Creating value in online communities through governance and stakeholder engagement

Abstract The spread of the internet has led to the evolution of on-line communities (OCs) as collectives of members who share common goals. Whilst many OCs involve individuals who engage voluntarily for mutual interest, commercial and government organizations engage involuntary stakeholders in their less egalitarian OCs. Although research has explored how members perceive and achieve value in voluntary OCs, exploration of the strategies used to engage stakeholders and deliver value in OCs where the membership is more diverse and less than voluntary, is required. We investigate this issue through a longitudinal case study of two OCs related to delivering government employment services. Our findings demonstrate the role of governance in fostering stakeholders' cognitive, emotional and behavioral engagement in two OCs, and related governance of the IT system that was subsequently deployed. Further, assessment of the performance outcomes, reported in terms of the primary stakeholder's objectives, indicates that value has been achieved for the mutual benefit of the OCs' multiple stakeholders. Analysis of the processes of value creation, in terms of Makadok's four causal mechanisms for generating profit, show that whilst the key stakeholder preemptively committed timelines, governance mechanisms that generated competition and flexibility (rather than restraining rivalry), and delivered competitive advantage and information asymmetry, produced value for government, service providers, jobseekers and employers.