Without proper management, a community's material resources may be depleted or rendered unusable.^[8] The common pool problem is an economic situation which exists when goods are rival, but non-exclusive (See common-pool resource). Since these resources are owned in common, individuals have no private incentive to preserve them, but rather will seek to exploit them before others can derive benefit. The classic example is of fish in the ocean; anybody can harvest fish, but a fish that has been caught cannot be caught by another fisherman. Therefore, fishermen will seek to maximize their personal profit by catching as many fish as possible, which will ultimately lead to the stock being depleted. It is similar to the free rider problem in that those who do not contribute to the resource may use it without penalty, but the common pool problem is usually considered an economic "problem" since it will eventually lead to the exhausting of a resource.^{[9][additional citation(s) needed]} Another example of the common pool problem involves the shared use of limited internet bandwidth, such as in a university network, when the connectivity of all users is slowed by the heavy usage of a few.^{[citation needed]}

Elinor Ostrom and Oliver E. Williamson won the 2009 Nobel prize in economic science for work in this area, where they suggested that with good community management of shared resources, as found in successful firms, the "tragedy of the commons" can be avoided.^[10]

Developing open-source software or other collaborative projects such as Wikipedia generally requires some form of community management, whether it involves leadership or egalitarianism. Unlike as is the case with physical resources, the sharing of information does not necessarily deplete the resource. Nonetheless, proper management may be necessary to encourage a network effect, where collaborative use actually enriches the resource, and to avoid conflict.

More generally, community management designates the activity of maintaining communication, motivation, efficiency, and engagement among a group of remote individuals often only linked together by the Internet. Typically, it will contribute to the success of an open-source initiative by keeping forums alive with information, questions, and challenges, by organizing real-life events for virtual communities, or by organizing contests or hackathons to focus all efforts on a common goal. It may also be used to improve motivation and synergy in a large organization (such as a company or a public organization) by creating a sense of belonging and ensuring that members are aware of each other's work. Community management requires human skills (a community manager) and the use of tools (e.g., social networks, instant messaging, resource sharing, etc.).

Community management has been a popular strategy utilized in African water management, but research has shown that Africans often don't prefer this management style.^[11] Main problems of community management, specifically related to water management, consist of potential maintenance issues, population issues, money collecting issues, and a lack of community engagement.

• Community management can create potential maintenance issues that are resolved with less expediency and with less efficiency. This often stems as a result of having a lack of a qualified person to perform the repair or lacking a reliable way to collect money in order to hire someone to do the repair.^[4]
• Money collecting issues are a main problem in poorer areas. If not, everyone is paying a fee to use the resources in question, then there won't be any money to make repairs when needed. This includes not paying and a lack of an efficient way to pay fees. People will not go out of their way to pay fees so a solid collection strategy is needed.^[11]
• General user fees within community managed water supply systems have been found to be not enough to keep the service operational let alone make repairs when needed.^[7] Even if citizens have the capacity to pay fees it has been found that many people simply don't want to. It is suggested that health concerns about clean drinking water are not enough to create a population of users who are willing to pay user fees let alone maintenance fees when needed.^[7]
• Population issues can also cause problems because community management is often more effective on a smaller scale. In other words, communities with smaller populations have an easier time developing effective systems like citizen participation, money collection, or maintenance repairs simply because it is easier to combat the problems that arrive within those areas when there is a smaller group of people affected that need help.^[12]
• A lack of community engagement is a chronic issue that arises within community management, as well. In order for community management to be an effective strategy of management style the community must be engaged within the management system in order to reap the community benefits. Despite this, most citizens are not interested in the issues community management organizations are looking to improve, meaning these organizations are getting less input from the community which negates the point of community management.^[4][5]