Rationalization can be defined as the re-organization and rebuilding of the organization in order to increase its efficiency and performance. There are a number of processes and operations that an organization can undergo in order to increase efficacy and operational strength of the organization. These process and operations may include expansion and reduction in the size of the organization, hiring or firing of the staff, change in the market or the public policy of the organization and altering the strategy used to produce market or sell different products and the services of the organization.

Rationalization is somewhat similar to that of the reorganization of the company or the organization however the span of rationalization is larger and wide as compared to re-organization. The rationalization involves the change of strategy as well as the change of the operations as well as the change of the structure of the organization.

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