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.

1. HOW TO WORK A CROWD: DEVELOPING CROWD
CAPITAL THROUGH CROWDSOURCING
Ian P. McCarthy
Beedie School of Business
Ian_mccarthy@sfu.ca

2. Based on the following
research:
Prpić, J., Shukla, P. P.,
Kietzmann, J. H., & McCarthy,
I. P. (2015). How to work a
crowd: Developing crowd
capital through
crowdsourcing. Business
Horizons, 58(1), 77-85.
Access the full paper here.

3. Traditionally the term ‘crowd’ was used
almost exclusively in the context of people
who self-organized around a common
purpose, emotion, or experience.

4. CROWDSOURCING DEFINED
• Today, firms often refer to
crowds as “collections of
individuals who can be
engaged for organizational
purposes” (Prpić et al. 2015:
77).
• Crowdsourcing is “the use of
information technologies to
outsource business
responsibilities to crowds”
(Prpić et al. 2015: 77).

5. TYPES OF CROWDSOURCING
Crowd-voting
An organization requests
choices between
alternatives and then
aggregates the votes
e.g., American Idol
Idea crowdsourcing
An organization invites
ideas about questions and
issues and then evaluates
the proposed ideas
e.g., Threadless
Micro-task crowdsourcing
An organization breaks a
problem or task into smaller
tasks and then re-assembles
the completed tasks
e.g., ReCAPTCHA
Solution crowrdsourcing
An organization invites
and tests developed
solutions to challenges
and adopts the best ones
e.g., Netflix Prize
Subjective
Content
Objective
Content
Aggregated
Contributions
Filtered
Contributions
Prpić, J., Shukla, P. P.,
Kietzmann, J. H., & McCarthy, I.
P. (2015). How to work a crowd:
Developing crowd capital
through crowdsourcing.
Business Horizons, 58(1), 77-85.

6. THE THEORY OF CROWD CAPITAL (TCC)
Prpić, J., Shukla, P. P.,
Kietzmann, J. H., & McCarthy, I.
P. (2015). How to work a crowd:
Developing crowd capital
through crowdsourcing.
Business Horizons, 58(1), 77-85.

7. 1. Determine why you want to crowdsource. Why do you want to
outsource a task to a crowd?
2. Define the population of individuals needed to perform the
task. Who are they? Where are they? Why will they help? How
will they help? How diverse is the population? How
independent are the individuals?
3. Determine the simple rules that individuals would follow so as
to (i) construct the crowd, and (ii) harness the capital of the
crowd.
4. Determine the technologies needed to acquire and assimilate
the capital from the crowd.
HOW TO WORK A CROWD

8. CAPTION CONTESTS
• Caption contests are a
longstanding form of
crowdsourcing.
• Please submit your
caption using the
SlideShare comment
function for this
presentation