Theorizing the dynamics of value co-creation

IT, social networks and the Internet allow for the value co-creation theory to be applied with a focus on social, economic and intellectual motivation among people, businesses and government. This provides the necessary infrastructure for researching motivation theory. In terms of customer interactions, value addition comes from improvements in productivity, knowledge and proficiency. Motivation is not directly performance or behaviour in itself, while studies have deliberated that it is based on psychology, behaviour and performance (Mitchell 1982).

Motivation to use technologies for value addition is rather a service convenience with the ability and the freedom to control what is perceived, easily comprehended and experienced. An evaluation of value co-creation within IT, social networks and the Internet requires us to determine what adds to the creation of economic and social value. Through technology, (1) creativity and innovation, (2) resourcefulness of infrastructure, (3) proficiency and (4) equity for value co-creation are derived.

Based on the literature review, the attributes of social, economic and intellectual motivation were identified, with 25 parameters or attributes of value co-creation determining the measures. These are listed in Table 3. These attributes are explained in relevance to the study. Hypotheses were then defined on what constitutes social, economic and intellectual motivation. Data collected via

face-to-face interviews with industry managers using a survey informed a statistical study on how the three types of motivation are associated with each other.

Figure 44. Associating intellectual, social and economic motivation

Intellectual motivation

Customer innovation is a measure of the extent of customer creativity involved in using IT, social networks and the Internet when standardizing and customizing products and services. Customer efficacy is the proficiency and ability to learn and associate knowledge with the commercial attributes of products and services.

Customer intentions and preferences in relation to markets are associated with the knowledge learned from the use of technology infrastructures for improving products and services. Collaborative IT management projects have helped identify the leadership attributes required for problem-solving challenges. Customer interaction is used as a measure of the extent to which customers are integrated in IT and social networks and on the Internet in order to improve the efficiency and effectiveness of markets. Knowledge, problem-solving and learning are measures of the extent of customer interaction in the improvement of product and service innovation, both directly and indirectly facilitated by the firm.

Social motivation

Customer attitudes towards business practices and learning in the case of products and services transform businesses by enhancing efficiency, effectiveness and productivity. Generosity and reciprocity during interactions in the use of IT, social networks and the Internet adds value to businesses and customers. This results in better CRM, which in turn improves knowledge management for product and service innovation. Customer values and interpretation regarding products and services are transformed and validated along with the knowledge generated on the Internet. Customer motivation in social networks and on the Internet adds value to the management of product and service innovations. Firms are able to leverage customer loyalty and trust across social networks. This leads to the prioritization of investments in product and service innovations. Customer experiences facilitated by voluntary disclosure of information regarding products and services on the Internet and social networks enhance businesses’ knowledge in improving their value propositions.

Customer and employee wellness has improved productivity through the use of social networks, the Internet and IT. This measure presents firms with opportunities to improve work practices in order to enhance customer and employee wellness. Another view is that productivity in networking is improved by means of technological facilitation between businesses and customers. The Internet and social networks also provide firms with knowledge about customer commitment towards products and services. Customer entertainment on the Internet has also improved productivity at work, due to a better work-life balance and supported better advertising and marketing for the firm. This has further enhanced co-shopping referrals and recommendations, in turn creating the required economic and social value. In broader terms, social networks have added to the creation of social groups relevant to a firm’s business. Some firms have even gone further by integrating customer interactions to create and improve products and services.

Economic motivation

Customer knowledge in relation to a better work-life balance, efficacy, and product and service awareness is enhanced and enabled by the use of IT, social networks and the Internet. Purchase intentions from customers on the Internet and from social networks regarding products and services provide businesses with knowledge about markets and economies. Firms promoting incentives and discounts can now provide customers with new sources of income and benefits.

With business data, firms are also able to visualize the clientele of markets and

economies. This allows them to make decisions about standardizing and customizing product and service innovations, as well as ways to integrate customers into creating and improving products and services.

Telecommunications infrastructures have become extensions of the firm.

Software as a service and cloud services have become extensions of the firm.

Indeed, firms currently recognize that investments in such services improve business productivity and create value for the customer. This being said, the infrastructure for CRM enabled by telecommunications facilitates better interactions between businesses and customers. This has made firms rethink their advertising, promotion and business strategies for better CRM.