The relevance of engaging in co-creation of value : from a purelyeconomic process to a comprehensive interactional experience : a study that discusses what organizational motivations define the engagement in co-creation

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The relevance of engaging in co-creation of value: From a purely

economic process to a comprehensive interactional experience

A study that discusses what organizational motivations define the engagement in co-creation

interactions with customers within the Dutch startup community

Name: Philippe van Belle Student number: 10373624 Msc Business Administration Thesis Track: Innovation & Entrepreneurship Supervisor: Dhr. Dr. T.A. Vinig Second supervisor: Dhr. Dr. B. Szatmari Institution: University of Amsterdam Date: 17-08-2018

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Statement of originality

This document is written by Philippe F.C. van Belle, who declares to take full responsibility for the contents of this document. I declare that the text and the work presented in this document is original

and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of

completion of the work, not for the contents.

Abstract

Through the introduction of organizing the product development departments of firms in an open manner to efficiently and effectively realize innovation, the way value is created has change

significantly. Organizations now heavily rely on external parties that help them adhere to the rapidly changing preferences and needs of today’s customer by co-creating value together. The motivation to co-create with customers traditionally comes from benefits that are based on purely economic principles and outcomes such as reduction of costs and the decreased cycle times. Evidently, firms benefit considerably in these terms but it seems that less importance is given to interactional benefits that can function as a motivation to engage in co-creation with customers.

In this study we suggest that certain benefits that are caused through interaction with the customer community, such as organizational learning, personal development and social enrichment, form a key motivation to continuously engage in co-creation with customers. Additionally, we propose that the attitude towards the customer base influences the organization’s motivation to engage in co-creation. Our empirical study finds support for the hypotheses that organizational learning and employee personal development are an important motivation to co-create. This implies that an organization must ensure that the right people, tools and channels are in place that facilitate comprehensive interactions with its customers to effectively and efficiently co-create innovation. Managerial implications regarding customer management, organizational design and value co-creation are discussed.

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1. Introduction

1.1 Introduction

In recent years there has been a shift visible in the way companies organize their innovation processes. In the late 20th_{century most major companies relied heavily on intensive R&D spending} and believed that all innovation must be done internally by hiring all the best talent in the industry. This process of closed innovation become the norm during most of this time period (Chesbrough, 2003). Firms would be fully self-reliant and responsible for the development, marketing and financing of the innovation (Lee, Olson & Trimi, 2012). However, it soon became apparent that firms

committing major resources into R&D experienced fierce competition from small enterprises and startups. The reason being that these firms employ an open innovation process where they allow external knowledge to flow into the company, and internal knowledge to be used outside the company. This process showed that even without spending heavily on R&D, innovation could still be fostered to gain a competitive advantage (Chesbrough, 2003). By designing the innovation process to be open, firms are more efficient in generating new ideas and thus innovation.

A second rising trend concerns the meaning of value and how firms capture it. There is no longer a firm-centric firm that focuses solely on product development. Instead, the interaction between customer and firm, and how the customer experienced this, is becoming the main point of value generation and capture (Pralahad & Ramaswamy, 2004). Additionally, firms now face a new challenge regarding the fact that customer communities are becoming increasingly well-educated, informed and empowered. Irrespective of its quality, information is nowadays easily accessible through the online environment and customers desire to fully understand all risks and potential benefits a product or service generates. Subsequently, customers demand to be involved from the start of the product innovation process. Value propositions are no longer set by the product itself but primarily by the customer experience. The interaction between the firm and the customer is

becoming the main focus of value creation and capture (Pralahad & Ramaswamy, 2004).

This shift of focus from product to customer experience is a consequence of being able to compete in the global market becoming increasingly difficult. The primary way to survive in such a competitive environment is to build long-lasting competitive advantages by putting a stronger emphasis on customer instead of product (Gentile, Spiller & Noci, 2007; Gouillart, 2014). During the formation of a company’s strategy, the growing importance of customers as innovation sources increased the inclusion of customer relation management philosophies. Additionally, there was a growing amount of contact points between customers and organizations. The increased attention to the customer uncovered the importance of constantly monitoring the customer experiences that originate in these

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interactions. This can be summarized in the expansion of the transaction-based concept of customer relationship to the continuous-interaction concept of customer experience (Gentile, Spiller & Noci, 2007). In addition, 85% of the senior managers believe that focusing solely on business aspects like product, price and quality no longer generates a sustainable competitive advantage. Instead, they believe that the notion of customer experience is where companies can differentiate themselves from their competitors (Shaw & Ivens, 2005).

Consequently, it is imperative to note that there was a progression of economic value, which caused increased attention towards open innovation and customer experience as the main method and source of value creation. In extension of the work of Pine, Pine & Gilmore (1999), value is no longer primarily generated by customer interaction at certain staged events. Instead, it is of primary importance to enable customers to interact with the company during all contact points and let them fully experience the relationship between them and the organization (Gentile, Spiller & Noci, 2007). The aforementioned can be realized by engaging in co-creating with customers to enable them to create their own unique experience. Companies do not sell or stage experiences but provide contexts or platforms, which can be used by customers to be involved during each stage of the innovation process (Carù & Cova, 2003; Prahalad & Ramaswamy, 2004). The marketplace must be viewed as a space of potential co-creation experiences. More specifically, as a forum, which challenges the former dominant economic theory where organizations and consumers are seen as separate, with distinct and predetermined roles (Prahalad & Ramaswamy, 2004).

The development of new innovative products requires the information about specific market needs and it is the customer itself that has possession of the most accurate knowledge regarding this matter. Organizations normally only have information about how to adhere to specific customer needs. This disparity creates a situation of information asymmetry (O’Hern & Rindfleisch, 2008). By conducting market research firms gather only desultory information about customer needs, while in reality customer needs are often distinctive and complex. Therefore, they are hard to measure and product innovation often fails due to the firm’s inability to accurately adhere to customer demands (Von Hippel, 2005). To bridge this gap of information asymmetry, firms provide customers with tools and channels that give them a more proactive role in the innovation process in order to collectively co-create innovation (O’Hern & Rindfleisch, 2008).

With the prevalent trend of firms organizing their innovation process in an open manner and the increasing emphasis on generating value and innovation through a reciprocate experience, the concept of co-creation has amassed growing attention. The interaction between customer and firm has become the main point of innovation value creation and extraction. Customers are no longer

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solely regarded as end-users but more as active collaborators. They realize value co-creation by introducing new innovative ideas and support for improving and rearranging the product portfolio of firms by sharing their customer experiences (Kristensson, Matthing & Johansson, 2008. Co-creation allows for innovation that is more market focused. Through sharing incentives, production and design organizations can collaborate and co-create with their customers, realizing innovation. By organizing its innovation process to be open and processes to be transparent and collaborative, firms can facilitate this interaction with customers and the in- and outflow of innovative ideas (Lusch, Vargo & O’Brien, 2007; Ogawa & Piller, 2006; Prahalad & Ramaswamy, 2004).

1.2 Research question

As mentioned above there is a prevalent trend visible nowadays that most organizations design their product development activities in an open manner and thus rely on external parties to realize innovation (Chesbrough, 2003). Organizing the production process in a co-creation setting has major economic motivation benefits in the form of being more efficient, eliminating information

asymmetry, cutting cost, and rapid growth (O’Hern & Rindfleisch, 2008). However, it is not enough to look at the process of co-creation from a purely economic perspective. Value is no longer generated at certain points of the production process but during the full interaction experience between the customer and the organization. The emphasis needs to shift from product to building a long-lasting relationship with the customer. This study focuses on this continuous interaction between customer and organization, and looks at the motivation to co-create in a full interactional experience from the perspective of the organization. It will specifically concentrate on startup organizations, since these organizations often lack the resources to establish a product development department and thus need to rely more on co-creation to realize innovation. This will be done with the following research question: What interactional motivations among startup organizations lead to engagement in co-creating with customers and how does the attitude towards the customer community influence these motivations?

1.3 Societal relevance

The popularity of open innovation and co-creating has become more prevalent over the years. Therefore, it is relevant to further delve into this subject and see what motivations organizations uphold that lead to engagement in co-creation. This study will give extra insights into these motivation benefits and can contribute to our understanding of how organizations experience co-creation interactions with customers. Furthermore, it can show managers the relevance of not only looking at economic motivational outcomes when deciding whether to engage in co-creation. The interactional motivational outcomes could show that there is a second perspective that should be considered equally as important. This interactional perspective may prove that further developing

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the open production process into a comprehensible, iterative and reciprocate experience for both organization and customer could lead to more co-creation benefits.

1.4 Scientific relevance

The findings of this study will hopefully bring new insights towards motivational theories regarding co-creation or extend current literature on this subject. O’Hern & Rindfleisch (2008) and Nambisan (2010) have written extensive literature regarding the economic motivations for organizations to engage in co-creation. However, their theories only look at pure economic outcomes such as increased time to market, reduced costs and increased growth. They do not look at the motivation benefits that can be derived from interactions with customers, such as organizational learning, personal development and social enrichment. This study hopes to clarify whether these interactional motivations also have a positive influence on choosing to partake in co-creation.

Additionally, Nambisan & Baron (2007) state that interactional motivations are important for

customers to co-create, and that certain aspects like identification and attitude towards the host firm positively influence these relationships. This study hopes to extend their research and look if for an organization the same interactional motivations hold true. Moreover, we take a look if the attitude towards the customer community, whether it is positive or negative, influences the strength of the relationship between these motivations and engagement in co-creation.

1.5 Layout of the paper

This study was conducted at multiple startup organizations that are all situated within the

Netherlands. Due to their size, age and available resources, co-creation is an efficient and effective way to realize innovation and product development. Since it is therefore commonly practiced, we choose to conduct our study among this type of organization. The respondents that were

approached to participate in the survey consisted of either the founder or the CEO of each startup organization. The organizations differed in size and age, but were all founded in 2012 or later and had less than 50 employees. The method of data collection was through the use of a survey that consisted of general demographic questions, specific questions regarding motivation and attitude towards the customer, and open questions about what channels were used to co-create.

The structure of the paper is as follows. First the theoretical background will be presented that form the foundation of our research. Next we propose our conceptual framework and the generated hypotheses. Thirdly, the method of data collection and the composition of each variable is discussed. Thereafter, we present the result of our findings that we found through statistical analysis. Finally, the academic literature and our findings are combined and linked in the discussion.

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2. Literature review

2.1 The concept of co-creation

2.1.1 Definition of co-creation

The concept of co-creation aims to encapsulate the inclusion of customers in new product

development (NPD) and consequently innovation. It is imperative to have a clear definition of what co-creation entails as stated by previous literature. A broad definition of the concept of co-creation comes from Kristensson, Matthing & Johansson (2008).

“Customer co-creation refers to collaboration with customers for the purposes of innovation and has become a foundational premise of the service-dominant logic.” (Kristensson, Matthing & Johansson, 2008: p. 475)

The most interesting aspect of this definition is that Kristensson, Matthing & Johansson (2008) regard co-creation as a tool to foster innovation but that it is most prevalent when looking at product innovation from a service-dominant logic and not from a goods-dominant logic. This connects to the rising trend that in order to build a long-lasting competitive advantage in highly competitive markets organizations must shift their central focus from product to customer. As mentioned earlier, the continuous-interaction concept of customer experience is becoming more relevant than the transaction-based concept of customer relationship (Gentile, Spiller & Noci, 2007).

The process of product innovation should therefore be more customer- focused and based on a reciprocate relationship between the organization and her customers. Product innovation through co-creation can be realized by involving customers to a varying degree of intensity. A more specified definition of customer co-creation comes from O’Hern & Rindfleish (2008):

“Customer co-creation is a NPD activity in which customers actively contribute and/or select the content of a new product offering.” (O’Hern & Rindfleisch, 2008: p. 4)

In this definition the first part reflects the fostering of new product innovation by involving

customers from the start of the innovation process and actively collaborating with them to adhere to specific customer needs. The second part relates to the involvement of customers later on in the innovation process and sees the customer as a resource in selecting which product innovation will specifically be the most valuable to produce.

So far, customer co-creation can be regarded as the concept of involving customers in the process of NPD in order to foster innovation and create customer experiences that adhere specifically to

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customer needs. Romero & Molina (2011) give a final and most detailed definition of customer co-creation, mainly focused on the notion of concertedly creating value:

“Corporations processes for co-creating goods, services and experiences in close cooperation with experienced and creative consumers, tapping into their intellectual capital, and in exchange

rewarding them for what actually gets produced, manufactured, developed, designed, co-serviced and/or co-processed.” (Romero & Molina, 2011: p. 448)

Following from this definition, co-creation entails the cooperative process of continuous interaction between customers and the organization during all creative activities of the value chain. Value generation is achieved by developing and exploiting these interactions with the ultimate goal of co-creating the next level of value for a product or service. Subsequently, customer expectations are exceeded by building a complete experience around new product and services. The general notion is that customers are no longer regarded as destroyers of value organizations create for them, but as actively co-creating and re-creating value with organizations (Romero & Molina, 2011).

Deriving from the aforementioned definitions we can formulate our own definition regarding customer co-creation that will be the central definition throughout this paper:

“Customer creation is the NPD innovation process of producing, manufacturing,

co-developing, co-designing, co-servicing or co-processing value by maintaining a close and interactive partnership with customers and take advantage of their intellectual capital to create a continuous unique customer experience.”

2.1.2 Imperative conditions for co-creation: From closed to open innovation

In order for co-creation to fully come to fruition, an organization must design its structure in such a way that product innovation through collaboration with external parties, and the subsequent potential increase in value, can be

accomplished unhindered. The core fundamental principle that is imperative to foster co-creation is that the NPD innovation process of an organization is structured around open innovation (Lusch, Vargo & O’Brien, 2007). Traditionally, firms have been organizing their innovation process in a closed cycle, which was defined by the fact that for innovation to be successful an

organization needs to have full control (Lee, Olson & Trimi, 2012). This way of organizing innovation Figure 1: The closed innovation product development funnel (Herzog & Leker, 2010)

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is conceptualized by Chesbrough (2003) as “Closed innovation” and is unfavorable for engaging in co-creation. Closed innovation is completely internally focused and is considered as self-evident as the only way to achieve innovation. Organizations would fully rely on hiring the best human capital in the industry and spending heavily on R&D to foster innovation. Intellectual property that was crucial for the realization of innovation was closely guarded to avoid the competition profiting from this resource (Chesbrough, 2003).The closed NPD innovation process can be seen as an organizational environment where the boundaries of the firms are solid, so new ideas cannot come from outside the firm and innovation is generated internally. This is illustrated by Herzog & Leker (2010) in their product development funnel, where ideas are generated and screened during the internal R&D phase, and the ideas that survive are developed and released into the market (figure 1).

However, it soon became apparent that certain rising factors caused the notion of closed innovation to become unsustainable. The growing mobility of human capital and spill-over of knowledge, the growing presence of private venture capital, and the pressure for decreased time to market for new products and services, were all factors that caused the benefits of closed innovation to erode

(Chesbrough, 2003). But most importantly was the fact that customers became more knowledgeable and self-aware, and demanded to be involved in the process of product innovation. This caused firms to experience difficulties in fully profiting from their own internal intellectual property, since the external intellectual property of customers had become an increasingly prevalent resource that had rich information about specific customer needs (Chesbrough, 2003; Lee, Olson & Trimi, 2012). Consequently, product failures were primarily contributed to an organization’s inability to identify and adhere to these needs (Ogawa & Piller, 2006)

These aforementioned factors affected the traditional way of designing the NPD innovation process in major industries, which made the practice of closed innovation unsustainable (Chesbrough, 2004). Subsequently, there was the emergence

of what Chesbrough (2003)

conceptualized as “Open innovation”. The fundamental difference compared to closed innovation, is that with open innovation organizations allow the in- and outflow of innovative ideas. Value can be created either through

developing internal innovation, but also by benefiting from external innovative sources. Organizations explore internal

Figure 2: The open innovation product development funnel (Herzog & Leker, 2010)

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and external innovation opportunities, integrate these activities with firm capabilities and resources, and exploit these opportunities through multiple channels (West & Gallagher, 2006). Consequently, open innovation allows for the inflow of innovative ideas into the organization since the boundaries of the firms have evolved from solid to porous (figure 2).

The entire process of innovation has become increasingly complex with firms no longer solely relying on internal R&D spending to foster innovation. Instead they need to cooperate with an array of external parties, which generates increased risk and costs. Furthermore, due to the rapid

development of technology and actors within the market becoming more knowledgeable, firms will need to acknowledge that external parties will play an increasingly important role in the innovation process (Howells, James & Malik, 2003). According to Herzog & Leker (2010) these external parties are often more efficient and more innovative than if the same activities were performed internally by the organization. Preceding this notion is the trend that more people are enjoying higher education and easy access to a wide variety of information is available to external parties, such as customers. Therefore, firms nowadays need to closely co-create value and foster innovation with outside knowledge pools, which in a closed innovation setting is unrealizable (Herzog & Leker, 2010).

2.2 Different outcomes of co-creation

In order to have a clear overview of what different types of co-creation add value, we follow the dimensions as proposed by O’Hern & Rindfleisch (2008). There are four different ways a customer can engage in co-creation with an organization, which fundamentally differ in the degree of customer autonomy and contribution intensity (figure 3).

2.2.1 Collaboration

Collaborating is defined as the process in

which the customers closely cooperate with the organization to collectively develop and improve a new product or service. This way of co-creation offers an extensive amount of autonomy to the customer and allows them to incorporate their own voice into the new product offering (O’Hern & Rindfleisch, 2008; Gouillart, 2014). Through this process customers receive substantial freedom to contribute their own innovative ideas, but also select the product improvement they consider to be able to generate the most value. Through collaboration customers have the ability to alter the product or underlying structure, which transforms them from passive users to active co-producers

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(Von Krogh, Spaeth & Lakhani, 2003). Additionally, customers that engage in collaboration often form their own external product teams, which are characterized by a flat hierarchical structure and

community-based governance that control and select the innovative inputs from other team

members. Most customers that engage in collaboration are strongly intrinsically motivated since they believe the work they do to be highly important and deeply enjoy contributing their own innovative ideas (Hertel, Niedner & Herrmann, 2003). Collaborating with customers that have high levels of intrinsic motivation has the potential to realize high levels of co-creation involvement and can

improve NPD innovation by tapping from rich customer-knowledge talent pools that belong to a wide variety of customers.

Through the high degree of involvement and access to diverse knowledge domains, collaboration can be an effective way of accelerating NPD innovation and decreasing costs due to the use of unpaid customers for NPD projects instead of employees. Furthermore, organizations can acquire a

competitive advantage because of the fact that collaboration is an ongoing process, which provides a mechanism for continuous product improvement and a competitive edge by increasing the pace of NPD innovation creation and distribution to market (Von Hippel, 2005; O’Hern & Rindfleisch, 2008).

2.2.2 Tinkering

With respect to customer co-creation, tinkering offers a way of incorporating the voice of the customer into an initially developed product. Through this process customers make modifications to an available product and some of these proposed modifications are subsequently integrated into future product releases (O’Hern & Rindlfleisch, 2008). Tinkering allows for a relatively high degree of consumer autonomy over their NPD input. However, the organization retains some degree of control over what customer contributions are realized into the NPD development. Co-creation with

customers through tinkering begins with the release of a basic building block like certain development tools or a basic product by the organization, yet access to these resources can be limited if the organizations choose to. In contrast to collaboration, customers that co-create through tinkering must sign end-user licensing agreements that limit their rights to share their NPD

modifications and the use of certain development tools to an unlimited extent. Consequently, access to product content that was co-created can be barred by the organization after the final release of the new product, which shows organizations have substantial control over customer-generated NPD developments (O’Hern & Rindfleisch, 2008).

Through the process of tinkering, organizations can realize differentiation advantages in markets that have very similar product offerings or strong competition. Additionally, customer-created

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see that their modifications, adhering to specific needs, are incorporated into the new product. Lastly, organizations can also benefit from the contributions made by tinkering customers through extension of their market reach. Modifications made by co-creating customers can adhere to additional customers that have the same specific needs and subsequently increase the market acceptance of their NPD developments (O’Hern & Rindfleisch, 2008).

2.2.3. Co-designing

Co-designing is the third possible practice of customer co-creation, which O’Hern & Rinfleisch (2008) define as the process of in which a relatively small group of customers helps co-create the NPD developments, with a much larger group of customers helping to select which developments should be realized by the organization. There is high customer autonomy in the NPD selection, but

contributions to NPD development is relatively fixed and lies primarily at the organization. The process of co-designing starts when a small number of lead customers submit NPD ideas for

development via a central platform. Afterwards, a network of interested customers select the ideas that adhere the most to customer needs, which will then be developed, produced and marketed by the organization. Thus, co-creating customers have decreased influence in altering the product base as compared to tinkering, since the organization dictates the format customer contributions must follow (O’Hern & Rindfleisch, 2008).

A major advantage of co-designing is that the generation and selection of new ideas or creative content are outsourced to the customer’ base, thus reducing cost. Additionally, due to the customer providing and selecting new products to develop, cycle times can also be reduced and NPD products can be released into the market more quickly (O’Hern & Rindfleisch, 2008). Through the process of co-designing the customer has a strong voice in NPD selection and a sense of collective identity, which can lead to higher levels of customer satisfaction and commitment (Hertel, Niedner & Herrmann, 2003). Furthermore, because customers are responsible for NPD selection the risk of product failure at launch is diminished, and inventory holding costs and substantial price markdowns can be reduced (Ogawa & Piller, 2006).

2.2.4 Submitting

The final co-creation process of submitting is defined by O’Hern & Rindlfleisch (2008) as the direct communication of NPD ideas to the organization, with the selection of which ideas to develop being the full responsibility of the organization itself. It is imperative to note that submitting differs from traditional forms of customer inquiry, like focus groups and customer surveys, in the sense that submitting requires customers to present an idea that can be translated into a fully developable product, while traditional customer inquiries only demand customer responses to queries. Through

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submitting customers need to translate their ideas into well-defined processes and detailed graphic depictions, with the organization retaining full control over which idea to select and develop. Submitting is often executed through the use of an online platform where firms solicit current and potential customers to deliver their ideas or it is done through a third party that disposes of an extensive network of individuals, who are willing to participate in exchange for some form of compensation (O’Hern & Rindfleisch, 2008).

Submitting requires the lowest level of customer empowerment since the organization not only decides through what format customers must broker their ideas, but also has the definite say on what ideas are selected for development. However, submitting provides customers with a much stronger voice in NPD than traditional customer’ inquiries, and allows the direct sharing of

knowledge and creative ideas with the organization (Nambisan, 2002). This, in turn, will lead to richer dialogue with customers and subsequently improve customer relationships and market sensing capabilities (O’Hern & Rindfleisch, 2008).

2.2.5 Evolvement of organization-customer relation

Specifically due to the development of IT, Nambisan (2010) mentions five roles that customers can fulfill within the context of co-creation in virtual environments, in relation to the organization. These five roles supplement and extend the four dimensions as proposed by O’Hern & Rindlfleisch (2008) and divide customer co-creation into upstream and downstream interactions.

2.2.5.1 Upstream customer co-creation

There are two customer roles that Nambisan (2010) regards as upstream activities. The first one is the customer as product conceptualizer. This role encourages customers to come up with continuous product improvements and new product ideas. Within a virtual environment interaction among customers is facilitated, which enable generation of new ideas or the continual evolution of ideas that are in development (Nambisan, 2010). This can be connected to the literature of O’Hern & Rindfleisch (2008) and more specifically to the co-creation dimensions of collaborating and tinkering. These theories can be considered comparable since they both allow for an open way of contributing to the NPD process and provide substantial customer autonomy, which allows for the development of new product ideas and improvement suggestions to the product base.

Secondly, there is the role of the customer as designer. In this role the customer designs its own product through the utilization of virtual tools, as provided by the organization. In their role as product designer, customers can contribute to the NPD innovation by either validating product design choices, indicating prioritization of product features, specifying product interface

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the other two dimensions mentioned by O’Hern & Rindlfleisch (2008), namely co-designing and submitting. In both theories, consumers have reduced autonomy and are mainly adding value in a more fixed contribution setting by providing the company with specific suggestions. Consequently, to what extent and in what format consumers can present their suggestions is specified by the

organization, and the responsibility regarding the choice of which suggestions to develop lies with the organization’s management.

2.2.5.2 Downstream customer co-creation

Nambisan (2010) extends the theory of O’hern & Rindfleisch (2008) in stating that there are also customer co-creation roles at the front-end or downstream part of the NPD innovation process that add value. The first role that involves downstream co-creation is the customer as product tester. Customer involvement in the testing of the early versions of the developed product enables firms to detect product flaws early on and reduce costs for rework and redesign activities. Additionally, by letting a diverse group of customers test the product, an organization can get a more thorough understanding of how different consumer segments will respond to the product. Through the further application of virtual tools, customers can be involved to a greater extent, which will accelerate product development and increase market potential effectiveness (Nambisan, 2010).

A second role that is stated by Nambisan (2010) is the consumer as product support specialist. In this role customers acquire significant and expert knowledge with respect to a certain product, which forms the basis for providing support to their peer customers. The degree of similarity between customers determines the effectiveness in understanding the concerns and problems of product users, which is a critical success factor in product support. Customers, in their role as support specialist, can help develop the product further by finding new ways of product utilization and consequently enhance the value of the product.

Finally, Nambisan (2010) mentions that customers can co-create value by fulfilling a role as product marketer. By leveraging the expertise of customers in product marketing activities, organizations can increase product awareness. Letting customers diffuse information about new products to peer customers and shaping their perceptions about new products via dialogue and discussion, creates an environment that provides an effective setting to learn about new products. The customer as

marketer will probably evolve over the upcoming years as newer technologies arise that ease virtual interactions, consequently enhancing the diffusion rate.

2.3 Customer motivation benefits and impact

In their research Nambisan & Baron (2007) identify four reasons that form the foundation for a customer to engage in co-creation activities and help to understand what benefits are experienced

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from participating in virtual co-creation environments. These dimensions are derived from the Uses & Gratification (U&I) framework compiled by Katz, Blumler & Gurevitch (1973), who based their framework on types of customer benefits that are generated from the use of online media.

2.3.1 Learning benefits

Relates to the product-related learning that is experienced by customers, which translates into a better understanding of the product, the underlying technologies, and their usage. Through

continuous customer interactions, collective knowledge about the product and its usage is generated and shared (Nambisan & Baron, 2007)

2.3.2 Social integrative benefits

In a customer environment the social context is set by participating customers and the organization. The benefits that are experienced in this setting are derived from the social and relational ties that develop through the shared interactions (Nambisan, 2002). These ties are generally highly valued by customers and provide enhancement of a sense of belonging or social identity.

2.3.3 Personal integrative benefits

The third benefit customers can experience relates to the gains in reputation or status and the achievement of a sense of self-efficacy. Within a community customers can show their product-related knowledge and skills, and subsequently enhance their expertise-product-related status with peer customers but also with the organization (Nambisan & Baron, 2007).

2.3.4 Hedonic benefits

Lastly, customers can also derive considerable pleasure from participating in a co-creation

environment. Conversing with peer customers can be a highly interesting and mentally stimulating experience, which focusses on discussing product features and product usage applications (Nambisan & Hartog, 2007).

In extension of the benefits that serve as the main motivation for customers to engage in co-creation activities, is the consequent beneficial impact on the company. According to Bendapudi & Leone (2003) the involvement of customer in the co-creation of products and services may lead to types of psychological outcomes that enhance customer loyalty and customer satisfaction. In addition, this customer relationship outcomes can also be attributed to a co-creation environment. Customers attribute their experience directly to the organization that is responsible for the co-creation initiative, which results in the formation of the customer’s perception of the organization and its products (Nambisan & Nambisan, 2008). A highly enjoyable pragmatic experience and a high degree of sociability experience may lead to increased customer identification and customer satisfaction. In

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contrast, a negative experience creates major drawbacks for the organization in terms of customer relationship outcomes (Nambisan, 2010).

Moreover, the organization can also benefit in terms of innovation outcomes. According to

Nambisan (2010) it is likely that customer co-creation activities positively impact the three economic variables that are related to innovation, namely innovation cost, time-to-market, and market

effectiveness, and therefore serve as a motivation to engage in co-creation. Customers who have had a positive co-creation experience may continue their participation and submit more valuable and innovative product suggestions, which will positively affect the cost, time and quality of NPD innovation (Nambisan, 2010).

2.4 Ongoing development of co-creation interactions

Organizations nowadays need to consider the growing relevance of engaging in open innovation and including customers in their innovation process. There has been a shift in the main focus of attention in the sense that organizations are less challenged by its competitors but primarily by rising

communities of educated, connected and creative customers (Chesbrough, 2003; Pralahad &

Ramaswamy, 2004). Moreover, Berthon, Pitt, McCarthy & Kates (2007) state that creative customers are a rich source of innovation for firms. Involving them in the innovation process offers an

alternative to internal formal product development. It enables a firm to extend its product life cycles by closing the gap between design production and design consumption (Berthon et al., 2007).

2.4.1 Virtual customer environments

Across industries forms of co-creation take shape by setting up virtual customer environments (VCE), which provide services that allow customers to be involved in the product design, development, testing and support activities. These VCE’s can take the form of online discussion forums, virtual design toolkits or prototyping centers and enable customers to indulge in forms of co-creation that vary in degree of interaction and autonomy. This can range from involvement in early-stage product design activities to including customers in the delivery of product support services (Nambisan & Baron, 2007). The online interaction between the organization and the customer and the subsequent co-created value, is considered an equal critical experience as the offline experience related to the consumption of the product. This is primarily due to the fact that customers in VCE’s are typically lead users and highly influential to their peer customers (Prahalad & Ramaswamy, 2004). The rise of IT-enabled customers and the establishment of virtual co-creation platforms in the form of VCE’s caused a change in how customer involvement was incorporated in product innovation and made it much more feasible and cost-effective. Moreover, it enhanced the richness of customer interactions with the organization but also among customer communities (Nambisan, 2002).

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However, even though customers can play an important role in the generation and development of new products, the intensive involvement of customers can also lead to imitative and unimaginative idea generation. The utility of customers as means of co-creation innovation varies with the maturity of the technology and the alignment of the product offer with the current customer base

(Christensen, 1997). When an organization scores high on both dimensions (continuous innovation) customers are a rich resource for innovation. If both dimensions are low, which is the case in emerging markets with developing technologies, the value of involving customers as a resource for innovation is limited (Nambisan, 2010).

2.4.2 Virtual channels that facilitate co-creation

With the rise of online communities and customers being informed trough easy information access on the Internet, the economics of product development decision making is changing rapidly. The prevalent introduction of the Internet has led to cost-efficient and multimedia-rich interaction opportunities that eventually formed the foundation for virtual co-creation possibilities as means of generating value and improving product success. Moreover, the Internet-based product

development has proven to realize product innovation (Ogawa & Piller, 2006). The adoption of IT related virtual co-creation tools allow for a relaxation of the traditional collaboration separation between consumer and company. Subsequently, they can assume different roles, supported by the application of a wide variety of IT tools. Nambisan (2002) states that in the ideation & development phase (Upstream co-creation: Collaborating & Tinkering) customers serve as a resource and can be reached through interactive multimedia tools, virtual brainstorming, or virtual focus groups. In the design phase (Upstream co-creation: Submitting & Co-designing) customers fulfill the role of creator, which can be established through tools such as Web-based conjoint analysis, virtual user design, Internet-based design competitions and toolkits that allow customers to express their preferences and design personal versions of a product. Lastly, in the test and launch phase (Downstream co-creation) valuable feedback can be collected through IT tools such as virtual concept testing and prototype testing (Nambisan, 2002).

Nambisan (2003) states that the use of IT tools can enhance the effectiveness and efficiency of virtual NPD innovation and rising technologies can alter the way customers can participate in future NPD co-creation activities. The power of the Internet and IT-based co-co-creation tools lies in that it enables increased consumer empowerment and gives organizations an efficient and cost-effective method to realize product development and innovation.

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3. Conceptual framework

In our conceptual model we suggest that the four different motivations for companies to engage in co-creation all influence the dependent variable of engagement in customer co-creation. In other words, we believe that these four typologies of motivation impact a company’s future engagement in co-creation activities. We further hypothesize that the relationships between two of the four

typologies of motivation (personal and social integrative) and future engagement in co-creation are influenced by the attitude/image towards the customer community as perceived by the organization. Figure 4 shows our conceptual model as described above.

3.1 Organizational learning motivation

One of the major factors that can motivate to engage in co-creation is learning about the market demand and your product in a more accurate and beneficial way than when this was done internally through market research. The customer segment that the organization serves, is a valuable source of factual and experiential knowledge that an organization can use to their advantage by developing their product more efficiently. Through the involvement of customers in the NPD process,

organizations can access multiple knowledge pools and can learn to collaborate in a more effective way to accelerate product development. Since co-creation is an ongoing process, a competitive advantage can be gained through the realization of a continuous mechanism for product

improvement, and through the increase of the pace of product innovation (Von Hippel, 2005). This is Figure 4: Conceptual Model

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a crucial aspect, since internal innovation departments cannot keep up with the need to understand and respond to rapidly changing individual customer needs (Romero & Molina, 2011).

A company can benefit from co-creation activities by translating tacit knowledge of the customer into explicit knowledge. This means transforming the new ideas and suggestions of their customers into their product or service, or creating a whole new product altogether. This conversion of

knowledge can lead to an organization acquiring new and innovative ideas that they normally would not have had if they had not engaged in co-creation (Nambisan, 2002; Gouillart, 2014). The greater the extent of product-related content in co-creation activities, the greater the opportunity to learn about the product and its usage. Therefore, we suggest that organizational learning will positively influence the engagement in co-creation.

H1: Organizational learning motivation will be positively related to the engagement of an organization in co-creation activities with their customer community.

3.2 Social integrative motivation

In a co-creation environment the social context is defined by the customer community and the host firm. An organization can feel connected to their customer community through the affiliation of the customer with their product. In a sense of belonging both parties can feel connected as community members based on common experiences with the product. The more in-depth these interactions are between the organization and the customers, the greater the opportunity would be to gain a deeper understanding of each other’s product-related knowledge and issues (Nambisan & Baron, 2007). Additionally, continued interaction will allow the organization to reinforce and establish more ties within their customer community network. These strong ties tend to be highly valued and can create a sense of belonging and a strong shared social identity (Nambisan, 2002).

This social identity enhances the expectations regarding future interactions. In turn this will lead to both parties investing more in mutually understanding each other and increases the probability of deriving gains from social ties in the future (Nambisan, 2010). Therefore, we hypothesize that social integrative motivation will positively influence the engagement in co-creation.

Furthermore, we suggest that the attitude of the organization regarding its customer community will affect this relationship. If an organization has a very positive image about the customer community, then the perceived value of the established ties with this community will be greater than when the organization has a negative image (Jeppesen & Molin, 2003). Consequently, attitude towards the customer community will positively moderate the relationship between social integrative motivation and engagement in co-creation.

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H2a: Social integrative motivation will be positively related to the engagement of an organization in co-creation activities with their customer community.

H2b: Attitude towards customer community will positively moderate the relationship between social integrative motivation and engagement in co-creation, to the degree that the impact of social integrative motivation will be larger when attitude towards the customer community is high

3.3 Personal integrative motivation

Interactions in a co-creation context can also lead to motivation on a personal level. From a social perspective, established ties between customers and members of the organization can create a deeper understanding of each other and a shared social identity. Consequently, the members of the organization can establish or enhance their product-related expertise with respect to the customer community, as well as reinforce their own level of self-efficacy (Nambisan & Baron, 2007). If a product-related issue is complex and requires in-depth knowledge, members of the organization can provide context and consequently improve their status as experts (Jeppeson & Molin, 2003). This allows for the organization to adequately interact with customers regarding complicated product-related issues and retain control of the co-creation process to some degree.

Moreover, members of the organization can attain a sense of self-efficacy by deriving satisfaction from influencing product development through co-creation, while experiencing a sense of authority through the role as product expert. Consequently, we propose that personal integrative motivation will positively influence the engagement in co-creation.

We also propose that the attitude of the organization regarding its customer community will affect this relationship. If members of the organization and the organization itself have a positive image of their customer community, more value would be perceived in attaining a status as product expert since they identify with their customers to a greater extent. In other words, greater satisfaction and self-esteem is derived from influencing people they consider as equals (Nambisan & Baron, 2007). Consequently, attitude towards the customer community will positively moderate the relationship between personal integrative motivation and engagement in co-creation.

H3a: Personal integrative motivation will be positively related to the engagement of an organization in co-creation activities with their customer community.

H3b: Attitude towards customer community will positively moderate the relationship between personal integrative motivation and engagement in co-creation, to the degree that the

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impact of personal integrative motivation will be larger when attitude towards the customer community is high

3.4 Hedonic motivation

Co-creation interactions with members of the customer community can be perceived as a source of highly pleasurable and mentally stimulating experiences. The act of simply conversing about product usage or features, and cooperatively working towards solving product-related issues can induce a sense of enjoyment and intellectual invigoration (Nambisan, 2002). More specifically, the greater the complexity of the product-related interaction, the greater the need for creativity and problem-solving skills, and consequently, the greater the mental stimulation (Prahalad & Ramaswamy, 2004). This is especially relevant in modern high technology organizations, since these companies face rapidly evolving techniques and practices that are challenging in that few people are true experts. Therefore, we suggest that hedonic motivation will positively influence the engagement in co-creation.

H4: Hedonic motivation will be positively related to the engagement of an organization in co-creation activities with their customer community.

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4. Methodology

For this study we executed a quantitative research method to find an answer to the question of what motivates a startup organization to engage in co-creation activities. As the primary source of data collection, first of all academic literature was analyzed from different scientific journals to establish what already has been studied and what literature states with regard to our dependent variable and independent variables. Through Google Scholar, academic articles were found with co-creation as a central or significant contributing factor. Leading articles we identified were those of O’Hern & Rindfleisch (2008), Nambisan & Baron (2007), and Nambisan (2002).

4.1 Description of data collection

The research design to test the proposed hypotheses and research question constitutes of a

deductive quantitative research method. This means establishing a theory through the proposition of hypotheses which will be either confirmed or (partially) discarded through the collection of data. The collection of data was executed through the distribution of a Web-based questionnaire survey. This questionnaire was based on previous academic literature to ensure its reliability. Some items were adapted to fit the proposed constructs that were to be measured. A pilot was launched to test the composed questionnaire and see if any unclarities or vagueness had surfaced after modifying the questions within the survey. The pilot showed that this was not the case.

The results are presented with the help of SPSS statistical analysis tools. Through the use of a 5 point Likert scale, the results of the questionnaire were easily transferred to an online environment where they were analyzed thoroughly. With the help of statistical analysis tools the hypothesized relations were tested for significance and the proposed conceptual model was either confirmed or (partially) discarded.

4.2 Sample description

The sample of participants in this study consisted of startup organizations that are situated in the Netherlands. Startups are defined as having less than 50 employees and not being older than 6 years (Founded in 2012 or later). The reason for choosing startups is that many research has already been done regarding large organizations, but more interestingly, within a startup organization employees have many different responsibilities due to their limited number and the general absence of specific internal departments. Additionally, startups are more flexible due to their size and more innovative due to pressure of existing competition, which in turn can lead to the widespread practice of co-creation. The entrepreneurial spirit of startup organizations defines an interesting potential for the central subject of this study.

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The used method of sampling was nonprobability sampling since the research subjects do not permit to use probability sampling. The population of startups was analyzed by selecting startups that have the highest chances of willingness to participate. Three ways of nonprobability sampling were executed to obtain our data. The pilot test group and the initial first group of respondents were approached through purposive sampling and consequently snowball sampling, which led to generated data of known and pre-selected startup companies. The reason for this method of

sampling is that a small subset of a larger population in which many members of the subset are easily identifiable, are more desirable to study, since the enumeration of them all would be nearly

impossible (Babbie, 2012). Since the minimum number of respondents was not reached through the execution of these methods of sampling, consecutive nonprobability sampling was used to meet the desired quota.

Regarding our method of data collection, first of all emails were sent to multiple startup companies that were extracted from the publicly available database of DutchStartUpMap.com. Since the emails of employees were mostly unavailable, the emails were sent to the support and info email accounts posted on the company websites. This had very limited success. Afterwards, employees of startup companies that were within our network were approached and asked if they could fill in the survey and forward it to people within their network that work at a startup organization. Although initially successful, the number of responses quickly stalled. Finally, a database was used that we received from The Next Web, a tech media company and startup incubator. This database consisted of 1.834 startups. In this database we first filtered the companies that were either inactive or acquired, which left us with only the operating startups. Then we filtered the companies that had their headquarters situated outside the Netherlands, which gave a list of 1.572 startup names. For each of these startup companies we extracted the LinkedIn profile URL of either the founder or the CEO. During this stage we found a couple of startup companies to be absent on LinkedIn as well as on the web, so we deleted these companies from our list. Subsequently, we had a final list of 1.389 startup companies and their founder’s LinkedIn profiles left. As a final stage to get the required responses we installed an Application Programming Interface (API) that would send 10 LinkedIn connect requests, 8 times a day. Each LinkedIn connect request was accompanied by a personalized message asking their

participation, along with reference to our LinkedIn profile for more information and an incentive of a brief summary of the final results if they would partake in the survey. Of the 1.389 founders/CEO’s that were approached, 577 accepted our invitation to connect and eventually 110 responses were received (an overall response rate of 7,92%; and a response rate of 19,06% of those who accepted our connect request). Of these, 4 responses could not be included due to missing data, thus a final sample of 106 responses was accepted for analysis.

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4.3 Description of main measures and analysis method

As mentioned previously the measures for each construct were either adapted from existing scales or newly formed based on prior literature. The pilot that was launched helped redefine questions that could cause some unclarities with the approached respondents. The used measures are listed in the Appendix.

4.3.1 Engagement in co-creation

The dependent variable in this study was measured by asking the respondents to indicate the number of product-development interactions between the startup organization and its customers in one month time. This could be feedback moments, focus group meetings or collaborative

development activities. This construct measures the objective data of the number of customer interactions with respect to customer co-creation and reflects the number of actual collaborative activities within one month time.

4.3.2 Co-creation motivation

For measuring the independent variables four scales were adapted from previous studies concerning the motivation for customers to engage in co-creation activities in online environments. These four independent motivation variables are used in multiple studies and are therefore proven to be successful in measuring motivation benefits behind co-creation. For measuring organizational learning motivation and personal integrative motivation two 5-item scales were used, and for measuring social integrative motivation and hedonic motivation two 3-item scales were used. The scales were derived from previous studies, most notably Nambisan (2002), Hertel, Niedner & Hermann (2003) & Nambisan & Baron (2007). However, these studies focus on the motivation behind customers to co-create. Consequently, the scale items were modified to measure the four possible motivations of organizations in order to correspond with the way they were described in the conceptual framework section of this study. The four scales had reliability scores of .85, .77, .78, & .84 respectively.

4.3.3 Attitude towards customer community

The moderating variable of attitude towards the customer community was measured by a 6-item scale, which was composed of two existing scales from Bruner & Hensel (1992) & McCroskey, Richmond & Daly (1975), as used in the study of Nambisan & Baron (2007). In their research Nambisan & Baron (2007) used two scales to measure attitude towards the host firm and identification with peer customers. In our study we selected the most relevant items of both constructs and merged them into one 6-item scale. These items are related to how the organization

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perceives its customers and if they assume a positive or negative image. This scale had a reliability score of .61

4.3.5 Control variables

As control variables we asked the respondents to fill out additional information so that during our analysis it could be checked whether these variables are of significant influence on the tested hypotheses. In this study the respondents were first asked about general demographics such as gender and age. Additionally, respondents were asked to fill out the control variables of last enjoyed education level and tenure, which was measured in the number of years the respondent had been working at the company. Finally, the last control variables were the number of employees at the company and the number of years since its founding.

In addition, to extract extra information about the subject of creation, a list of possible

co-creation channels was created that was derived from the research of Nambisan (2002). Respondents could highlight multiple channels if deemed relevant. These channels were not part of our

conceptual model but were created solely for the purpose of getting additional information about the different channels that are most prevalent in co-creation among startups.

4.3.6 Analysis method

For the analysis of our results and to test our hypotheses we used a hierarchical multiple regression method. Before conducting the regression analyses with our control and independent variables, we checked for any missing data by executing a frequencies test and by recoding the counter-indicative items. Afterwards, we looked at internal consistency and validity of the used measures by performing a confirmatory factor analysis and by running a reliability analysis. Then a correlation matrix was generated to determine the correlation coefficients between the measures. Finally, we used a hierarchical multiple regression analysis to analyze our results and confirm or (partially) discard our hypotheses.

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5. Results

5.1 Description of respondents

As mentioned previously the total population that was approached to participate in the survey consisted of 1.389 startup founders/CEO’s. Of these 1.389 possible participants, eventually 110 completed the survey. Due to missing data of 4 cases, a final sample of 106 responses was analyzed. Of this sample the majority of the respondents was male and in the age range of 31-40 years old. On average, the organizations they work for have existed for 3.63 years and the tenure at their current organizations is 3.35 years. Lastly, the most frequent number of employees at the organization of the participants is in the range of 1-5 employees. Table 1 shows additional information regarding our sample of respondents that was accepted for analysis.

Variable Overall statistics

Gender (Ratio Male to Female) 90.6% - 9.4%

Age - 30 or younger 22.6% - 31- 40 years 38.1% - 41- 50 years 30.2% - 51 or older 8.5% Education - MBO or lower 7.5% - HBO 26.4% - Bachelors 13.2% - Masters or higher 52.8%

Tenure (in years) 3.38

Age of organization (in years) 3.64

Number of employees

- 1-5 61.3%

- 6-12 16.9%

- 13-20 8.5%

- 21 or more 13.2%

Table 1: Description of respondents

5.2 Evaluation of used measures and correlations

First of all a frequencies test was run to determine if there were any errors in the data. The test made it clear that there were no errors in the data and all responses were recorded correctly. Additionally,

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no missing values were identified in the responses of the participants. The four cases that were discarded previously had completed the survey, but failed to fill in more than 50% of the questions and were therefore excluded from the analysis. Next, the recoding of counter-indicative items was executed to ensure all the items measured the constructs in a uniform way. This was done to some items of the mediating variable Attitude towards the customer.

5.2.1 Internal consistency

To test for internal consistency we ran a reliability analysis for all the items on each construct. For this method the Cronbach’s Alpha is the main determinant of internal consistency and shows if all the items on one scale measure the same construct or if some items decrease the Cronbach’s Alpha significantly and, therefore, need to be excluded. This was the case for one item of Personal

Integrative (PersI5) as it has an Item-Total Correlation of less than .30 (.125), and its removal would raise the Cronbach’s Alpha from .715 to .773, which is a significant increase. In the cases of

Organizational Learning, Social Integrative, Personal Integrative and Hedonic the Cronbach’s Alpha exceeded the universally recommended .70. For the moderating variable Attitude towards the customer the Cronbach’s Alpha was .612, which is below the recommended .70. The composite reliability results of the Cronbach’s Alpha of each construct are shown in table 2.

Variable Cronbach’s Alpha

Organizational Learning .848

Social Integrative .777

Personal Integrative .773

Hedonic .841

Attitude towards the customer .612

Table 2: Composite reliability results

Since the Cronbach’s Alpha has certain strict assumptions that need to be met, an additional principal axis factoring analysis was run to check for internal consistency. The Kaiser-Meyer-Olkin measure verified the sampling adequacy of the analysis with KMO = .766, which exceeds the recommended .60. Bartlett’s test of sphericity showed X² (171), = 933.195, p <.001, indicating that the correlations were significantly large enough. Additionally, the analysis showed that five components had Eigenvalues over the Kaiser criterion of 1. These five components in combination explained 66.32% of the variance. In comparison with the Kaiser’s criterion, an examination of the scree plot saw a leveling off at the fifth point, thus further confirming the existence of 5 factors. Looking at the pattern matrix for dimension loadings we see that for Attitude towards the customers

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all items load on the same dimension, with cross loading being twice as small as the regular main loadings. This shows that the items for this variable do show internal consistency.

5.2.2 Discriminant validity

To test for discriminant validity we further analyzed the pattern matrix and looked at if each scale loaded on its own construct. Examination of Organizational learning, Social integrative, Personal integrative and Attitude towards the customer showed that they all primarily load on their own construct. All standardized item loadings exceed .65, which indicates good discriminant validity. The only exception is Hedonic, which loads moderately strong on two dimensions and thus not

necessarily supports discriminant validity. However, this can mean that the instrument simply cannot distinguish between the constructs. We assume content validity since we extracted the survey items from the study of Nambisan & Baron (2007) and did not change the premises and direction of the items, only adjusted them to suit a population of members of an organization instead of members of a customer community (which solely consisted of the deletion of irrelevant one item). The central subject of each included item stayed the same. In their study hedonic motivation is tested as significantly different compared to the other constructs and thus discriminant validity is confirmed. Based on their academic research, we do not discard this construct and assume discriminant validity for this construct.

5.2.3 Correlation matrix

As a final step before the regression analyses, we generated a correlation matrix to show the

different correlation coefficients between all variables. To execute a bivariate correlation analysis we first computed new variables as a function of existing variables to find the mean of all items that were used to measure a construct. These new scale means for the independent variables were calculated as OrgLTOT, SocITOT, PersITOT, HedTOT & CustAttTOT. For the dependent variable a new scale (CCEngS) was computed based on the mean of the objective information about how many times an organization engages in co-creation on a monthly basis.

Thus, a bivariate correlation analysis was run including our control variables. It becomes clear that each independent variable correlates strongly with our dependent variable as seen by the Pearson correlation coefficients of r=.46, .46, .49 & .44 respectively, significant at p<.01. The complete correlation matrix is shown in table 3.

The relevance of engaging in co-creation of value : from a purelyeconomic process to a comprehensive interactional experience : a study that discusses what organizational motivations define the engagement in co-creation