How to Work a Crowd: Developing Crowd Capital Through Crowdsourcing (1702.04214v1)

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, the use of information technologies to outsource business responsibilities to crowds, can now significantly influence a firms 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 (knowledge, labor, funds) from the crowd. Step three addresses key decision-areas that executives need to address to effectively engage crowds.

Analysis of "How to Work a Crowd: Developing Crowd Capital through Crowdsourcing"

This paper by Prpic, Shukla, Kietzmann, and McCarthy provides a comprehensive examination of the concept of crowdsourcing and its strategic applications within organizations. The authors articulate a clear framework for understanding how different types of crowdsourcing can be leveraged to develop what they term "crowd capital," an organizational resource harnessed from the crowd. This analysis will explore the critical components of the paper, highlight key numerical insights, and offer implications for future research and practice.

Types of Crowdsourcing

The paper presents a detailed typology of crowdsourcing, categorizing it into four distinct types: crowd voting, micro-task, idea, and solution crowdsourcing. These categories are differentiated based on the nature of the contributions required—objective or subjective—and the way these contributions are processed—aggregated or filtered. Each type of crowdsourcing serves unique organizational needs:

• Crowd Voting: Exemplified by prediction markets, this type relies on aggregating subjective inputs to make decisions. The model references how these aggregated votes informed marketing campaigns at Starwood Hotels and Resorts.
• Micro-task Crowdsourcing: This involves breaking down significant projects into manageable tasks, as seen in Google’s use of reCAPTCHA, which helps digitize text that OCR software cannot decipher.
• Idea Crowdsourcing: Organizations leverage diverse participant ideas for potential problem-solving, requiring contributions to be filtered for applicability. Threadless is cited as an example, where the best T-shirt designs are filtered and selected for production.
• Solution Crowdsourcing: Focused on well-defined problems, this approach seeks viable solutions from the crowd that can be tested for efficacy, such as the Netflix Prize challenge aimed at improving movie recommendation algorithms.

The Crowd Capital Framework

The authors introduce an innovative perspective on crowdsourcing by proposing a "crowd capital" framework, which is delineated into a three-step process:

1. Constructing a Crowd: Emphasizes the importance of aligning crowd engagement with organizational goals and defining the crowd's parameters.
2. Developing Crowd Capabilities: Distinguishes between acquisition and assimilation capabilities. Acquisition focuses on identifying and engaging relevant crowd resources, while assimilation pertains to integrating crowd-contributed knowledge into organizational practices.
3. Harnessing Crowd Capital: Explores the potential for crowd capital to offer competitive advantages, contingent on the unique and hard-to-replicate nature of subjective filtered content.

Practical and Theoretical Implications

The paper's strategic insights into crowdsourcing can significantly influence both managerial practices and academic discourse. Practically, it provides a structured methodology for deploying crowdsourcing as a strategic tool, emphasizing the roles of IT structures and engagement strategies tailored to specific crowd interactions. Theoretically, it invites further exploration into the distinct capabilities required for various crowdsourcing types and the competitive edge crowd capital can confer on organizations.

Future Directions

The paper sets the stage for further research into crowdsourcing practices, particularly regarding how organizations segment and engage different crowds. There is potential for cross-pollination between crowdsourcing frameworks and market segmentation strategies, as suggested by the authors. Additionally, examining crowdsourcing's role in diverse organizational strategies and business models offers substantial room for scholarly inquiry.

In conclusion, the paper contributes valuable insights into the mechanics of crowdsourcing for generating organizational resources, providing a robust foundation for both practitioners and researchers interested in capitalizing on distributed networks of knowledge and labor. By delineating a clear framework and highlighting unique insights into crowd engagement, this work equips organizations to integrate crowd capital into their strategic initiatives effectively.