Why your company might fail at crowdsourcing

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A central step in enabling companies to harness the immense potential of crowdsourcing is to have a sound understanding of the behaviour of the individuals that make up the crowd. New research by Oguz Ali Acar of Rotterdam School of Management, Erasmus University (RSM) enhances our understanding of crowd’s behavior, and reveals that monetary rewards in crowdsourcing do not necessarily motivate the crowd and that crowd’s expertise does not always bring better solutions to complex innovation problems. Acar also discovered that young and male members of the crowd experience highest levels of fears of their ideas being misused.

With his dissertation Crowdsourcing for Innovation: Unpacking Motivational, Knowledge and Relational Mechanisms of Innovative Behavior in Crowdsourcing PlatformsOguz Ali Acar found that using larger amounts of monetary rewards to motivate the crowd is not effective at all under certain circumstances. Some crowd members are motivated by prosocial reasons, such as wanting to help others, in which case money will not be effective, and could even backfire.

In addition to helping others, crowds also engage in creative activities because of other non-monetary reasons: they enjoy solving problems and creating ideas, they want to learn new things and they want to gain reputation for their contributions. It is of great importance to acknowledge and take into consideration such diversity in motivations in order to effectively encourage the crowd to engage in creative activities. 

Oguz Ali Acar also found that being an expert in a certain field of knowledge does not necessarily contribute to a better performance. Expertise only has a positive effect on performance when crowd members also look into a wide variety of knowledge domains for solving the problem. Although this kind of broad search was required for the performance-enhancing effects of expertise, breadth of the search was not enough on its own. For such positive effects, experts should also be shallow in the problem domain and those outside of it, but should be deep in domains that are related to the problem domain such as those at the boundaries of the problem domain. Organizers of crowdsourcing initiatives can benefit from these findings by encouraging specific approaches for solving problems.

Third, Acar reveals some members of the crowd might fear potential opportunistic behaviour which can be a critical factor determining success or failure of crowdsourcing initiative as members of the crowd  are unlikely to share their valuable knowledge when they fear their ideas being misused. Specifically, women and older people have significantly less fears due to potential opportunistic behaviour when disclosing their knowledge. In other words, young males experience the highest levels of fears, and this is the largest demographic group in most of the crowdsourcing platforms. What business can learn from this is that certain groups of users in crowdsourcing platforms need more attention to be motivated to disclose their ideas and solutions. Companies might benefit from being transparent about what happens with the ideas and solutions shared by the crowd, and from taking a proactive approach to inform male and younger participants regarding how the potential opportunistic behaviour will be avoided.

Dissertation abstract

The internet and the advance of communication technologies have brought unprecedented opportunities for harnessing the creative potential of people all over the world. In an attempt to utilize this potential to explore breakthrough new product ideas and find solutions to challenging innovation problems, companies make extensive use of crowdsourcing practices. The main purpose of this dissertation is to contribute to a greater understanding of the dynamics of crowdsourcing by providing a comprehensive investigation of the behavioral factors that influence innovative behavior and the performance of the crowd. In particular, Acar examines motivational, knowledge and relational mechanisms of crowd engagement, creativity and knowledge-sharing behavior. He demonstrates that crowd members engage in new product ideation and innovative problem solving for different reasons, such as intrinsic, extrinsic, prosocial and learning motivation, and that monetary rewards impact creativity in different ways, according to individuals’ prosocial motivation. In addition, Acar finds that a crowd member’s performance in solving innovation problems is a consequence of the interplay between their expertise and how broadly and deeply they search for solutions. Finally, Acar shows that the fear of opportunism by others – the main relational risk attached to disclosing knowledge in crowdsourcing platforms – is not uniform among crowd members, and trust in the owner of the crowdsourcing platform is central in assuaging such fears.

About the author

Oguz Ali Acar (Turkey, 1983) obtained his Bachelor's and Master's degrees (with honors) in Management Engineering from Istanbul Technical University, Turkey. Prior to his PhD at Rotterdam School of Managament, he gained industry experience in brand management and business development in Turkey. While completing his PhD, he was a visiting scholar at Massachusetts Institute of Technology (2012) and NYU Stern School of Business (2013). Oguz is fascinated by the transformative power and creative potential of the Internet, and is seeking to understand more about how this potential can be better utilized by organizations and society. In particular, his research focuses on the role of behavioral, social and contextual factors that influence new product ideation and innovative problem solving in crowdsourcing platforms. He has presented his research at more than a dozen international academic conferences, and his papers are currently under review in top-tier academic journals. In addition to his research, he is actively involved in teaching and supervising students at Master’s and Bachelor’s level on topics relating to innovation management and marketing. Following his PhD, Oguz will be joining the Management Department of King’s College London as a tenure-track Lecturer (Assistant Professor) in Marketing.

Rotterdam School of Management, Erasmus University (RSM) is ranked among Europe’s top 10 business schools for education and among the top three for research. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who carry their innovative mindset into a sustainable future thanks to a first-class range of bachelor, master, MBA, PhD and executive programmes. RSM also has offices in the Amsterdam Zuidas business district and in Taipei, Taiwan. www.rsm.nl

For more information about RSM or on this release, please contact Ramses Singeling, Media Officer on +31 10 408 2028 or by email at singeling@rsm.nl.

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