Open Collaboration will likely grow and displace traditional organizations

Open collaboration – which created Wikipedia, Bitcoin and TEDx – is likely to spread and progressively replace traditional organizations, researchers from Emory University and Columbia University wrote in the journal INFORMS.

The study, written by Sheen S. Levine of Columbia University and Michael J. Prietula of Emory University, is titled “Open Collaboration: Principles and Performance.”

The authors explain how open collaboration creates new types of organizations that are neither non-profits nor corporations. They describe how these collaborations have developed and performed.

In seemingly harsh environments, open collaborations have performed surprisingly well. For example, when collaborators belong to a minority group, those who tag along (“free riders) provide much needed diversity.

The researchers conclude that open collaboration will probably expand into domains that have until now been created by traditional organizations. “Executives and civic leaders should take heed,” they warn.



 

Levine and Prietula identify and examine three elements that drive performance:

  • How well participants cooperate.
  • The diversity of participants’ needs.
  • The degree to which the goods are rival.

What is open collaboration?

According to Levine and Prietula, open collaboration is “any system of innovation or production that relies on goal-oriented yet loosely coordinated participants who interact to create a product (or service) of economic value, which they make available to contributors and non-contributors alike.”

Economic value refers to the most people are willing to pay for an item or service.

Open collaboration started off less than twenty years ago with open source software. Several new ventures today contain its underlying principles. Some of these ventures are entirely Internet based, such as Wikipedia, Bitcoin, communities and forums. TEDx is an offline venture.

Some open collaboration ventures have completely dominated areas controlled by traditional companies. Wikipedia has virtually blown Encyclopedia Britannica completely from the reference and research scene.

In spite of its impact, the operating principles of open collaboration have been unclear. This new study explains how they operate, and highlights areas where they are expected to do extremely well.

In an Abstract in the journal, the authors concluded:

“We conclude that OC (open collaboration) is viable and likely to expand into new domains. The findings also inform the discussion on new organizational forms, collaborative and communal.”

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