Opening the floodgates : How big companies can reap the benefits of internal crowdfunding

Digital technologies enable employees at all levels to participate in distributed decision-making. We examine the design principles, benefits, and challenges of a new type of distributed decision-making: internal crowdfunding. We build on a five-year case study of internal crowdfunding contests at Siemens AG to deepen our understanding of the design principles of internal crowdfunding and its potential for corporate innovation. Based on this data, we discuss the three design choices in internal crowdfunding (contributors, configuration, and control), find four key benefits (decentralization, cross-collaboration, institutionalization, and intrapreneurship), and identify three key challenges (dealing with rejected ideas, evaluation biases, and implementation and follow-on funding) and potential actions by managers to overcome them. The paper contributes to both the emerging literature on internal crowdfunding and the literature on distributed decision-making.

Subjects

DDC Class

333.7: Natural Resources, Energy and Environment

Funding(s)

Projekt DEAL

Publication version

publishedVersion

Lizenz

https://creativecommons.org/licenses/by/4.0/

Name

1-s2.0-S0007681323000976-main.pdf

Type

Main Article

Size

875.33 KB

Format

Adobe PDF

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Opening the floodgates : How big companies can reap the benefits of internal crowdfunding