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Co-Creation and Value Creation: A Basis for Producer-Consumer Synergy

Background To The Study

Co-creation makes up that initiative of organizational management initiative, or form of economic strategy which brings different parties together such as the firm and its customers to produce a valued outcome mutually. The process elicits the contribution of new ideas from the customers which is subsequently inculcated as a blend of new ideas to the organization. The Value is co-created when the customer uses his personal experiences in the firm’s product-service proposition–to create value best suited for the customer’s utility and which provides greater value for the firms product-service investment in the form of increased revenue, new knowledge, profitability and superior brand loyalty and value. Scholars C. K. Prahalad and Venkat Ramaswamy (2000) Harvard Business Review article, “Co-Opting Customer Competence”. They defined co-creation as “The collective creation of value by the firm and its customer; allowing the customer to inculcate their service experience to create the value which suit them” (Prahalad and Ramaswamy, 2004, p. 8). Co-creation processes entail two fundamental steps: Contribution which is the submission of contributions by the public to the firm and Selection where the best submissions are selected. The term ‘value’ is viewed from different perspectives including the strategic value, economic value or service customer, provider (Helkkula, Kelleher & Philström 2012, 60). Therefore, the roles in value creation are imprecise and equal, thus making all actors the co-creators of value.

Statement of the Problem

Co-creation of value involves the collective effort of both the firm and the customers. Co-creation makes up that initiative of organizational management initiative, or form of economic strategy which brings different parties together such as the firm and its customers to produce a valued outcome mutually. The process elicits the contribution of new ideas from the customers which is subsequently inculcated as a blend of new ideas to the organization. The value is co-created when the customer uses his or her personal experiences in the firm’s product-service proposition to create value best suited for the customer’s utility and which provides greater value for the firms product-service investment in the form of increased revenue, new knowledge, profitability and superior brand loyalty and value. Significant challenges exist as Successful co-creation requires two fundamental steps which comprise contribution of ideas where: the firm faces the challenge of convincing the customer to make contributions towards the creation of value to a value proposition. However, the collection of contribution from customers is not a straightforward task as many of these customers have busy schedules to attend to the firms calls. As a result, most co-creation efforts are not successfully carried out. Second, the challenge of the selection process is that most submissions are not useful, impractical of making the selection is difficult to implement. Firms are in a dilemma when many of the customer submission is on the negative side of profiting the firm as the risk of fallout with the customer exist if their opinions are rejected and not included in the co creation process. The process of co-creation and direct interactions between the customer and the firm is becoming more challenging in value creation. Therefore, the problem confronting the research is to appraise co-creation for value creation: A basis for producer-consumer synergy.

Objectives of the Study

To determine co-creation for value creation: A basis for Producer-Consumer synergy.

The process elicits the contribution of new ideas from the customers which is subsequently introduced as a blend of new ideas to the organization. The value is co-created when the customer uses his personal experiences in the firm’s product-service proposition to create value best suited for the customer’s utility and which provides greater value for the firm’s product-service investment in the form of increased revenue, new knowledge, profitability and superior brand loyalty and value, “Co-opting customer competence”. They defined co-creation as “The collective creation of value by the firm and its customer; allowing the customer to inculcate their service experience to create the value which suit them (Prahalad and Ramaswamy, 2004, p. 8).

Research Questions

Q1. What is co-creation and value creation?

Q2. What is co-creation for value creation: A basis for producer-consumer synergy?

Significance of the Study

The study shall proffer appraisal of co-creation and value creation: A basis for producer-consumer synergy. Co-creation makes up that initiative of organizational management initiative, or form of economic strategy which brings different parties together such as the firm and its customers to collectively produce a valued outcome mutually. The process elicits the contribution of new ideas from the customers which is subsequently inculcated as a blend of new ideas to the organization. The value is co-created when the customer uses his personal experiences in the firm’s product-service proposition–to create value best suited for the customer’s utility and which provides greater value for the firms’ product-service investment in the form of increased revenue, new knowledge, profitability and superior brand loyalty and value.

Research Hypothesis

H0 Co-creation for value creation as a basis for producer-consumer synergy is not significant.

H1 Co-creation for value creation as a basis for producer-consumer synergy is significant.

Definition of Terms

Co-creation

Co-creation makes up that initiative of organizational management initiative, or form of economic strategy which brings different parties together such as the firm and its customers to collectively produce a valued outcome mutually. The process elicits the contribution of new ideas from the customers which is subsequently inculcated as a blend of new ideas to the organization. The value is co-created when the customer uses his personal experiences in the firm’s product-service proposition–to create value best suited for the customer’s utility and which provides greater value for the firms product-service investment in the form of increased revenue, new knowledge, profitability and superior brand loyalty and value.

Value proposition

According to Chandler and Lusch (2015, 6 – 8) this makes up an invitation to engage in service from one actor to another. This is the principle which is applied in the process of value creation.

Value creation

The fundamental focus of value creation lies in the inculcation of the customers experience together with the current and expected future visions (Helkkula et al. 2012, 65).

The core team members of the Responsible Business, Peacebuilding and Education Project (RB-PEP) met to discuss and plan the activities for the new year, 2020. Below you will find some activities we shall be engaged in 2020.

Why I go to Ghana so frequently: Advancing research, impacting society – Bro. Remy Nyukorong

Background

In 2016, there was a call for applied research from the German Federal Ministry of Economic Cooperation and Development (BMZ) based on the priority/focus area, “Good governance / decentralisation: increasing tax revenues and strengthening domestic accountability, promoting participation in local decision-making, improving living conditions through effective local governments”. The sustainable development goals made up an overall thematic framework for the applied research. To meet the eligibility criteria, I had to collaborate with the University of Cape Coast (Institute for Oil & Gas Studies), Regent University College of Science and Technology (School of Business and Leadership) and Erasmus Research Institute of Management (Centre for Leadership Studies) to develop the research proposal; as I could only submit applications through a university or a research-based institution. In this way, we established a consortium research team through a trilateral agreement. Together with this core consortium, we contributed actively preparing both the Phase 1 (field research) and Phase 2 (intervention mapping) applications. They selected our proposal, so we could carry out Phase 1 – a precondition for phase 2.

Data gathering, analyses and findings (Phase 1: 2017-2018)

We considered support a critical part of research capacity strengthening of the partner institutions. Therefore, we trained five MPhil students who assisted in data gathering and analyses for their direct input to the project.  We evaluated challenges faced by multinational oil and gas companies in the western region of Ghana through various corporate data we gained access to, observations and interviews with company executives, mining experts, government authorities and community representatives, and group discussions in villages.

We embraced teamwork, because social problems are never one-dimensional, and can never be solved through mono disciplinary approaches. It is my experience that research and education are always team efforts. You get interesting and relevant findings, when you work from a strong disciplinary orientation towards a common language, a common goal.

The essential findings of the research showed a poor engagement of communities and stakeholders by the multinational oil and gas companies operating in the western region. This was consistent with previous research findings in similar contexts that where communities and stakeholders are poorly engaged, marginalised or excluded from the dialogue in the extractive industry development process, they are almost certain to oppose the development. As the conflict escalates, the use of strategies of violence as a coercive measure against the company, and a means for addressing old grievances and mounting opposition against the government, are likely.

Intervention Project (Phase 2: 2019-2021)

Preparing for such challenges in the early stages, and responding to community concerns was crucial to ensuring that operations at the centre of Ghana’s oil boom are genuinely inclusive, mitigating conflict with local communities.  Early engagement provides opportunities to build the social license and mitigate against social risk and local impacts. Mining communities, particularly those in the Western region of Ghana, have experienced high levels of conflict surrounding oil and gas extraction activities in the region. The local communities have felt exploited and side-lined from both mine decision-making and profit. Hence, this intervention project is to help the multinational companies (engaged in the extractive sector) and their stakeholders to find common ground and build long-term, sustainable partnerships.

The intervention logic and the underlying theory of change is that if youth are involved and fully engaged in decision-making as valued stakeholders in community collaboration and if young people and their communities are given opportunities to engage in dialogue with each other and with extraction company representatives, then young people will seek legitimate and conflict-lessening methods to express their grievances. Thus, the Project seeks to strengthen institutions, capacities, policies and regulatory environment, voice and participation within the extractive sector through the bottom-up approach, engaging various levels of stakeholders in the decision-making process. This could be a positive start in avoiding future resource-driven conflicts. The development of the extractive industry can enable increased use of resource rents to foster the development of the country’s infrastructure and human capital, contributing to the development of other sectors. For instance, a strategy to build strong linkages between Ghana’s extractive industry and the rest of the economy can contribute to the development of its small-scale private sector, creating jobs and improving the welfare of its people.

We design this collaborative project to build a solid foundation on which Ghana’s extractive sectors can be efficiently and transparently managed to benefit its citizens. The project is aimed at enhancing knowledge and skills of policy makers and technicians, in the application of administrative and regulatory mechanisms of the extractive sectors but with the specific focus on the oil and gas sector.  We do that by addressing how collaboration and co-creation with societal partners, both local and external, is needed to ensure that essential insights and breakthroughs in mono and multidisciplinary research create value for society.

This two-year (2019-2021) intervention project will receive technical and financial help from the United Nations Development Programme (UNDP), International Alert (IA), the Danida Fellowship Centre (DFC), Stanley Thomas Johnson Foundation (STJF) and the German Federal Ministry for Economic Cooperation and Development (BMZ).

Project kick-off meetings

From January 20 to February 16, 2019, the consortium partners, both local and international, held some preparatory meetings in Accra. We discussed the project objectives, work packages, process and the different project phases. A lively exchange between the participants followed.

In each meeting with local partners, we also discussed the partnership agreement and prepared a guide of good practices for implementing the project. In addition, we discussed administrative tasks and financial issues. Other topics we deliberated on included quality needs assessment analyses, common ground approach to stakeholder engagement, and the design of training modules. All the local partners were enthusiastic about the project.

We scheduled the next meeting to take place in June 2019. It will be the official kick-off of the project: rolling out in five regions involving twenty-five selected districts.  During this period, project partners will deliberate on stakeholder engagement. Based on the quadruple helix model, each partner will bring together a multi-sectorial group of stakeholders and involve this group in the project through meetings, participation in thematic seminars and study visits. Together with local stakeholders, each partner will then create an action plan to improve their addressed policy instrument. During this second meeting, we shall organise an intensive stakeholder mapping workshop to enable partners identify the main stakeholders in the regions (i.e. selected districts=25).

Concluding remarks

I am happy that the practical implications of a research finding can be implemented for the solution of a real problem., the impact and relevance of a scientific paper are precisely their application either to expand a concrete scientific field or for the solution to a practical problem. Societal value is the destination. So, “it’s not either/or, it’s both research and positive impact. They are inseparable.” We aim our work at fulfilling both purposes.

The true and authentic value of a business to society is creating products and services and not about making profits.

This is particularly true today because the actual epicentre of innovation has shifted from individual researchers and scientific laboratories to enterprises, a perspective that also echoes with the position of thought leaders at the recent “Oracle Open World.”

The role of lead innovator comes with huge responsibility, and along with it, an opportunity to develop creative ideas for improvement and advancement. That is, progress that looks beyond narrow interests and short-termism towards the greater good.

The question then is: how can we integrate the quest of such progress within the organizational framework? In my opinion, there are three ways. That is, (a) by innovating with products and processes, (b) by designing new and better customer experiences, and (c) by reinventing business models.

For example, think about how technology innovation in the form of a mobile banking platform has offered financial access to the huge, previously unbanked populations in the developing world. Or, consider how advances in intelligent healthcare systems have made it possible to provide remote care to geriatric patients. And finally, let’s take the example of the “Global Delivery Model” which has been influential in developing entire regions in the emerging world into hubs of innovation, generating new employment opportunities for many young people while providing unmatched business advantage to businesses in the developed economies.

The above ideas stick out not only for the observable benefits they gain for the parent company, but also for the role they play in the local community, sustainability and society as a whole.

What is astonishing is that time and again organizations do not recognise and appreciate the importance of those moments, which will eventually continue to create history. They fail to recognise a “not-so-obvious” breakthrough for what it is: a small but major building block of not just business growth, but profound and pervasive progress.

Thus far, such progress has certainly been an unexpected outcome of business. It is time it became the fundamental reason to stay alive in business.

For many organizations, human resources are their greatest asset. Indeed, organizational performance and organizations’ ability to gain a competitive advantage is often critically contingent on the effective management of people. Leadership is a key element in this process. Leaders may motivate employees to excellent performance and mobilise employees for the organization’s mission and vision. Leaders may also be a primary source of conflict and demotivation, however. Understanding how leadership can bring out the best in people as well as where leadership can go wrong therefore is of critical importance to successful organizational functioning.

Therefore, my ‘mission’ is to contribute to this understanding through fundamental as well as applied research in leadership. Based on this, I try to conduct field research in collaboration with a variety of organizations with the hope that these studies will allow me to develop models of effective leadership that highlights leaders’ role as influencing agents and motivators of followers, and that emphasise such aspects of leadership as leaders’ vision, servant leadership, team leadership, and leaders’ ability to represent the shared identity of the team or organization. I am keen to apply these models to help organizations resolve leadership issues and increase organizations’ understanding of the role of leadership in their effective functioning, and invite interested organizations to contact.

Thursday, 16^th August 2018

Today was a sightseeing outing. We left Denekamp immediately after our breakfast at about 09:16 hours.

MEYER WERFT, PAPENBURG-GERMANY

The first place we visited was MEYER WERFT, (in Papenburg), a shipbuilding company in Germany.

Floatation Classroom

Founded in 1795, Papenburg-based MEYER WERFT has meanwhile been owned by the seventh generation of the Meyer family. This well-established company has some 3,300 employees. MEYER WERFT’s extensive production program covers a wide range of ship types, from cruise ships, gas tankers and passenger ferries. In order to stay successful in worldwide competition, production technology has been continuously extended. Today, MEYER WERFT has the most modern production premises in the shipbuilding industry.

Meyer Werft Shipyard

Building cruise ships is a particularly complex task compared to other industries. One cruise ship is a highly complex, large-scale project that must satisfy customer requirements as well as meet stringent safety regulations. Each cruise ship is made of more than 10 million individual parts and assemblies, compared to about one million parts for today’s largest passenger airplanes and about 10,000 parts for a car. The complexity, diversity and large volume of data involved require efficient solutions to design and build ships that stand out from those of competitors. Meyer Werft can efficiently manage this complexity while ensuring high quality standards that, ultimately, help its cruise line customers offer a best-in-class passenger experience.

It was a very enjoyable two-hour tour, including a view of the ships in progress. It is an insightful experience and a well worth visit. A perfect place for a company of friends.

LUNCH

After the shipyard tour, we had our Lunch together at the Gasthof Tepe restaurant in Aschendorf, about 6 km away from Papenburg, Germany.

BOURTANGE FORTRESS

The next place tourist site we visited was the Bourtange fortress – also referred to as the fortress that was never conquered – a unique historical defences which is without comparison.

Rich in history, Vesting Bourtange dates back to 1580 when Willem van Oranje ordered an entrenchment be built with five bastions near the Dutch-German border. Build on a sandy ridge or ‘tange’ (in Dutch) it was completed in 1593. Over the centuries it was continually reinforced but as over time it eventually lost its military status and was dismantled by 1851. Since then it has grown into an agricultural village which is teeming with history. Bourtange is located southeast of Groningen, not far from the German border, making it a fun day trip if you are in the area. Its cobblestone roads, historic canons and wooden drawbridges allow your imagination to wander back in time.

We spend our time walking around the high ridges that line the village, a water canal on one side and the town in the centre. Stunning views and fields as far as the eye could see made us feel as if we really were protected from the rest of the world. Visiting Bourtange, you walk through the so called ‘Vriesse gate’ or ‘Münsterse gate’, depending from which way you enter, following the road to the picturesque Marketplace. This square is surrounded by fourteen 300 years old lemon trees. Along with museums, Bourtange also has an Inn which would allow you to actually stay overnight and enjoy the fortress for a little bit longer. We made sure to visit the “candle maker” and also enjoyed watching the residents having their relaxation in the gardens. We eventually made our way to the centre square where there were several restaurants available.

Bourtange Street Walk

The tour continued with the Protestant Church, the Jewish Synagogue and windmill and then a little relax time watching the swans go by. The video makes it look massive, but in all reality, it was quite a bit smaller than we expected. In this small cosy village (Bourtange), the present day and past centuries go together perfectly giving you a sense of appreciation of one’s own historical and cultural background. Regardless it was a beautiful place to visit and a great way to expose young people to history. No theme parks, no rides, just exploring and wandering the streets of this century’s old fortress. I highly recommend Bourtange for family outing.

SUPPER

We left Bourtange at 17:38 hours arriving in De Lutte-Loser at about 18:50 hours, where we took our supper together in the Cafe-Restaurant Keet’n Zwart.

BACK TO GENERAL CHAPTER VENUE

At 21:00 hours we left the restaurant (Keet’n Zwart) and arriving in Denekamp at 21:20 hours. That was how we spent the day.

BRIEF REFLECTION ON BEING TOGETHER

OUTING is one of the ways of expressing our fraternal solidarity with one another. As it is said in our Constitutions: “being together in hours of relaxation… is a sign of unity” (Article 45).

Thanks a lot, to Bro. Lo Koeleman for the practical arrangements he put in place to make the outing successful and joyful being together.