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Traditionally, the term crowd was used almost exclusively in the context ofpeople who self-organized around a common purpose, emotion or experience.Today, however, firms often refer to crowds in discussions of how collectionsof individuals can be engaged for organizational purposes. Crowdsourcing, theuse of information technologies to outsource business responsibilities tocrowds, can now significantly influence a firms ability to leverage previouslyunattainable resources to build competitive advantage. Nonetheless, manymanagers are hesitant to consider crowdsourcing because they do not understandhow its various types can add value to the firm. In response, we explain whatcrowdsourcing is, the advantages it offers and how firms can pursuecrowdsourcing. We begin by formulating a crowdsourcing typology and show howits four categories (crowd-voting, micro-task, idea and solution crowdsourcing)can help firms develop crowd capital, an organizational-level resourceharnessed from the crowd. We then present a three-step process model forgenerating crowd capital. Step one includes important considerations that shapehow a crowd is to be constructed. Step two outlines the capabilities firms needto develop to acquire and assimilate resources (knowledge, labor, funds) fromthe crowd. Step three addresses key decision-areas that executives need toaddress to effectively engage crowds.

How to Work a Crowd: Developing Crowd Capital Through Crowdsourcing