What technology has wrought: the rise of the 'rateocracy'

Technology may increase corporate transparency overnight, in a way that decades of laws and regulations have not been able to accomplish.
Written by Joe McKendrick, Contributing Writer

The top one percent may or may not control most of the world's wealth, but the power to make or break enterprises rests with those who take the initiative to vote up or down on products and services.

Photo credit: Joe McKendrick

Currently, consumers can rate products, services and experiences through sites such as Yelp, Angie's List, TripIt, Amazon and Facebook. Robert Moran, head of the Brunswick Group, says the economy is rapidly evolving into a "rateocracy," in which enterprises will rise and fall based on consumer and stakeholder ratings.

The next phase in the revolution will extend these ratings systems even deeper into enterprises, with corporate reputations rising and falling on ratings systems, as Moran explains in The Futurist:

"Soon, we will also rate corporations on their behavior and have real-time mobile access to the aggregated, stakeholder-generated reputation scores of nearly every corporation on the planet. We will use this information to reward and punish companies by buying their products or spurning them. We will have entered into a completely new era of corporate reputation, one in which reputation is radically transparent and extremely valuable."

As the rateocracy opens up real-time data from internal rating systems, stakeholder expectations, CRM data, and aggregations of multiple rating sites, "the corporation will lose power as it controls relatively less of its own reputation," Moran says. The resulting datasets that will be open for viewing across the Internet will create competition between enterprises for a "virtuous race to the top," he states.

In the long run, technology may increase corporate transparency -- not only among publicly traded companies, but also private and non-profit organizations -- in a way that decades of laws and regulations have not been able to accomplish.

This post was originally published on Smartplanet.com

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