MGT2210 TEST 3 QUESTIONS AND ANSWERS
What is crowdsourcing? - CORRECT ANSWER✅✅✅The practice of obtaining needed services, ideas,
or content through contributions from a large group of people (mostly online communities as opposed
to traditional employees or suppliers)
Examples: "sharing" (or share) economy, crowdsourcing ideas, crowdsourcing legislation- getting around
political impasses
Crowdsourcing is not new but IT changes the game (as usual)... - CORRECT ANSWER✅✅✅-Seamless
(faster, cheaper, more reliable) communication
-Easier to integrate multiple data sources
-Real time updating
-Increased computational and storage capabilities
-Scalability
-Reduced human error
-Elimination of the geographical borders
-Increased ability to track and attribute actions and records
What is the sharing economy? - CORRECT ANSWER✅✅✅Asset owners use digital clearing houses to
capitalize the unused capacity of things they already have, and consumers rent from their peers rather
than rent or buy from a company. A two-sided market.
Examples: hospitality (Airbnb), shared rides (Lyft, Uber)
What kind of e-commerce is the sharing economy? - CORRECT ANSWER✅✅✅C2C e-commerce
Explain crowdsourcing using Airbnb as an example. - CORRECT ANSWER✅✅✅-People seeking
vacation rentals and other short-term accommodations
-People with rooms to rent- generally not professional hotellers
How is Airbnb a 2-sided market with network effects? - CORRECT ANSWER✅✅✅-Word of mouth
and ratings (reputation mechanism)
-More rental seekers interested → value for hosts
,-More hosts available → value for rental seekers
-Of rental seekers who use Airbnb- inspired to become hosts -this "conversion" takes off rapidly with
scale
Most revenue comes from hosts renting space while away.
Challenges regarding Airbnb - CORRECT ANSWER✅✅✅-Airbnb vs city laws, which vary widely
-Market has significant positive network externalities so who could take on Airbnb?
In what areas is IT-based crowdsourcing commonly used? - CORRECT ANSWER✅✅✅-Evaluation
-Ideation
-Labor
-Funding
-Access to peer-provided assets and services (overlap with the "sharing economy")
Microtasks - CORRECT ANSWER✅✅✅-Usually small parts of a large task- many individuals work in
parallel to complete the overall task (Amazon Mechanical Turk, CrowdSource)
-Platform- pre-testing, automated posting, validation, aggregation
Macrotasks - CORRECT ANSWER✅✅✅-Larger scope tasks that can be completed by an individual or
a small team (e.g., Freelancer, Upwork, Thumbtack)
-Platform- auction mechanism, monitoring
Crowdsourcing labor potential for trouble - CORRECT ANSWER✅✅✅-Privacy and IP concerns
-Possibility for the emergence of "digital sweatshops"- especially in the case of microtasks-employer has
a lot of power
-Arbitration of disagreements (macrotasks)
-Mitigated by reputation mechanisms on both sides (e.g., TurkOpticonfor microtaskmarkets)
Taking advantage of "collective intelligence" - CORRECT ANSWER✅✅✅-Skills and knowledge
-Diversity
,-Independence and flexibility
-Potential for interactions
Explain how crowdsourcing can be used for ideation of business problems. - CORRECT
ANSWER✅✅✅Contests/challenges:
-Open call for innovation/solutions posted on an external 2-sided crowdsourcing platform
-Acceptance of submissions
→ The "seeker" evaluates the submissions and chooses the winner(s)
[Note: there might be an implicit labor component (e.g., submit a proof of concept or a design)]
Explain how crowdsourcing can be used for ideation and evaluation of solutions of business problems. -
CORRECT ANSWER✅✅✅Ideation: open call for new ideas; acceptance of submissions
Evaluation: voting on the submissions by the community; submissions with enough supporting votes are
evaluated first by the company
→ Depending on the company assessment (in conjunction with the assessment of the community),
some of the crowdsourced ideas are implemented
Corporate platforms for proposing new ideas and features (e.g., Dell IdeaStorm) sometimes make
submissions publicly accessible- especially for purposes of crowdsourcing the evaluation of the ideas. -
CORRECT ANSWER✅✅✅-IP rights can be specified in the challenge description
-When the ideas are made publicly available on a site there are always concerns
What are two concerns regarding ideas being made publicly available? - CORRECT
ANSWER✅✅✅1)An open contest may reveal that there is an important idea out there for which we
(a company) do not have a solution
-This may invite other companies to invest in R&D in that direction to create competitive advantage.
-This is the case even if the competitor cannot see submitted solutions.
2)Competitors can get inspired to introduce such features as well.
Pipe - CORRECT ANSWER✅✅✅Value is created by a producer "upstream" and consumed by a user
"downstream" like "water flowing in a pipe."
, -The dominant business model throughout history—manufacturing, education, traditional media,
software development, much e-commerce, most services, etc.
Platform - CORRECT ANSWER✅✅✅Value may be created by anyone anywhere in the stream and
may flow upstream or downstream to be consumed by anyone.
-Made possible by the Internet.
-Users can easily market extensions to a product's capabilities.
Pipe: What contact occurs between suppliers and customers of the firm? - CORRECT
ANSWER✅✅✅No or only indirect direct contact between suppliers and customers of the firm
"Restaurant"
Platform: What contact occurs between suppliers and customers of the firm? - CORRECT
ANSWER✅✅✅Firm facilitates direct contact among suppliers and customers of the firm
"Food Court"
Pipe: Who perform high value activities? - CORRECT ANSWER✅✅✅The firm performs them to assert
control over valuable resources and to create competitive advantage
"Pipeline Ind"
Platform: Who perform high value activities? - CORRECT ANSWER✅✅✅Firm sets up infrastructures
and rules that allow other firms to perform high value activities
"Uber/Airbnb/etc."
Pipe: What source of value is maximized? - CORRECT ANSWER✅✅✅Firm focuses on maximization of
customer lifetime value, which is incremental
Platform: What source of value is maximized? - CORRECT ANSWER✅✅✅Firm focuses on
maximization of ecosystem value, which can be "exponential"
What is crowdsourcing? - CORRECT ANSWER✅✅✅The practice of obtaining needed services, ideas,
or content through contributions from a large group of people (mostly online communities as opposed
to traditional employees or suppliers)
Examples: "sharing" (or share) economy, crowdsourcing ideas, crowdsourcing legislation- getting around
political impasses
Crowdsourcing is not new but IT changes the game (as usual)... - CORRECT ANSWER✅✅✅-Seamless
(faster, cheaper, more reliable) communication
-Easier to integrate multiple data sources
-Real time updating
-Increased computational and storage capabilities
-Scalability
-Reduced human error
-Elimination of the geographical borders
-Increased ability to track and attribute actions and records
What is the sharing economy? - CORRECT ANSWER✅✅✅Asset owners use digital clearing houses to
capitalize the unused capacity of things they already have, and consumers rent from their peers rather
than rent or buy from a company. A two-sided market.
Examples: hospitality (Airbnb), shared rides (Lyft, Uber)
What kind of e-commerce is the sharing economy? - CORRECT ANSWER✅✅✅C2C e-commerce
Explain crowdsourcing using Airbnb as an example. - CORRECT ANSWER✅✅✅-People seeking
vacation rentals and other short-term accommodations
-People with rooms to rent- generally not professional hotellers
How is Airbnb a 2-sided market with network effects? - CORRECT ANSWER✅✅✅-Word of mouth
and ratings (reputation mechanism)
-More rental seekers interested → value for hosts
,-More hosts available → value for rental seekers
-Of rental seekers who use Airbnb- inspired to become hosts -this "conversion" takes off rapidly with
scale
Most revenue comes from hosts renting space while away.
Challenges regarding Airbnb - CORRECT ANSWER✅✅✅-Airbnb vs city laws, which vary widely
-Market has significant positive network externalities so who could take on Airbnb?
In what areas is IT-based crowdsourcing commonly used? - CORRECT ANSWER✅✅✅-Evaluation
-Ideation
-Labor
-Funding
-Access to peer-provided assets and services (overlap with the "sharing economy")
Microtasks - CORRECT ANSWER✅✅✅-Usually small parts of a large task- many individuals work in
parallel to complete the overall task (Amazon Mechanical Turk, CrowdSource)
-Platform- pre-testing, automated posting, validation, aggregation
Macrotasks - CORRECT ANSWER✅✅✅-Larger scope tasks that can be completed by an individual or
a small team (e.g., Freelancer, Upwork, Thumbtack)
-Platform- auction mechanism, monitoring
Crowdsourcing labor potential for trouble - CORRECT ANSWER✅✅✅-Privacy and IP concerns
-Possibility for the emergence of "digital sweatshops"- especially in the case of microtasks-employer has
a lot of power
-Arbitration of disagreements (macrotasks)
-Mitigated by reputation mechanisms on both sides (e.g., TurkOpticonfor microtaskmarkets)
Taking advantage of "collective intelligence" - CORRECT ANSWER✅✅✅-Skills and knowledge
-Diversity
,-Independence and flexibility
-Potential for interactions
Explain how crowdsourcing can be used for ideation of business problems. - CORRECT
ANSWER✅✅✅Contests/challenges:
-Open call for innovation/solutions posted on an external 2-sided crowdsourcing platform
-Acceptance of submissions
→ The "seeker" evaluates the submissions and chooses the winner(s)
[Note: there might be an implicit labor component (e.g., submit a proof of concept or a design)]
Explain how crowdsourcing can be used for ideation and evaluation of solutions of business problems. -
CORRECT ANSWER✅✅✅Ideation: open call for new ideas; acceptance of submissions
Evaluation: voting on the submissions by the community; submissions with enough supporting votes are
evaluated first by the company
→ Depending on the company assessment (in conjunction with the assessment of the community),
some of the crowdsourced ideas are implemented
Corporate platforms for proposing new ideas and features (e.g., Dell IdeaStorm) sometimes make
submissions publicly accessible- especially for purposes of crowdsourcing the evaluation of the ideas. -
CORRECT ANSWER✅✅✅-IP rights can be specified in the challenge description
-When the ideas are made publicly available on a site there are always concerns
What are two concerns regarding ideas being made publicly available? - CORRECT
ANSWER✅✅✅1)An open contest may reveal that there is an important idea out there for which we
(a company) do not have a solution
-This may invite other companies to invest in R&D in that direction to create competitive advantage.
-This is the case even if the competitor cannot see submitted solutions.
2)Competitors can get inspired to introduce such features as well.
Pipe - CORRECT ANSWER✅✅✅Value is created by a producer "upstream" and consumed by a user
"downstream" like "water flowing in a pipe."
, -The dominant business model throughout history—manufacturing, education, traditional media,
software development, much e-commerce, most services, etc.
Platform - CORRECT ANSWER✅✅✅Value may be created by anyone anywhere in the stream and
may flow upstream or downstream to be consumed by anyone.
-Made possible by the Internet.
-Users can easily market extensions to a product's capabilities.
Pipe: What contact occurs between suppliers and customers of the firm? - CORRECT
ANSWER✅✅✅No or only indirect direct contact between suppliers and customers of the firm
"Restaurant"
Platform: What contact occurs between suppliers and customers of the firm? - CORRECT
ANSWER✅✅✅Firm facilitates direct contact among suppliers and customers of the firm
"Food Court"
Pipe: Who perform high value activities? - CORRECT ANSWER✅✅✅The firm performs them to assert
control over valuable resources and to create competitive advantage
"Pipeline Ind"
Platform: Who perform high value activities? - CORRECT ANSWER✅✅✅Firm sets up infrastructures
and rules that allow other firms to perform high value activities
"Uber/Airbnb/etc."
Pipe: What source of value is maximized? - CORRECT ANSWER✅✅✅Firm focuses on maximization of
customer lifetime value, which is incremental
Platform: What source of value is maximized? - CORRECT ANSWER✅✅✅Firm focuses on
maximization of ecosystem value, which can be "exponential"
