Reference no: EM131883108

Problem: MANAGEMENT DECISION

Crowdsourcing a More Stable Economy Magazine and newspaper articles, op-ed columns, and even entire books are being written in an effort to explain the causes of the recent global economic downturn. Many ask, "How did we not see it coming?" Being in the credit rating business, you know that the signs were there. They were just missed by the big-name agencies like Moody's, which gave Lehman Brothers an A2 rating despite signs of a likely default. What's the problem in your industry? One problem might be groupthink: There is not a lot of diversity or creativity in how algorithms are created among the big agencies (so there is not a diversity of opinion), and their models are not available for public scrutiny. Another problem: Large firms can be slow to react to new information. What's more, credit rating organizations often take payment from the companies they evaluate-it's legal, but it still looks an awful lot like a conflict of interest. You think you may have a solution: crowdsourcing. Set up a website where users can create their own algorithms to assess credit risk. Your main goal is to get a clean, open store of financial data and make it available for download.

Then you might offer some examples and templates to get contributors off to a start, but you want to encourage people to come up with their own strategies. This will certainly provide a diversity of algorithms that will be transparent and can be assessed on how well they actually perform.108 Your problem: How can you motivate potential users to contribute to this "ecosystem" without offering financial rewards? Crowdsourcing has been growing in recent years, enabled by the fact that people are motivated by other things besides cold, hard cash: recognition, respect, satisfaction at having accomplished something and contributed to a greater goal, the opportunity for personal expression and building a personal brand. You know you will have to invest in creating a base-getting contributors access to the financial data they need will be a good start-and a message that will bring potential contributors on board. But beyond that, what can you do? Some organizations, like those who post challenges in need of solutions on InnoCentive.com, can offer cash prizes for the person who comes up with the best solution. Others create online games or contests to offer incentive, create competition, and make it fun.109 You know you've got a powerful message that can tap into this set of powerful internal motivations: We can work together to create a more stable economy. Now you just have to create a strategy for doing it.

Questions: 1. Think about the four theories of motivation you read about in the text. Which one (or combination of more than one) might work best in this situation?

2. What specific incentives would you design and implement to motivate potential contributors if you were in charge of this website? Discuss them with reference to one or more of the motivational theories presented in the text.