New organization of labor through crowdsourcing: a literature study
Summary

Jan Marco Leimeister and Shkodran Zogaj
Translated by Birgit Penzenstadler
Edited by M. Six Silberman
Original at http://wtf.tw/ref/leimeister.pdf

In recent years, crowdsourcing has become a popular alternative to directly completing tasks. "Crowdsourcing" denotes the outsourcing of specific tasks to an undefined mass of people ("crowd") through an open call. The crowdsourcing model is not merely an innovative concept for the distribution and execution of company tasks, but in fact a completely new type of work organization that brings changes for both employers and employees. This study reviews current literature on the forms, work undertaken, coordination strategies, and value created in current crowdsourcing practice.

The preliminary definition of crowdsourcing above is derived from a number of publications. It states that crowdsourcing always involves a contracting party or principal (the "crowdsourcer") and a contractor or agent (the "crowdsourcees"). Crowdsourcing initiatives are executed through an IT platform, which can be provided by the contracting organization or by an intermediary. In general, there are three types of crowdsourcing: crowdvoting, crowdfunding, and crowdcreation. Crowdvoting prompts crowdsourcees to give evaluations, votes, reviews, or recommendations with respect to a specific circumstance. In crowdfunding, the crowd finances (a part of) a specific project. Crowdcreation encompasses the elaboration and development of (problem) solutions, ideas, designs, and concepts.

Crowdsourcing companies must decide which internal value creation activities can be crowdsourced. Literature and practice show that nearly all value creation activities can be included in crowdsourcing. Crowdsourcees need task descriptions that are very concrete, detailed and described in small work units to successfully deliver results for these tasks. Knowledge for the execution of the individual subtasks must be limited so that many less qualified individuals can help complete the task. This approach can be compared to the principles of Taylorization. One objective is to improve work productivity via standardization and decomposition of complex tasks into simpler subtasks. These simpler and recurring subtasks can then be repeated by (often less qualified or more quickly trained) workers while exploiting learning and size effects as well as effects of economies of scope. This increases the overall productivity and speed of value creation. Similar to the industrialization of production processes, a big share of the effort is spent on planning, management, and coordination of the task execution. Crowdsourcing process managers have different challenges than "conventional" project or process managers.

An "ideal" crowdsourcing process can be differentiated into five phases. The first phase involves the decomposition of work tasks into subtasks as well as the determination of solution or task requirements. The second phase determines which crowdsourcees (all, or a subset) will execute the respective subtasks in the third phase. The fourth phase consolidates and evaluates the submitted solutions or contributions, and the last phase encompasses the reimbursement of the crowdsourcees and completes the overall task.

Especially in the area of informatics, there are approaches that are concerned with the partial automatization of crowdsourcing processes for micro tasks (human computation). Studies in this area show that the crowd can develop, depending on the tasks and the process design, qualitatively similar or even better task results in less time than conventional work processes. In addition to producing high quality results quickly, crowdsourcing is more flexible and less costly than traditional methods. But costs are often hard to calculate (especially costs associated with standardizing and decomposing tasks, integrating results, and quality control), there is a risk of losing control of the work process, and there are data security risks.

On the side of the crowdsourcees (or crowd workers), the emphasis in the literature lies on working conditions and work design—i.e., the ways of working in the crowd, the reimbursement of crowd workers, and the legislative framework. Generally we can distinguish two forms of working: a competition-oriented approach and a collaboration-oriented approach. In the first case the crowd workers are in a temporal (the crowd worker who fulfills the task first gets the reward) or result-oriented (crowd worker with best result gets the reward) competition with each other. In the collaboration-oriented approach, a number of crowd workers elaborate a solution for a specific task collectively.

Different studies on crowdsourcees show that intrinsic motives like social exchange, the possibility to improve individual capabilities, and the joy of crowd working play an important role. Pay and other material rewards are, however, the primary motivation for crowd workers. Moreover, the high degree of self determination are denoted positively when choosing the type of task. Consequently we can find different models for reimbursement and work organization in practice, and many more are possible. The rewards vary greatly, depending on the type of work and the tasks. While for some tasks (usually micro tasks) crowd workers are paid a few cents, other—usually competition-oriented—crowdsourcing initiatives have rewards of up to thousands of euros or dollars.

We found no studies of legislative constraints on crowd work in Germany. Some US studies suggest existing labor regulation cannot easily be applied to crowdsourcing. The differential implications for organization-internal vs. external crowd workers (i.e., employees vs. contractors) remains to be determined even as crowdsourcing grows in popularity. Research is needed on the relationship between crowdsourcing and the self-determination rights of workers.

Research is also needed on the "crowdsourcers'" side, inter alia on the prerequisites for successful crowdsourcing and suitable models for payment and suitable mechanisms for planning, managing, and controlling crowdsourcing projects. More research on crowdsourcing platforms is also needed to support continued improvement.

Contents
1. Introduction
2. Method
3. Definition and forms of crowdsourcing
3.1 Analysis of existing definitions
3.2 Forms of crowdsourcing
4. Crowdsourcing as innovative model of value creation: the perspective of the crowdsourcers 
4.1 Explanatory approaches for crowdsourcing decisions
4.2 Management of the crowdsourcing process
4.2.1 Phases and characteristics of the crowdsourcing process
4.2.2 Partial automation of crowdsourcing process: human computation
4.2.3 Management and control of crowd activities
4.2.4 Technology: Crowdsourcing platform as medium of interaction
4.3 Crowdsourcing as business model: crowdsourcing intermediaries
4.4 Advantages and disadvantages of crowdsourcing 
5. Working in the crowd: perspective of the crowd workers
5.1 Forms of working in the crowd
5.2 Working conditions, motivation, and reward of the crowdsourcees
5.2.1 Crowdsourcees' reasons for participation
5.2.2 Reimbursement of crowdsourcees and legislative constraints
6. Discussion
6.1 Implications for research
6.2 Implications for crowd work in light of the literature analysis
7. Conclusion and outlook
8. Literature
9. Appendix