Governance Considerations for Seeker–Solver Relationships: A Knowledge‐Based Perspective in Crowdsourcing for Innovation Contests
| Author | Mariangela Piazza,Nuran Acur,Erica Mazzola,Giovanni Perrone |
| Date | 01 October 2019 |
| Published date | 01 October 2019 |
| DOI | http://doi.org/10.1111/1467-8551.12327 |
British Journal of Management, Vol. 30, 810–828 (2019)
DOI: 10.1111/1467-8551.12327
Governance Considerations for
Seeker–Solver Relationships: A
Knowledge-Based Perspective in
Crowdsourcing for Innovation Contests
Mariangela Piazza, Erica Mazzola, Nuran Acur 1and Giovanni Perrone
DICGIM – Managerial and Economics Division, Universit`
a degli Studi di Palermo, 90128, Palermo, Italy
1Adam Smith Business School, University of Glasgow, Glasgow, UK
Corresponding author email: nuran.acur@glasgow.ac.uk
The need to solve innovation problems and insource knowledge has led to an increasing
number of organizations engaging in crowdsourcingactivities and subsequently establish-
ing working relationships with winning solution providers.Using a knowledge-based view
and the problem-solving perspective, we developa theoretical framework suggesting how
specific innovation problem attributes (i.e. the decomposability, formulation and search
space of the problem) influence the governancedecision (unilateral vs. bilateral) of seekers
to manage the relationship with winning solvers. We empirically analyse the framework
using 582 challenges broadcast on the NineSigma crowdsourcing platform. Our results
indicate that problem attributes – the formulation and search space of the problem– have
a positive eect on seekers’ preference towards unilateral governance structures. How-
ever, we did not find anyempirical confirmation of the eect that the decomposability of
the innovation problem has on seekers’ preference towards unilateral governance struc-
tures. This study oers several contributions to the crowdsourcing literature, and also
has important implications for managers of organizations aiming to insource knowledge
through crowdsourcing forinnovation contests.
Introduction
As more organizations access external knowl-
edge, open up their boundaries and engage in
crowdsourcing for innovation contests, determin-
ing how to govern the working relationships with
external solution providers has increasingly be-
come strategicallyimportant (L ¨
uttgens et al., 2014;
Majchrzak and Malhotra, 2013). For example,
if organizations perform poorly in choosing the
structure of the working relationship, it may result
in missed opportunities and wasted resources due
to delays in the new product development process
and a decrease in innovationoutcome rates (Samp-
son, 2004; Stanko and Calantone, 2011). Further,
choosing inappropriategovernance structures may
also lower the revenuesof future contests, since an
unfair and poorly designed crowdsourcing contest
may damage the company’s reputation (de Beer
et al., 2017). Accordingly, deepening the under-
standing of the governance structure of the work-
ing relationship between organizations and solu-
tion providers is vital for organizations looking
for appropriate relationships that may increase the
value of their crowdsourcing initiatives.
Organizations (i.e. seekers) that wish to solve a
given innovation problem are searching for exter-
nal providers (i.e. solvers) that possess particular
know-how to join in a working relationship (i.e.
governance structure decision) and implement
the best solutions (L¨
uttgens et al., 2014). When
crowdsourcing innovation problems, the seeker
must still take several decisions, such as whether
to proceed with an external crowdsourcing
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Governance Considerations for Seeker–Solver Relationships 811
platform instead of an internal one, and how to
organize the knowledge sharing and transfer of in-
tellectual property related to the winning solution
(de Beer et al., 2017; Schenk, Guittard and P´
enin,
2017). To date, how seekers can insource new
knowledge from winning solvers by establishing
an appropriate working relationship remains
a neglected area of research. This relationship
ranges from unilateral (e.g. licensing arrangements
and research contracts) to bilateral relationships
(e.g. technology partnerships, cross-licensing
agreements and joint ventures) (Hagedoorn, 1990;
Leonard-Barton, 1995). In particular, a related
question has been overlooked: what influences
seekers in deciding the governance structure of the
working relationship they will establish with the
winning solver?
As previous scholars have empirically shown,
the attributes of the problems may attract/inhibit
potential solvers to/from participating in the in-
novation contests, thereby influencing the overall
performance of the challenge (Boudreau, Lacetera
and Lakhani, 2011; Franke, Keinz and Klaus-
berger, 2013; Jeppesen and Lakhani, 2010; Terwi-
esch and Xu, 2008). These attributes, which are
more complex than technical indications favour-
ing the use of new ideas or solutions to innova-
tion problems, depend on the nature of the prob-
lem and the knowledge requirements of the solver.
The seeker-preferred governance structure is then
pushed forward when the combination of these
attributes yields solutions that exceed the expec-
tations generated by the solver’s experiences. The
challenge attributes, therefore, play a critical role,
not only in gaining new knowledge from outsiders
and attracting solvers but also in defining gover-
nance structures. Thus, the aim of this paper is to
fill the previous gap and answer the researchques-
tion by investigating whether and how the prob-
lem attributes aect the seeker’s governance pref-
erences under alternative governance structures,
both unilateral and bilateral (Afuah and Tucci,
2012; L¨
uttgens et al., 2014; Nickerson, Wuebker
and Zenger, 2017).
An organization’s level of knowledge access is
a key driver of competitive advantage and orga-
nizational capacity (Easterby-Smith and Prieto,
2008); the knowledge-based view of the firm ex-
amines the ways in which organizations can in-
crease this level (Grant, 1996; Kogut and Zander,
1992). Within the framework of the knowledge-
based view of the firm, research has explored how
knowledge considerations impact the type of al-
liance chosen (e.g. Gulati and Singh, 1998), the
management of partners (e.g. Dimitratos et al.,
2010), the integration of knowledge in the crowd
context (e.g. Malhotra and Majchrzak, 2014) and
the connection between the type of governance
chosen and the problem-solving context (e.g. Fe-
lin and Zenger, 2014; Nickerson, Wuebker and
Zenger, 2017). We grounded the development of
our model in the knowledge-based view of the
firm (Grant, 1996; Kogut and Zander, 1992),
positing that the seeker’s knowledge-based objec-
tive is to insource valuable new knowledge from
the crowd. The seeker, however, cannot simply
choose a problem and ask for the new knowl-
edge to be acquired, because the desired knowl-
edge is frequently hard to communicate or has
not been developed yet (Nickerson and Zenger,
2004). Instead, seekers must define valuable prob-
lems that, through their attributes, formalize the
knowledge required. Such problem attributes (i.e.
decomposability, formulation and search space of
the problem) (Afuah and Tucci, 2012; Natalic-
chio, Petruzzelli and Garavelli, 2017) are the means
through which a seeker can solicit knowledgefrom
the crowd. Thus, when deciding about the gover-
nance structure of the working relationship, seek-
ers adopt a problem-solving perspective (Nicker-
son and Zenger, 2004). They rely on the attributes
of the problem they would like to solve and match
these attributes with governance modes that al-
low them to better acquire the related knowl-
edge from the crowd (Nickerson, Wuebker and
Zenger, 2017). As such, we integrate the problem-
solving perspective and the knowledge-based view
of the firm (Grant, 1996; Kogut and Zander, 1992;
Nickerson and Zenger, 2004; Nickerson, Wuebker
and Zenger, 2017) and provide matching argu-
ments between problems, which vary according
to their attributes, and crowdsourcing relation-
ships, which vary according to their governance
structures.
To empiricallyinvestigate the eect that innova-
tion problem attributes have on seeker preferences
in governance structures, we chose the NineSigma
crowdsourcing platform. Collecting a distinctive
dataset of 582 challenges broadcast from 2010
to 2014, we tested the hypotheses related to the
seeker knowledge-based governance consider-
ations. Moreover, since our empirical setting
presents some specificities, we conducted ex-
ploratory interviews to deepen our understanding
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