Crowdsourcing Participation for Firms with Poor Reputations: The Role of Competitive Intensity and Firm-Oriented Motivations

Although prior research suggests that firms with a poor reputation should improve it before embarking on crowdsourcing, some companies have succeeded without doing so. This research thus examines when and why companies with poor reputations can successfully implement crowdsourcing for marketing outputs (e.g. new product concepts, creative ideas). Through four online experiments (including two with consumers of real companies), we demonstrate that market competitive intensity serves as a key boundary condition: consumers are more likely to participate in crowdsourcing hosted by firms with poor reputations operating in markets with limited competition. We find that firm-oriented motivation is crucial in driving participation in low-competition markets, whereas self-oriented motivation dominates in highly competitive environments, with downstream effects on participation and brand attachment. Results further show that in low-competition markets, existing customers participate readily without financial incentives, while non-customers require rewards for participation. This research challenges conventional assumptions about prerequisites for crowdsourcing success and demonstrates that crowdsourcing can serve as an effective reputation repair mechanism, particularly when alternatives are limited. It also provides strategic guidance for firms on both implementing crowdsourcing and framing related messages, based on their market and reputation contexts.