Are all communities similar? I have asked this question to many prominent people and they were in unison in responding that no they are not similar. Different communities have different characteristics and need to be dealt differently.  I am completely onboard with this idea.

In my previous post, I distinguished communities by their structure and the communication processes within the community. In this post, I intend to write more about governance model’s within the community. Governance models in essence define the rules of the game. In this post, I shall talk about structural governance and in succeeding posts I will write more about social governance and hybrid governance models.

Depending on the business model (topology will be explained in another post), different designs for a virtual community are sought. Things to be observed here are that these virtual communities, specifically the once that are for-profit, are not entirely self-organizing or egalitarian but have some elements of hierarchy that are implemented, managed, and controlled by sponsors (Tapscott & Williams, 2008). The entire experience is guided by the site design and the user has no flexibility perform an action that is not guided by the sponsor of the site through the site design. Sponsors define the scope and complexity of tasks that contributors can choose from, assume formal and informal leadership roles, and create systems for managing membership, recognizing contributions, and resolving conflict. These formal mechanisms are designed into the infrastructure, by means of features of the community to foster communication, support role development, incentivize behavior and ultimately enhance productivity (Herrmann, Loser & Jahnke, 2006). The management and control of these systems are essential to the sponsor’s ability to appropriate value from the coordinated production efforts (Shah, 2006; Li & Bernoff, 2008).

 Let me give an example for the sake of digesting what I just said above. Take a case, like EBay or Amazon, where the sponsor provides a secure environment for members to trade or share goods and/or services. They bring a buyer and a seller together and facilitate transactions. The sponsor makes money though transaction fees (Rothaermel & Sugiyama, 2001; Schubert & Ginsburg, 2000). The sponsor of the site can track behavioral data of the previous transactions and suggest other products or services to a member based on the previously displayed preferences by the community, thereby maximizing the exposure to preferred products and services and also maximizing the chances of brokering a sale (Schoenbachler & Gordon, 2002). Data about consumers and their consumption habits are valuable, especially when that information is carefully analyzed and used to target marketing campaigns (Phelps, Nowak & Ferrell, 2000, Mathwick, 2002). Independently collected data about producers and their products are useful to consumers when considering a purchase. The site is designed to bring product manufacturers/ resellers in contact with retail buyers. The end to end experience on these sites and the reciprocating user behavior is guided by site design. If you want to pay for the goods you bought, then there are very specific links or tabs that you need to click or else the transaction won’t take place. The structure of the site governs the behavior and sometimes incentivizes it.  

I hope this clarifies what I mean by structural governance. The next post will be about social governance and how it is different from the structural governance. As usual, I am looking forward for your feedback.