Crowdsourcing as a Way to Solve Company Problems - Essay Example

Literature Review on Crowdsourcing Name Institution Literature Review on Crowdsourcing Introduction In June 2006, the concept of crowdsourcing was introduced by Jeff Howe (Wadhwa, 2014). At that time, he was an editor of Wired.com; he published an article about crowdsourcing and its importance in business marketing. He stated that, crowdsourcing is “the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call” (Pedersen et al., 2013). From the inception of the term, there have been a number of definitions that have been created by different researchers. From Pedersen et al. (2013) perspective, crowdsourcing can be termed as the collaboration model made possible by web technology that solve organisation and societal challenges using a group of individuals who are available for participation when the need arises. According to Tarrell et al. (2002), crowdsourcing is the act of utilizing the intelligence of a group of people to solve societal challenges. From 2006, the term has been used extensively and interchangeably with phrases such as “User Generated Content”, “Smart Mobs” and “peer Production”. The term crowdsourcing has been a developing research concept since the change of the millennium but it has generally received little attention from contemporary literature (Terrell et al., 2002). This purpose of this paper is to explore the academic and industry literature on the concept of crowdsourcing. The paper will explain which organisation pioneered the concept and when it emerged. It will also explain its emergence and its importance in today marketing world. In addition, the paper will offer the criticism of the concept and the benefits as well as the downfalls of crowdsourcing to businesses and marketers. Literature Review As mentioned earlier, the concept of crowdsourcing was pioneered by Jeff Howe in 2006 (Wadhwa, 2014). The initial aim of the concept was to source people who were ready and willing to assist in working on a specific task. It started as a problem solving tool for small tasks such as tagging photos, and confirming the feasibility of an idea among other tasks. The success of crowdsourcing was not predicted and many scholars argued that the concept was too weak to survive. However, it has grown to be a phenomenon used by many companies large or small (Goodrish, 2013). Despite being a new concept, it is said to have existed in our midst for years in other forms. For example, the phenomenon developed many years ago, the beta invitation is a form of crowdsourcing. The concept applies in the video games where developers offer a beta version of a video game to the public to test its viability and feasibility. This has been in the software industry for many years. In the recent years, the crowdsourcing concept has been adopted in other industries as well (Davis and Sun, 2006). Today, the wildly recognised application of the concept crowdsourcing is in the recruitment and selection industry (Savage, 2012). Organisations including microWorkers as well as Mechanical Turk have given an opportunity for companies across the globe to crowd source its employees in an aim of completing tasks quickly in return of monetary benefits (Savage, 2012). This can be done through a company posting an advertisement of a task and staff bid for the job. The company then selects the person to complete the task on the basis of their qualifications and the bid price. Doing this enables a company tap into a global knowledge-base which is competitive (Sonnleitner et al., 2013). Additional application of the concept of crowdsourcing can be seen in the fields of astronomy where companies crowd source workers to understand how galaxies are made. It also applies in the field of internet maps to offer user-generated mapping applications maintained by people found across the globe (Kaufmann, Schlze and Veit, 2011). The success of crowdsourcing is most renowned in the web-based Wikipedia. This web page uses the wiki to crowd source user-contributed data (Tarrel et al., 2013). It is reported that by 2015, Wikipedia had published more that 4.5 million articles which were contributed by global internet users. Other areas of application of crowdsourcing are in the healthcare industry and service industry (Tarrel et al., 2013). Today, companies have identified the advantages of crowdsourcing and have adopted it in their business operations. Naomi has confirmed that large companies across the globe have adopted crowdsourcing as a means of solving problems and generating innovative idea. In addition, these companies also use crowdsourcing to engage with potential customers and suppliers (Tarrel et al., 2013). Crowdsourcing activities bring about many benefits to companies. Posing a challenge to a group of people is beneficial since they are able to solve the problem quickly and innovatively (Wadhwa, 2014). This is the reason why crowdsourcing is seen as a model that boosts competitive advantage. Therefore, crowdsourcing is an important business marketing tool since it allows a company to leverage the innovativeness and resources of its solution providers (Wadhwa, 2014). This is able to promote and grow companies at lower costs. In addition, crowdsourcing is able to enhance productivity of an organisation as well as reduce labour expenses. From its definition, crowdsourcing acts as a problem-solving tool. It is able to elicit collective knowledge which was previously hidden and use it to solve societal challenges (Pedersen et al., 2013). Compared to prices incurred in hiring professional individual, crowdsourcing activity is able to incur lower costs. The tasks can be done effectively and accurately at affordable prices. In addition, crowdsourcing provide an opportunity for companies to access a large number of individuals who are always ready to assist at any time (Pedersen et al., 2013). Poetz and Schreier (2012) have termed crowdsourcing as an excellent research and Development model that bring together knowledgeable people who are able to assist companies where they are stuck. Any challenge facing an organisation can be posted to the public in an attempt to find solution quickly before making further decisions that can affect the operations of the business (Nambisan and Baron, 2009). Crowdsourcing is also beneficial to companies seeking usability feedback for new products or services. For instance, it is an excellent tool for web designers to get usability feedback about their invention before they make it public. Although crowdsourcing is linked to several benefits, it also comes with a number of challenges and issues. One of the major challenges of crowdsourcing is management issues. Companies that have adopted crowdsourcing activities need to manage a large number of solution providers (Muller, Thoring and Oostinga, 2010). This is challenging and waste of time for the management. The management is diverted from its original functions which can lead to poor management decisions based on the overall operation of the business. Moreover, it is always difficult to form a smooth collaboration between participants since they compete for the same task. Harvesting idea and solutions can be a challenge. It is not always a straightforward process to reach a consensus on the idea or solution to invest in (Richard and Gao, 2016). A large number of people offer different expectations that are difficult to manage at once. Worst of all, crowdsourcing activities are not under any contract. And as such, the participants can use the tasks or operations as much as they want which leads to overuse (Richard and Gao, 2016). In addition, quality of ideas and solutions are sometimes poor. The increasing volume of half-baked ideas can create more work for companies which may add to the operation costs (Arakji and Lang, 2007). There is loss of control for task providers. By adopting the concept of crowdsourcing, companies risk the loss of control in terms of data and information that can harm the business in the long run. In the past, companies used to hoard knowledge as a competitive strategy. They used to rely on the knowledge and skills from industry analysts, internal gurus and consultants. These people understood the trends in the industry and were able to solve most of the challenges facing companies (Fuller et al., 2009). However, today, with the aim of developing strategies for competitive advantage, organisations have created armies of people. These people are able to perform the same functions of the experts or even better. This strategy may be seen to add some benefits to the companies but it has led to loss of employment for experts (Arakji and Lang, 2007). Some academics and researchers have critic the concept of crowdsourcing. According to Pedersen et al. (2012), the issue of intellectual property rights as well as copyright ownership can impede the success of the concept in companies. The success of the activity of crowdsourcing depends on the media in which participants are attracted and retained. Sonnleitner et al. (2013) illustrated that although the concept of crowdsourcing has benefited many businesses, it results to the challenge of trust between the task owners and the group of participants. Mistrusts have happened in the few years and are bound to continue happing in the future. In addition, crowdsourcing has been criticised for bringing more harm than good to companies (Arakji and Lang, 2007). For instance, Kaufman, Schlze and Veit (2011) have criticised crowdsourcing for not offering a framework needed in motivating the solution providers. In most instances, it has been seen that some task submissions are of poor quality due to lack of motivation of participants. The solution providers can be divided into two; extrinsic and intrinsic. Intrinsic encompass motivation coming from contributing solutions while extrinsic are tangible payoffs. Muller et al. (2010) illustrates that the activity of crowdsourcing has made a mistake of using extrinsic means of motivation since it tends to create social barrier and does not support cooperation in the workplace. Therefore, before applying the concept of crowdsourcing it is important for companies to understand the most effective motivational factors that enhance engaging and participation in crowdsourcing (Kaufmann, Schulze and Veit, 2011). In addition, a number of academics have questioned the credibility of crowdsourcing activities due to the presence of quasi-ubiquitous internet search tools (Savage, 2012). The ability of crowdsourcing to achieve its purpose depends on the reliability of the internet. Pedersen et al. (2013) argues that the internet is not ready to handle the work that accompanies crowdsourcing. Nevertheless, Savage (2012) has argued that crowdsourcing activities are able to able people from different areas to develop novel and innovative solutions that could be impossible. Industry Application One of the best examples of the application of crowdsourcing is seen in Google Company. The company has developed a new app called Crowdsource which appears in the play store. Google uses the app to ask for help with issues such as translation, transcription among others (Nakaj, 2016). The main purpose of the app is to assist the company solve its transcription and translation challenges. Surprisingly, Google does not offer any monetary rewards or benefits to its solution providers. Nevertheless, it has been a huge help for the company and has led to cost saving advantages. There are other several crowdsourcing projects Google Company has been working on in order to be competitive and solve its operation challenges (Nakaj, 2016). Some crowdsourcing activities include Sheer Crowdsourced Journalism, Global Community of Explorers and Google Contributor. Since its reliance on crowdsourcing Google Company has been able to solve its transcription, translation and advertisement challenges (Nakaj, 2016). Conclusion This review has presented the views of different literatures on the concept of crowdsourcing. The phenomenon of overcrowding in marketing was introduced by Howe Jeff in 2006. Crowdsourcing is considered a problem solving tool that is used by companies to reach out to wider knowledge. Companies are able to solve operation costs quickly and at a cheaper price. The concept of crowdsourcing has played a fundamental role in boosting organisational competitive advantage. Although, crowdsourcing has brought benefits to companies, it is associated with unemployment of experts. It has also led to loss of control of companies and management and collaboration issues. In addition, quality of ideas and solutions are sometimes poor which creates more work for companies and adds to the operation costs. References Arakji, R. Y.and K. R. Lang, (2007). Digital consumer networks and producer-consumer collaboration: Innovation and product development in the video game industry. Journal of Management Information Systems, 24(2): 195-219. Davis C. H and E. Sun, (2006)“Business development capabilities in information technology SMEs in a regional economy: An exploratory study,”. Journal of Technology Transfer, vol. 31, no. 1, pp. 145-161. Füller, H. Mühlbacher, K. Matzler, and G. Jawecki, (2009). Consumer empowerment through internet-based co-creation. 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