Crowdsourcing E-Book

Jean-Fabrice Lebraty

• Herausgeber: John Wiley & Sons
• Kategorie: Wissenschaft und neue Technologien
• Sprache: Englisch

Seitenzahl: 167

Veröffentlichungsjahr: 2013

Beschreibung

Crowdsourcing is a relatively recent phenomenon that only appeared in 2006, but it continues to grow and diversify (crowdfunding, crowdcontrol, etc.). This book aims to review this concept and show how it leads to the creation of value and new business opportunities. Chapter 1 is based on four examples: the online-banking sector, an informative television channel, the postal sector and the higher education sector. It shows that in the current context, for a company facing challenges, the crowd remains an untapped resource. The next chapter presents crowdsourcing as a new form of externalization and offers definitions of crowdsourcing. In Chapter 3, the authors attempt to explain how a company can create value by means of a crowdsourcing operation. To do this, authors use a model linking types of value, types of crowd, and the means by which these crowds are accessed. Chapter 4 examines in detail various forms that crowdsourcing may take, by presenting and discussing ten types of crowdsourcing operation. In Chapter 5, the authors imagine and explore the ways in which the dark side of crowdsourcing might be manifested and Chapter 6 offers some insight into the future of crowdsourcing. Contents 1. A Turbulent and Paradoxical Environment. 2. Crowdsourcing: A New Form of Externalization. 3. Crowdsourcing and Value Creation. 4. Forms of Crowdsourcing. 5. The Dangers of Crowdsourcing. 6. The Future of Crowdsourcing. About the Authors Jean-Fabrice Lebraty is Professor of management sciences at IAE (Business School) at Jean Moulin - Lyon 3 University in France and a member of the research laboratory Magellan EA3713. He specializes in the management of information and communication systems and his research notably concerns decision-making and the links between crowd and information technology. Katia Lobre-Lebraty is Associate Professor of management sciences at IAE (Business School) at Jean Moulin - Lyon 3 University in France and a member of the research laboratory Magellan EA3713. She specializes in management control and strategic management and her research concerns both the modes of governance of organizations and Open Data

Leseprobe

Contents

Introduction

I.1. A typology of management situations

I.2. Crowdsourcing: a multifaceted concept

Acknowledgments

1 A Turbulent and Paradoxical Environment

1.1. Economic financialization and its challenges

1.2. The mass diffusion of the Internet and its consequences

1.3. The paradoxical coexistence of scarcity and abundance around data

1.4. Unique simultaneity of crisis and immobilism

2 Crowdsourcing: A New Form of Externalization

2.1. The concept of externalization

2.2. The idea of relationships

2.3. The concept of a crowd

3 Crowdsourcing and Value Creation

3.1. Creation of value

3.2. What type of value?

3.3. What type of crowd?

3.4. Towards an adapted business model

4 Forms of Crowdsourcing

4.1. Crowdjobbing

4.2. Crowdwisdom

4.3. Crowdfunding

4.4. Crowdsourcing and forecasting

4.5. Crowdsourcing and innovation

4.6. Crowdsourcing and authenticity (C&A)

4.7. Crowdauditing

4.8. Crowdcontrol

4.9. Crowdcuration

4.10. Crowdcare

5 The Dangers of Crowdsourcing

6 The Future of Crowdsourcing

Conclusion

Bibliography

Index

First published 2013 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.

Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address:

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© ISTE Ltd 2013

The rights of Jean-Fabrice Lebraty and Katia Lobre-Lebraty to be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.

Library of Congress Control Number: 2013942764

British Library Cataloguing-in-Publication Data

A CIP record for this book is available from the British Library

ISSN: 2051-2481 (Print)

ISSN: 2051-249X (Online)

ISBN: 978-1-84821-466-8

Introduction

This book is intentionally grounded in the field of Management Science; that is, the sciences that seek to understand work in order to improve the functioning of organizations. As recently noted by an esteemed colleague, Professor François-Xavier De Vaujany, during a presentation to support an Authorization to Direct Research (Habilitation à Diriger des Recherches)1, the sciences of management and sociology fundamentally differ in terms of their subject, though they do share some common points. Sociology examines “how to live together” and Management Science looks at “how to act together”. We are, then, clearly in the domain of organized action. More precisely still, we study management situations defined by Girin [GIR 90, p. 142] as:

“A management situation occurs when participants are brought together and must, in a set amount of time, accomplish a collective action leading to a result subject to an external judgment.”

A management situation therefore includes individual actions, but these are integrated into the workings of the organization. Moreover, a result is expected and will be assessed by various stakeholders and major participants [FRE 84] in this organization.

Of course, there are different types of management situations, marked notably by the changes of the economic world within which organizations evolve, in particular the “crisis–opportunity–crisis” loops that have shaped the economic world for 40 years now. In fact, the first oil shock in 1973 put a definitive end to the glorious 30 years of French economic prosperity, and since then cycles alternating between economic hope and despair have continued to recur. The financial crisis of 2008 is currently being succeeded by a resurgence of optimism, the most visible sign of which is the recent record Dow Jones index: 15,056 on May 7, 2013.

I.1. A typology of management situations

A typology distinguishing four management situations according to two dimensions allows for a better understanding of this concept that is so central for managers, particularly in terms of deployable tools and methods. The first dimension concerns the nature of the environment in the organization within which the management situation occurs. This environment may be considered normal or extreme depending on whether or not it is permanently marked by changeability, uncertainty, and risk for the participants. The second dimension concerns the state of the environment at a given moment. This can be its normal state or a state of crisis according to whether it is undergoing an unusual event. The intersection of these two dimensions therefore allows us to identify four management situations, two aspects of which should be noted: the permeability of the boundaries, which allows passage from one management situation to another; and the increased frequency of passages from one management situation to another, a frequency related particularly to the acceleration of the economic cycles mentioned above.

The four typical management situations can be described as follows:

– The first situation is the so-called normal situation, in which it is possible to apply classic management methods from the 1970s and 1980s (optimization, planning, certification, etc.). In this type of situation, illustrated by the case of a chain restaurant franchise located in a place with high tourist traffic which is not experiencing any specific problems, the occurrence of a minor incident (a client unhappy with his meal, for example) will have little effect on the overall functioning of the restaurant chain.

– The second situation is the so-called crisis situation. It arises when an unusual and impactive event occurs within an organization that generally deals with normal management situations (as described in the preceding paragraph). For example: high pollution leads tourists to abandon the area where the restaurant is located; or: the press reveals a food scandal that directly involves the restaurant chain (these two levels of crisis are obviously different, but they are both crises for the restaurant owner). This crisis situation can be managed using classic crisis management approaches such as those proposed by Lagadec [LAG 91] or Wybo [WYB 04].

– The third situation may be called an “extreme management situation”. We consider a management situation to have become extreme when it occurs in an environment permanently marked by high changeability, uncertainty, and significant risks for the participants, whether direct (involving their physical safety) or indirect (if their organization weakens, they are in danger of losing their jobs) [BOU 12; WEI 07]. A trading room in an investment bank, or an aerospace company that conducts in-flight tests of prototype planes, works permanently in extreme situations. This type of organization employs experts who are generally highly resilient. Here, even a tiny grain of sand can rapidly turn a “routine” situation2 into a crisis situation. The major difference between a crisis occurring in a “normal” environment and one occurring in an “extreme” situation lies in the fact that the participants who are directly involved do not have the same skill levels.

– Finally, the fourth situation is the crisis situation that arises in an extreme environment. “Houston, we have a problem”3 sums up this situation perfectly. Here, nothing counts but the quality of the people involved; particularly their degree of expertise and level of resilience; and the quality of the organization within which they are working. In the example of Apollo XIII, the ability of the crew to maintain an understanding of the situation and to avoid being carried away by their own emotions was exemplary. On the ground, the ability to think of new strategies and to test them rapidly was also remarkable. The trust between the flight crew and the ground-control personnel was also a decisive factor. On the other hand, in this context it is not possible to have pre-planned methods or strategies to follow. Those participating in these situations must simply confront them. This involves employing coping strategies as shown by Lazarus [LAZ 00], and only the intrinsic qualities and skills of those involved can increase their chances of survival, though they can in no way guarantee it.

The figure below summarizes these four situations:

Figure I.1.Management situations

I.2. Crowdsourcing: a multifaceted concept

As we will see, crowdsourcing, the subject of analysis in this book, can contribute to the proper functioning of an organization in each of the management situations described above. It can sometimes even constitute the innovative solution. A first example of this perspective is that of the recent elections in Kenya. A presidential election was held on March 4, 2013 in this country, which was hardly known for its stability, but which had undergone an unprecedented crisis at the time of its previous election in 2007. During the free election, a fundamental task was to control the regularity of checking the balloting process, particularly through reporting information coming from the thousands of polling stations. During this process, in reaction to the riots provoked by irregularities observed in the Kenyan polling stations in 2007, a platform called Ushahidi was created and provided a partial solution to the problem. In fact, the platform, developed by a young Kenyan named Juliana Rotich, allowed anyone to report an irregularity, either by sending a text message to the number 3002 or by posting a message directly on the platform’s website. It was then a matter of correlating the information thus reported with the direct observations of the members of the international observation mission. It is still too early for a complete assessment of this experiment, but the initial results indicate that there does not seem to have been massive fraud.

What can we conclude for now? This is an extreme management situation (marked by changeability, uncertainty, and risk) that involves an extended area (a country the size of France). The task for the organization in charge of monitoring elections and for security officers consists of monitoring the proper functioning of the voting process; this is crucial, as poor functioning can lead to a crisis tipping point. Traditionally, this task is undertaken by investigation teams that are identified, selected, and trained before the election. In this case, these teams were strengthened by a large number of anonymous individuals simply connected to a network. The “anonymous” participation of these masses of people was passionate in nature and deserves emphasis. Paradoxically, trust was placed in the anonymous masses during an electoral process intended to very precisely define the roles of each of them. Moreover, the anonymity of the crowd possessing mobile telephones and microcomputers exercised strong and ubiquitous pressure on the people who would have been tempted to create incidents. Thus, by the very fact of its existence, this experiment can contribute to smooth election processes.

As this example attests, crowdsourcing concerns not only the world of business; its range of applications is much wider. One of this book’s objectives is to show the diversity of crowdsourcing by attempting an exhaustive recapitulation of all its forms4 and defining its specific attributes. The case of Innocentive alone shows some of the confusion present around crowdsourcing and some of the forms it may take in matters of Research and Development (R&D). It has often been said that the Innocentive platform can provide a company with the means to externalize its R&D department. This is not entirely true; though Innocentive does allow the externalization of a small percentage of an organization’s R&D activities, particularly those that can be formalized with precision, in fact, only problems that are clearly identified and formalized can be submitted to the masses via Innocentive. The work done by Innocentive stems from a specific form of crowdsourcing, “crowdsourcing and innovation”, which allows an organization to benefit from the specialized expertise of individuals spread out all over the globe in order to solve identified and timely problems. The mission of an R&D department is not limited to this single type of problem; it also consists, for example, of identifying these same problems, and of creating and conceiving new goods and services in accordance with the business’s environment. There are consequently other forms of crowdsourcing that can be mobilized, including “crowdauditing”, “crowd and forecasting”, and “crowdsourcing and authenticity”. It appears that only the combined use of various forms of crowdsourcing would allow an organization to externalize a large portion of its R&D department.

Now, though, let us look back at a page from the history of the world of organizations, by outlining the context and, in particular, two major trends within which crowdsourcing emerged. Since 1995, the year of Netscape’s IPO5 and the mass diffusion of the Internet, two major paradoxes characterizing the organizational environment have been at work: the coexistence of rarity and abundance, and the simultaneity of crisis and opposition to change.

1 January 13, 2013 on the campus of the University of Lyon III

2 For a test pilot, conducting a flight is routine. The term “routine” is in no way used in a pejorative sense.

3 Apollo XIII, April 13, 1970 at 3:07:52 a.m., when an oxygen tank exploded 321,860 km above Earth.

4 However, the daring nature of the objective should be emphasized, insofar as crowdsourcing is a phenomenon in full expansion and its limits, in conjunction with the combined power of the Web and the masses, are difficult to define in principle. There is every reason to believe that new forms of crowdsourcing will appear between the submission of this book to our publisher and its appearance in bookstores.

5 Initial Public Offer: date on which Netscape went public on the stock market.

Acknowledgments

We would like to thank all those brilliant people with brilliant ideas who have inspired us to write this book. We think of academics and entrepreneurs as students navigating the sea of crowdsourcing. Special thanks to those at the universities of Lyon and in Lausanne, Paris, and Nice, as well as overseas (China and the Middle East).

It is true that the crowdsourcing movement is an ongoing process propelling us toward a new world of business opportunities but – and this is key – there is an element of fun that goes along with it. It is this joyful aspect that puts us in mind of Camden Town market in London, and the lyrics we used to sing along with there: “One step beyond…”

1

A Turbulent and Paradoxical Environment

The 1990s were the start of a new era, marked by two major revolutions: the advent of economic financialization, and the mass diffusion of the Internet.

1.1. Economic financialization and its challenges

In his latest book, Gomez [GOM 13] offers an original analysis of economic financialization and the manner in which it is manifested in the behavior of businesses. We have based this writing on his analysis. The roots of economic financialization lie in the investment of savings by households which, desirous of preserving these savings, aspire to the security and liquidity of their investments. This is what is offered to them by the finance industry, which transmutes household savings into financial products such as SICAVs (Société d’Investissement à Captial Variable, “investment company with variable capital”), common investment funds, and life insurance products. The finance industry’s task is to place the resources collected in safe and profitable investments: safe, so that the savings are not lost in risky business ventures; and profitable, so that the profits earned, rather than the businesses’ capital, procure a profit for the savers in the form of dividends. From this perspective, household savings are directed mainly toward large companies that are listed on the stock market.

The stock market, as a second-hand sharemarket, ensures the liquidity of investments; the preference given to large companies is justified by their perceived economic stability: they are considered “too big to fail”. What occurs next is a phenomenon of attraction: the more capital businesses obtain, the more they become interesting investment targets for funds. Because they are powerful and their capital is liquid, they attract new investments. Money attracts money.

There has also been unprecedented competition between these large listed companies, which secure and seek to secure household savings. They must in fact attract the large-scale attention of backers by producing the expected profit and by clearing at least as large a profit as their competitors do. Therefore, companies outdo each other to prove the merits of their use of the capital they seek to obtain. In other words, they mimic each other in order to fulfill what they see as the market’s expectations of them. These common projected expectations include the imagined market requirement of 15% profit on the capital invested; the speed with which the critical profit margin must be reached; and the necessity of becoming global, or of maintaining flexibility. The means chosen to achieve these objectives are as similar as the objectives themselves. They include innovation, business mergers, strategic international growth, and development of sophisticated managerial monitoring and reporting tools. These tools are intended to note, via the power of computer information systems, how each activity contributes (or does not contribute) to the final result, thus rationalizing the activities of these organizations. The result is that the organizations have been put under increasing pressure: large listed companies most of all, but also other companies, partners, clients, suppliers, and subcontractors, on whom the large companies put a great deal of pressure to achieve their own objectives.

Finally, and in an exaggerated manner, a direct link can be established between the savings of millions of small and anonymous households, and the mimetic behavior of thousands of large and small businesses under intense pressure in an ever-more competitive environment.

1.2. The mass diffusion of the Internet and its consequences

Though they are often cited, we believe that the massive transformations engendered by information technology remain underevaluated. However, in his book, Friedman [FRI 05] emphasized the driving role of the Internet in global evolution. Remember that, above all, what we call the Internet is really a consolidation of various information technologies, some of which do not yet use the Internet protocol (text messages and Blackberry messages, for example). A piece of technology consists of a technique and a useful logic (techno + logic); there are many techniques or applications (the Web, Skype, Twitter, Peer to Peer, videos, newsgroups etc.) and various ways of using them. Understanding the distinction between technique and logic is very important. A mobile telephone1, for example, is not necessarily a tool used to exchange voice communications over a long distance2; it can often be a short-range coordination tool3, as in “I’ll be there in 2 minutes. I’m here, can you see me?”. It is also important not to confuse these terms: the Internet is a protocol and the Web, for example, is an application that uses this protocol. The headline of the August 2010 issue of Wired magazine clearly showed this nuance: “The Web is Dead. Long Live the Internet”. This showed that the Web was no longer the dominant application for the enduringly dynamic protocol that is the Internet.

Let us look at two examples.

On September 15, 2008, the Lehman Brothers investment bank went bankrupt after 150 years in existence. This failure was rooted in a panic that drove investors to withdraw their money at the same time. Banks cannot survive this type of situation since they do not possess enough ready cash. Certainly, to ensure their clients’ trust, they invest money in securities that are liquid enough – that is, easy to resell in the case of mass client withdrawals. However, this liquidity has limits, the exceeding of which is statistically controlled in a confidence-based situation. They also invest the savings entrusted to them in diverse securities in order to ensure the safety of the investments. How then to explain the crisis of confidence around Lehman Brothers? Where did the panic come from, and why had no one foreseen it? Information technology played a role in this bankruptcy; should it also play a role in avoiding such a situation?