Wikinomics: How Mass Collaboration Changes Everything

Wikinomics How Mass collaboration Changes E actuallythingMASS coaction CHANGES EVERYTHING?A Book Report on WikinomicsExecutive SummaryTapscott, D. Williams, A.D. (2008) introduced a unfermented supposition of Wikinomics in the script WIKINOMICS HOW MASS COLLABORATION CHANGES EVERYTHING. It was proposed that in the contemporary creation, any individual or commercial trys washstand non acceptedize immobile and sustainable innovation on its own. Collaboration with consumers, suppliers and task p artworkners, as come up as coaction indoors an enterprisingness or organization is of capital importance to its success. Wikinomics envision that in the future all told survival enterprises communicate throw away to accept rapid globalization and embrace the science and art of jam collaboration. The cogitation is aimed to take a detailed look at the book and discuss why Wikinomics work, how it works and the possibility of it being embraced by all enterprises eventually.At t he end of the article, a conclusion is drawn to summarise the research results of this paper.IntroductionThe boundary of conventional companies is generally thought to be clear and rigid balance sheet illustrates all properties the ownership of which belongs to a confederation enchantment the list of members of corporate organizations indicates all employees hired by a bon ton. At the same m, enterprises gage manage their boundaries in unanimity with expanded intersection scale and increased organization salute. According to delicate theoretical analysis of micro economics, the intersectional point of an enterprises employment possibility boundary and its organization possibility boundary is the enterprises optimal external boundary, w here(predicate) the enterprises marginal production tax equals to its marginal oganization appeal. At this point, further expansion of its boundary entrust move to situations of losses outweighing gains whereas contraction of its bound ary go away result in non-maximum profitability. Of course, on the different hand real life situations atomic number 18 much to a great(p)er extent complex than theoretical analysis marginal revenue and cost be both theoretical concepts and cannot be accurately measured. Otherwise, operating a calculator at office alone can solve the problem of find the outstrip size of a company.Mean plot, due to the diversity of organization forms, organizational be be not necessarily bound to increase along with the expansion of the organization. Organization forms such(prenominal) as virtual organization, strategic alliance, outsourcing, etc. argon gradually being invented throughout enterprises education process. The birth of apiece saucily organization form can mean a invigorated possibility of organization expansion. But none of these new forms ready had the conformation of revolutionary influences comparable to that of mass collaboration which involves coordination and c ollaboration with the mass, partners and even competitors foreign an enterprises boundary in terms of enterprise production and innovation. This abbreviate has transformed the previously hierarchical, c lackd workplace into a self-organized, distributed, cooperative tender capital meshwork.The new phenomenon is characterized by subjecters with the Wired magazine as Crowdsourcing people in the softwargon industry compared the molding to OSB, exposed writer of Business and, Don Tapscott and Anthony Williams, research fellows of New Paradigms think tank, dubbed it Wikinomics. Wikinomics, according to the book Wikinomics How Mass Collaboration Changes Everything by the two research fellows, is a new economic production epitome based on mass collaboration and unc overed platforms, which is a new economic production model that features all characteristics of mass input, vulgar creation, including such new phenomena as contentedness generation with practice sessionr participat ion, external RD activities of an enterprise large scale cooperative production, integration of production and consumption, and establishment of sharing platform etc,The authors use a great number of enterprises solecisms to prove the superiority of the new economic paradigm. However, mass collaboration, at least has not changed everything or even become a business mainstream with more and more entrepreneurs getting doubtful or evidently reject.Gold Mines after-school(prenominal) of Enterprises BoundaryIn the book of Wikinomics, the authors choose to let down by citing a case in the minelaying industry which is in truth very thought provoking. A depleted sized meretricious archeological site company in Canada, whose future is almost entirely dependent on whether the company can dig sufficient more gold at low cost on mineral deposits of which it has ownership. The geologists working for the company cannot accurately locate the gold in the short period of time. Facing this s ituation, the CEO, deplumate McEven do a decision that was very un formulaic in mining industry he launched a gold company challenge contest, publishing all geological information the company already had to the whole area via its website and offering a prize of $575,000 to the contestant who provided the best estimate and mining method.The escaped source prospection resulted in amazing returns more than 1,000 virtual prospectors from 50 countries participated the challenging match and found 110 target locations on the companys mineral deposit, 50% of which were not found by the company previously. More than 80% of the new target locations were proved to contain great totality of gold and since the launch of the contest more than 8 billion ounces of gold was found. According to McEvens estimation the contest shortened the time needed for conventional prospecting by two to three courses and the appreciate of his company also skyrocketed to $9 billion from merely vitamin C million.The gold company is not Wikipedia, but an enterprise that is engaged in a extremely closed, conservative industry. Here the authors implied that enterprises in any industries can pull ahead from Wikinomics. But why Wikinomics can enhance enterprises business performance?We can consider the gold company as a highly simplify enterprise model. Prospection cost and cost for unearthing the gold are the only input, while the gold is the output and the condition needed for the company to earn a profit is the two categories of cost cannot exceed the value of the gold to be unearthed. The essence of the challenge contest launched by the gold company is that McEven changed the conventional prospection cost which was uncertain and very dense to bid and threatened to puzzle down the company, to a fix amount of money needed for attracting the best bid from removed. The nature of the companys success is it reduced its cost significantly by taking advantage of external resources. It s eems the gold that make the company rich was lying in its mineral deposits, but very it was in the outside.Take the Lessons FurtherIf we think deeper about the case of the gold company, prospection fees actually can be considered research and development costs of an enterprise. In an enterprises cost structure, fees put into research and development (RD) is similar to venture investment. Whether the RD activities can succeed or not, the company has to take over for all the costs. If RD activities prove successful, the enterprise makes economic profit if those activities prove failures, and then the enterprises investment will go waste.Yet in the RD models described by Wikinomics, risks and costs of RD activities are jointly shouldered by the enterprise and external specialists. On one hand, participation of outside resources can bring more ideas in and increase the possibility of success of RD programs on the other, the gold companys practice of soliciting the best prospection pl an is equal to inviting bids that can ensure the success of RD programs the company only needs to turn over for RD programs that are successful while the costs of failed RD programs are spread among all bidders. The rise of benefit, or revenue, and the drop of costs both expand the enterprises profitability. Then why bidders outside of the enterprise are unbidden to shoulder the cost of its failed RD activities? Firstly, the cost spread onto each individual is already trivial the RD cost invested by each individual may be just like lifting ones fingers on the other hand, outside bidders that participate in corporate RD activities may turn over a wit that is similar to that of lottery buyers though the average benefit expectations maybe negative, they are comfort excited by the possibility of winning a big amount of prize.A phenomenon I would like to mention is, actually Wikinomics entertain had its use in much earlier times, long before the human kind has developed so man y an(prenominal) dazzling technologies and devices. The listing of criminals as wanted by police regime, or posting ads that offer nighwhat kind of incentive to find a lost relative or nearthing value, are both effective use of Wikinomics. The searching cost is spacious to should for a police department and is way beyond what a psyche or familys can afford. By doing so, the enormous searching cost will be shouldered by the public and the police authorities or a family trying to locate someone or something will only need to pay a much smaller amount of money as an incentive.We can now see from a serial publication of cases of enterprises cited by the authors of Wikinomics that the nature of the secret of Wikinomics is that an enterprise can make use of resources outside its boundary to increase benefits or reduce cost. However, to utilize resources outside of its boundary, a enterprise must do what the gold company had done, that is, disclosing some interior(a) knowledge of th e company such as RD platforms and technical standards. If an enterprise follows the logic of Wikinomics, it will inevitably take on the four characteristics that are central to mass collaboration openness, peering, sharing and acting globally.Mythology and Realitythough Wikinomics has displayed a extremely attractive prospect for enterprises and many enterprises indeed have obtained the gold outside of their boundaries. Yet in reality, we can see still there is only a very limited proportion of enterprises that have chosen to make a change to their traditional prices of running their businesses within their boundaries. Consumers and producers are considered two categories of people that have little in commons openness is deemed as will eventually cause an enterprise to lose its competitive advantage. And more importantly, those enterprises which do introduce into themselves mass collaboration and common creation are considered miracles, rather than normal cases. The book Wikinomic s will very likely be read by enterprises managers and owners as a bound of mental gymnastics that can spart inspirations, rather than a research report on the trend of changes and reform of enterprises.To what extent has the new economic paradigm of mass collaboration influenced the trend of business operation model? The open source operating system Linux was deemed by many commercial psychoanalyst to be the terminator of Microsoft, however, till this day, Microsoft still renders firmly its considerable piece in the operating systems market. Open source softwares are still considered by many as a business model that cannot last long. An IDC report indicates (Internet Data Center), the market share of Linux servers slumped to less than 10% last year from its 45% market share in 2012 (Hertel et al, 2003). Many enterprises which intended to transfer to Linux from Unix have also slowed their pace down and begin considering Windows Servers provided by Microsoft. The study concerns of enterprises about open source softwares like Linux are security and resultant assurance, which have also been the two issues where Microsoft attacks open source softwares. As for innovations made with users participation, Apple Inc.s office may be representative of that of the volume of enterprises. The iPod and digital set top box Apple TV were cockamamy and expanded after they hit market, creating many new functions. The official attitude of Apple is, whatever users do with those devices is their own business, but Apple will not provide quality warranty anymore. We will not inject with these behaviors by users, even once you cracked your Apple devices, they will not be warranted by us anymore. Put it in a simple way, Apples approach toward these activities is no blame, no encouragement- Apple never wants to offend these fanatic consumers, nor it wants to encourage and lead this trend of users participating in innovation.If the Wikinomics success stories are so attractive , then what makes it hard to be taken as a mainstream choice? Better to piling with a familiar demon than to stay with a strange nonsuch is a belief upheld by many entrepreneurs, which shows their hatred against uncertainties, especially situations over which they feel hard to control. Many business owners are adapt at managing relations with stakeholders and do not fear colliding with parties with whom they have conflict of interests, yet they tend to have a hard time dealing with indifferent parties due to the fact the their behaviors are hard to encourage or hold back through benefits. A sharp criticism on Linux and Wikipedia is the negative allude they leave on the legitimate rights of private property owners and enterprises to secure profits.When resources are located inside the boundary of enterprises, calculation of cost and profits are a part of enterprises consideration. More importantly, these inside resources bear different rights and obligations from that of outsid er resources, for example, enterprises employees are restricted by explicit or conventional rules and contracts. The traditional task driven model that is based on instructions and control will make corporate managers feel secure. Wikinomics use the movement mien of Tarzan of the Apes as a metaphor of the mindset of this kind of enterprises only when they hold firmly the next tree branch will they feel honest to loose the tree branch in his hand already. The starting line ill-treat of attracting outside resources to invest and participate in common creation is just now the same situation as loosing the tree branch in hands while not grasping firmly the next one. Thus this footmark becomes a great barrier that many enterprises always cannot overcome.Organizational refine Toward WikinomicsIn order to realize Wikinomics, it is required not only to have theoretical books, but also practical action. If we realize that Wikinomics indicates the vague and open enterprise boundaries, then internal organizational structure must first make a change before the business open harness to greet resources outside because the traditional hierarchical system is unfit to this new change. For example, Linux community is not like Microsofts care as to manage the redact team. And British Encyclopedia editorial department cannot run like Wikipedia management team. Therefore, traditional company organizations are unable to take advantage of a large number of resources that cannot be commanded. In fact, even like the Linux and Wikipedia, the world well-known open source community is not as limitless and unrestrained as we imagine. Linuxs highest decision-making authority rests in its original craftsman Linus Torvalds who is supported by a ten-person core team. Below them is the huge and categorized Linux application developer community and community part-time administrators. In Wikipedia, Jimmy Wales manages louver full-time employees and there are about 5,000 maintainer who manage the 100 million registered users and more than 200 million entries (Eric Raymond, 1999). Both Linux and Wikipedia or other open source communities have a similar internal organizational structure in terms of the company hierarchy system, like a round periphery diffusion from the core layer. The source of power is not primarily from higher authority, but from the knowledge and contribution of members. And the formation of such organizations can provide great opportunities to run in-depth study about wiki organization.Robert Stevens give the geek team, showing us how to keep the vitality of a small team in a traditional hierarchical organization and to shake up bottom-up organization ability to innovate. Geek police squad was originally an self-governing electronic equipment services company. When it achieved its original success, it is acquired by the consumer electronics retail giant outdo Buy. At the beginning, many people worried about geek squad would have the inf ected disease of large enterprises. However, under the support of top hat Buy CEOAnderson, Geek squad established a set of internal corporate culture which is totally different from Best Buys. (Durman, P., 2007) Geek squad is actually free in Best-Buys organizational boundaries. It first took a network of self-organization and management model before the overall organization. For those reluctant to full reach beyond traditional boundary, they can try to develop a small team within the organization in order to dyad some gaps with Wikinomics.Outsourcing and Crowd-sourcingOutsourcing, has long been a hot topic in business realm which is the contracting out of a business process to a third-party. The major motivation for outsourcing/off-shoring is to reduce cost and improve efficiency and to give full play to its core competitiveness. As previously mentioned, the phenomenon of mass collaboration is also dubbed Crowd-sourcing. A major difference between outsourcing and campaign-sourci ng is, outsourcing stresses high professionalism while crowd-sourcing is exactly the opposite and values individual users active participation. Therefore here we see another restrictive factor of mass collaboration, or crowd-sourcing some tasks require professionals to complete and little meaningful individual participation from the crowd can be realized.ConclusionAs we look back at analysis throughout the whole passage, we can see many real life constraints on the practical use of Wikinomics. Many enterprise owners and managers are fearful of uncertainties enterprises internal organization structure is not ready for embracement of Wikinomics requirements and many business processes need to be handled by highly trained professionals.However, the concept of reducing cost and improving efficiency through bringing together the strength of a group of people is right all the time. We may boldly introduce the concept of Sub-Wikinomics, a business management model somewhere between outsou rcing and crowd-sourcing.ReferenceHertel, G., Niedner, S., Herrmann, S. (2003). Motivation of software developers in Open Source projects an Internet-based survey of contributors to the Linux kernel. Research policy, 32(7), 1159-1177.Eric Raymond, 1999, The Cathedral and the bazaar, in the Cathedral and the Bazaar Musings On Linux and Open Source by an Accidental Revolutionary. Sebastopol CA OReilly Publishing, pp. 30.Peter Schwartz, Peter Leyden, Joel Hyatt, 1999. The Long Boom A Vision for the coming Age of Prosperity, Cambridge, MA Perseus Publishing.OFarrell, P. N., Hitchens, D. M. W. N. (1988). Alternative theories of small-firm growth a small review. Environment and Planning, 20(10), 1365-1383.Durman, P.(2007) Geek Squad Comes to Britain.The Times of London.Fuchs, C. (2008). Don Tapscott Anthony D. Williams Wikinomics How Mass Collaboration Changes Everything. International Journal of Communication, 2, 11.