From Wikipedia, the free 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. A general tendency in modern times to mathematize experience, knowledge, and work; or the growth of means-end rationality (goal-oriented rationality), referring to a highly precise calculation of means to attain a goal, and applying such calculation to the “conduct of life” itself. This is usually intended to increase efficiency or flexibility. Results tend to vary with the enthusiasm of the workers for the changes being made, with the skill in which management applies the rules to the work being done, and with the degree to which the rules fit the job at all.

The rationalization process is the practical application of knowledge to achieve a desired end. It leads to efficiency, coordination, and control over both the physical and the social environment. It is a product of "scientific specialization and technical differentiation" that seems to be a characteristic of Western culture (Freund, 1968). It is the guiding principle behind bureaucracy and the increasing division of labor. It has led to the unprecedented increase in both the production and distribution of goods and services. It is also associated with secularization, depersonalization, and oppressive routine. Increasingly, human behavior is guided by observation, experiment and reason (zweckrational) to master the natural and social environment to achieve a desired end (Elwell, 1999). Freund (1968: 18) defines it 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." Max Weber's general theory of rationalization (of which bureaucratization is but a particular case) refers to increasing human mastery over the natural and social environment. In turn, these changes in social structure have changed human character through changing values, philosophies, and beliefs. Such superstructural norms and values as individualism, efficiency, self-discipline, materialism, and calculability (all of which are subsumed under Weber's concept of zweckrational) have been encouraged by the bureaucratization process.

Elwell, Frank W. 1999. Industrializing America: Understanding Contemporary Society through Classical Sociological Analysis. West Port, Connecticut: Praeger.

Freund, Julien 1968. The Sociology of Max Weber. New York: Vintage Books.

This economics or finance-related article is a stub. You can help Wikipedia by expanding it.