rationalsation

• What is the main goal of rationalisation in a business?

  To increase efficiency
• What is rationalisation in business?

  Reorganisation to increase efficiency
• What are some examples of rationalisation in business?

  Closing branches, transferring production, trimming product ranges
• Why do businesses rationalise their operations?

  To increase efficiency and reduce size
• What is an example of a company that rationalised its operations by closing underperforming branches?

  Barclays Bank
• What is an example of a company that rationalised its operations by transferring production?

  Ford
• What is an example of a company that rationalised its operations by trimming its product ranges?

  Boots the Chemist
• What can be a result of rationalisation in a business?

  Uncertainty, resistance from staff, loss of jobs
• What is outsourcing in business?

  Involving outside suppliers in internal activities
• What is the main advantage of outsourcing in business?

  Increased efficiency and lowered costs
• What are the advantages of outsourcing?

  • Significantly reduced staffing costs
  • Well trained staff provided by the outsourcing company
  • Existing workload and stress levels are reduced
  • Less investment risk
  • Capital needs are reduced
  • Lower costs increase profits
• What are the disadvantages of outsourcing?

  • Potential of poor customer service
  • Existing employees may feel demotivated
  • Quality of production / product cannot be guaranteed
  • More difficult to implement JIT systems
  • Breakdown of communication in the production chain
  • Loss of security of data
  • Lost tax revenues to the home government
• Why might a business choose to outsource its operations?

  To reduce costs and increase efficiency
• What are the potential risks of outsourcing in business?

  Poor customer service, demotivated employees, loss of data security
• What is the difference between outsourcing and offshoring?

  Outsourcing involves outside suppliers, offshoring involves moving jobs overseas
• How can rationalisation affect employees?

  Uncertainty, resistance, loss of jobs, demotivation
• What role can IT systems play in rationalisation?

  Replacing paper systems, increasing efficiency
• How can outsourcing benefit research and development?

  Lower costs, increased profits, more capital for R&D
• What are the potential consequences of poor communication in the production chain?

  Breakdown of communication, loss of data security, decreased efficiency