collective research programs and facilities. The industrial research and investigation is of immense use in improving the quality of the products and improving the process of distribution. Shortage of financial resources can be easily met through centralization of finance under rationalization. Financial rationalization ensures increased rate of return on capital employed in an industry. Adequate financial resources can be utilized for conducting research, installation of better and improved methods of production and modernization of plant etc.

Rationalization, by adopting the techniques of amalgamation, absorption and merger etc. eliminates the inefficient and weak units. This leads to proper industrial stability and peace and provides suitable basis for long term planning for the industry as a whole.

Advantages to Workers Due to lesser cost of production and increased profits, wages of the workers increase. This provides them greater security and higher standard of living. Workers get better working conditions and improved environment of work which is helpful in increasing their efficiency. It further enhances their morale, and confidence for better performance.

Rationalization results in the stability of labor force in industrial organizations in the long run. As there is no scarcity of finances under rationalization schemes, the workers can be provided with better and improved working conditions viz., lighting, ventilation, canteen facilities, limited working hours followed by rest pauses, safety and other labor welfare measures etc.

Rationalization plays an important role in creating mutual cooperation and understanding between the employer and the employees. The intimate relations and cordial atmosphere is very helpful in securing industrial peace, enhancing industrial production and overall prosperity. Rationalization provides for a proper procedure to be followed in the recruitment, selection, placement and training of personnel. This provides ample opportunities for skilled and efficient workers for increasing their efficiency. Rationalization also lays down promotion policies for efficient and hard working personnel.

Rationalization provides various facilities like housing, recreational, medical, schools etc. Various schemes of social security and benefits are also introduced.

Advantages to Consumers Rationalization considerably reduces the cost of production thereby bringing down the cost of goods to consumers. On account of lesser prices of goods, the consumers can make more purchases. By adopting the measures of rationalization like specialization and standardization, better and improved quality goods are ensured to the customers.

Since rationalization provides standardized products having limited varieties, it provides the customer convenience of choice from limited varieties of products. The customer needs not to waste his time and money in making selection of the product. By providing goods of better quality at lower prices to the consumers, rationalization plays significant role in increasing the standard of living of the consumers. The customers can purchase more goods on account of lesser prices.

Advantage to the Nation Rationalization leads to higher production and increased productivity of various factors of production. This results in higher national income which in turn leads to increased per capital income. This is considerably helpful in raising living standards of the people. Rationalization ensures proper and effective utilization and balanced distribution of rare resources thereby eliminating wastage and inefficiency of every kind.

Rationalization enhances the competitiveness of the industry in the international market. In other words, it equips the rationalized industry with the strength to meet the prevalent competition in the international market. This increases the export earnings by creating new export potential.

Rationalization is beneficial to the community as a whole Rationalization is beneficial to the community as a whole. Manufacturers get higher profits, workers receive higher wages and enjoy better working conditions and consumers get better quality products at lesser prices.

Disadvantage Iron Cage A social order so organized and rational that it traps people inside an invisible prison. Therefore, Weber called it rationality of irrationality.