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In social psychology, the interplay between individuals and groups is a central concern, particularly regarding how individual actions and characteristics influence group processes and outcomes. While much research emphasizes the group's power in shaping individual behavior, it is equally significant to understand how individuals contribute to the functioning, development, and success of groups.Individual Roles in Group Productivity and Decision-MakingIndividuals are not passive participants in...
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Equity theory explains how our sense of fairness influences the dynamics of close relationships. Rooted in social psychology, the theory posits that individuals evaluate fairness by comparing the ratio of their contributions to the rewards they receive. Relationship satisfaction is highest when these ratios are perceived as balanced between partners, promoting mutual reciprocity and a sense of justice.Equity vs. Equality in RelationshipsEquity is distinct from equality. Fairness does not...
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Another way in which a group presence can affect performance is social loafing—the exertion of less effort by a person working together with a group. Social loafing occurs when our individual performance cannot be evaluated separately from the group. Thus, group performance declines on easy tasks (Karau & Williams, 1993). Essentially individual group members loaf and let other group members pick up the slack. Because each individual’s efforts cannot be evaluated,...
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Related Experiment Video

Updated: Feb 27, 2026

The Innovation Arena: A Method for Comparing Innovative Problem-Solving Across Groups
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Firms, crowds, and innovation.

Teppo Felin1, Karim R Lakhani, Michael L Tushman2

  • 1University of Oxford, UK.

Strategic Organization
|July 11, 2017
PubMed
Summary

This research proposes a framework for understanding how firms leverage crowds for innovation, exploring sociality

Area of Science:

  • Organizational Theory
  • Innovation Management
  • Sociology of Markets

Background:

  • Extant theories of the firm provide a foundation for exploring crowd phenomena.
  • Crowd-related practices like crowdsourcing and peer production are increasingly relevant to business strategy.
  • The concept of 'sociality' offers a lens to analyze firm-crowd interactions.

Purpose of the Study:

  • To propose a preliminary taxonomy and research agenda for "firms, crowds, and innovation."
  • To introduce a special issue focused on the intersection of firms, crowds, and innovation.
  • To examine how crowd phenomena relate to theories of the firm, emphasizing sociality.

Main Methods:

  • Review of extant theories of the firm.
  • Theoretical discussion of sociality in the context of crowds and innovation.
Keywords:
crowdsourcinginnovationopen innovationorganization theorystrategy

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  • Categorization of sociality into functions, forms, and failures.
  • Main Results:

    • Sociality can function as an extension of rationality, sensing/signaling, and matching/identity.
    • Sociality manifests in both independent/aggregate and interacting/emergent forms.
    • Failures of sociality include misattribution and misapplication.

    Conclusions:

    • A taxonomy and research agenda are proposed for "firms, crowds, and innovation."
    • Understanding the functions, forms, and failures of sociality is crucial for firms engaging with crowds.
    • Future research should further explore these theoretical aspects to advance the field.