Finally, I have some time to blog. I had this blog post percolating in my mind forever. Today, I get to put it in writing. In my last post I wrote about structural governance. In this post I shall focus on social governance.

In community-managed governance, collective action motivates individuals to contribute to the community effort (Shah, 2006) and to adhere to shared norms. The cost of transactions are reduced as volunteers self-select the tasks they are most capable and motivated to do and activities are coordinated with greater efficiency than is possible with formal hierarchical forms of governance (Jones, Hesterly & Borgatti, 1997). Key to the enhanced efficiency of a community managed governance system is the presumption that the need for formal policing can be replaced by informal social norms that ensure that contributions will be safeguarded and favors will be reciprocated (Jones, Hesterly & Borgatti, 1997). A generalized norm of reciprocity permeates the interactions of the online community and creates the foundation for trust that is essential to the smooth function of the networked organization (Coleman, 1988; Gouldner, 1960; Mathwick & Wiertz, 2009). Social norms and generalized trust allow community members to establish ties and build social capital (Mathwick, Wiertz et al., 2008). Strong social capital provides  individuals access to information, allows them to exert influence, provides social credentials, and provides emotional support (Lin, 1999). Consequently there is a strong motivation for individuals to engage in community activities.

This type of governance can be observed in communities that foster common interest, such as open source development and communities that foster common cause, such as cancer support communities. In these communities members are free to interact with members with whom they have something in common. The communities mutually decide roles and responsibilities based on the norms developed through consensus.

Most of the businesses today are challenged as they are figuring out the right balance between the social governance and structural governance. If they impose too much structural governance then people might not want to participate but at the same time if they let social governance take over then they run the risk of not meeting their business objectives. It is indeed a very tricky to motivate people participating on the communities without overriding the ethos of volunteerism, which defines a community.

Let me know your thoughts on the topic.