Traditionally, the term ‘crowd’ was used almost exclusively in the context of people who self-organized around a common purpose, emotion, or experience. Today, however, firms often refer to crowds in discussions of how collections of individuals can be engaged for organizational purposes. Crowdsourcing –— defined here
as the use of information technologies to outsource business responsibilities to crowds –— can now significantly influence a firm’s ability to leverage previously unattainable resources to build competitive advantage. Nonetheless, many managers are hesitant to consider crowdsourcing because they do not understand how its various types can add value to the firm. In response, we explain what crowdsourcing is, the advantages it offers, and how firms can pursue crowdsourcing. We begin by formulating a crowdsourcing typology and show how its four categories –— crowd voting, micro-task, idea, and solution crowdsourcing – can help firms develop ‘crowd capital,’ an organizational-level resource harnessed from the crowd. We then present a three-step process model for generating crowd capital. Step one includes important considerations that shape how a crowd is to be constructed. Step two outlines the capabilities firms need to develop to acquire and assimilate resources (e.g., knowledge, labor, funds) from the crowd. Step three outlines key decision areas that executives need to address to effectively engage crowds.
An evolutionary approach to understanding adaptive organizational resilienceIan McCarthy
In this paper, we introduce a framework to understand organizational resilience as an evolutionary process where organizations adapt their configurations to changes in two external conditions: disturbance and munificence. Focusing on the contexts of manufacturing and operations management, we explain the concepts of organizational configuration and resilience. We then present a framework that views resilience driven configuration change as an evolutionary process of variation, selection and retention. We conclude the paper by presenting a typology that shows how different levels of munificence and disturbance combine to produce two types of adaptive resilience (cladogenetic and anagenetic) and one type of non-adaptive or resistance resilience (inertia).
Gamified Crowdsourcing: The Impact on Community EngagementBilal Mufti
FILM260 assignment called a FlipBook. Using inspiration through a software called HaikuDeck, I was able to create a FlipBook using PowerPoint and taking advantage of the many different design aspects embedded in the software.
I chose to create my FlipBook on how Gamified Crowdsourcing has an impact on community engagement.
The document discusses the rise and potential fall of crowdsourcing. It notes that while some crowdsourcing initiatives have been successful, not all live up to expectations. Barriers to success include difficulties making people aware of initiatives, getting people to contribute, and keeping contributors engaged over time. As more crowdsourcing sites emerge, they will compete for limited crowd resources, potentially decreasing participation rates. Only initiatives that offer high rewards or connect to major brands may sustain long-term business models relying solely on crowdsourcing. While crowdsourcing shows promise, many initiatives are likely to fail due to challenges in participant awareness, engagement, and retention.
One does not simply crowdsource the Semantic WebElena Simperl
This document discusses crowdsourcing approaches for solving problems in semantic web technology. It defines crowdsourcing and the semantic web. There are many challenges to using crowdsourcing effectively for semantic web tasks, such as determining the appropriate form of crowdsourcing for different tasks, how to combine crowd and machine intelligence, and how to encourage participation. The document reviews different forms of crowdsourcing projects and discusses factors to consider in task design, quality assurance, and incentives. It also summarizes some research on improving paid microtasks and hybrid crowd-machine approaches. Several open questions are raised about the fundamental challenges of using crowdsourcing at the necessary scale, scope and sustainability for knowledge-intensive semantic web problems.
Unpacking the Geography of Crowd CapitalYannig Roth
A presentation that I did at the Open & User Innovation Conference, at Harvard Business School, with two fellow crowdsourcing researchers from Canada (Prashant Shukla & John Prpic). Our talk, titled "Is the World Flat? Unpacking the Geography of Crowd Capital," presented early results of a research about crowdsourcing participation across the globe.
An evolutionary approach to understanding adaptive organizational resilienceIan McCarthy
In this paper, we introduce a framework to understand organizational resilience as an evolutionary process where organizations adapt their configurations to changes in two external conditions: disturbance and munificence. Focusing on the contexts of manufacturing and operations management, we explain the concepts of organizational configuration and resilience. We then present a framework that views resilience driven configuration change as an evolutionary process of variation, selection and retention. We conclude the paper by presenting a typology that shows how different levels of munificence and disturbance combine to produce two types of adaptive resilience (cladogenetic and anagenetic) and one type of non-adaptive or resistance resilience (inertia).
Gamified Crowdsourcing: The Impact on Community EngagementBilal Mufti
FILM260 assignment called a FlipBook. Using inspiration through a software called HaikuDeck, I was able to create a FlipBook using PowerPoint and taking advantage of the many different design aspects embedded in the software.
I chose to create my FlipBook on how Gamified Crowdsourcing has an impact on community engagement.
The document discusses the rise and potential fall of crowdsourcing. It notes that while some crowdsourcing initiatives have been successful, not all live up to expectations. Barriers to success include difficulties making people aware of initiatives, getting people to contribute, and keeping contributors engaged over time. As more crowdsourcing sites emerge, they will compete for limited crowd resources, potentially decreasing participation rates. Only initiatives that offer high rewards or connect to major brands may sustain long-term business models relying solely on crowdsourcing. While crowdsourcing shows promise, many initiatives are likely to fail due to challenges in participant awareness, engagement, and retention.
One does not simply crowdsource the Semantic WebElena Simperl
This document discusses crowdsourcing approaches for solving problems in semantic web technology. It defines crowdsourcing and the semantic web. There are many challenges to using crowdsourcing effectively for semantic web tasks, such as determining the appropriate form of crowdsourcing for different tasks, how to combine crowd and machine intelligence, and how to encourage participation. The document reviews different forms of crowdsourcing projects and discusses factors to consider in task design, quality assurance, and incentives. It also summarizes some research on improving paid microtasks and hybrid crowd-machine approaches. Several open questions are raised about the fundamental challenges of using crowdsourcing at the necessary scale, scope and sustainability for knowledge-intensive semantic web problems.
Unpacking the Geography of Crowd CapitalYannig Roth
A presentation that I did at the Open & User Innovation Conference, at Harvard Business School, with two fellow crowdsourcing researchers from Canada (Prashant Shukla & John Prpic). Our talk, titled "Is the World Flat? Unpacking the Geography of Crowd Capital," presented early results of a research about crowdsourcing participation across the globe.
New Product Development as a Complex Adaptive System of DecisionsIan McCarthy
Early research on new product development (NPD) has produced descriptive frameworks and models that view the process as a linear system with sequential and discrete stages. More recently, recursive and chaotic frameworks of NPD have been developed, both of which acknowledge that NPD progresses through a series of stages, but with overlaps, feedback loops, and resulting behaviors that resist reductionism
and linear analysis. This article extends the linear, recursive, and chaotic frameworks by viewing NPD as a complex adaptive system (CAS) governed by three levels of decision making — in-stage, review, and strategic—and the accompanying decision rules. The research develops and presents propositions that predict how the configuration and organization of NPD decision-making agents will influence
the potential for three mutually dependent CAS phenomena: nonlinearity, selforganization, and emergence. Together these phenomena underpin the potential for NPD process adaptability and congruence. To support and to verify the propositions, this study uses comparative case studies, which show that NPD process adaptability occurs and that it is dependent on the number and variety of agents, their corresponding connections and interactions, and the ordering or disordering effect of the decision levels and rules. Thus, the CAS framework developed within this article maintains a fit among descriptive stance, system behavior, and innovation type, as it considers individual NPD processes to be capable of switching or toggling between different behaviors — linear to chaotic — to produce corresponding innovation outputs that range from incremental to radical in accord with market expectations.
Remanufacturing is_a_superior_choce.pdfMichael Davis
Remanufactured printer cartridges are a more environmentally friendly and cost-effective alternative to new cartridges. Each year, over 300 million used cartridges end up in landfills globally. Remanufacturing cartridges involves cleaning and refilling them, allowing them to be reused while keeping more plastic waste out of landfills. It also saves resources and energy compared to producing new cartridges. Remanufactured cartridges are typically 40-60% cheaper than new ones but provide comparable quality and reliability. Choosing remanufactured cartridges is better for the environment and a consumer's budget.
When customers get clever: Managerial approaches to dealing with creative con...Ian McCarthy
Creative consumers (defined as customers who adapt, modify, or transform a proprietary offering) represent an intriguing paradox for business. On
one hand, they can signify a black hole for future revenue, with breach of copyright and intellectual property. On the other hand, they represent a gold mine of ideas and business opportunities. Central to business is the need to create and capture value, and creative consumers demand a shift in the mindsets and business models of how firms accomplish both. Based upon their attitude and action toward customer innovation, we develop a typology of firms’ stances toward creative consumers. We then consider the implications of the stances model for corporate strategy and
examine a three-step approach to dealing with creative consumers: awareness, analysis, and response.
Why do some patents get licensed while others do not?Ian McCarthy
To understand why some patents get licensed and others do not, we estimate a portfolio of firm- and patent-level determinants for why a particular licensor’s patent was licensed over all technologically similar patents held by other licensors. Using data for licensed biopharmaceutical patents, we build a set of alternate patents that could have been licensed-in using topic modeling techniques. This provides a more sophisticated way of controlling for patent characteristics and analyzing the attractiveness of a licensor and the characteristics of the patent itself. We find that patents owned by licensors with technological prestige, experience at licensing, and combined technological depth and breadth have a greater chance at being chosen by licensees. This suggests that a licensor’s standing and organizational learning rather than the quality of its patent alone influence the success of outward licensing.
Toward a Phylogenetic Reconstruction of Organizational LifeIan McCarthy
Classification is an important activity that facilitates theory development in many academic disciplines. Scholars in fields such as organizational science, management science and economics and have long recognized that classification offers an approach for ordering and understanding the diversity of organizational taxa (groups of one or more similar organizational entities). However, even the most prominent organizational classifications have limited utility, as they tend to be shaped by a specific research bias, inadequate units of analysis and a standard neoclassical economic view that does not naturally accommodate the disequilibrium dynamics of modern competition. The result is a relatively large number of individual and unconnected organizational classifications, which tend to ignore the processes of change responsible for organizational diversity. Collectively they fail to provide any sort of universal system for ordering, compiling and presenting knowledge on organizational diversity. This paper has two purposes. First, it reviews the general status of the major theoretical approaches to biological and organizational classification and compares the methods and resulting classifications derived from each approach. Definitions of key terms and a discussion on the three principal schools of biological classification (evolutionary systematics, phenetics and cladistics) are included in this review. Second, this paper aims to encourage critical thinking and debate about the use of the cladistic classification approach for inferring and representing the historical relationships underpinning organizational diversity. This involves examining the feasibility of applying the logic of common ancestry to populations of organizations. Consequently, this paper is exploratory and preparatory in style, with illustrations and assertions concerning the study and classification of organizational diversity.
Achieving contextual ambidexterity in R&D organizations: a management control...Ian McCarthy
Research on how managers control R&D activities has tended to focus on the performance measurement systems used to exploit existing knowledge and capabilities. This focus has been at the expense of how broader forms of management control could be used to enable R&D contextual ambidexterity, the capacity to attain appropriate levels of exploitation and exploration behaviors in the same R&D organizational unit. In this paper, we develop a conceptual framework for understanding how different types of control system, guided by different R&D strategic goals, can be used to induce and balance both exploitation and exploration. We illustrate the elements of this framework and their relations using data from biotechnology firms, and then discuss how the framework provides a basis to empirically examine a number of important control relationships and phenomena.
Understanding outsourcing contexts through information asymmetry and capabili...Ian McCarthy
Outsourcing is a strategic activity that has long been central to operations management research and practice. Yet, there are still many outsourcing management challenges that remain. In this article, we explore two of the outsourcing challenges that motivated this special issue and are central to the 10 articles included. To do this, we develop a theoretical model that examines how variations in capability fit and information asymmetry combine to present firms with four different outsourcing contexts. We then explain how each of the articles included in this special issue relate to our theoretical model and explore several avenues for future research.
Innovation in manufacturing as an evolutionary complex systemIan McCarthy
This document discusses innovation as an evolutionary complex system. It makes three key points:
1. Innovation can involve either continuous (smooth) evolution or discontinuous (qualitative) changes when new ideas branch off. Innovations introduce new customer experiences and needs but also carry high risks.
2. There is a tension between standardized control approaches used for mass production, which can inhibit creativity, and allowing emergent freedom which enables innovation. Decentralized and collaborative approaches are important for innovation.
3. Innovations evolve through ideas more than rational decision-making. Collective and expansive learning between groups and expanding knowledge boundaries supports innovation more than top-down control of ideas.
Complex adaptive system mechanisms, adaptive management practices, and firm p...Ian McCarthy
As a fascinating concept, the mechanisms of complex adaptive system (CAS) attracted many researchers from a variety of disciplines. Nevertheless, how the mechanism-related variables, such as strategic resonance, accreting nodes, pattern forming, and catalytic behavior of organization, impact the firm product innovativeness is rarely addressed empirically in the new product development (NPD) literature. Also, there exist limited studies on the antecedents of the mechanisms of CAS in the NPD literature. In this respect, we identified and operationalized the adaptive management practices, which involve bonding, nonlinear, and attractor behaviors of management, as antecedents of mechanisms and firm product innovativeness. By studying 235 firms, we found that (1) strategic resonance and accreting nodes are positively related to firm product innovativeness, (2) bonding, nonlinear, and attractor behaviors of management positively influence the mechanism variables, and (3) market and technology turbulence impact the adaptive management practices. We also found that mechanisms of CAS partially mediate the relationship between adaptive management practices and firm product innovativeness.
Organisational diversity, evolution and cladistic classificationsIan McCarthy
This document discusses constructing a formal cladistic classification of manufacturing systems based on techniques used in biological taxonomy. It presents a seven-stage framework for developing a manufacturing "cladogram" or phylogenetic tree. A cladistic classification could provide a standardized way to study organizational diversity and evolution. It may help clarify different types of emerging manufacturing systems and their relationships. Mapping the evolutionary history and relationships between manufacturing systems could provide insights to help organizations adapt to changes in their operating environment. The document also reviews different approaches to classification in biology and assumptions required to apply cladistics to developing a classification of manufacturing organizations.
Achieving Agility Using Cladistics: An Evolutionary AnalysisIan McCarthy
To achieve the status of an agile manufacturer, organisations need to clearly understand the concept of agility, relative to their industrial and business circumstances and to then identify and acquire the appropriate characteristics which will result in an agile manufacturing organisation. This paper is not simply another discussion on the definition of agility, or a philosophical debate on the drivers and characteristics of agility. This paper presents an evolutionary modelling technique (cladistics) which could enable organisations to systematically manage and understand the emergence of new manufacturing forms within their business environment. This fundamental, but important insight is valuable for achieving successful organisational design and change. Thus, regardless of the industrial sector, managers could use cladistics as an evolutionary analysis technique for determining ``where they have been and where they are now''. Moving from a non-agile manufacture to an agile manufacture is a process of organisational change and evolutionary development. This evolutionary method will enable organisations to understand the landscape of manufacturing possibilities that exist, to identify appropriate agile forms and to successfully navigate that landscape.
Understanding the effects of outsourcing: unpacking the total factor producti...Ian McCarthy
Research on why firms should outsource and how they should do it has proliferated in the past two decades, but few consistent findings have emerged concerning the benefits of outsourcing. We argue that this is in part due to the lack of an adequate framework for measuring the effects of outsourcing. To address this, we present such a framework based upon the Cobb–Douglas productivity function. We explain how our framework can be used to unpack one component of the Cobb–Douglas productivity function, the ‘total factor productivity’, which represents the other numerous sub-variables that affect outsourcing productivity, beyond the capital and labour expenditures. We also demonstrate the framework using a simple illustrative example.
The ability of current statistical classifications to separateservices and ma...Ian McCarthy
This paper explores the performance of current statistical classification systems in classifying firms and, in particular, their ability to distinguish between firms that provide services and firms that provide manufacturing. We find that a large share of firms, almost 20%, are not classified as expected based on a comparison of their statements of activities with the assigned industry codes. This result is robust to analyses on different levels of aggregation and is validated in an additional survey. It is well known from earlier literature that industry classification systems are not perfect. This paper provides a quantification of the flaws in classifications of firms. Moreover, it is explained why the classifications of firms are imprecise. The increasing complexity of production, inertia in changes to statistical systems and the increasing integration of manufacturing products and services are some of the primary and interrelated explanations for this lack of precision. We emphasise, however, that such classification problems are not resolved using a ‘technical fix’. Any statistical classification method involves a number of tradeoffs.
Technology Management - A Complex Adaptive Systems ApproachIan McCarthy
This document discusses using a complex adaptive systems approach and fitness landscape theory to understand technology management. It presents a model called the strategy configuration chain that illustrates how organizations classify, select, adopt and exploit technologies through four linked tasks to develop capabilities and a technological configuration. The document also introduces an NK model that can represent an organization's technology strategy as a string of bits and calculate a fitness value for different strategic configurations based on their potential for survival and competitiveness. This provides a way to visualize different strategic options and their relationships on a fitness landscape.
Game on: Engaging customers and employees through gamificationIan McCarthy
Managers are frequently tasked with increasing the engagement levels of key stakeholders, such as customers and employees. Gamification - defined as the application of game design principles to change behavior in non-gaming contexts - is a tool that, if crafted and implemented properly, can increase engagement. In this article we discuss how gamification can aid customer and employee engagement, and delineate between four different types of customers and employees who act as ‘players’ in gamified experiences. We include illustrative examples of gamification and conclude by presenting five lessons for managers who wish to utilize gamification.
Executive Digest: managing resources, managing the crowd and disrupting indus...Ian McCarthy
This article discusses the opportunities and challenges around remanufactured and refurbished consumer products. Key points:
- Product returns represent a large opportunity as many are still functional but returned for convenience. Remanufacturing can generate additional profit.
- Consumers have mixed views - some see value in lower prices but others view remanufactured products negatively as "dirty" or lower quality.
- The two biggest drivers of demand are quality perceptions and pricing. Emphasizing quality and discounting remanufactured products up to 40% can boost appeal.
- Branding, green marketing, and managing "disgust" perceptions also impact appeal. Outsourcing remanufacturing
The open academic: Why and how business academics should use social media to ...Ian McCarthy
Abstract: The mission of many business schools and their researchers is to produce research that that impacts how business leaders, entrepreneurs, managers, and innovators, think and act. However, this mission remains an elusive ideal for many business school academics because they struggle to design and produce research capable of overcoming the "research-practice gap." To help those scholars address this gap, we explain why and how they should use social media to be more 'open' to connecting with, learning from, and working with academics and other stakeholders outside of their field. We describe how social media can be used as a boundary-spanning technology to help bridge the research-practice gap. To do this, we present a process model of five research activities: networking, framing, investigating, dissemination, and assessment. Using recently published research as an illustrative example, we describe how social media was used to make each activity more open. We conclude with a framework of different social media-enabled open academic approaches (connector, observer, promoter, and influencer) and some dos and don'ts for engaging in each approach. This paper aims to help business academics rethink and change their practices so that our profession is more widely regarded for how its research positively impacts practice and societal well-being more generally.
Big Data for Creating and Capturing Value in the Digitalized Environment: Unp...Ian McCarthy
Despite significant academic and managerial interest in big data, there is a dearth of research on how big data impacts
the long-term firm performance. Reasons for this gap include a lack of objective indices to measure big data
availability and its impact, and the tendency of studies to ignore the costs associated with collecting and analyzing
big data, assuming that big data automatically delivers benefits to firms. Focusing on how firms create and capture
value from big data about customers, we use the resource-based view and three dimensions of big data (i.e., volume,
variety, and veracity) to understand when the benefits outweigh the costs. Relying on the number of downloads of
mobile device applications, we find that volume of big data has a negative effect on firm performance. This result
suggests that the “bigness” of big data alone does not ensure value creation for a firm, and could even constitute a
“dark side” of big data. Because big data variety—measured as the number of types of information taken per each
application—moderates the negative effects of big data volume, simultaneous high values of volume and variety
allow firms to create value that positively affects their performance. In addition, high levels of veracity (i.e., a high
percentage of employees devoted to big data analysis), are linked to firms benefiting from big data via value capture.
These findings shed light on the circumstances in which big data can be beneficial for firms, contributing to a better
theoretical understanding of the opportunities and challenges and providing useful indications to managers.
Standardization in a Digital and Global World: State-of-the-Art and Future Pe...Ian McCarthy
We discuss how the standards emerge from an interaction between three main sources, the standards standard-setting organizations (SSOs), the competitive market forces, and the government. We present a framework (see Table I) that highlights how these sources differ and work together to shape the standardization in a digital and global context. Also, using this framework, we introduce the contribution of each article of this issue and their contribution to some of the major issues that the standardization is facing today in a digital and global world. We conclude with the suggestions of avenues for future research on this topic.
Open branding: Managing the unauthorized use of brand-related intellectual pr...Ian McCarthy
Consumers often innovate with brand-related intellectual property (IP) without permission. Although firms often respond by exercising their legal right to stop such activity, there are a variety of situations in which consumers’ unauthorized use of brand-related IP can be desirable for a brand or in which enforcing IP rights can adversely affect a brand. This article illustrates situations in which managers may benefit from choosing to forgo exercising their IP rights. To assist managers, this article contributes a framework for understanding the managerial approaches to situations in which consumers use IP without permission.
Does getting along matter? Tourist-tourist rapport in guided group activitiesIan McCarthy
Guided group activities, where tourists consume with other tourists, are common and important. Although the
tourism and services literature suggests customer-employee rapport impacts customer satisfaction, the composition
and impact of tourist-tourist rapport in guided group activities have received minimal attention. We use a
three-study mixed method approach to conceptualize and examine tourist-tourist rapport in guided group activities.
Study 1 identifies two recognized dyadic dimensions of tourist-tourist rapport (enjoyable interaction and
personal connection) and two new group-based dimensions (group attentiveness and service congruity). Study 2
(video experiment) and Study 3 (field experiment) find that enjoyable interaction and personal connection
mediate the relationship between group attentiveness and service congruity with satisfaction. Thus, touristtourist
rapport in a group context is more multidimensional and complex than previously conceptualized for
customer-employee rapport and non-group contexts. Further, we find tourist-tourist rapport is a critical service
factor such that high levels satisfy, while low levels dissatisfy.
New Product Development as a Complex Adaptive System of DecisionsIan McCarthy
Early research on new product development (NPD) has produced descriptive frameworks and models that view the process as a linear system with sequential and discrete stages. More recently, recursive and chaotic frameworks of NPD have been developed, both of which acknowledge that NPD progresses through a series of stages, but with overlaps, feedback loops, and resulting behaviors that resist reductionism
and linear analysis. This article extends the linear, recursive, and chaotic frameworks by viewing NPD as a complex adaptive system (CAS) governed by three levels of decision making — in-stage, review, and strategic—and the accompanying decision rules. The research develops and presents propositions that predict how the configuration and organization of NPD decision-making agents will influence
the potential for three mutually dependent CAS phenomena: nonlinearity, selforganization, and emergence. Together these phenomena underpin the potential for NPD process adaptability and congruence. To support and to verify the propositions, this study uses comparative case studies, which show that NPD process adaptability occurs and that it is dependent on the number and variety of agents, their corresponding connections and interactions, and the ordering or disordering effect of the decision levels and rules. Thus, the CAS framework developed within this article maintains a fit among descriptive stance, system behavior, and innovation type, as it considers individual NPD processes to be capable of switching or toggling between different behaviors — linear to chaotic — to produce corresponding innovation outputs that range from incremental to radical in accord with market expectations.
Remanufacturing is_a_superior_choce.pdfMichael Davis
Remanufactured printer cartridges are a more environmentally friendly and cost-effective alternative to new cartridges. Each year, over 300 million used cartridges end up in landfills globally. Remanufacturing cartridges involves cleaning and refilling them, allowing them to be reused while keeping more plastic waste out of landfills. It also saves resources and energy compared to producing new cartridges. Remanufactured cartridges are typically 40-60% cheaper than new ones but provide comparable quality and reliability. Choosing remanufactured cartridges is better for the environment and a consumer's budget.
When customers get clever: Managerial approaches to dealing with creative con...Ian McCarthy
Creative consumers (defined as customers who adapt, modify, or transform a proprietary offering) represent an intriguing paradox for business. On
one hand, they can signify a black hole for future revenue, with breach of copyright and intellectual property. On the other hand, they represent a gold mine of ideas and business opportunities. Central to business is the need to create and capture value, and creative consumers demand a shift in the mindsets and business models of how firms accomplish both. Based upon their attitude and action toward customer innovation, we develop a typology of firms’ stances toward creative consumers. We then consider the implications of the stances model for corporate strategy and
examine a three-step approach to dealing with creative consumers: awareness, analysis, and response.
Why do some patents get licensed while others do not?Ian McCarthy
To understand why some patents get licensed and others do not, we estimate a portfolio of firm- and patent-level determinants for why a particular licensor’s patent was licensed over all technologically similar patents held by other licensors. Using data for licensed biopharmaceutical patents, we build a set of alternate patents that could have been licensed-in using topic modeling techniques. This provides a more sophisticated way of controlling for patent characteristics and analyzing the attractiveness of a licensor and the characteristics of the patent itself. We find that patents owned by licensors with technological prestige, experience at licensing, and combined technological depth and breadth have a greater chance at being chosen by licensees. This suggests that a licensor’s standing and organizational learning rather than the quality of its patent alone influence the success of outward licensing.
Toward a Phylogenetic Reconstruction of Organizational LifeIan McCarthy
Classification is an important activity that facilitates theory development in many academic disciplines. Scholars in fields such as organizational science, management science and economics and have long recognized that classification offers an approach for ordering and understanding the diversity of organizational taxa (groups of one or more similar organizational entities). However, even the most prominent organizational classifications have limited utility, as they tend to be shaped by a specific research bias, inadequate units of analysis and a standard neoclassical economic view that does not naturally accommodate the disequilibrium dynamics of modern competition. The result is a relatively large number of individual and unconnected organizational classifications, which tend to ignore the processes of change responsible for organizational diversity. Collectively they fail to provide any sort of universal system for ordering, compiling and presenting knowledge on organizational diversity. This paper has two purposes. First, it reviews the general status of the major theoretical approaches to biological and organizational classification and compares the methods and resulting classifications derived from each approach. Definitions of key terms and a discussion on the three principal schools of biological classification (evolutionary systematics, phenetics and cladistics) are included in this review. Second, this paper aims to encourage critical thinking and debate about the use of the cladistic classification approach for inferring and representing the historical relationships underpinning organizational diversity. This involves examining the feasibility of applying the logic of common ancestry to populations of organizations. Consequently, this paper is exploratory and preparatory in style, with illustrations and assertions concerning the study and classification of organizational diversity.
Achieving contextual ambidexterity in R&D organizations: a management control...Ian McCarthy
Research on how managers control R&D activities has tended to focus on the performance measurement systems used to exploit existing knowledge and capabilities. This focus has been at the expense of how broader forms of management control could be used to enable R&D contextual ambidexterity, the capacity to attain appropriate levels of exploitation and exploration behaviors in the same R&D organizational unit. In this paper, we develop a conceptual framework for understanding how different types of control system, guided by different R&D strategic goals, can be used to induce and balance both exploitation and exploration. We illustrate the elements of this framework and their relations using data from biotechnology firms, and then discuss how the framework provides a basis to empirically examine a number of important control relationships and phenomena.
Understanding outsourcing contexts through information asymmetry and capabili...Ian McCarthy
Outsourcing is a strategic activity that has long been central to operations management research and practice. Yet, there are still many outsourcing management challenges that remain. In this article, we explore two of the outsourcing challenges that motivated this special issue and are central to the 10 articles included. To do this, we develop a theoretical model that examines how variations in capability fit and information asymmetry combine to present firms with four different outsourcing contexts. We then explain how each of the articles included in this special issue relate to our theoretical model and explore several avenues for future research.
Innovation in manufacturing as an evolutionary complex systemIan McCarthy
This document discusses innovation as an evolutionary complex system. It makes three key points:
1. Innovation can involve either continuous (smooth) evolution or discontinuous (qualitative) changes when new ideas branch off. Innovations introduce new customer experiences and needs but also carry high risks.
2. There is a tension between standardized control approaches used for mass production, which can inhibit creativity, and allowing emergent freedom which enables innovation. Decentralized and collaborative approaches are important for innovation.
3. Innovations evolve through ideas more than rational decision-making. Collective and expansive learning between groups and expanding knowledge boundaries supports innovation more than top-down control of ideas.
Complex adaptive system mechanisms, adaptive management practices, and firm p...Ian McCarthy
As a fascinating concept, the mechanisms of complex adaptive system (CAS) attracted many researchers from a variety of disciplines. Nevertheless, how the mechanism-related variables, such as strategic resonance, accreting nodes, pattern forming, and catalytic behavior of organization, impact the firm product innovativeness is rarely addressed empirically in the new product development (NPD) literature. Also, there exist limited studies on the antecedents of the mechanisms of CAS in the NPD literature. In this respect, we identified and operationalized the adaptive management practices, which involve bonding, nonlinear, and attractor behaviors of management, as antecedents of mechanisms and firm product innovativeness. By studying 235 firms, we found that (1) strategic resonance and accreting nodes are positively related to firm product innovativeness, (2) bonding, nonlinear, and attractor behaviors of management positively influence the mechanism variables, and (3) market and technology turbulence impact the adaptive management practices. We also found that mechanisms of CAS partially mediate the relationship between adaptive management practices and firm product innovativeness.
Organisational diversity, evolution and cladistic classificationsIan McCarthy
This document discusses constructing a formal cladistic classification of manufacturing systems based on techniques used in biological taxonomy. It presents a seven-stage framework for developing a manufacturing "cladogram" or phylogenetic tree. A cladistic classification could provide a standardized way to study organizational diversity and evolution. It may help clarify different types of emerging manufacturing systems and their relationships. Mapping the evolutionary history and relationships between manufacturing systems could provide insights to help organizations adapt to changes in their operating environment. The document also reviews different approaches to classification in biology and assumptions required to apply cladistics to developing a classification of manufacturing organizations.
Achieving Agility Using Cladistics: An Evolutionary AnalysisIan McCarthy
To achieve the status of an agile manufacturer, organisations need to clearly understand the concept of agility, relative to their industrial and business circumstances and to then identify and acquire the appropriate characteristics which will result in an agile manufacturing organisation. This paper is not simply another discussion on the definition of agility, or a philosophical debate on the drivers and characteristics of agility. This paper presents an evolutionary modelling technique (cladistics) which could enable organisations to systematically manage and understand the emergence of new manufacturing forms within their business environment. This fundamental, but important insight is valuable for achieving successful organisational design and change. Thus, regardless of the industrial sector, managers could use cladistics as an evolutionary analysis technique for determining ``where they have been and where they are now''. Moving from a non-agile manufacture to an agile manufacture is a process of organisational change and evolutionary development. This evolutionary method will enable organisations to understand the landscape of manufacturing possibilities that exist, to identify appropriate agile forms and to successfully navigate that landscape.
Understanding the effects of outsourcing: unpacking the total factor producti...Ian McCarthy
Research on why firms should outsource and how they should do it has proliferated in the past two decades, but few consistent findings have emerged concerning the benefits of outsourcing. We argue that this is in part due to the lack of an adequate framework for measuring the effects of outsourcing. To address this, we present such a framework based upon the Cobb–Douglas productivity function. We explain how our framework can be used to unpack one component of the Cobb–Douglas productivity function, the ‘total factor productivity’, which represents the other numerous sub-variables that affect outsourcing productivity, beyond the capital and labour expenditures. We also demonstrate the framework using a simple illustrative example.
The ability of current statistical classifications to separateservices and ma...Ian McCarthy
This paper explores the performance of current statistical classification systems in classifying firms and, in particular, their ability to distinguish between firms that provide services and firms that provide manufacturing. We find that a large share of firms, almost 20%, are not classified as expected based on a comparison of their statements of activities with the assigned industry codes. This result is robust to analyses on different levels of aggregation and is validated in an additional survey. It is well known from earlier literature that industry classification systems are not perfect. This paper provides a quantification of the flaws in classifications of firms. Moreover, it is explained why the classifications of firms are imprecise. The increasing complexity of production, inertia in changes to statistical systems and the increasing integration of manufacturing products and services are some of the primary and interrelated explanations for this lack of precision. We emphasise, however, that such classification problems are not resolved using a ‘technical fix’. Any statistical classification method involves a number of tradeoffs.
Technology Management - A Complex Adaptive Systems ApproachIan McCarthy
This document discusses using a complex adaptive systems approach and fitness landscape theory to understand technology management. It presents a model called the strategy configuration chain that illustrates how organizations classify, select, adopt and exploit technologies through four linked tasks to develop capabilities and a technological configuration. The document also introduces an NK model that can represent an organization's technology strategy as a string of bits and calculate a fitness value for different strategic configurations based on their potential for survival and competitiveness. This provides a way to visualize different strategic options and their relationships on a fitness landscape.
Game on: Engaging customers and employees through gamificationIan McCarthy
Managers are frequently tasked with increasing the engagement levels of key stakeholders, such as customers and employees. Gamification - defined as the application of game design principles to change behavior in non-gaming contexts - is a tool that, if crafted and implemented properly, can increase engagement. In this article we discuss how gamification can aid customer and employee engagement, and delineate between four different types of customers and employees who act as ‘players’ in gamified experiences. We include illustrative examples of gamification and conclude by presenting five lessons for managers who wish to utilize gamification.
Executive Digest: managing resources, managing the crowd and disrupting indus...Ian McCarthy
This article discusses the opportunities and challenges around remanufactured and refurbished consumer products. Key points:
- Product returns represent a large opportunity as many are still functional but returned for convenience. Remanufacturing can generate additional profit.
- Consumers have mixed views - some see value in lower prices but others view remanufactured products negatively as "dirty" or lower quality.
- The two biggest drivers of demand are quality perceptions and pricing. Emphasizing quality and discounting remanufactured products up to 40% can boost appeal.
- Branding, green marketing, and managing "disgust" perceptions also impact appeal. Outsourcing remanufacturing
The open academic: Why and how business academics should use social media to ...Ian McCarthy
Abstract: The mission of many business schools and their researchers is to produce research that that impacts how business leaders, entrepreneurs, managers, and innovators, think and act. However, this mission remains an elusive ideal for many business school academics because they struggle to design and produce research capable of overcoming the "research-practice gap." To help those scholars address this gap, we explain why and how they should use social media to be more 'open' to connecting with, learning from, and working with academics and other stakeholders outside of their field. We describe how social media can be used as a boundary-spanning technology to help bridge the research-practice gap. To do this, we present a process model of five research activities: networking, framing, investigating, dissemination, and assessment. Using recently published research as an illustrative example, we describe how social media was used to make each activity more open. We conclude with a framework of different social media-enabled open academic approaches (connector, observer, promoter, and influencer) and some dos and don'ts for engaging in each approach. This paper aims to help business academics rethink and change their practices so that our profession is more widely regarded for how its research positively impacts practice and societal well-being more generally.
Big Data for Creating and Capturing Value in the Digitalized Environment: Unp...Ian McCarthy
Despite significant academic and managerial interest in big data, there is a dearth of research on how big data impacts
the long-term firm performance. Reasons for this gap include a lack of objective indices to measure big data
availability and its impact, and the tendency of studies to ignore the costs associated with collecting and analyzing
big data, assuming that big data automatically delivers benefits to firms. Focusing on how firms create and capture
value from big data about customers, we use the resource-based view and three dimensions of big data (i.e., volume,
variety, and veracity) to understand when the benefits outweigh the costs. Relying on the number of downloads of
mobile device applications, we find that volume of big data has a negative effect on firm performance. This result
suggests that the “bigness” of big data alone does not ensure value creation for a firm, and could even constitute a
“dark side” of big data. Because big data variety—measured as the number of types of information taken per each
application—moderates the negative effects of big data volume, simultaneous high values of volume and variety
allow firms to create value that positively affects their performance. In addition, high levels of veracity (i.e., a high
percentage of employees devoted to big data analysis), are linked to firms benefiting from big data via value capture.
These findings shed light on the circumstances in which big data can be beneficial for firms, contributing to a better
theoretical understanding of the opportunities and challenges and providing useful indications to managers.
Standardization in a Digital and Global World: State-of-the-Art and Future Pe...Ian McCarthy
We discuss how the standards emerge from an interaction between three main sources, the standards standard-setting organizations (SSOs), the competitive market forces, and the government. We present a framework (see Table I) that highlights how these sources differ and work together to shape the standardization in a digital and global context. Also, using this framework, we introduce the contribution of each article of this issue and their contribution to some of the major issues that the standardization is facing today in a digital and global world. We conclude with the suggestions of avenues for future research on this topic.
Open branding: Managing the unauthorized use of brand-related intellectual pr...Ian McCarthy
Consumers often innovate with brand-related intellectual property (IP) without permission. Although firms often respond by exercising their legal right to stop such activity, there are a variety of situations in which consumers’ unauthorized use of brand-related IP can be desirable for a brand or in which enforcing IP rights can adversely affect a brand. This article illustrates situations in which managers may benefit from choosing to forgo exercising their IP rights. To assist managers, this article contributes a framework for understanding the managerial approaches to situations in which consumers use IP without permission.
Does getting along matter? Tourist-tourist rapport in guided group activitiesIan McCarthy
Guided group activities, where tourists consume with other tourists, are common and important. Although the
tourism and services literature suggests customer-employee rapport impacts customer satisfaction, the composition
and impact of tourist-tourist rapport in guided group activities have received minimal attention. We use a
three-study mixed method approach to conceptualize and examine tourist-tourist rapport in guided group activities.
Study 1 identifies two recognized dyadic dimensions of tourist-tourist rapport (enjoyable interaction and
personal connection) and two new group-based dimensions (group attentiveness and service congruity). Study 2
(video experiment) and Study 3 (field experiment) find that enjoyable interaction and personal connection
mediate the relationship between group attentiveness and service congruity with satisfaction. Thus, touristtourist
rapport in a group context is more multidimensional and complex than previously conceptualized for
customer-employee rapport and non-group contexts. Further, we find tourist-tourist rapport is a critical service
factor such that high levels satisfy, while low levels dissatisfy.
Confronting indifference toward truth: Dealing with workplace bullshitIan McCarthy
The document discusses workplace bullshit and how to deal with it. It defines bullshit as statements made without regard for truth and explores why people produce and consume bullshit. It presents the C.R.A.P framework for comprehending, recognizing, acting on, and preventing bullshit which includes encouraging critical thinking, expertise over opinions, and prohibiting excessive jargon. Some open questions are identified for further researching the impacts and causes of bullshit.
What Next for Rowing? Exploring the Discontinuous Side of ChangeIan McCarthy
This document discusses continuous and discontinuous change in rowing. Continuous change involves incremental improvements but staying within the same overall direction, while discontinuous change means doing things differently or for different people and changing directions. Discontinuous change can provide great benefits but is difficult because it is disruptive, seen as inferior, and perceived as going against tradition. It requires being open to new ideas from outside rowing and from users.
Social media? It's serious! Understanding the dark side of social mediaIan McCarthy
This document discusses the dark side of social media and its unintended negative consequences. It begins by noting that while research has focused on the benefits of social media, there are also significant risks to individuals, communities, firms, and society. Examples of these risks include cyberbullying, addiction, trolling, witch hunts, fake news, and privacy abuse.
The document then adapts an existing social media framework to explain how each of the seven functional building blocks of social media (conversations, sharing, presence, relationships, reputation, groups, identity) can have unintended negative consequences. For each building block, examples are given of how functions meant to connect and engage users can enable harmful behaviors like harassment, inaccurate information
Leveraging social capital in university-industry knowledge transfer strategie...Ian McCarthy
University-industry partnerships emphasise the transformation of knowledge into products and processes which can be commercially exploited. This paper presents a framework for understanding how social capital in university-industry partnerships affect knowledge transfer strategies, which impacts on collaborative innovation developments. University-industry partnerships in three different countries, all from regions at varying stages of development, are compared using the proposed framework. These include a developed region (Canada), a transition region (Malta), and a developing region (South Africa). Structural, relational and cognitive social capital dimensions are mapped against the knowledge transfer strategy that the university-industry partnership employed: leveraging existing knowledge or appropriating new knowledge. Exploring the comparative presence of social capital in knowledge transfer strategies assists in better understanding how university-industry partnerships can position themselves to facilitate innovation. The paper proposes a link between social capital and knowledge transfer strategy by illustrating how it impacts the competitive positioning of the university-industry partners involved.
Do your employees think your slogan is “fake news?” A framework for understan...Ian McCarthy
Purpose – This article explores how employees can perceive and be impacted by the fakeness of their company slogans.
Design/methodology/approach – This conceptual study draws on the established literature on company slogans, employee audiences, and fake news to create a framework through which to understand fake company slogans.
Findings – Employees attend to two important dimensions of slogans: whether they accurately reflect a company’s (1) values and (2) value proposition. These dimensions combine to form a typology of four ways in which employees can perceive their company’s slogans: namely, authentic, narcissistic, foreign, or corrupt.
Research limitations/implications – This paper outlines how the typology provides a theoretical basis for more refined empirical research on how company slogans influence a key stakeholder: their employees. Future research could test the arguments about how certain characteristics of slogans are more or less likely to cause employees to conclude that slogans are fake news. Those conclusions will, in turn, have implications for the
morale and engagement of employees. The ideas herein can also enable a more comprehensive assessment of the impact of slogans.
Practical implications – Employees can view three types of slogans as fake news (narcissistic, foreign, and corrupt slogans). This paper identifies the implications of each type and explains how companies can go about developing authentic slogans.
Originality/value – This paper explores the impact of slogan fakeness on employees: an important audience that has been neglected by studies to
date. Thus, the insights and implications specific to this internal stakeholder are novel.
Making sense of text: artificial intelligence-enabled content analysisIan McCarthy
This document discusses using artificial intelligence (AI) for content analysis and compares it to manual and computer-aided content analysis approaches. Specifically, it examines the text of leadership speeches using IBM Watson to conduct an AI-enabled content analysis. The key findings are that relative to manual and computer-aided content analysis, AI-enabled content analysis provides high reliability, high validity, and moderate efficiency. The document contributes by highlighting the continued importance of content analysis and providing a roadmap for how to use AI-enabled content analysis.
Confronting indifference toward truth: Dealing with workplace bullshitIan McCarthy
Abstract Many organizations are drowning in a flood of corporate bullshit, and this is particularly true of organizations in trouble, whose managers tend to make up stuff on the fly and with little regard for future consequences. Bullshitting and lying are not synonymous. While the liar knows the truth and wittingly bends it to suit their purpose, the bullshitter simply does not care about the truth. Managers can actually do something about organizational bullshit, and this Executive Digest provides a sequential framework that enables them to do so. They can comprehend it, they can recognize it for what it is, they can act against it, and they can take steps to prevent it from happening in the future. While it is unlikely that any organization will ever be able to rid itself of bullshit entirely, this article argues that by taking these steps, astute managers can work toward stemming its flood.
The Promise of Digitalization: Unpacking the Effects of Big Data Volume, Vari...Ian McCarthy
Despite significant academic and managerial interest in big data, there is a dearth of research on how big data impacts long-term firm performance. Reasons for this gap include a lack of objective indices to measure big data availability and its impact, and the tendency of studies to ignore the costs associated with collecting and analyzing big data, assuming that big data automatically delivers benefits to firms. Focusing on how firms create and capture value from big data about customers, we use the resource-based view (RBV) and three dimensions of big data (i.e., volume, variety and veracity) to understand when the benefits outweigh the costs. Relying on the number of downloads of mobile device applications, we find that volume of big data has a negative effect on firm performance. This result suggests that the ‘bigness’ of big data alone does not ensure value creation for a firm, and could even constitute a ‘dark side’ of big data. Because big data variety – measured as the number of types of information taken per each application – moderates the negative effects of big data volume, simultaneous high values of volume and variety allow firms to create value that positively affects their performance. In addition, high levels of veracity (i.e., a high percentage of employees devoted to big data analysis), are linked to firms benefiting from big data via value capture. These findings shed light on the circumstances in which big data can be beneficial for firms, contributing to a better theoretical understanding of the opportunities and challenges and providing useful indications to managers.
Masterclass: Confronting indifference to truthIan McCarthy
Many organizations are drowning in a flood of corporate bullshit, and this is particularly true of organizations in trouble, whose managers tend to make up stuff on the fly and with little regard for future consequences. Bullshitting and lying are not synonymous. While the liar knows the truth and wittingly bends it to suit their purpose, the bullshitter simply does not care about the truth. Managers can actually do something about organizational bullshit, and this Executive Digest provides a sequential framework that enables them to do so. They can comprehend it, they can recognize it for what it is, they can act against it, and they can take steps to prevent it from happening in the future. While it is unlikely that any organization will ever be able to rid itself of bullshit entirely, this article argues that by taking these steps, astute managers can work toward stemming its flood.
Confronting indifference toward truth: Dealing with workplace bullshitIan McCarthy
Many organizations are drowning in a flood of corporate bullshit, and this is particularly true of organizations in trouble, whose managers tend to make up stuff on the fly and with little regard for future consequences. Bullshitting and lying are not synonymous. While the liar knows the truth and wittingly bends it to suit their purpose, the bullshitter simply does not care about the truth. Managers can actually do something about organizational bullshit, and this Executive Digest provides a sequential framework that enables them to do so. They can comprehend it, they can recognize it for what it is, they can act against it, and they can take steps to prevent it from happening in the future. While it is unlikely that any organization will ever be able to rid itself of bullshit entirely, this article argues that by taking these steps, astute managers can work toward stemming its flood.
Although manipulations of visual and auditory media are as old as the media themselves, the recent entrance of deepfakes has marked a turning point in the creation of fake content. Powered by latest technological advances in AI and machine learning, they offer automated procedures to create fake content that is harder and harder to detect to human observers. The possibilities to deceive are endless, including manipulated pictures, videos and audio, that will have large societal impact. Because of this, organizations need to understand the inner workings of the underlying techniques, as well as their strengths and limitations. This article provides a working definition of deepfakes together with an overview of the underlying technology. We classify different deepfake types: photo (face- and body-swapping), audio (voice-swapping, text to speech), video (face-swapping, face-morphing, full body puppetry) and audio & video (lip-synching), and identify risks and opportunities to help organizations think about the future of deepfakes. Finally, we propose the R.E.A.L. framework to manage deepfake risks: Record original content to assure deniability, Expose deepfakes early, Advocate for legal protection and Leverage trust to counter credulity. Following these principles, we hope that our society can be more prepared to counter the deepfake tricks as we appreciate its treats.
Social media? It’s serious! Understanding the dark side of social mediaIan McCarthy
Research and practice have mostly focused on the “bright side” of social media, aiming to understand and help in leveraging the manifold opportunities afforded by this technology. However, it is increasingly observable that social media present enormous risks for individuals, communities, firms, and even the whole of society. Examples for this “dark side” of social media include cyberbullying, addictive use, trolling, online witch hunts, fake news, and privacy abuse. In this article, we aim to illustrate the multidimensionality of the dark side of social media and describe the related various undesirable outcomes. To do this, we adapt the established social media honeycomb framework to explain the dark side implications of each of the seven functional building blocks: conversations, sharing, presence, relationships, reputation, groups, and identity. On the basis of these reflections, we present a number of avenues for future research, so as to facilitate a better understanding and use of social media.
The propensity and speed of technology licensing: at LUISS Guido Carli Univer...Ian McCarthy
Licensing speed: There has been much research interest in the speed of innovation, although few consistent findings have emerged. In this study, we unpack the innovation process and focus on the commercialization stage to examine two questions: Which licensor and patent characteristics determine the speed of licensing? How does the speed of licensing impact the royalties and lumpsum payments to licensors? We addressed these questions by proposing that licensing speed is influenced by variables for licensor prominence (size and experience), licensor knowledge structuration (technological depth, technological breadth and experience), and patent appeal (forward citations, scope and complexity). We predict and find that these variables work to increase the size, complexity and duration of the licensing-out task, while also allowing licensors to take their time to review, negotiate and select agreements with higher royalty rates. These findings are counter to arguments for a fast-paced innovation strategy, as it suggests that for the commercialization stage of the innovation process the relationship between licensing speed and licensor royalty
rates rewards a ‘less haste, greater payoff approach.
Seven steps for framing and testing a research paperIan McCarthy
I use the steps in this presentation to:
(i) test research ideas for research papers,
(ii) shape research papers, and
(iii) help draft the Introduction section of a research paper.
For each step I draft one or two concise paragraphs.
I then present and share these with co-authors, collaborators and colleagues to test the ideas and get feedback on how interesting and valid they are.
I consider and work through these steps several times during the life of a research paper framed.
Ian McCarthy gave a seminar at LUISS Guido Carli University on being a business school professor. He discussed the challenges of balancing research, teaching, and service requirements while pursuing tenure. McCarthy emphasized the importance of having a clear "why" behind one's work to stay motivated. He advised professors to take small steps towards goals, manage their time well, and prioritize health to have long, productive careers. McCarthy also shared his experience using social media to enhance his research and reputation.
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How to work a crowd: Developing crowd capital through crowdsourcing
1. How to work a crowd: Developing crowd
capital through crowdsourcing
John Prpic´a
, Prashant P. Shukla b,*, Jan H. Kietzmann a
, Ian P. McCarthy a
a
Beedie School of Business, Simon Fraser University, 500 Granville Street, Vancouver V6C 1X6, Canada
b
Beedie School of Business, Simon Fraser University & Rotman School of Management, University of
Toronto, 105 St. George Street, Toronto M5S 2E8, Canada
1. Crowds and crowdsourcing
Not too long ago, the term ‘crowd’ was used
almost exclusively in the context of people who
self-organized around a common purpose, emotion,
or experience. Crowds were sometimes seen as a
positive occurrence–—for instance, when they
formed for political rallies or to support sports
teams–—but were more often associated negatively
with riots, a mob mentality, or looting. Under to-
day’s lens, they are viewed more positively (Wexler,
2011). Crowds have become useful!
It all started in 2006, when crowdsourcing was
introduced as ‘‘taking a function once performed by
Business Horizons (2015) 58, 77—85
Available online at www.sciencedirect.com
ScienceDirect
www.elsevier.com/locate/bushor
KEYWORDS
Crowds;
Crowdsourcing;
Crowd capital;
Crowd capability;
Knowledge resources
Abstract Traditionally, the term ‘crowd’ was used almost exclusively in the context
of people who self-organized around a common purpose, emotion, or experience.
Today, however, firms often refer to crowds in discussions of how collections of
individuals can be engaged for organizational purposes. Crowdsourcing–—defined here
as the use of information technologies to outsource business responsibilities to
crowds–—can now significantly influence a firm’s ability to leverage previously unat-
tainable resources to build competitive advantage. Nonetheless, many managers are
hesitant to consider crowdsourcing because they do not understand how its various
types can add value to the firm. In response, we explain what crowdsourcing is, the
advantages it offers, and how firms can pursue crowdsourcing. We begin by formu-
lating a crowdsourcing typology and show how its four categories–—crowd voting,
micro-task, idea, and solution crowdsourcing–—can help firms develop ‘crowd
capital,’ an organizational-level resource harnessed from the crowd. We then present
a three-step process model for generating crowd capital. Step one includes important
considerations that shape how a crowd is to be constructed. Step two outlines the
capabilities firms need to develop to acquire and assimilate resources (e.g., knowl-
edge, labor, funds) from the crowd. Step three outlines key decision areas that
executives need to address to effectively engage crowds.
# 2014 Kelley School of Business, Indiana University. Published by Elsevier Inc. All
rights reserved.
* Corresponding author
E-mail addresses: prpic@sfu.ca (J. Prpic´), pshukla@sfu.ca,
prashant.shukla@rotman.utoronto.ca (P.P. Shukla),
jan_kietzmann@sfu.ca (J.H. Kietzmann), imccarth@sfu.ca
(I.P. McCarthy)
0007-6813/$ — see front matter # 2014 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved.
http://dx.doi.org/10.1016/j.bushor.2014.09.005
2. employees and outsourcing it to an undefined (and
generally large) network of people in the form of an
open call’’ (Howe, 2006, p. 1). The underlying con-
cept of crowdsourcing, a combination of crowd and
outsourcing, is that many hands make light work
and that wisdom can be gleaned from crowds
(Surowiecki, 2005) to overcome groupthink, leading
to superior results (Majchrzak & Malhotra, 2013). Of
course, such ambitions are not new, and organiza-
tions have long desired to make the most of dis-
persed knowledge whereby each individual has
certain knowledge advantages over every other
(Hayek, 1945). Though examples of using crowds
to harness what is desired are abundant (for an
interesting application, see Table 1), until recently,
accessing and harnessing such resources at scale has
been nearly impossible for organizations. Due in
large part to the proliferation of the Internet,
mobile technologies, and the recent explosion of
social media (Kietzmann, Hermkens, McCarthy, &
Silvestre, 2011), organizations today are in a
much better position to engage distributed crowds
(Lakhani & Panetta, 2007) of individuals for their
innovation and problem-solving needs (Afuah &
Tucci, 2012; Boudreau & Lakhani, 2013).
As a result, more andmore executives–—from small
startups to Fortune 500 companies alike–—are trying
to figure out what crowdsourcing really is, the bene-
fits it can offer, and the processes they should follow
to engage a crowd. In this formative stage of
crowdsourcing, multiple streams of academic and
practitioner-based literature–—each using their own
language–—are developing independently of one an-
other, without a unifying framework to understand
the burgeoning phenomenon of crowd engagement.
Forexecutiveswhowouldliketoexplorecrowd-based
opportunities, this presents a multitude of options
and possibilities, but also difficulties. One problem
entails lack of a clear understanding of crowds, the
various forms they can take, and the value they
can offer. Another problem entails absence of a
well-defined process to engage crowds. As a result,
many executives are unable to develop strategies or
are hesitant to allocate resources to crowdsourcing,
resulting in missed opportunities for new competitive
advantages resulting from engaging crowds.
To help provide clarity, we submit an overview of
the different types of crowdsourcing. Then we in-
troduce the crowd capital framework, supplying a
systematic template for executives to recognize the
value of information from crowds, therein mapping
the steps to acquire and assimilate resources from
crowds. Finally, we discuss the unique benefits that
can be gained from crowds before concluding with
some advice on how to best ‘work a crowd.’
2. Types of crowdsourcing
Crowdsourcing as an online, distributed problem-
solving model (Brabham, 2008) suggests that ap-
proaching crowds and asking for contributions can
help organizations develop solutions to a variety of
business challenges. In this context, the crowd is
often treated as a single construct: a general col-
lection of people that can be targeted by firms.
However, just as organizations and their problems
vary, so do the types of crowds and the different
kinds of contributions they can offer the firm. The
following typology of crowdsourcing suggests that
managers can begin by identifying a business prob-
lem and then working outward from there, consid-
ering (1) what type of contributions are required
from members of the crowd and (2) how these
contributions will collectively help find a solution
to their business problem.
First, the types of contributions required from
the crowd could either call for specific objective
contributions or for subjective content. Specific
objective contributions help to achieve an impartial
and unbiased result; here, bare facts matter and
crowds can help find or create them. Subjective
content contributions revolve around the judgments,
opinions, perceptions, and beliefs of individuals in
a crowd that are sought to collectively help solve a
problem that calls for a subjective result.
Second, contributions need to be processed col-
lectively to add value. Depending on the problem to
be solved, the contributions must either be aggre-
gated or filtered. Under aggregation, contributions
collectively yield value when they are simply com-
bined at face value to inform a decision, without
requiring any prior validation. For instance, political
elections call for people to express their choices via
electoral ballots, which are then tallied to calcu-
late the sums and averages of their collective pref-
erences; the reasons for their choices are not
Table 1. Offline crowds
Crowdsourcing happens mostly online, but not
exclusively so. For instance, when Peter Jackson,
director of Lord of the Rings: The Two Towers,
needed to create the sound of the orc armies, he
turned to a physical rather than a virtual crowd. At
Westpac Stadium in Wellington, New Zealand,
Jackson asked 20,000 cricket fans to yell, scream,
and grunt to create the sound of the Uruk-hai orcs
rallying before the Battle of Helms Deep. Since
such offline crowdsources are the exception rather
than the rule, we will focus on IT-mediated
crowdsourcing in the following discussion.
78 J. Prpic´ et al.
3. important at this stage. Other problems, however,
are more complex and call for crowd contributions
to be qualitatively evaluated and filtered before
being considered on their relative merits (e.g.,
when politicians invite constituents’ opinions be-
fore campaigning). Together, these two dimensions
help executives distinguish among and understand
the variety of crowdsourcing alternatives that exist
today (see Figure 1).
Two forms of crowdsourcing rely on aggregation
as the primary process: crowd voting and micro-task
crowdsourcing. In crowd voting, organizations pose
an issue to a crowd and aggregate the subjective
responses derived from crowd participants to make
a decision. Consider the popular television show
American Idol, which allows viewers to support their
preferred contestants by submitting votes online or
via telephone or text. These votes are tallied at the
end of the show and contestants with the fewest
votes are eliminated from the competition. Similar-
ly, so-called prediction markets (Arrow et al., 2008)
activate the wisdom of the crowd through crowd
voting. But rather than simply adding up votes, these
markets arrive at specific predictions that can exceed
the accuracy of experts by averaging the indepen-
dent responses of crowd participants. For instance,
Starwood Hotels and Resorts utilized an internal
prediction market by asking a crowd of its own
employees to select the best choice among a variety
of potential marketing campaigns (Barlow, 2008).
In micro-task crowdsourcing, organizations en-
gage a crowd to undertake work that is often un-
achievable through standard procedures due to its
sheer size or complexity. An organization may need
to assemble a large data set, have numerous photos
labeled and tagged, translate documents, or tran-
scribe audio transcripts. Breaking such work into
micro-tasks (Gino & Staats, 2012) allows daunting
undertakings to be completed more quickly, cheap-
ly, and efficiently. Consider how Google uses re-
CAPTCHA (von Ahn, Maurer, McMillen, Abraham, &
Blum, 2008) and the little–—and admittedly
annoying–—dialogue boxes that ask users to enter
the text snippets they see of distorted images on-
screen. It is commonly believed that this web utility
is only for authenticating human users, thus keeping
websites from spambots. However, every time the
task of entering characters is completed, individuals
are actually digitizing what optical character rec-
ognition (OCR) software has been unable to read. In
this way, micro-task crowdsourcing is helping to
digitize the archives of The New York Times and
Figure 1. Crowdsourcing alternatives
How to work a crowd: Developing crowd capital through crowdsourcing 79
4. moving old manuscripts into Google Books. Similarly,
crowdfunding (Stemler, 2013) endeavors are a form
of micro-task crowdsourcing whereby an overall
highly ambitious financial goal is broken into smaller
funding tasks and contributions consist of objective
resources (herein ‘funds’) that are simply aggregat-
ed for each venture.
Whether objective or subjective, crowdsourced
contributions must be processed to be valuable. In
idea crowdsourcing, organizations seek creativity
from a crowd, hoping to leverage its diversity to
generate unique solutions to problems/issues. An
organization may receive many ideas from a crowd,
which it will need to filter before one or more can be
implemented.
For instance, online artist community and
e-commerce website Threadless asks the crowd
for creative T-shirt designs and then internally choo-
ses those it deems the most fitting ideas to be
produced for sale (Brabham, 2010). Similarly, Cine-
Coup seeks movie ideas in the form of trailers and
then vets them, choosing which movie ideas will
ultimately be financed for production (Fera, 2013).
In solution crowdsourcing–—as opposed to idea
crowdsourcing–—organizations pose a well-defined
and idiosyncratic problem to a crowd, potentially
the organization’s innovative and creative consumer
base, asking for actual solutions (Berthon, Pitt,
McCarthy, & Kates, 2007). Here, the organization
can test, measure, and falsify solutions to deter-
mine whether and to what degree the contribution
actually solves the business problem. For instance,
video streaming firm Netflix invited crowd members
to participate in a competition to improve the
company’s predictive accuracy regarding how much
viewers are going to enjoy a movie based on their
extant film preferences (Bell & Koren, 2007; Zhou,
Wilkinson, Schreiber, & Pan, 2008). Based on past
data, the contributions were tested for accuracy,
and the most effective solution won.
As the aforementioned forms of crowdsourcing
produce a variety of potentials, these options can be
implemented for differing goals. It is important to
note that the different types of crowdsourcing can
be implemented simultaneously or in a complemen-
tary fashion–—as organizational needs dictate–—as a
crowdsourcing mix. Starwood Hotels and Resorts
actually implemented an idea-crowdsourcing activ-
ity first, via which employees submitted different
marketing campaign ideas, before the company
used crowd voting to then select the best of the
submitted marketing campaign ideas.
3. A crowd capital perspective
For any and all of the aforementioned initiatives,
firms build crowd capital: organizational resources
acquired through crowdsourcing. But this does not
happen by accident; crowd capital is gained when
the organization develops and follows a top-down
process to seek bottom-up resources (e.g., knowl-
edge, funds, opinions) from a crowd (Aitamurto,
Leiponen, & Tee, 2011; Prpic & Shukla, 2013). In
this section, we present this process as a three-stage
model–—constructing a crowd, developing crowd
capabilities, and harnessing crowd capital–—which
offers unique benefits to executives seeking to
enter the crowd milieu (see Figure 2).
Crowds need to be constructed–—they hardly ever
pre-exist–—so in the first subsection that follows, we
offer a detailed discussion of the important aspects
to consider when constructing a crowd. Then, we
describe crowd capabilities and summarize the
two distinct stages of how organizations must
(1) acquire content from a crowd and (2) assimilate
Figure 2. The crowd capital perspective
80 J. Prpic´ et al.
5. the crowd-derived content into organizational prac-
tices (adapted from Zahra & George, 2002). Finally,
we illustrate how constructed crowds and crowd
capabilities can lead to the generation of crowd
capital, and discuss the unique benefits this re-
source can bring to organizations.
3.1. Constructing a crowd
Traditionally, executives and managers have worked
with groups of individuals who are under direct con-
trol of the organization, for example in workgroups
and project teams. These are relatively comfortable
environments that do not involve dealing with strang-
ers. More recently, organizations have also started
to accept and appreciate contributions from groups
that are outside of their direct control, consisting of
people who span the boundaries of the organization–—
for example, in communities that are virtual or
mobile (Kietzmann et al., 2013). Regarding crowds,
we are now asking executives to rethink who can
add value to the organization, and how.
Although it might appear timely and considerate,
and may send the right signals to organizational
stakeholders, reaching out to crowds can only be
of strategic value once the primary purpose for
engaging a crowd is well aligned with organizational
goals. Assuming that such an alignment is in place,
firms next need to evaluate where the necessary
contributions can be found; in other words, define
the members of the crowd it wants to access (Frey,
Lu¨thje, & Haag, 2011) so the primary purpose of the
activity can be achieved. Generally speaking, in
terms of crowd size, larger scale–—and thus large
sample size, too–—is thought to be beneficial, though
scale alone is not the only consideration. Executives
must also consider more narrowly where the solu-
tions to their problems could come from. Should
crowd members be derived solely from people out-
side of the organization (e.g., to obtain new ideas)
or from employees (i.e., to harness knowledge that
already exists within the organization)? Further-
more, should the crowd be accessible to anyone
within these different populations or closed to se-
lected types of participants?
In some cases, no special talents are required
and everyone’s contributions can help perform
organizational functions. In the micro-task crowd-
sourcing example of Google’s reCAPTCHA, anyone
can complete this routine task of reading and
entering characters from a screen. As a result,
the crowd can decipher and enter about 30 million
squiggles per day. In other situations, the crowd is
more restricted and targeted at individuals who
fulfill specific requirements or satisfy certain con-
ditions. For example, Barclay’s Bank assembled an
external, closed group to help with development of
the BarclayCard Ring (Marquit, 2013). Existing
credit cardholders were invited to participate,
narrow down, and vote on the terms and conditions
associated with the new credit card.
Organizations can also construct crowds consti-
tuted of their own employees. Consumer electron-
ics retailer Best Buy instituted a company-wide
prediction market to forecast the success of new
product ideas (Dvorak, 2008). But a crowd consti-
tuting an organization’s own employees need not
include the entire community. For example, when
the U.S. Army launched ArmyCoCreate, a platform
to canvass ideas for its Rapid Equipping Force, it
actually did not invite all soldiers or officers, but
rather only soldiers in the field at that time (Moore,
2014; Schiller, 2014). Clearly, these members of
the crowd were very selectively invited from a
closed, internal community. In this way, the U.S.
Army tapped into only a section of its employee
community for relevant knowledge and expertise,
with the goal of solving real-life soldier challenges.
Overall, the implications of these differing sources
of crowds are clear. Different crowds possess dif-
ferent knowledge, skills, or other resources and,
accordingly, can bring different types of value to
an organization. Therefore, crowd construction is
absolutely non-trivial in generating crowd capital.
3.2. Developing crowd capabilities
Implicit in the preceding discussion is the notion
that an organization recognizes and is receptive to
the value of resources dispersed in crowds. After an
initial type of crowdsourcing is determined (the
why) and the crowd construction is completed
(the who), the organization needs to decide how
it can (1) obtain resources dispersed in a crowd and
(2) align crowd contributions with its existing inter-
nal processes. Working from the well-established
absorptive capacity framework (Zahra & George,
2002), we refer to these two capabilities as acquisi-
tion and assimilation, respectively. Together, they
comprise an organization’s crowd capability (Prpic &
Shukla, 2014).
3.2.1. Acquisition capabilities
Acquisition capabilities refer to an organization’s
proficiency in identifying and acquiring external
resources that are useful toward its operations. In
a crowd context, this capability mainly consists
of (1) understanding the type of interaction that
is required for the acquisition of knowledge and
(2) choosing an appropriate IT structure that will
facilitate the engagement of dispersed individuals in
a crowd.
How to work a crowd: Developing crowd capital through crowdsourcing 81
6. Different types of problems require different
types of interaction between the crowd and the
organization, and among individuals in the crowd
itself. Regarding the former, the choices are related
to those presented in the customer service litera-
ture, wherein conceptually distinct social mecha-
nisms are used in the interaction between a
customer and a firm (Gutek, Bhappu, Liao-Troth,
& Cherry, 1999; Gutek, Groth, & Cherry, 2002). Any
organization engaging a crowd needs to determine if
crowd engagement should be based on encounters–—
that is, on discrete transactions that could be
repeated but are essentially independent–—or on
relationships, via which the organization and crowd
members expect to have continued contact with one
another in the future, possibly with no end in sight.
The second dimension of crowd interaction for
knowledge acquisition relates to whether the indi-
viduals in a crowd need to interact with one another
to generate the desired output. Should they work
together on solving a problem through collabora-
tion, or should the engagement be autonomous, via
which individuals are not affiliated with one another
and complete tasks independently?
These choices matter a great deal, as these two
dimensions of interaction together influence the
incentives for motivating individuals to participate
and the choices of an appropriate IT structure. For
instance, consider reCAPTCHA again as an example.
Because quick episodes of interaction happen
independently from Google and independently of
other crowd members, human contributors volun-
teer about 83,000 hours of daily labor to Google,
scanning documents while at the same time safe-
guarding websites from spambots. The key insight
from this acquisition capability is the realization
that participants do not need to invest any time
in understanding how to work with the organization
or with each other. At the other extreme, enterprise
wiki technologies (Jackson & Klobas, 2013) and
enterprise social media (Mathiesen & Fielt, 2013)
are based on relationships: ongoing cooperation is
required to create and negotiate rich content from
dispersed knowledge. The power of such a capability
can also be considerable; for example, consider Best
Buy, whose implementation of its solution crowd-
sourcing tool Blue Shirt Nation wiki (Dvorak, 2008)
connects 24,000 employees, allowing them to indi-
vidually raise and discuss issues important to inter-
nal operations and to share customer service tips.
Use of this form of interaction has allowed the
company to quickly reverse internal policies that
reduce employee morale. In sum, the type of crowd
interaction chosen is a distinct design choice avail-
able to the organization and has significant ramifi-
cations for organization-crowd dynamics.
Given that crowdsourcing is almost always an IT-
mediated activity, the choice of technology flows
very much from earlier strategic decisions. The
combination of the primary purpose of the activity
(crowd voting, idea, micro-task, or solution crowd-
sourcing), the boundaries of the crowd (inside or
outside the organization or a mixture), and the type
of interaction of participants with the organization
(encounter or relationship, collaborative or auton-
omous) all heavily influence the chosen ITstructure.
The vast majority of crowd-engaging ITemploys a
web-based or mobile platform, or uses the two in
concert. These IT choices often start with the fun-
damental question of whether an organization
should make or buy the technology it requires.
There are always advantages and disadvantages
for either choice pertaining to things such as quality
and feature control, security, development cost,
risk and time to market, IP ownership, and product
maintenance. In this respect, crowdsourcing strat-
egies are no exception, and organizations can
choose between developing their own proprietary
solutions or opting to operate through intermediar-
ies.
In the realm of intermediaries, many offerings
already exist, organized solely to help an organiza-
tion generate crowd capital. One class of crowd
capital facilitating intermediaries includes web-
based spot-labor pools for micro-task crowdsourc-
ing, such as Amazon’s M-Turk (Buhrmester, Kwang, &
Gosling, 2011; Little, Chilton, Goldman, & Miller,
2009), CrowdFlower (Biewald, 2012; Finin et al.,
2010), and Samasource (Biewald, 2012; Nesbit &
Janah, 2010). These intermediaries have already
cultivated large populations of participants, allow-
ing organizations to quickly tap into a ready, willing,
and able supply of affordable labor. In the case of
Samasource and some other social enterprises
(Seelos & Mair, 2005), the labor pool is sourced from
the developing world, so using such an alternative to
generate crowd capital may also serve an organiza-
tion’s corporate social responsibility goals via what
Gino and Staats (2012) term ‘impact sourcing.’
Another class of crowd capital facilitating
intermediaries includes web-based ‘tournament-
style’ intermediaries for solution and idea crowd-
sourcing (Afuah & Tucci, 2012; Boudreau & Lakhani,
2013), such as Innocentive, Eyeka, and Kaggle
(Ben Taieb & Hyndman, 2014; Narayanan, Shi, &
Rubinstein, 2011). Similar to the spot-labor pool
sites such as M-Turk, sites like Innocentive and
Kaggle have established a large pool of self-selected
participants, though in these cases, the participants
are problem solvers rather than workers for hire.
Through these intermediaries an organization can
post specific problems that need to be solved, and
82 J. Prpic´ et al.
7. the intermediaries offer a variety of different
packages and price points for the organization’s
problem-solving needs. These intermediaries can
represent a highly successful strategy; consider In-
nocentive, for example, which boasts a cadre of
250,000 registered solvers and a success rate of
greater than 50% (Aron, 2010).
3.2.2. Assimilation capabilities
As we have thus far outlined, an organization has
many different decisions to consider before engaging
a crowdthroughIT.However, wemust emphasizethat
implementing all of the previous decisions success-
fully does not guarantee generation of the desired
crowd capital resource. Successfully engaging a
crowd and acquiring the desired contributions from
it are necessary, but not sufficient alone to generate
crowd capital. The final element in the crowd capital
creation process lies in the internal assimilation of
crowd contributions. A separation between the ac-
quisition and assimilation of crowd capital reflects
arguments from organizational strategy scholars,
who propose that value creation and value capture
are two distinct processes (Lepak, Smith, & Taylor,
2007). Since the former does not naturally lead to the
latter (e.g., Yahoo; Shafer, Smith, & Linder, 2005),
value creation and value capture need to be consid-
ered individually and explicitly (Amit & Zott, 2001;
Shafer et al., 2005). We proceed with a similar
analogy and reason that both acquisition and assimi-
lation strategies are independently important in the
process of creating crowd capital.
As we have illustrated in Figure 1, some forms of
crowd engagement require filtering and others re-
quire aggregation of crowd contributions. In either
case, organizations need to institute internal pro-
cesses to organize and purpose the incoming knowl-
edge and information. Such processes may include
assigning the aggregation and filtering to specific
teams within the organization or creating a new
group concerned with the task. Depending on the
goals of the endeavor, certain teams or individuals
may be tasked with engaging individuals in the
crowd to curate and manage the community, shap-
ing crowd engagement and ensuring that desired
contributions are elicited from the participants.
Similarly, the organization should define a set of
metrics before beginning crowd engagement to de-
termine how success or failure might be evaluated.
Such metrics can include measures for the size of
the crowd, for contributions from the crowd, and/or
for other tailored metrics specific to the endeavor.
Research has shown that it may be advisable to
assign experts in the specific field to interact with
the crowd (Chun & Cho, 2012), and that it may be
useful to determine ahead of time how the crowd
contributions will be used within the organization
(Brabham, 2012).
3.3. Harnessing crowd capital
As we pointed out in Section 2, it is useful to think of
the different forms of crowdsourcing available to
organizations as a mix whereby different types of
crowdsourcing may be employed simultaneously or
sequentially. Further, as noted in Section 4, knowl-
edge is dispersed within the population of an orga-
nization. Bringing these two insights together, we
suggest that–—depending upon the resource needs–—
an organization can construct separate crowds as
acquisition and assimilation capabilities. For exam-
ple, an organization could construct a crowd com-
prised of its own employees as the filtering or
aggregation mechanism to process the knowledge
acquired from an external crowd. In turn, it may also
be that the reverse situation is also beneficial; we
see no reason why crowds within organizations could
not be used to derive a list of problems, which could
then be posted to a crowd outside the organization
at a place like Innocentive (Aron, 2010) to capture a
diverse range of ideas or solutions. Therefore, in
pursuit of crowd capital, executives should not think
of these applications as siloed potentialities, but
rather as hypothetically overlapping tools brought
to bear in an overall crowdsourcing mix.
Irrespective of what a competitor might do to
mimic another’s crowd capability, the crowd capital
resource that is gained through the goal-focused,
thought-out process that we detail here is hard to
replicate. This, of course, is particularly true for
subjective contributions that are filtered by the or-
ganization, gleaning unique and idiosyncratic resour-
ces for the organization that can lead to competitive
advantages, a potentially positive addition to any
business model (Barney, 1991; Shafer et al., 2005).
In addition, crowd capital can be generated with-
out collaboration, lowering investment in gaining
this resource. As illustrated herein, crowd capital
can be generated through encounters or relation-
ships with the firm. Many examples–—such as
Google’s reCAPTCHA or Microsoft’s Asirra (Aggarwal,
2012; von Ahn et al., 2008), the Iowa Electronic
Prediction market (Arrow et al., 2008), and Foldit
(Cooper et al., 2010)–—illustrate the power of using
encounters to generate crowd capital. Therefore,
generating crowd capital by engaging the dispersed
knowledge of a crowd does not require a community
of individuals or their continuous participation.
When deciding whether to make, buy, or rent a
crowd capability, organizations must consider if
they need to construct an encounter or relation-
ship-based crowd, or some combination thereof.
How to work a crowd: Developing crowd capital through crowdsourcing 83
8. 4. Final thoughts on how to work a
crowd
This article offers contributions to both the research
and practitioner communities. We hope that our
typology–—separating crowdsourcing by the subjec-
tive or objective content obtained from the crowd,
and then either aggregated or filtered by the organi-
zation–—will help scholars develop lenses appropriate
forresearch on crowd voting, micro-taskcrowdsourc-
ing, idea crowdsourcing, and solution crowdsourcing,
respectively. Herein, we present the crowd capital
perspective (which illustrates in testable form a
generalized process model of crowd construction)
as well as acquisition and assimilation capabilities,
leading ultimately to different forms of crowd capi-
tal. It is our hope that this early work on a crowd-
sourcing process will motivate other researchers to
tease apart the different kinds of capabilities needed
for different types of crowdsourcing, and to study in
more detail thedifferent types ofcrowdcapital these
can create. Furthermore, our work on crowdsourcing
may have the potential to inform literature in other
management areas. In particular, a firm’s need to
construct a crowd based on the similarity of its
members is comparable to marketers’ need to seg-
ment their markets: to divide a heterogeneous mar-
ket into homogeneous groups (Wedel & Kamakura,
1999). Future research on how firms form their
crowds from an amorphous group of people outside
their boundaries might inform segmentation practi-
ces (e.g., Yankelovich & Meer, 2006), and vice versa.
For the practitioner community, we contribute by
illustrating key decision areas that executives need
to consider and address to effectively engage
crowds through IT. For instance, for decision mak-
ers, the crowd typology provides a suitable starting
point for understanding what problems can be
crowdsourced and the types of responses crowd-
sourcing will yield. Crowdsourcing capabilities, both
in terms of acquisition and assimilation, provide
dimensions and examples of IT structures and en-
gagement options that we hope will prove practical
for decision makers and their strategic development
of crowdsourcing initiatives.
In review, we close with the fundamental consid-
erations for generating and benefiting from crowd
capital. The first topic an organization needs to
investigate is the content to be acquired using its
crowd capability. In other words, what problem or
opportunity can/should be addressed by leveraging
crowd knowledge? Does the problem call for a
subjective or objective solution, and should crowd
contributions be aggregated or filtered to yield
optimal value for the firm? From here, the organi-
zation can begin to think about constructing the
pertinent crowd (i.e., where crowd members should
come from: internal, external, or both) and what
form(s) of ITwill be used to engage members of the
crowd (i.e., in encounters or relationships). Should
crowd members collaborate with each other or work
as autonomous agents? Should the appropriate IT
structure be made (in house), bought, or rented
(through intermediaries) so that dispersed crowd-
based resources can be accessed?
Overall, the powerful insights of Hayek (1945)
from about 70 years ago could not be more pertinent
and significant in this day and age. As new technol-
ogies allow firms to reach more and more individuals
and crowds, access to dispersed knowledge will
continue to improve, allowing managers not only
to consider crowdsourcing for the solution of a
variety of everyday problems, but also to build
crowdsourcing into their organizational strategies
and underlying business models. For vanguard busi-
nesses, this change has already arrived. We hope
this article convinces others that working a crowd
and developing crowd capital through crowdsourc-
ing can play a significant role in creating and sus-
taining competitive advantage.
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