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Social innovation: Crowdsourcing and the new face of corporate social responsibility

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Social innovation: Crowdsourcing and the new face of corporate social responsibility

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SOCIAL INNOVATION: CROWDSOURCING AND THE NEW FACE OF
CORPORATE SOCIAL RESPONSIBILITY

by

Diana Marie Bulnes

A Thesis Presented to the
FACULTY OF THE USC GRADUATE SCHOOL
UNIVERSITY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree
MASTER OF ARTS
(STRATEGIC PUBLIC RELATIONS)

May 2011

Copyright 2011 Diana Marie Bulnes

ii

Dedication
I dedicate this thesis to my mother and father, Martha and Juan Bulnes, who have
continuously encouraged me to pursue my dreams and have given me the faith to believe
that anything is possible. Thank you for the endless opportunities you have afforded me
in life and for supporting me regardless of the path I choose.
I also dedicate this thesis to my sister, Brenda Bulnes, for always being someone
that I can look up to. You have helped me to see that it is okay to go after what makes me
happy.
Because of each of you, I can fearlessly take on the next stage of my life with the
belief that I possess everything I need to successful.

iii

Acknowledgments
I would like to express my appreciation to my committee chair, Professor Jennifer
Floto, for helping me find a topic that I could be passionate about and offering guidance
along the way.
A special thank you to my committee members, Professor Kjerstin Thorson and
Professor Burghardt Tenderich for your input, guidance and insights that have shaped this
project into what it has become.
I would also like to thank the interview participants for taking the time to answer
my questions and to offer their industry expertise.

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Table of Contents
Dedication ii.
Acknowledgements iii.
Abstract v.
Chapter I: Introduction 1
Chapter II: Background on the Field of Public Relation 6
Chapter III: The Evolution of Corporations‟ Communication Strategies 10
Social Media 10
Public Engagement 11
Corporation Social Responsibility (CSR) 13
Chapter IV: What is Crowdsourcing? 15
Typology of Crowdsourcing 15
Crowdsourcing for Social Good 18
Risks Involved with Social Media & Crowdsourcing Approaches 20
The Case for Crowdsourcing 22
Changes in Corporate Social Responsibility 27

Chapter V: Case Studies 32
Nokia “Change Connections” 32
Pepsi Refresh Project 38
Chase Community Giving 45
Case Study Findings 51

Chapter VI: Primary Research 54
Chapter VII: Best Practices in Implementing Crowdsourcing Methods for CSR 60
Determining Whether to Choose a Crowdsourcing Approach 60
Implementing Crowdsourcing Methods for CSR Best Practices 61

Conclusion 65
Glossary 67
Bibliography 68

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Abstract
The recent popularity of corporations integrating social media to their
promotional strategy has created a world in which consumers want direct engagement
with brands and the ability to have multi-directional dialogue. Companies have often
engaged in Corporate Social Responsibility (CSR) to raise awareness and cultivate good
will among consumers toward the brand. This paper will examine how corporations are
utilizing crowdsourcing for CSR purposes to meet their business goals and engage with
consumers to build brand ambassadors.
Corporations utilize crowdsourcing projects to raise brand awareness, bring their
corporate missions into action and instill good sentiments about the brand among
consumers with the ultimate goal of increasing sales. By looking at three different case
studies of corporations that have used crowdsourcing for social good, conclusions will be
drawn regarding the advantages and risks involved with using this tool for CSR purposes.
Furthermore, interviews with industry experts will solidify the claim that despite the risk
involved with companies using social media for social good, the ability to participate in
the dialogue surrounding a company and to garner good will for practicing social
philanthropy is worth the risk. The potential to employ crowdsourcing for social
innovation to enhance brands will also be examined to determine best practices for the
future of crowdsourcing project.

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Chapter I. Introduction
Trust in large corporations has decreased by 8% in the United States since 2010,
positioning the world‟s largest economic power a slim five points away from last-place
Russia (2011 Edelman Trust Barometer). Consumers have grown increasingly wary of
how they spend their money. According to the Associated Press, experts say that
consumers are “more likely to spend their money on brands that take responsibility and
help improve the world” especially when the economy is weak (2009). The digital world
of the 21
st
century has forced corporations to become more transparent, accountable and
honest. With social media sites allowing corporations to have direct interaction with their
consumers, new strategies must be enacted to gain awareness, build trust, and affect
consumers purchasing decisions.
As such, no longer are corporations primarily turning to advertising to garner
awareness and guarantee sales (Ries & Ries, 2002). The consumer has changed and thus
companies that are aiming to meet their business goals must also change and evolve to
meet the new demands. While public relation campaigns have often sought “buzz”
around new products or offerings, the use of public engagement offers corporations the
ability to connect with consumers and build brand ambassadors. Buzz, on the other hand,
“does not equal trust, engagement, or dedicated fans,” the way that newer forms of
dialogue with consumers can produce (PRWeek, 2010).
The field of public relations has evolved from one in which public relations
practitioners primarily focused on pushing out messages and information to consumers
toward the management of two-way dialogue with consumers. In turn, these consumers

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are now able to relay their opinions and needs to organizations. The changes that have
occurred with brands and consumers can be attributed to the changes on the World Wide
Web that came to be known as Web 2.0. The shift in people‟s ability to use the Web
transformed people from passive users of the Internet to more active users of the Internet.
Users who were accustomed to reading information online and consuming images or
video became able to post their own content and commentary. Before consumers looked
to company Web sites to get information and now they are able to look on blogs or social
networking sites, with the ability to also contribute to the discussion. The popularity of
Facebook and Twitter has forever changed the public relations industry because social
media platforms can be used to either benefit public relations efforts or cause greater
problems. Social media platforms have given consumers a voice to criticize or praise
products, customer service experiences and the operational activities of corporations. Jeff
Hayzlett, CMO and VP at Eastman Kodak Company, elaborates:
If social media has taught CMOs one thing, it's that we no longer own our brands.
The world now engages in a nonstop conversation and consumers expect that
dialogue to continue when they interact with companies. Today anyone with
Internet access and an opinion about a product is helping shape perceptions of
your corporate assets. Think of it as billions of potential brand managers -
whether you want them or not.

The rise of this type of activity led corporations to take action. Initially,
corporations were reluctant to participate in online conversations and did not want to
engage with consumers because of the risks involved in doing so. Today we see
increasing numbers of corporations engaging in some form of social media program that
positions them at the forefront of discussion surrounding the organization. According to

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Doc Searls in his 1999 book The Cluetrain Manifesto, “markets are conversations,” and
these conversations are often communicated in language that is honest, direct, and in a
human voice. In order to thrive in this new media landscape “companies have to
participate in the conversations where they‟re happening” (Morrissey, 2010). In
understanding that this was not a trend that would soon disappear, corporate leaders
decided that it would be important for them to be in control of their own reputations.
Discussion among consumers would continue to take place on social media platforms and
corporations needed to either join the conversations or suffer through reputational issues.
Corporations began using social media platforms in different ways to garner
brand awareness, create fun and innovative contests, and hold conversations with their
stakeholders. By participating in the conversations that take place through social media,
corporations are able to respond to criticism directly and to offer solutions to consumers
who have had a bad experience with a product. The reason corporations engage in this
kind of behavior is to maintain a good reputation among the general public and to keep
consumers happy. Another way that companies have traditionally been proactive about
their reputations is through the practice of CSR. Most typically, companies use CSR as a
way to contribute monetary donations to organizations and causes that help to boost their
reputation among consumers who believe it is important for corporations to give back.
In the past, companies privately made decisions about which organizations to
support and this information was found on a section of their Web sites. Today the
changes that have taken place with social media platforms and with public engagement
have led corporations to turn to more innovative approaches to complete their CSR

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initiatives. Even with something like CSR, consumers expect corporations to do more
than just cut a check and send it off to an organization of their choosing. According to
Dori Molitor, founder and CEO of WomanWise LLC, corporations “need to be showing
that they care and they need to be visible and they need to be authentic in the
neighborhood. It‟s not just allocating several million dollars and writing a check”
(Associated Press, 2009).
Consumers are now more concerned that corporations are truly looking to better
the world and to align CSR with their business goals. Accordingly, some companies have
started to use crowdsourcing approaches to come up with new ideas and crowd voting
contests to allow consumers to have a say in the organization that is picked to receive
monetary funding.
Crowdsourcing has become a popular way to engage with consumers while also
benefitting the corporation. Companies are able to create contests like PepsiCo did with
the Pepsi Refresh Project that leverages a social media platform to build awareness
around the company itself, while also creating awareness of many different non-profit
organizations and their missions. The participants are required to come up with an idea or
a project that they want funded and then the public is asked to vote on what they believe
to be the best and most deserving of being funded by Pepsi. While this seems like a win-
win situation for everyone involved there are a few considerations to make when
deciding to create a project of this nature.
This thesis will look at the evolution of the public relations industry and the
changes that have led to the need for public engagement. It will then examine different

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types of crowdsourcing methods, with particular emphasis on crowd funding and crowd
voting approaches. The paper will explore the risks involved with using social media to
engage in crowdsourcing, how it can do damage to a company‟s reputation and, finally,
examine whether it can do more harm than good.
By examining three different case studies Nokia Inc., Pepsi Co., and Chase Bank,
this thesis will point out the different crowdsourcing approaches and reveal what went
right or wrong. Finally, this thesis will ascertain whether or not engaging in
crowdsourcing approaches is worth the risk involved and provide some guidelines for
best practices and the future of social innovation changing the face of CSR.

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Chapter II. Background on the Field of Public Relations
The field of public relations has drastically changed as the World Wide Web has
become more social and interactive. According to Cutlip and Center (2009) public
relations is defined as “the management function that establishes and maintains mutually
beneficial relationships between an organization and the publics on whom its success or
failure depends.” The primary function of public relations is to assist the general public in
understanding or making decisions about the complex ideas that are presented between
themselves and the institutions that they have a stake in. Public relations practitioners
serve as intermediaries between institutions and various publics. While many people
confuse public relations with advertising or marketing there are several distinct qualities
that separate these different industries.
Marketing and advertising build relationships with target audiences that are
distinct from the relationships built by public relations. In marketing, there is an
exchange between companies and their consumers that result in a transaction of either
products or services and results in something of value to the providers (Cutlip and Center,
2009). In marketing, practitioners are in the business of understanding the wants and
needs of consumers and offering the products and services that meet these demands.
Advertising also helps to garner brand awareness and relays crafted messages to the
public.
One of the major differences, among many of the differences, between advertising
and public relations is that advertising is paid and controlled, while public relations

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requires earned media. When public relations practitioners issue a message, they do so in
the hopes that journalists (or other third parties) will take their messaging and use it in
their publications to relay certain messages to the public. This is much riskier than
advertising because journalists are at liberty to take the messages and develop their own
opinions or positioning when creating a story. The even greater risk arose as the
advancement of technology created new platforms that changed the behavior of
consumers forever.
The development of new technology and the rise of Web 2.0 provided the tools
necessary for the public to establish platforms through which their opinions could be
heard. Web 2.0 includes social networking sites, blogs and other online communities that
allow people to make social and business connections and share information (Parise et
al., 2008). As described by Cutlip and Center (2009), “Access made „self-publishing‟ a
reality, leading to less control over the public information system by traditional media, to
greater diversity in points of view, to increased interest in organizational transparency,
and to precisely targeted communication with stakeholders.” The interactive nature of the
Web allowed people the ability to communicate more readily with each other and to find
ways to tell their own stories and voice their opinions on anything they desired.
Inevitably, this led to consumers finding platforms to discuss products and services that
came from the various corporations that exist to meet their demands.
When looking at the evolution of public relations, it is evident that the industry
began as a means to deliver messages of interest and value to different stakeholder groups
for which the messages were crafted. Web 2.0 transformed the nature of the industry by

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creating a platform through which the interactions with consumers became
multidimensional. With an open platform for conversation, consumers were able to make
their needs known and vent when they did not receive the quality of product or services
they expected. As described by Ryan and Leong (2007), “Mass culture is giving way to
new consumerism, or put more simply, the rise of the savvy, more demanding consumer
– a consumer who expects more, especially more accountability, more realness, and more
individualized service.” The change in technology and media led to the evolution of a
new type of consumer and with this new consumer, a new set of rules.
According to Peter Land, Senior Vice President of beverage communications at
PepsiCo, “Because of technology and social media, consumers have the capability for
quicker influence. We are open to identifying more opportunities to bring the consumer
in. They‟re passionate about the brand. Having them involved in the brand development
and ideas is better than any focus group” (Bruell, 2010). PepsiCo is one company that has
become known for its use of crowdsourcing as a strategy in several different capacities.
The company has utilized crowdsourcing to acquire user-generated content for
advertising purposes in their “Crash the Super Bowl” campaign initiated five years ago.
Most recently PepsiCo launched another crowdsourcing campaign that tied the approach
to social good initiatives that will be looked at in more depth in a later section of this
study.
The changes within the public relations industry that have been described above
are indicators that new opportunities are presenting themselves in the field. According to
Alexandra Bruell, “The lines between PR and traditional marketing blur as the company,

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and a flurry of marketing brands, cede a degree of control to their marketing-savvy and
demanding target audience” (Bruell, 2010). As such, public relations practitioners are
required to understand the dynamics associated with the changing space. Bruell also
gives insight on the “new consumer” by saying, “Today, consumers possess a heightened
awareness of how companies market to them. They also have tangible evidence that their
digitally transmitted voice can echo as far as corporate headquarters, as when consumers
expressed dislike, via Twitter and Facebook, for Gap's new logo. The company quickly
responded and crowdsourced ideas for logo designs. In the end, it decided to stick with its
beloved original logo” (Bruell, 2010). The power of the consumer is illustrated in this
example and many others.

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Chapter III. The Evolution of Corporations’ Communication Strategies
Social Media
Kaplan and Haenlein (2010) define social media as “a group of Internet- based
applications that build on the ideological and technological foundations of Web 2.0,
which allows the creation and exchange of user-generated content.” The rise of social
media has connected people around the world and allowed Internet users to disperse
content almost instantly. It has also provided a cost effective way for corporations to
conduct business that would typically take a lot of marketing dollars to enact. Shiv Singh,
PepsiCo‟s head of digital, describes the use of social media by saying that Pepsi is using
Facebook more strategically, because it is cheaper than the cost to create a microsite and
provides all the same benefits that could be gained through a microsite (Bruno, 2010).
Thus, social media has spurred a transformation in the methods and strategies
corporations use when communicating with their consumers.
In regard to social media platforms Mangold and Faulds (2009) said, “They have
become a major factor in influencing various aspect of consumer behavior including
awareness, information acquisition, opinions, attitudes, purchase behavior, and post-
purchase communication and evaluation.” Social media has changed the way people
shop. It allows consumers to have the information to make a decision as to whether they
will purchase a product before they even enter a store. This occurs because different
products can reach high levels of buzz through social media platforms. Once on the
market, consumers can take to the Internet to read countless reviews on any product of

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their choice. While social media has become a cost effective way for businesses to
promote themselves, it has also created high risks for the reputation of those businesses.
Consumers now have the ability to talk to one another in ways they could not
before and this communication takes away from the amount of control companies had in
the past over the dissemination of information (Mangold and Faulds, 2009). Companies
have also lost even more control over the ways in which their organization is portrayed to
people around the world. Today, social media platforms allow consumers to publish their
negative experiences or poor customer service encounters on the Internet where they can
live forever.
Public Engagement
Corporations are now faced with the dilemma of how to handle their reputation
and protect their name in this new digital age. Jerry Swerling, Annenberg School for
Communications & Journalism, University of Southern California, defines public
engagement as follows:
Strategic public engagement is the discipline-agnostic through which
organizations form matrices of interrelated, active and bi-directional relationships
with their stakeholders, or groups of stakeholders, in pursuit of organizational
goals. At a macro, strategic level it consists of an organization-wide commitment
to a multi-dimensional, multifunctional, fully harmonious strategy of engagement.
At a micro, tactical level, it consists of specific-operational processes and
practices- as determined by each unique set of stakeholder needs- utilized to
create and maintain those engagements.

Companies began engaging with consumers through social media platforms and
establishing their own official company page to encourage this new form of
communication. As companies began to create Facebook pages, it was crucial to weigh

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the pros and the cons of being on such a highly visible site. While many consumers
“liked” the Facebook page because they were fans of the company, there were also
dissatisfied consumers that wanted to tell the company what they were not satisfied with.
Some companies opted to create Facebook pages where the public could not comment
and others allowed the good and the bad comments to appear on the page. For most
companies, members of the communication staff quickly addressed the negative
comments that appeared on the site. Opening the lines of communication and being
readily available for comment were good tactics that companies employed, but the
constant monitoring of social sites is time-consuming and a 24/7 job.
Yet, the benefits of social media and public engagement can create brand
ambassadors who can help companies spread the word about the products or services
they offer. It also allows companies to acquire information from consumers in ways that
it could not do before. Companies now have a way to directly listen to the consumers‟
needs and concerns allowing them to add to production lines and make improvements to
existing products. This is essential given the change that has occurred with consumers
and the inability of demographics to help companies discern what a large group of people
wants.
Traditionally, the field of public relations was viewed as being centered on media
relations. The recent changes that have made public engagement almost a requirement for
corporations has affected the industry in several ways. Primarily, it has caused debate
surrounding ownership of this new space and of the increase in social media usage.
Richard Edelman has been a strong proponent of the idea that public relations is the

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definitive owner of this new space. In the 2011 Edelman Trust Barometer, public
engagement is considered a “necessary” strategy to adopt in order to regain trust from
businesses (Edelman.com). The 2011 study also reached the conclusion that business
must align profit and purpose for social benefit (Edelman.com). The ability to gather
crowds of people from around the world on social media platforms has also led to the use
of “crowdsourcing” to solve problems, gather information, and spur social innovation.
Corporate Social Responsibility (CSR)
CSR is often used to help maintain a favorable public reputation. Typically
corporations pick charities or non-profit organizations that they want to support and the
corporation makes a monetary contribution. Mahlouji and Anaraki (2009) describe CSR
by saying, “Corporate social responsibility is a widely used term in business literature,
which can be interpreted as continuous commitment of a business to behave ethically and
to contribute to economic development while improving the living standards of the
workforce and their families as well as the community.” There is a long-standing
question as to the goals corporations plan on reaching through the enactment of CSR
initiatives. At times the initiatives taken on by corporations fall closely in line with the
business and, in turn, help the business become more profitable. The ways in which
corporations use CSR serves several different purposes. During times of crisis, having a
strong corporate reputation can help a company survive and continue to be profitable
after the crisis has subsided. Other CSR initiatives are done to raise brand awareness and
have an effect on profitability.

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Companies like Starbucks are known for their emphasis on CSR initiatives and
the ways in which they tie it to business. One of the company‟s most popular initiatives is
Starbucks (RED), which partners with the Global Fund to help people with HIV/AIDS in
Africa. Along with making a corporate contribution to the Global Fund, Starbucks sells
products like mugs and special coffee bean blends that carry the Starbucks (RED) logo
and a portion of the proceeds are donated to the Global Fund. An article in The
Economist highlighted the benefit of initiatives like this by citing, “Research in 2008 by
Cone, a brand consultancy, found that 79% of consumers would switch to a brand
associated with a good cause, up from 66% in 1993, and that 38% have bought a product
associated with a good cause, compared with 20% in 1993.”

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Chapter IV. What is Crowdsourcing?
In a 2006 Wired magazine article, Jeff Howe and Mark Robinson defined
crowdsourcing as follows:
Simply defined, crowdsourcing represents the act of a company or institution
taking a function once performed by employees and outsourcing it to an
undefined (and generally large) network of people in the form of an open call.
This can take the form of peer-production (when the job is performed
collaboratively), but is also often undertaken by sole individuals. The crucial
prerequisite is the use of the open call format and the large network of potential
laborers.

There are many different ways that companies are using crowdsourcing methods
to meet their business goals. Whitla (2009) describes Web 2.0 as the impetus that led to
the rise of crowdsourcing, because it was the period in which people were no longer
passive browsers of the Internet. When the term crowdsourcing debuted it typically
referred to an open call request where anyone could complete a task and potentially
receive payment from companies to solve problems that people within the company could
not solve. The crowd may be limited to a particular group of people that have been
screened and have some expertise or knowledge in the area of interest (Whitla, 2009).
Crowdsourcing can also occur in the more “open call” format that includes any and all
members of the public willing to participate.
Typology of Crowdsourcing
In his 2008 book Crowdsourcing: Why the Power of the Crowd is Driving the
Future of Business, Jeff Howe presents four different crowdsourcing approaches: crowd

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wisdom, crowd creation, crowd voting and crowd funding. Crowd wisdom includes
crowdsourcing that solicits ideas from groups of people through online brainstorm
sessions. While some believe the idea that groups or crowds of people make decisions
that are worse than individuals could make alone, James Surowiecki, in his book The
Wisdom of Crowds, argues that the opposite is true. Surowiecki (2004) suggests that a
group that is large and diverse enough will make decisions that are intellectually superior
to the isolated individual. More and more corporations have adopted this idea and have
begun tapping into the “wisdom of crowds” to solve some of their most difficult
problems.
Crowd wisdom is equally effective for new or existing products. In 2007, Dell
launched IdeaStorm as a way to directly communicate with its consumers and host online
brainstorm sessions. These online brainstorm sessions generated ideas and suggestions
for product improvements from consumers around the world. By 2010, Dell‟s IdeaStorm
sessions resulted in over 10,000 ideas discussed and the implementation of 400 ideas
(dell.com).
Crowd creation is the creation and development of products. One such company,
Threadless.com is a t-shirt making company that utilizes crowdsourcing to solicit t-shirt
designs through an online competition (Brabham, 2008). Participants are asked to submit
their t-shirt designs to the Web site and the public votes on the shirts they would be most
likely to purchase. Threadless.com selects the designs that garner the most votes then
manufactures the shirts and sells the product on the Web site. There are several benefits
to this approach; namely, the t-shirt company manufactures t-shirts that it knows people

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will be interested in purchasing. Another example of crowd creation comes from the
PepsiCo contest to create an advertisement for either Pepsi Max or Doritos to air during
the Super Bowl. Participants are asked to submit their video commercials to a Web site
and then the public votes on their favorite commercials. The company offers consumers
an opportunity to win tickets to the Super Bowl as an incentive to vote on the commercial
videos posted to their site. This „Crash the Super Bowl‟ crowdsourcing contest began in
2007. According to Ann Mukherjee, vice president of marketing for Frito-Lay North
America, “Consumers who are loyal to the brand know the best way to express what a
brand is about” (Howard, 2007). In addition to spending less money on hiring an
expensive advertising agency to create the company‟s Super Bowl ads, Pepsi is also
establishing a platform through which it engages with its consumers. As Mukherjee
notes, the company is creating brand ambassadors who feel close enough to the brand to
express what the brand is about through a commercial. Using crowdsourcing in this way
has the added benefit of making consumers feel that they are the brand.
Howe (2008) describes crowd voting as the leveraging of the community‟s
judgment to organize, filter and rank content. This is one of the approaches to
crowdsourcing that usual gains the most participants because it usually involves
something as simple as clicking on an online vote button. The Threadless.com example
of crowd creation by which, people participate in making t-shirts, also features an
element of crowd voting. The last type of crowdsourcing is crowd funding. In crowd
funding participants are usually seeking money for ideas or projects that they otherwise
would not be able to implement.

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Distinct from crowd voting for funding, crowd funding usually involves an
organization that issues information about a particular idea or project either through
social media or a different platform where it will get attention, and then asks participants
to donate. Crowd funding is used to network for funding from a supportive community as
opposed to seeking donations from large corporations. Created only two years ago,
Kickstarter is considered a leader in the realm of crowd funding. Christopher Borrelli of
the Chicago Tribune equates crowd funding and Kickstarter to what “Amazon is to online
bookselling” (2011). Kickstarter allows individuals to set up a page on its Web site
explaining how much money they want to make and why. This crowd funding site has
attracted writers, designers, chefs and many other creative beings that are looking for new
and innovative approaches to garner funding. To date, the company boasts having raised
more than $30 million for 15,000 projects (Borrelli, 2011).
Crowdsourcing for social good
Crowdsourcing offers proven results. Brabham (2008) describes the phenomenon
by saying, “Crowdsourcing is not merely a web 2.0 buzzword, but is instead a strategic
model to attract an interested, motivated crowd of individuals capable of providing
solutions superior in quality and quantity to those that even traditional forms of business
can.” While some of the contests and brainstorms get creative people to share their ideas,
some participants have the scientific talent to solve some of the more difficult questions
posed by corporations. Forward-thinking organizations are taking full advantage of the
crowd to spur innovation in the research and development department (Howe, 2006).
This is beneficial to companies in two ways: to offset the rising cost of corporate research

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and at the same time gain insight from a diverse population of people that they might not
have attained from within the company (Whitla, 2009). Similarly, the use of
crowdsourcing for social good increases brand loyalty and gives consumers a sense of
investment in the organization.
Crowdsourcing for social good is becoming more common with employees and
consumers expecting a greater corporate social consciousness from companies (Skibola,
2010). One example of this type of crowdsourcing approach is GE‟s Ecomagination
initiative that called on participants to devise energy efficient ideas and assist in saving
the environment. Once participants submitted their ideas, they were posted to the
Ecomagination Web site and the public was able to vote.
According to the 2010 Weber Shandwick Social Impact report on Crowdsourcing
and Social Media in CSR, 44% of executives (216 executives from Fortune 200
companies) surveyed say their company has used crowdsourcing to engage stakeholders
around CSR programs (Weber Shandwick, 2010). While this number seems low for the
percentage of executives who have used crowdsourcing methods, an outstanding 95% of
executives who have used crowdsourcing found it valuable (Weber Shandwick, 2010).
Mashable‟s Zachary Sniderman (2011) elaborates on the social media findings:
Social media reversed that ratio with 72% saying they had used a social media
service in regards to CSR, but only 59% believed that it had a positive impact on
their communication with consumers. Facebook (67%) was seen as the most
valuable social network while Twitter (46%) and Foursquare (44%) lagged behind
blogs (60%) and LinkedIn (58%) in terms of perceived value.

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Along with statistics on the use of crowdsourcing and social media by Fortune
200 corporations, the Social Impact report also lays out reasons for the use of
crowdsourcing for CSR initiatives.

The study notes the perceived value of crowdsourcing as follows:
 Surfaces new perspectives
 Builds engagement with key audiences
 Invites clients and customers from nontraditional sources to contribute ideas
 Brings a new energy to the process of generating ideas and content
Weber Shandwick‟s Social Impact report highlights the advantages of crowdsourcing
and also gives a sense for the future of crowdsourcing for CSR. Overwhelming research
shows that crowdsourcing for CSR purposes is beneficial to corporations and is essential
in getting a corporations message out to the public. The study concludes with the claim
that crowdsourcing, as a part of CSR communications, is a key area to explore in 2011
(Weber Shandwick, 2010).
Similarly, companies like Nokia Inc, PepsiCo, and Chase Bank, which will be
looked at in depth in this paper, have all engaged in crowdsourcing for social good. Some
initiatives have even used industry experts to help solidify ideas garnered by the crowds.
While crowdsourcing has many benefits, there are risks that must be examined.
Risks involved with social media and crowdsourcing approaches
The openness of social media platforms allows people to say anything they feel
instantaneously. For example, someone may go to a store and receive poor customer

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service or buy a product that does not live up to its promise. Social media gives this
person a place to vent all of her/his feelings and instantly words of anger are posted
online where, by the way, they live forever. This can be especially true for companies
with an active Facebook presence.
A prime example of this is Nestle. In this case, the environmental activist group,
Greenpeace, was unhappy with the company‟s use of palm oil (McCarthy, 2010). As
described by Caroline McCarthy (2010), “These days, just about every brand has a public
forum in the form of a Facebook fan page and Greenpeace supporters- whom the activist
group had encouraged to change their Facebook profile photos to anti-Nestle slogans that
often incorporated one or more of the company's food logos--started posting to the Nestle
fan page en masse.” Even while trying to protect its intellectual property rights, the
company faced an even greater backlash for deleting the posts.
Another example of the risks associated with crowdsourcing is the Chevy Tahoe
project that called for the crowds to develop advertisements for the carmaker. The events
that occurred during this campaign are what Mark Robinson, editor at Wired, labeled
crowdslapping, “when the crowd turns against the crowdsourcer” (Brabham, 2008). In
this case, the crowds created 30-second spots filled with rants on topics ranging from the
negative effects SUVs have on the environment to the poor state of the American
automotive industry. In what can be a testament to the unpredictable nature of social
media and crowdsourcing approaches, Chevy did not attempt to remove the videos
claiming “it‟s part of playing in this space” (Brabham, 2008).
Companies create Facebook fan pages with the intention of forming a public

22

platform where enthusiasts can show support for the company, but in the same manner
the platform is open to naysayers who choose to criticize (McCarthy, 2010). Sometimes
the use of crowdsourcing methods can lead to unintended consequences that have the
potential to do more harm to companies than it does good. For example, when
organizations engage in crowd voting contests through social media platforms people
may create fake profiles and enact voter fraud to win the top prize. The way that a
company handles these mishaps, or allows them to continue to happen plays a significant
role in ongoing public perception. Unfortunately, these mishaps often result in news
articles with headlines that can be damaging to the company‟s name. Specific examples
will be explored in depth in the case studies section.
The Case for Crowdsourcing
The previous sections of this paper have explained what crowdsourcing is and
how it can be used, while the following studies will show that crowdsourcing is an
“emerging, successful, alternative business model” with the potential to influence the
ways in which people solve the world‟s problems (Brabham, 2008). Furthermore, studies
have shown the overall benefits that corporations can gain from engaging in CSR. Studies
have been conducted to attempt to prove that CSR helps corporations to garner positive
public perception and build brand awareness, but little research has been done to show
the new trends in CSR approaches. The following section will explore the research on the
emerging trend of crowdsourcing and its different uses as well as research to suggest it
may be time for CSR to move in a different direction to become meaningful again.

23

The use of crowdsourcing is not a means to acquire cheap labor and resources
from the unknowledgeable masses. According to Brabham (2008), crowdsourcing is not a
ploy to steal ideas from the masses and use those ideas to solely benefit the corporation.
He describes this idea by saying, “It [crowdsourcing] is not just a repackaging of open
source philosophy for capitalist ends either. It is a model capable of aggregating talent,
leveraging ingenuity while reducing the costs and time formerly needed to solve
problems” (Brabham, 2008). Similarly, Whitla describes crowdsourcing as “a process of
organizing labor where firms parcel out work to some form of (normally online)
community” (2009). Advantages described by Whitla include the acquisition of
knowledge from people that possess a “diverse range of skills and expertise” and are
“willing and able to complete activities within a short time frame” (Whitla, 2009).
In addition to the idea that crowdsourcing is not merely a means to exploit the
public, James Surowiecki‟s 2004 book, The Wisdom of Crowds, explores that idea that
while humans are typically perceived as making poor decisions when in group settings,
attributed to concepts like group think, they are more likely to make far better decisions
when working with the crowd. Surowiecki (2004) argues this point by saying:
If you put together a big enough and diverse enough group of people and ask
them to “make decisions affecting matters of general interest,” that group‟s
decision will, over time, be “intellectually [superior] to the individual,” no matter
how smart or well- informed he is.

To further Surowiecki‟s position that groups of crowds, that are diverse enough,
could essentially avoid the pitfalls of groupthink, researchers Kozinets et al. (2008)
describe how innovation and “collective consumer creativity” is attained. Kozinets et al.

24

suggest that collective consumer creativity occurs when “social interactions” trigger ideas
and concepts that could not have been generated by one single person (2008). These
researchers categorized the different types of online communities that form from
consumers that engage in collective innovation. Their research led to a two-dimensional
structure to describe the behaviors of four ideal types of online consumer communities.
The online creative consumer communities are classified as Crowds, Hives, Mobs, and
Swarms.
Kozinets et al. describe the four types of ideal creative consumer communities
and the different types of activities each community engages in. The researchers define
Crowds as “large, organized groups who gather or are gathered together specifically to
plan, manage, and/or complete particular tractable and well defined projects” (Kozinets et
al., 2008). The defining characteristic of this group is that they are gathered together to
focus on one particular objective and then they usually disband (Kozinets et al., 2008).
The “Crash the Super Bowl” advertising campaign created by PepsiCo Frito-Lay,
described in more detail in a later section of this study, is an example of the type of
objective that is met through the work of Crowds.
Hives are the second category of ideal consumer communities and this group is
known for their skills in creating user generated content and for producing high quality
work. Kozinets et al. (2008) define Hives as “online communities whose members
contribute a relatively greater amount to the community, but who also produce
innovations specifically to respond to particular challenges or to meet particular project

25

goals.” Unlike Crowds, Hives are more inclined to take their work more seriously and to
create higher quality content.
Mobs are defined as a group with “a high concentration of innovative
contribution, but these contributions are oriented to a communo-ludic spirit of communal
play and lifestyle exchange” (Kozinets et al., 2008). Kozinets et al. (2008) elaborate by
saying, “Mobs are often based around the contributions of specialists who speak to
relatively homogenous affinity or interest groups.” This group of collective consumers
share similar interests and gather together to build communities around their interests.
Mobs often use blogs as a means of communication and can be used as a source for
marketing innovation (Kozinets et al., 2008).
The last group of online consumer communities described by the researchers is
Swarms. This group is defined as “the amassed collections of often- multitudinous yet
individually small individual contributions that occur as part of more natural or free-
flowing cultural or communal practices” (Kozinets et al., 2008). Swarms are more
associated with the advances in technology that have been brought on by Web 2.0. They
are known more for commenting or posting on work that has already been created either
through a message thread, blog or social networks (Kozinets et al., 2008). While the
individual that participates in a swarm may add little value of his own, the contributions
of the swarm as a whole can add high value. The defining characteristic of this group is
their ability to solve complex problems and issues by working together and following
simple rules that allow them to collaboratively reach solutions.

26

The distinctions between the different kinds of consumer collectives are important
for corporations to consider when utilizing crowdsourcing techniques. Corporations that
are able to understand the dynamic of each type of consumer collective is more likely to
develop a campaign that garners more participation and fosters the acquisition of ideas
that will make the project more successful. Understanding the different types of
consumer collectives is also beneficial for developing tactics around the campaign that
will bring more brand awareness among the target audience and create a loyal consumer
base for the brand.
The study conducted by Kozinets et al. reaches the conclusion that many different
forms of consumer communities exist and work together to innovate in distinct ways. The
researchers suggest that there are certain elements that foster the collective actions that
groups of consumers enact, such as “communal notions of membership formation,
enculturation, shared values, ideologies, hierarchy and status, collective political action,
and the shared base of grounded knowledge” (Kozinets et al., 2008). This study suggests
that new business models must be created in order to incorporate the innovative ideas that
are proposed by consumer communities. To support the idea that a new direction toward
social good enacted by these communities is possible in the future, Kozinets et al. (2008)
conclude by saying, “the interests of these online communities often trend toward the
ethical, the sustainable, even the activist.”
Brabham reaches a similar conclusion in his study suggesting that nonprofit
organizations can benefit from the examples of for-profit corporations executing
crowdsourcing techniques. Brabham (2008) elaborates:

27

Where altruism may be lacking or where material products are needed by these
causes, crowdsourcing may provide a productive alternative. Environmental
sustainability, architecture and urban planning, emergency logistics planning,
public art projects, and even intelligence industries may benefit from the
application of crowdsourcing in the problem-solving process.

Kozinets et al. describes the work that can be accomplished by distinct groups of
consumer collectives and suggests that the power of the crowds can create sustainable
solutions for the communities in which they act. Similarly, Brabham alludes to the idea
that crowdsourcing would be an appropriate tool to garner solutions for issues like
environmental sustainability and community planning. The aforementioned studies
suggest that there is great potential for the use of crowdsourcing for social good. The
following studies will show how CSR works to benefit corporations. Some studies also
suggest that CSR, in its traditional form, has developed a negative stigma. The findings
will support the idea that crowdsourcing, as a new method of CSR, is something that
should be undertaken by corporations.
Changes in Corporate Social Responsibility
Mahlouji and Anaraki (2009) define CSR as “a widely used term in business
literature, which can be interpreted as continuous commitment of a business to behave
ethically and to contribute to economic development while improving the living
standards of the workforce and their families as well as the community.” Their study
suggests that while some corporations have been engaging in CSR merely to comply with
standards created by the larger society, other corporations are using CSR to spur social
innovation. Social innovation refers to “new ideas that resolve existing social, cultural,
economic and environmental challenges for the benefit of people and planet”

28

(http://socialinnovation.ca). The distinctions between the CSR methods described by the
researchers is that some corporations are merely cutting checks to organizations in an
effort to appease society, while other corporations are making it a priority to create real
and sustainable changes in the world. Mahlouji and Anaraki (2009) define the three main
features of CSR as follows:
1. The integration of social and environmental concerns within business operations
that goes beyond philanthropy.
2. The interaction with stakeholders rather than shareholders is a crucial aspect of
CSR.
3. Conviction CSR implies what enterprises can do in the social and environmental
fields above what they are required to do by law.
Researcher Edward Weisband goes on to give his definition of CSR and describes the
changing standards of CSR practices. Weisband (2009) elaborates by saying, “Corporate
Social Responsibility validates the legitimacy of stakeholder participation on the grounds
that business profitability requires responsible strategies reflective of social concerns.”
The stance taken by Weisband‟s study is that CSR, as it is practiced today, does not go
beyond the “borders of shareholder value” and is used only as a means to meet
requirements. Weisband negates the idea that CSR as it is practiced today is done out of a
pursuit of social good or concern for the community.
The researcher‟s study concludes by suggesting that there needs to exist a new set
of standards for the practice of CSR. Weisband (2009) elaborates, “Measures of learning
must be tied to frameworks of accountability in ways that allow for the mutual realization

29

of internal learning and the revision of external standards.” This research draws
conclusions based on a corporation‟s motivations behind the use of CSR initiatives and
ethical standards that dictate sentiments around CSR. More generally, the idea here is that
if corporations are seen as enacting CSR initiatives that appear motivated by genuine
intentions of creating social good they are more likely to build awareness among
consumers and create brand ambassadors.
Similarly, crowdsourcing offers a solution to the problem of consumers being
unaware of the CSR initiatives of corporations discussed by Mohr et al. When launching
a crowdsourcing campaign of the magnitude of the Pepsi Refresh Project, the world
becomes aware of the corporation‟s efforts. The visibility that this brings for a
corporation is invaluable. To Mohr et al.‟s point, the ability to link CSR initiatives
directly to the corporation may play a role in determining the effect this has on
consumer‟s purchase intent and in being able to measure the profitability of CSR for
corporations.
In contrast, other researchers elaborate on the question of whether CSR initiatives
result in profitability for corporations. In 2001, Lois A. Mohr, Deborah J. Webb, and
Katherine Harris conducted research to determine whether consumers “expected”
companies to be socially responsible. The initial conclusion drawn by the researchers is
that “first consumers need to be aware of a firm‟s level of social responsibility before this
factor can impact their purchasing” (Mohr et al., 2001). It is noted that when measuring
consumer‟s perceptions of CSR initiatives by corporations, it is done under the
assumption that the consumer is aware of the CSR campaign. Mohr et al. draw further

30

conclusions to ultimately indicate that higher levels of awareness and consumer
knowledge about social responsibility are needed to understand consumers purchasing
intent and the impact CSR has on profitability.
This section has served to support the idea that crowdsourcing has the potential to
solve certain problems with traditional approaches to CSR that limit the corporations
ability to increase awareness and attain buy in from consumers. Initial research on the
concept of crowdsourcing proves it to be an emerging approach that is more beneficial
than people may think. The research shows that crowdsourcing is an effective way to
gain wisdom from consumers that are likely to make better decisions when working
collectively. Whitla‟s research elaborates on the idea that the crowd is equipped to handle
complex issues because of the diverse range of knowledge and skill each person can
contribute. Surowiecki‟s book makes the same claim in an effort to dissuade people from
the common belief that groups make poor decisions based on theories like groupthink.
To further expand upon the use of crowdsourcing Kozinets et al. researched the
various types of consumer communities. Their research suggests the range of possibilities
that exist when consumers group together and form distinct types of interactions. It is
beneficial for a company to understand the differences that make crowds unique and
affect their level of participation in a crowdsourcing project. This information can assist
corporations in determining the activeness that they can expect from certain people that
participate in their campaigns. The study presented by Kozinets et al. suggests a shift in
the business strategy to take into account the possibilities of leveraging consumer
communities to increase sales and meet business goals. The researchers also make

31

mention of the possibility of tapping consumer communities for social good and to create
an activist movement.
On the other hand, research has also been done to suggest that CSR enacted by
corporations has lost the genuine desire to benefit the community that it initially had. The
researchers suggest that corporations look at CSR as a requirement and usually do the
minimal act of cutting a check to an organization. The desire to shift this mentality and
bring CSR back to a standard that is ethically acceptable poses an opportunity for
crowdsourcing for social good. Corporations are given the opportunity to be innovative
and create crowdsourcing campaigns that are unique and resonate with the public.

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Chapter V. Case Studies
Nokia “Change Connections”
Nokia launched into the telecommunications industry with the production of one
of the earliest forms of communication. The company began in Finland in 1865 and was
initially a paper manufacturing company. Fredrik Idestam launched his paper
manufacturing company called Nokia Ab and became known as the father of Finland‟s
paper industry (nokia.com). In 1902 electricity was added, and then Idestam merged with
a cable company and rubber company. Nokia Corporation was established. From the late
60s to the early 90s, Nokia Corporation took a leading role in the mobile communications
industry. In the 90s, Nokia executives decided to focus solely on telecommunications.
The company launched different mobile phones and in 1998, solidified its position as
world leader in mobile phones. Presently, Nokia offers a range of 3G phones, multimedia
devices and mobile multiplayer gaming. Unfortunately Nokia has seen lackluster sales in
the United States and has faced a competitive landscape that has undermined its efforts.
The mobile device industry has been taken over by smartphones competing to
offer the fastest network and best capabilities. Some of Nokia‟s biggest competitors
include Apple, Blackberry, Samsung and Android- based phones. Nokia has faced a
severe decline in sales and its shares have fallen sharply because of its inability to
compete in the smartphone arena. Nokia executives were well aware of declining profits
and their inability to compete with other smartphones being released to the market. At

33

Nokia‟s 15
th
annual technology conference, Nokia World 2010, held at London‟s
International Conference Centre, the presentation of the company‟s new range of phones
was unexpectedly trumped by the announcement that a new chief executive officer was
stepping in. Stephen Elop, the president of Microsoft Corp.‟s Business Division, was
replacing Chief Executive Olli-Pekka Kallasvuo. Shortly after this announcement came
word that Anssi Vanjoki, the head of Nokia‟s smartphone unit, was resigning and
Chairman Jorma Ollila would step down in 2012. Vanjoki‟s resignation was attributed in
large part to his belief that he should have been named chief executive officer of the
company (Lawton and Edmondson, 2010). Marred with reputational issues regarding its
inability to successfully compete in the smartphone market and its instability with
management changes, Nokia Corp. was in need of a new strategy to manage its corporate
reputation.
In 2010, Nokia Corp. presented a new strategy that included their vision for the
future of the company and the future of telecommunications. The new strategic approach
involved the company officials‟ belief that Nokia could empower people around the
world by “connecting” them with what matters most in their particular home or region of
the country. With the full understanding that its mobile units need to lead the way, Nokia
now offers a “truly consumer-driven company.”
Nokia Corp. revitalized its strategy by looking at the changing world and making
its own vision fall in line with the needs of consumers. Fully knowing that the
competitive landscape was becoming more difficult and new entrants were appearing
daily, Nokia wanted to offer consumers something in addition to mobile devices:

34

solutions. The company recognized that by using different platforms to open the
communication lines between corporate and consumer it would have the ability to offer
its consumers what they wanted. This also demonstrated Nokia‟s understanding that
simple demographics are no longer a determinant of what a category of people want. The
company engaged with consumers to find out their needs and develop applications that
would allow them to build relationships and offer something no other company could
offer.
In 2009, Nokia launched a new campaign called “Life Tools” that brought a new
set of applications to people in India. The goal of Life Tools was to offer cheap and
accessible applications that provided farmers and customers access to agricultural
information such as market prices, educational tools, and entertainment services (Skibola,
2010). This campaign was launched as a pilot program and was later expanded to
Indonesia and China. The company continued to research the needs of the region and
developed a mobile commerce platform that would allow money transfers through mobile
phones. This new technology that was supported by Obopay, a mobile financial service
supplier, brought access to rural areas where banks are limited (Skibola, 2010).
With this strategy in mind, Nokia Corp. developed a program to continue on the
path of social innovation and provide mobile solutions to different continents. The
company‟s strategy was to provide innovation that remained in line with the emerging
economy consumer base and to shift its focus from selling devices to developing
applications (Skibola, 2010). Nokia‟s new initiative began with a partnership between
Nokia, branding agency Lovely Day and The Feast social innovation conference. This

35

partnership led to the creation of a platform that opened discussion surrounding social
innovation and change in the developing world through the use of mobile technology.
Nokia launched its new platform “Change Connections,” in collaboration with
The Feast social innovation conference, in 2010, by gathering 25 people that are world
leaders in ideas and actions surrounding issues like health, environment, design,
technology, and more (Popova, 2010). The idea was to have experts identify various
opportunities to use communication technology to provide solutions to the world‟s
problems that fall into each of the specified categories. Once experts had brainstormed
the initial opportunities, Change Connections would bring these ideas to the web to allow
the public to offer their insights and build on the opportunities previously identified. The
whole campaign is based around the idea that change can come through communication
technology and collaboration between humans who can make significant changes
together.
Change Connections is a crowdsourcing campaign that combines crowd creation
and crowd wisdom, and has effectively created a thorough Web site through which most
of its ideas and information are gathered. The consumer collectives that participate in the
Change Connection campaign can be characterized as hives that have gathered together
to contribute greatly to the community. The ideas gathered by Change Connections are
grouped into five key areas that guide the research process: advocacy, health, learning,
livelihood, and resilience (Popova, 2010). The site uses a range of colors from light blue
to fire red to denote the level of “heat” each idea in the different key areas is receiving.
The categories that are in red are the ones with the most heat and that have the most ideas

36

being submitted. This is a good indication to let people know where more ideas could be
used and which categories could benefit from their input. In addition to this, the site has a
section to highlight a number of case studies that provide information on ideas that have
actually been implemented. The case studies are meant to show the public how the ideas
that are being discussed actually play out in the real world and the results of their
implementation.
Change Connections is an initiative that allows social innovation to occur through
the use Nokia‟s expertise in mobile technology to improve the lives of people around the
world. The name “Change Connections” signifies more than just the mobile or
technological connections people have, but more so the connections that can help spark
change. The connections referred to here are between systems and the changes that can
come from aiding someone get an education and the affects this has on their livelihood
(Skibola, 2010).
Another important approach to note is that Nokia heavily relied on the guidance
of experts to help form all ideas and to make sure that everything purposed could be
implemented. The use of experts solidifies the idea that the kinds of “crowds” that
companies work with can play a vital role in the success of certain programs. Nokia‟s
campaign attracted hives that were interested in creating something to benefit the greater
community. This intention combined with reliance on experts that were able to provide
proper guidance on feasible ideas ensured the success of Change Connections. Nokia is
working to offer location-based services that allow developing countries to have their
needs met through mobile technology.

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Prior to Change Connections, Nokia launched its first crowdsourcing experiment
called Design by Community. Change Connections and Design by Community are
distinct because the latter was a campaign that focused on the development of one
product. Nokia set the parameters and then used the wisdom of crowds to develop the
idea into a product to sell to consumers. One new product launched because of this
initiative is a bicycle-powered cell phone charger for people in the developing world.
This new product was greeted positively because it signifies how Nokia is the leading
mobile company focusing on communication technologies in the developing world
(Rajagopal, 2010). In an article in The Huffington Post, Jerri Chou, co-founder of The
Feast, attributed the success of Change Connections to the level of transparency the
initiative has shown since day one (Chou, 2010). She also made note of the campaign‟s
goal of making outcomes known to the public in order to ensure that people can truly see
the change that is occurring because of the contribution of their ideas. Another notable
claim made by Chou is attributing the success of this initiative to alignment between the
project and the company‟s goals. Full transparency from beginning to end contributed to
the campaign‟s success.
The level of transparency exhibited by Nokia and its Change Connections
campaign is rare among crowdsourcing users. The difference between Nokia‟s initiative
and the other two cases presented is that this program did not involve a crowd voting
approach. Nokia‟s crowdsourcing has proven to be a success a year later. The corporation

38

did a good job at understanding the type of consumer collective that would be receptive
of a project that aimed to better society.
Furthermore the corporation was intelligent enough to incorporate the wisdom of
experts. Unfortunately, very few publications have written about Nokia‟s Change
Connections program and there has been little attention surrounding the initiative. It
seems that without any accusations of fraud or dishonesty, crowdsourcing initiatives may
get little coverage. Organizations that are considering crowdsourcing need to be realistic.
Ultimately, if Nokia was hoping for a higher level of brand awareness or association with
social responsibility then it may need to rethink their strategy. This is a reminder that
corporations need to create public relations campaigns surrounding their crowdsourcing
initiatives to ensure that consumers are made aware of the corporations‟ efforts.
Pepsi Refresh Project
In 1898, pharmacist Caleb Bradham was looking for a refreshing beverage to
serve his customers in the midst of a hot and humid summer in North Carolina. Through
a mixture of juices, syrups and spices, Bradham created Pepsi-Cola, a beverage that
would become his most popular creation. He launched the Pepsi-Cola Company in 1902.
In the following years, he developed a strong franchise system that has become the
cornerstone of the Pepsi-Cola enterprise.
The success of Pepsi-Cola Company was brought to an abrupt halt when World
War I changed the cost of doing business for people across the United States. The
increase in the cost of ingredients, such as sugar, needed to produce Pepsi-Cola caused
the company to go bankrupt. In 1923, Bradham was forced to sell the Pepsi-Cola

39

trademark to Craven Holdings Corporation. After a few tumultuous years and a second
bankruptcy, a successful candy manufacturer, Charles G. Guth, acquired Pepsi-Cola
Company. Guth was able to rebuild Pepsi-Cola as a national brand and bring success to
the company at a time when the rest of the world was on the brink of the Great
Depression.
One of the most successful changes made by Guth was selling a 12-ounce bottle
of Pepsi-Cola for the same five-cent price as other six-ounce soft drinks. As the company
began to expand around the world in the 1930s, Walter S. Mack, president of Pepsi-Cola,
believed that advertising would take soft-drink marketing to another level. Pepsi-Cola
began with a jingle to promote its competitive pricing with the line “Twice as Much for a
Nickel” (www.pepsi.com). The success of this advertising campaign landed Pepsi-Cola
on Advertising Age’s 2005 list of top ten of the past century (www.pepsi.com). Most
notably, Pepsi-Cola was able to get this recognition at a time when not many companies
were using jingles.
Unfortunately, when World War II began, Pepsi-Cola was faced with the same
issues regarding the inflation of sugar prices. Having learned from the events that led to
the company‟s bankruptcy during World War I, Mack knew that he would have to take
action to ensure Pepsi-Cola remained prosperous. He purchased a sugar plantation in
Cuba and was able to avoid the same problems the company faced with sugar rationing
during World War I. World War II inspired feelings of patriotism prompting Pepsi-Cola
to incorporate the colors red, white and blue for its bottles. Pepsi also set up an operation
in New York City‟s Times Square that allowed families to send personalized message to

40

their loved ones serving the country in different areas around the world
(www.pepsi.com). At the conclusion of the war Pepsi-Cola began global expansion and a
shift in its marketing strategy. The company had to make changes to remain relevant in
an ever-changing marketplace. At this time, Pepsi-Cola had to increase its pricing and
began to package the soft drink in cans. The company also focused advertising around
slogans that would resonate with the world and with the changing concerns people had as
times changed. In the 1980s, Pepsi-Cola continued its successful advertising push with a
campaign that challenged the taste of Coca-Cola and a music campaign that featured stars
like Michael Jackson and Lionel Richie (www.pepsi.com). The company continued to
expand its appeal to people across various cultures and generations. The success of Pepsi-
Cola encouraged the company to expand its product line adding all types of beverages
including tea, water, coffee drinks, and juices. In more recent years the company
continued to stay current with burgeoning trends and began to build its online presence.
At the beginning of this century, with the digital age in full swing, the company
boosted its online presence and improved the company‟s Web site. Pepsi partnered with
Yahoo! to create a site called Pepsistuff.com where people could redeem points and win
prizes. Another successful marketing partnership, between Pepsi and Apple, allowed
consumers to win free downloads and other prizes from Apple‟s iTunes store.
Today, PepsiCo is headquartered in New York and with operations around the
world has grown into a $60 billion company that offers beverages, snack foods and
juices. It is ranked 4
th
among the world‟s largest beverage and food companies and has
strong brand recognition around the world. PepsiCo‟s mission focuses on meeting

41

business and financial goals, while providing enrichment to its employees and
surrounding communities. PepsiCo operates under what it calls “Performance with a
Purpose” ensuring that while the company finds financial success it also leaves a positive
impact on society. Along with driving shareholder value, PepsiCo works to address social
and environmental issues. Among its Pepsi-Cola Brands are Frito-Lay, Tropicana,
Quaker, and Gatorade brands. PepsiCo‟s top competitors include the Coca-Cola
Company, Dr. Pepper Snapple Group, Inc., and Kellogg U.S. Snacks Division.
In an unprecedented move, Pepsi announced that for the first time in 23 years it
would not spend money on advertising during the 2010 Super Bowl, instead using that
money for an initiative called the Pepsi Refresh Project (Strom, 2011). This could have
been a big risk for the company especially given its advertising and marketing history.
The Pepsi Refresh Project launched in February of 2010 at a time when social media was
becoming the biggest phenomenon for companies around the world. The goal was to
create more social connections using social media to allow people to make choices about
what causes they wanted to support. More specifically, Pepsi committed to give away
millions of dollars in grant money to fund ideas submitted by people, business and non-
profits in six different categories: arts and culture, health, the planet, education, food and
shelter, and neighborhoods. While Facebook and Twitter allow companies to interact
with consumers of their brand, the program Pepsi was developing engaged with
consumers in the real world (AP, 2009).
To launch a campaign of this magnitude, Pepsi had to carefully devise a plan to
execute this project effectively and mitigate any possible problems that could arise from a

42

crowdsourcing tactic. The Pepsi Refresh Project is a crowd voting approach that relies on
the participation of consumer collectives, which can be categorized as swarms, to use
social networking sites to vote for contest participants. The Pepsi Refresh Project allows
consumers to apply for grants ranging from $5,000 - $250,000. Consumers are asked to
submit applications through the site. The project runs on a monthly cycle during which
1,000 applications are accepted. The standard procedure is for consumers to submit their
applications in the first two weeks of the month to be considered in the next voting round.
Pepsi no longer accepts submissions after those first two weeks or upon receiving 1,000
applications. Consumers vote on those ideas for a full four weeks and winners are
announced at the end of the month. For each given contest cycle, awards in the amount of
$5,000, $25,000, and $50,000 are awarded to up to 10 different entrants and $250,000 to
up to two entrants.
The voting process also allows the general public to play a role in what ideas get
funded. People can vote directly online at the refresheverything.com Web site or through
Facebook. The Pepsi Refresh Project Web site comes equipped with links that allow
people to promote the ideas that they like on their own Facebook page. It also provides a
link so that people can install a Facebook application that allows others to vote directly
off of the page of the person who installed the application. The use of social media
allowed people to take their ideas to the next level by presenting them to all of their
Facebook friends. This also resulted in exposure and the possibility of getting more votes
from people who came across their ideas. To avoid upsetting consumers who submitted

43

ideas, Pepsi had to determine the proper way to fully disclose the rules and regulations
for awarding grant money.
The Pepsi Refresh Project Web site offers recommendations on how to best go
through the application process and make it past the contest moderators. In fact, for the
pre-submission process, Pepsi created a toolkit of tips to help with contest entries. Pepsi
specifies that it is looking for projects that are “beneficial, achievable, constructive, and
„shovel ready‟ (meaning it can be finished within 12 months of funding)”
(www.refresheverything.com). The rules and regulations are clearly spelled out. For
instance, once registered, voters are allotted 10 votes per day that they can use toward
any ideas they want to vote for. The guidelines make it clear that proxy voting is
prohibited and using more than one email address to vote multiple times is subject to
having their previous votes revoked. Pepsi also wants to maintain a level of transparency
by allowing the public to view how the various ideas are ranking by the amount of votes
they are receiving. As described by Morrisey (2010), “Pepsi is using social monitoring
tools to track share of voice and mentions in social media and traditional media, as well
as harder engagement metrics like visits to the Refresh site, time spent, submissions and
votes. It will try to gauge whether the program makes an impact on communities.”
While it seems as if this is a win-win effort by the company, Pepsi had serious
issues to take into consideration when media reports began to suggest flaws with the
contest‟s submission rules and cheating allegations. A few short weeks after the Pepsi
Refresh Project contest was launched, the New York Times ran a story with the headline
“Pepsi Charity Contest Trips Over Its Own Submission Rules.” It appeared that a small

44

charity called the Joyful Heart Foundation that was started by actress Mariska Hargitay
had its submission materials updated by Pepsi staff after the submission deadline had
passed (Strom, 2010). The contest rules prohibit materials from being updated or changed
after the submission deadline and this incident caused other contestants to question the
fairness of the contest. Most contestants were angry because they felt Pepsi was favoring
the charity because of its celebrity founder. The company took responsibility and
acknowledged that it had not followed the contests guidelines (Strom, 2010).
More recently, in January 2011, more news surfaced about the Pepsi Refresh
Project that had to do with cheating allegations. Almost a year after the project launched,
Pepsi expanded its efforts into new countries and begin rolling out its 2011 plan (Zmuda,
2011). Marring this effort were allegations suggesting that contestants were using proxy
services to generate a massive quantity of votes ensuring that their charity would win
grant funding. Pepsi denies the legitimacy of such claims because the company has taken
precautions to ensure that the integrity of the voting process remains intact. While it is
too soon to determine what effects these allegations have on the Pepsi Refresh Project,
some industry experts speculate that this could have a negative impact on a campaign that
has been viewed as “successful and groundbreaking” (Zmuda, 2011).
To date, the Pepsi Refresh Project has netted 61 million votes and is viewed as
one of the first successful crowdsourcing contests (Wasserman, 2010). Katz describes the
success of the Pepsi Refresh Project by saying, “The Pepsi Refresh Project was historical.
It not only raised the bar in terms of forward-thinking and innovative social media
campaigns, but its success can be measured in the high levels of consumer engagement

45

and participation and the overall reach of philanthropic projects it funded.” Pepsi has
given away $14.6 million to fund 352 ideas and has received 1.6 million comments on
refresheverything.com (Wasserman, 2010). In March 2011 reports surfaced that in what
can be considered a historic shift; Diet Coke bumped Pepsi to the third spot in the
beverage industry (Zmuda, 2011). With Coke in first place and Diet Coke in second
place, critics called in to question the Pepsi Refresh Project‟s strategy and ability to
contribute to the business goals of the company.
Chase Community Giving
J.P. Morgan Chase & Co. is a global financial services firm with operations in more than
50 countries specializing in financial transaction processing, investment banking, asset
management, etc. Founded in 1799, Chase has become one of the world‟s largest and best
known financial institutions. J.P. Morgan Chase & Co. as it is known today was created
by the acquisition of several predecessor banks. The first commercial bank in New York
City was called The Bank of New York founded in 1784 by Alexander Hamilton. It
existed largely with no competition until 1799 when Aaron Burr founded the Bank of the
Manhattan Co., which would mark the beginning of J.P. Morgan Chase.
Many of the banks that existed in the 1800s had historical links to J.P. Morgan
Chase. In 1871, J.P. Morgan & Co. was founded as Drexel, Morgan & Co. and would
also become a predecessor to J.P. Morgan Chase. This new banking partnership served as
an agent for Europeans investing in the United States. The bank supported American
industrial expansion and ultimately became the nation‟s leading domestic and foreign
bank. JPMorgan Chase institutions played a large role in the late 19
th
and early 20
th

46

century for financing many of the most memorable engineering project and revolutionary
technologies. For example, J.P. Morgan Chase & Co. raised $40 million for the U.S.
government to finance the Panama Canal. Today, J.P. Morgan and Chase brands deliver
global financial services in retail financial services, investment banking, card services,
commercial banking, treasury and securities services, and asset management.
Chase Bank is a subsidiary of J.P. Morgan Chase and focuses on consumer and
commercial banking. Chase was formed in 1955 by the merger of the Chase National
Bank and the Bank of the Manhattan Company. Headquartered in Chicago, JP Morgan
Chase & Co. has many competitors including Bank of America Corporation, Citigroup,
Inc. and Barclays PLC.
While the public witnessed the collapse of banking giants due to fraud and insider
trading, people began to distrust all banks in general. Chase‟s business principles
emphasize ethics and attracting the most capable and motivated employees possible.
Among its core principles is the belief that, it must fully support the communities in
which it has operations. Most notably, the company urges its employees to volunteer time
and donate money to various causes around the world. Chase also maintains a matching
gifts program that supports hundreds of employee-chosen causes.
In fact, JPMorgan Chase has given more than $100 million to non-profit
organizations with special emphasis on organizations that promote education, the arts,
and community development. In 2009, Chase launched a new initiative by engaging in a
crowd-voting contest to fund various organizations. The bank committed to giving away
$5 million to the charities that were most voted on during the course of the contest.

47

At the time this campaign was launching, it was seen as one of the first times that
a philanthropic entity was allowing the decision-making to be handled by crowds
(McGlone, 2009). Chase Community led this new wave of philanthropic effort by tapping
into crowds to determine the fate of different organizations. In particular, the campaign
relies on swarms that are willing to participate in this crowd voting approach put together
by Chase bank. Chase Community Giving also utilizes a Facebook page in its social
media strategy. Along with the opportunity to win money from Chase, this new initiative
gives non-profit organizations a platform to generate more awareness to their causes. The
use of Facebook for the Chase Community Giving campaign also helps participating non-
profits to gain new individual supporters who can contribute to whether they win the
Chase contest or not. The individual supporters are also potential donors for the
organization or members that can aid in the efforts of the organization.
The way this contest works is that non-profit organizations are featured on the
Chase Community Giving Facebook page and all Facebook members willing to
participate are asked to vote on the organizations they most wanted to support. The
organizations ranked as the top 100 vote getters receive $25,000 and are then qualified
for a chance to win an additional $1 million (McGlone, 2009). The organizations that are
allowed to participate in the Chase Community Giving contest must be registered 501(c)
3 that have annual budgets under $10 million. Another requirement is that their mission
falls in line with Chase‟s areas of philanthropic interest. As with most crowdsourcing
types of contests, Chase was tasked with creating rules and regulations to ensure that the
contest ran smoothly. Attempting to avoid claims of fraud and unfair practices is one of

48

the most difficult challenges that are faced when dealing with a platform that can be
unpredictable. In order to properly count the votes, Facebook users that wanted to vote in
the contest were required to become a fan of the Chase Community Giving page. To date,
the Chase Community Giving page has over two million fans bringing visibility and
brand awareness to the institution. Consumers were initially concerned that they would
also receive a barrage of marketing queries from Chase. Jennifer Zuccarelli,
spokeswoman for Chase, commented that becoming a fan would have no ties to business
mailing or emailing from the bank (McGlone, 2009).
In the first round of voting, participants are allotted 20 votes but can only vote
once for each organization. Once the top 100 vote getters are identified, this group of
non-profit organizations has the opportunity to explain how they would use $1 million
dollars if Chase awarded them this amount. A second round of voting then occurs and the
$1 million is awarded by an advisory board that includes actress Eva Longoria, Nancy
Lublin, founder of Do Something and David Robinson, a Hall of Fame basketball player
(McGlone, 2009). Chase‟s decision to award the grand prize through a combination of
votes from the public and an advisory board was based on a recommendation of the
executive director of the Center for High-Impact Philanthropy at the University of
Pennsylvania, Katherina Rosqueta (McGlone, 2009).
Unfortunately Chase‟s best efforts did not prevent the company from controversy,
as the first round of the contest was coming to an end in December 2009, unfavorable
headlines surfaced. More specifically, Chase was being criticized for disqualifying three
different nonprofit organizations that appeared to be ranking high within the top 100 vote

49

getters and should have moved on to the second round of the contest (Strom, 2009). The
organizations disqualified included Students for Sensible Drug Policy, the Marijuana
Policy Project, and an anti-abortion group called Justice for All. The first two
organizations are in support of marijuana legalization and the second is an anti-abortion
group. Quite literally, Chase did not want to be associated with organizations that had
such controversial missions. Strom (2009) details Chase‟s missteps in her New York
Time’s article by saying, “Three days before the contest ended, Chase stopped giving
participants access to voting information, and it has not made public the vote tallies of the
winners.”
Unfavorable statements were also released from the organizations that were
disqualified. Micah Daigle, executive director of Students for Sensible Drug Policy, told
reporters that Chase had never given them any indication that their organization would
not qualify to participate in the contest and as he searched for answers no one from Chase
would respond to him (Strom, 2009). The executive director of Justice for All, David
Lee, also released a statement that questioned the accountability of Chase and its contest.
Strom (2009) was able to communicate with a spokesman for Chase and tried to get
clarity from the company to determine what had gone wrong with the contest. Joseph
Evangelisti explained that the tallies had been removed to build excitement among the
100 finalists and to be able to notify the 100 finalists before anyone else did. Evangelisti
declined commenting on whether organizations had been disqualified, but he did state
that the rules of the contest clearly indicate that any participant can be disqualified at any
time during the contest. An article in the Economist (2008), which highlighted companies

50

that were engaging in “charity as advertising”, also mentioned of the “unintended
consequences” that befell JPMorgan Chase as a result of this disqualification mishap.
Similarly, the Huffington Post‟s Jonathan Daniel Harris indicated that fraud was
taking place in the Chase Community Giving contest on Facebook. The article featured
screen shots that showed Facebook page profiles with names like “Sdfj Dfsjlfkddjf” that
had voted for organizations in the contest. The voter fraud also extended to seeing
profiles that had names that seemed to be made up and had no activity and few friends
(Harris, 2010). While a $1 million winner had already been selected, the accusations of
voter fraud stirred trouble between the winning organization and the 2
nd
place
organization.
The Chase Community Giving case study outlines some of the negative and
unpredictable issues that can arise from engaging in crowdsourcing. Chase made some
large missteps that are important to note. The first and perhaps most notable mistake was
that Chase never created a public leader board to show the ranking of charities based on
the number of votes it had received (Strom, 2009). However, the charities that were in the
running to win money could go on to Facebook and determine how many votes they had
received. When trying to conduct a contest of this nature it is crucial to have complete
transparency and accountability.
Another mistake was the company‟s unwillingness to reveal the final leader votes
to show what organizations had ranked in the top 100. If Chase truly had nothing to hide,
then it would have had no problem providing this information to the public. Finally, when
sponsoring a contest that includes votes generated on an online platform or social

51

networking site like Facebook, public relations practitioners should avail themselves of
tools that can verify the legitimacy of an account and determine whether votes are being
generated in an unfair manner.
Case Study Findings
In looking at these three distinct case studies it is apparent that there were
different approaches that either led to success or failure for each of the companies
involved. The Nokia case study can be considered a success in using crowdsourcing
methods for social good. Part of the success was due to the fact that the company
incorporated the help of industry experts. By using experts, Nokia was able to fine-tune
the ideas that were acquired from the crowds and put them into achievable actions. The
Nokia case is also distinct from the other two cases, because it does not involve a crowd
voting component. Another benefit of Nokia‟s Change Connections initiative is that it
aligns so closely with the company‟s business strategy.
Nokia made the wise decision to engage in crowdsourcing projects that enforced
the new strategy that the company wanted to employ. When companies engage in CSR
practices that have nothing to do with the business goal or the mission they appear
disingenuous.
The Pepsi Refresh Project case study is an example of one of the largest
crowdsourcing projects that has been successfully executed. This campaign was also one
of the most covered by the media out of the three case studies presented. While the Pepsi
Refresh Project used Facebook to engage in crowd voting and also gave organizations a
platform to garner awareness for their causes, it did not align closely with the business

52

goals of the company and did nothing to prevent the societal issues that arise from soda
consumption (Mehra, 2010). While some might argue that the societal problems caused
by the types of beverages and snacks offered by the Pepsi Company is something that the
company might try to resolve internally before venturing out to solve the world‟s
problems, the general consumer may not be prone to think about this and it had little to
no impact on the success of the program.
The case of Chase bank‟s Community Giving initiative is different because it
seems as if the company was directly at fault for the issues that arose from its
competition. The Chase example is another crowd voting initiative that had a setback due
to mishandling of the rules and regulations of the competition.
A key reason that Chase could have potentially caused reputational damage is that
instead of confronting the issue and taking responsibility, officials made the decision to
stonewall the disqualified organizations that raised fairness issues. Chase was also asked
to make public the leader boards, so that people could see what organizations would have
won the contest. Chase was not willing to make this information public and this only did
further damage by making it seem as if the company had something to hide. These
actions by the company led to headlines in articles that were mostly negative in tone
surrounding the Chase Community Gives initiative.
All three of these case studies are a testament to the successes and failures that
can occur when delving into a crowdsourcing campaign. While crowdsourcing is not a
recent or new concept, corporations‟ use of crowdsourcing approaches for social good is
only now gaining wide popularity. The three case studies presented are some of the first

53

to be examined in this realm and the Pepsi Refresh Project is seen thus far as one of the
most successful contests of its kind. As with anything there are definite lessons to be
learned from these case studies and recommendations to be made in regards to best
practices for crowdsourcing initiatives.

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Chapter VI. Primary Research
The author conducted interviews with three industry experts to further examine
the notion of crowdsourcing. One of the interviews conducted provided a personal
account of what it was like to be the non-profit organization entering a crowdsourcing
contest created by a large corporation. The ideas and insight gained through these
interviews helped to guide this project and reach the conclusions that will be presented at
the end of this thesis.
The first interview was with Monte Lutz, Senior Vice President of Digital at
Edelman Public Relations, who leads the Digital teams in Los Angeles and Seattle. The
second interview was with Brian Katz, Account Director at Weber Shandwick, who
worked on the Pepsi Refresh Project account in the Los Angeles office of Weber
Shandwick. The third interview was with Katherine Hull, Vice President of
Communications for the non-profit organization Rape Abuse and Incest National
Network (RAINN), who entered the non-profit organization into the Pepsi Refresh
Project contest to win funding.
Each interview conducted included a set of questions that all touched upon the
same issues, but were tailored to address the specific interest of each participant. The
interview questions all stemmed from the same list of general questions to garner
information that was informative and offered different perspectives from individuals that
see the subject matter through different lenses. The following is a list of a few of the
types of questions that were included in the three interviews:

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1. How do you define crowdsourcing?
2. How would you describe the changing dynamic between consumers and
companies/brands?
3. Do you believe that using social media can at times backfire on a
company? Or do you believe that there are ways to monitor and avoid the
issues that arise when using such an open platform?
4. What are some of the strategies that drive participation in crowdsourcing
projects?
5. How is success measured in crowdsourcing projects? Is ROI a determinant
of success?
One unanticipated theme that surfaced from the interviews was the overwhelming
agreement that crowdsourcing techniques to engage consumers should be practiced by
companies and nonprofit organizations. Each participant also mentioned the risk involved
with using social media and crowdsourcing tools. The participants agreed that while the
risks associated with social media are real and can cause damage to a corporation‟s
reputation, it is worth the risk involved. Lutz made this point by saying, “Online
conversations are happening with or without you, if a company does not participate in the
conversation it is leaving only the competitors and critics to lead the conversations.” He
went on to describe the way in which social media has allowed cause-related practices to
evolve. “Both the expectations of the average consumer as well as the ways in which
companies engage in corporate social responsibility have evolved,” said Lutz.

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The evolution described by the participant signifies the changes that have
occurred with the methods companies use to engage with their consumers and enact their
CSR initiatives. Social media has allowed companies to become more interactive and to
turn the average consumer into a brand ambassador. To further this point, Katz described
the shift towards more socialized brands by saying, “Brands are really starting to
understand and respect the consumer‟s role in the creation of both value and brand
equity.” While having worked to promote the Pepsi Refresh Project and build awareness
around the initiative, Katz was able to provide insight that reinforced the notion that
crowdsourcing campaigns are becoming more widely used and highly successful. Katz
described the Pepsi Refresh Program as “historical” for the innovative thinking that led
the campaign into new forms of engagement with consumers through philanthropic
efforts.
The interview conducted with Katherine Hull offered a telling account of what it
is like to be a nonprofit organization entering a crowdsourcing contest. Hull described
RAINN as the nation‟s largest anti-sexual violence organization that has helped 1.5
million people since 1994. The organization operates a sexual assault hotline and an
online instant messaging platform to reach victims across the world at any time and
through various devices. When asked how RAINN first heard about the Pepsi Refresh
Project, Hull mentioned that they heard about the contest through media articles and on
Facebook. The decision to enter the Pepsi Refresh Project came when the organization
had an idea to launch the first ever-Spanish language instant messaging hotline platform
for victims of sexual assault.

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Actually entering the contest proved to be more difficult than expected for the
RAINN organization. The organization spent three months trying to get in to the contest
before they were able to be one of the first 1,000 applicants to submit their application.
Hull explained that RAINN was fully aware of all the rules and regulations of the contest
and they were made aware of the information from Pepsi‟s Refresh Everything Web site.
The author‟s goal in interviewing Hull was to gain perspective from the nonprofit
organization side of the process of entering the Pepsi Refresh Project and reactions to the
negative media coverage that was garnered by mishaps associated with the contest.
While Hull was not aware if a representative of the Pepsi Refresh Project ever
contacted RAINN to verify that they were aware of the contest rules, the organization
took every effort to ensure they closely abided by all regulations outlined on the site.
When asked her feelings about the media coverage that described incidents of voter fraud
she said, “It is frustrating knowing this information because of all the work that we put
into this contest. In the end, there are things that you can control and things that you can‟t
control.”
Similarly, when asked about her overall experience with the Pepsi Refresh Project
the participant explained that it was worth the valiant effort RAINN put towards trying to
win the contest. Most notably, Hull referred to RAINN‟s participation in the Pepsi
Refresh Program as a “friend raiser” as opposed to a fundraiser. She said that the increase
in awareness around the organization and all the new Facebook friends acquired through
outreach for the contest show the mutually beneficial relationship that is created by the
Pepsi Refresh Project.

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Furthermore, Lutz touched upon this concept when discussing the goals and
intentions of companies and organizations that seek to participate in crowdsourcing
campaigns. While he notes that some companies are only involved in crowdsourcing
contests to get funding, a smarter strategy would be to “ladder what you are doing
between cause and business.” Similarly, Katz agreed that the dynamic relationship that
has evolved between consumers and brands has allowed companies to reach audiences in
innovative ways that can further assist them in meeting business goals.
Insight gained from the interviews proved that if a possible disconnect exists
between the crowdsourcing approach and a company‟s business goal it could prove less
advantageous to the corporation. When asked whether she was more likely to purchase
Pepsi Co. products because of the Pepsi Refresh Project Hull explained, “It is
phenomenal what Pepsi is doing as a company and a lot of good is happening because of
the company, but I don‟t know if it persuades the taste buds.”
The end goal for using crowdsourcing methods is something that is commonly
debated and the reach of this type of approach has yet to be fully realized. According to
Lutz, “The end goal is not just interaction with consumers or raising brand awareness, the
goals is to sell a product, raise more money, add volunteers to your organization.” For
Hull and the RAINN organization, the Pepsi Refresh Project was able to do just that. The
amount of people that learned about RAINN because of their efforts in the contest was
something that made the experience worth it for the organization.

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The RAINN organization did not win the contest, but came very close to winning.
Hull noted that while they did not win funding from the contest, the organization had won
in many other ways.
The findings of these interviews show the agreement by all participants that
crowdsourcing is the way of the future. Past cases have shown the issues that can arise if
the approach is mishandled and the backlash companies can receive through social
media. The overwhelming response was that crowdsourcing is worth the risk and that
public engagement is not only recommended, but also required in the digital world of the
21
st
century. Lutz summed up this idea by saying, “The bigger risk is not engaging with
consumers, companies just have to learn how to do so the smart way.” The conclusion of
this thesis will provide further insight on the “smart” way of using crowdsourcing
methods.

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Chapter VII. Best Practices in Implementing Crowdsourcing Methods for CSR
The results of this study, the interviews and research presented serve to show that
crowdsourcing approaches used by companies is an effective way to support CSR
initiatives in the 21
st
century. The opportunity it gives companies to engage with
consumers, while creating social good, is something that companies need to do despite
the risks involved. The unpredictable nature of social media makes corporations wary of
using innovative approaches to change the way they do CSR. If companies make the
decision to use crowdsourcing approaches, how can they best implement this strategy
while mitigating the risks involved? The following recommendations will serve as a “best
practices” guide for companies to successfully use crowdsourcing approaches.
Determining Whether to Choose a Crowdsourcing Approach
Prior to determining the best practices for corporations using crowdsourcing
approaches, it is essential for corporations to determine whether this is the best method to
meet their goals. In order to do so corporations should ask themselves the following
questions:
 What does the corporation‟s CSR strategy include in its present state?
 Could the corporation benefit from updating their current practices?
 How do stakeholders both internally and externally feel about the reputation of
the corporation?
 How do stakeholders both internally and externally feel about the CSR initiatives
that are currently being used by the corporation?

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 Can the corporation create measurable goals and objectives to plan a
crowdsourcing approach to CSR?
 Are there any examples of competitor corporations that have either successfully
or unsuccessfully tried to roll out a crowdsourcing campaign?
 Can the corporation benefit from the public engagement that comes with using
crowdsourcing approaches?
 Is the corporation willing to deploy the resources needed to provide proper
attention to the execution of a crowdsourcing project?
Implementing Crowdsourcing Methods for CSR: Best Practices
After a corporation asks themselves these preliminary questions, they can better
determine if using a crowdsourcing approach for their CSR initiatives is a viable option.
If crowdsourcing is selected as a strategy, corporations will have to be prepared for the
extensive planning that is required to ensure the success of the program. The following
guidelines will serve as a “best practices” list of recommendations:
1. Establish clear and concise rules and regulations
One of the most daunting tasks that arise from crowdsourcing campaigns is
determining the rules and regulations that will guide the entire contest. The rules
must be all inclusive and written in language that is clearly understood by all
members of the public. The rules and regulations of the crowdsourcing approach
must be something that the corporation can always reference if issues should
arise.
2. Be as transparent and accountable as possible

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One of the first things corporations should plan for when running a crowd voting
contest is to have a public leader board that is posted somewhere that is
accessible to the public. The leader board, which displays the organizations,
ideas, or people that are garnering the most votes, should never be taken down
and should be able to be viewed by the public at any time. Naturally,
corporations may add to the original list of rules and regulations or make
changes to the contest, as they determine what is not working. The corporation
must keep the lines of communication open with all stakeholders involved. The
more transparent and accountable the corporation acts the less likely they are to
suffer the backlash of negative press if something were to go wrong.
3. Understand and prepare for everything that can go wrong and be ready to
respond
Corporations can abide by “best practice” suggestions, but ultimately the
unpredictable nature of social media is something that must always be taken into
consideration. Management should always determine a list of all possible
negative outcomes even before the crowdsourcing campaign is launched. The
goal is to be proactive instead of reactive. Therefore, a corporation should
develop messaging to respond to any major problems that may arise.
4. Try to tie your crowdsourcing campaign goals to the business mission and goals
Research has shown that CSR initiatives that are closely aligned with a
businesses‟ mission and goals are considered to be more genuine. According to
Forbes contributor Amol Mehra (2010), “True CSR focuses on doing good for

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those who are affected by a corporation‟s actual line of business.” For all the
successes that are attributed to the Pepsi Refresh Project, Mehra suggests that it
is not “true” CSR because it in no way affects the human rights issues at the core
of PepsiCo‟s line of business (2010). These findings are something to truly
consider if a corporation wants to ensure that their efforts are in the genuine
interest of society.
5. If possible, test the concept first
If this is the first time the corporation is utilizing crowdsourcing, they should
determine whether a pilot program rolled out locally is a viable option. The
corporation will have a better chance of working out any issues with the
campaign if the launch is rolled out on a smaller scale. This way if any major
problems were to arise, the corporation would receive significantly less backlash
than if it was a program that was on a large scale with a larger number of
participants.
6. Use tools that can detect vote generating proxy servers
The problems that the Pepsi Refresh Project faced with participants using proxy
servers to generate fake votes shows the importance of having tools to monitor
and prevent this from happening. While such tools exist and may be expensive, it
is well worth the price to avoid the negative press that was received by Pepsi for
this mishap. It will also save the corporation from having to respond to hundreds
of angry contest participants that are left wondering if they would have won if it
were not for the fake votes generated by other participants.

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7. Determine the overall goals intended when enacting crowdsourcing methods
The success of any campaign can only be determined if clear goals are outlined
before launch. Corporations need to determine whether they would like their
crowdsourcing campaign to raise brand awareness, lead to the sale of more units,
or to raise money for a cause the company is genuinely interested in helping.
Once the goals have been determined, it will be easier for the corporation to
establish whether they have been successful and determine whether
crowdsourcing is a method they would like to continue to use in the future.
8. Determine that there is a crowd interested in the type of contest you would like to
create
Corporations should engage in the appropriate research to ensure a market and
consumers exist that will be interested in the type of contest that is being created.
Crowdsourcing approaches cannot work without a crowd that is interested and
willing to participate. Research will also help the corporation determine what
type of consumer collectives are likely to participate in the campaign and then
they can use this information to tailor the program to meet the needs of the
consumers. Furthermore, corporations should become invested in understanding
the typologies of crowdsourcing in order to create a more thorough program that
is likely to be successful. This recommendation goes hand in hand with testing
the concept first. Perhaps through pilot programs that test the campaign in a
localized approach, corporations can gauge people‟s interest and see if their
campaign is something that would have success when rolled out to other regions.

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9. Ask internal stakeholders for input on crowdsourcing approaches that are being
developed for the public
A corporation‟s internal stakeholders are one of the strongest assets that can be
leveraged for support when rolling out new initiatives. Employees serve as brand
ambassadors for corporations and their support can improve the chances for
success. If employees support the crowdsourcing campaign that is being
employed by the corporation they are more likely to build buzz around the
project by word- of- mouth tactics. Similarly, when launching crowdsourcing
campaigns it is essential to have buy in from the executives of the corporations.
Without getting initial buy in, it will be difficult to move forward and get
approval for all the details that must be considered when rolling out a
crowdsourcing campaign. Executive buy-in simplifies the roll out of a
crowdsourcing campaign and allows for more support through all the ins and
outs of the initiative.
Conclusion
Research has shown that corporations in the 21
st
century are required to engage
with consumers in order to remain relevant and successful. Corporations have heeded this
recommendation by strengthening their presence on social networking sites and
amplifying their public relations campaigns to build more avenues for two-way
communications with stakeholders. The new shift in direction towards public engagement
by corporations and stakeholders involves social innovation and the use of crowdsourcing
to enact CSR initiatives.

66

The research done for this study leads to the conclusion that crowdsourcing can
be a risky approach for corporations, but it increasingly appears to be the way of the
future. The three case studies analyzed in this study are proof of the risks associated with
crowdsourcing approaches. While all of the case studies show elements of success, two
of the three are cautionary tales of the mishaps that lead to negative press coverage and
poor corporate reputations.
The overwhelming conclusion reached through the primary research of this study
shows that corporations would be taking a greater risk by not engaging with the public.
Web 2.0 has created a world in which the general public is at liberty to openly discuss
anything they want to, including discussion of corporations. As mentioned by Lutz, the
conversations about corporations will be happening whether the corporation chooses to
participate or not. It is evident that it is more beneficial for a corporation to become a part
of the conversations and to actively engage with its consumers. Crowdsourcing for social
good provides the perfect opportunity for corporations to engage with consumers and at
the same time fulfill CSR goals that impact society as a whole.

67

Glossary
1. Corporate Social Responsibility: continuous commitment of a business to
behave ethically and to contribute to economic development while improving the
living standards of the workforce and their families as well as the community
2. Crowds: large, organized groups who gather or are gathered together specifically
to plan, manage, and/or complete particular tractable and well defined projects
3. Crowdslapping: when the crowd turns against the crowdsourcer
4. Crowdsourcing: crowdsourcing represents the act of a company or institution
taking a function once performed by employees and outsourcing it to an
undefined (and generally large) network of people in the form of an open call
5. Hives: online communities whose members contribute a relatively greater amount
to the community, but who also produce innovations specifically to respond to
particular challenges or to meet particular project goals.
6. Mobs: a group with a high concentration of innovation contribution, but these
contributions are oriented to a communo-ludic spirit of communal play and
lifestyle exchange
7. Social Innovation: new ideas that resolve existing social, cultural, economic and
environmental challenges for the benefit of people and planet
8. Swarms: the amassed collections of often- multitudinous yet individually small
individual contributions that occur as part of more natural or free-flowing cultural
or communal practices

68

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Asset Metadata

Creator Bulnes, Diana Marie (author)

Core Title Social innovation: Crowdsourcing and the new face of corporate social responsibility

School Annenberg School for Communication

Degree Master of Arts

Degree Program Strategic Public Relations

Publication Date 04/27/2011

Defense Date 04/01/2011

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag crowdsourcing,CSR,OAI-PMH Harvest,public engagement,Social Innovation

Place Name Finland (countries), USA (countries)

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Floto, Jennifer D. (committee chair), Tenderich, Burghardt (committee member), Thorson, Kjerstin (committee member)

Creator Email diana.bulnes@yahoo.com,dmbulnes@gmail.com

Permanent Link (DOI) https://doi.org/10.25549/usctheses-m3796

Unique identifier UC1454601

Identifier etd-Bulnes-4469 (filename),usctheses-m40 (legacy collection record id),usctheses-c127-459256 (legacy record id),usctheses-m3796 (legacy record id)

Legacy Identifier etd-Bulnes-4469.pdf

Dmrecord 459256

Document Type Thesis

Rights Bulnes, Diana Marie

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Repository Name Libraries, University of Southern California

Repository Location Los Angeles, California

Repository Email cisadmin@lib.usc.edu