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Master Thesis

What is the role of storytelling as a trigger for stakeholder willingness to engage in value co-creation with organizations?

Graduate School of Communication Master’s Program Corporate Communication

Marcus Eckstein 10841687

Supervisor: Pernill van der Rijt 26.06.15

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Abstract

With the rise of new media and emergence of horizontal communication technologies, an extensive shift in power relations between customers and companies has taken place, which enabled both parties to access a prior unknown amount of information about the opposite party. As a result, evermore organizations seek to gather their stakeholders wisdom in processes of value co-creation. Drawing on literature on service-dominant logic, customer engagement as well as corporate communication, the present study tested a model, which proposes a link between styles of corporate communication, their outcomes among an organizations public and customers willingness to engage in co-creation activities. An online survey experiment was conducted among N = 315 participants. The results indicate, that communicating co-creation projects with narratives, influences customers behavioral intentions. Furthermore, trust towards on organization as well as stakeholder perceived empowerment, were found to have a strong impact upon the willingness to engage in co-creation. These findings contribute to a deeper understanding of strategic corporate communication as antecedent of different manifestations of customer engagement, particularly the willingness to co-create value with organizations.

Keywords: storytelling, willingness to co-create, web 2.0, empowerment, trust, engagement, customer centricity

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Investigating the role of storytelling as a trigger for willingness to engage value co-creation. In 2006 Time Magazine elected “You” as its person of the year. “You” meaning millions of Internet users, sharing knowledge, producing news, gathering information, creating content and thereby proclaim a “new digital democracy” on the Internet everyday (Grossman, 2006). What seems a prankish decision at first glance really illustrates the on-going paradigm shift, challenging conventional communicative, political as well as economic power relations. As argued by Castells (2007), emerging horizontal communication networks enabled prior unknown dimensions of communicative freedom and reach. Moreover, these networks enable a new dimension of user participation which is also referred to as “The Participatory Web” (Blank & Reisdorf, 2012).

What these developments exemplarily stand for, is that individuals become more and more powerful as they are connected and become part of the digital “crowd” (Prahalad & Ramaswamy, 2004). In order to gain wisdom from these crowds (Savage, 2012) and use their knowledge for own benefits and interests, companies open their borders and invite customers to participate in value co-creation (Prahalad & Ramaswamy, 2004). The concept of co-creation in general comprises all the phenomena in which organizational entities and their customers generate value in a process of collaborative interaction (Vargo & Lusch, 2008a). These interactions occur in manifold ways, such as design contests, new product development platforms, idea contests or community based discussions. All these approaches share common ground, as co-creation occurs majorly on the Internet (Sawhney, Verona, & Prandelli, 2005). While pioneering companies such Lego, Dell, Procter & Gamble, Nike and IBM already generate large portions of their revenue with co-creation (Di Gangi & Wasko, 2009; Hienerth,

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Keinz, & Lettl, 2011; Larry & Nabil, 2006; Ramaswamy, 2008), ever more firms compete in the race of implementing co-creation (Gouillart, 2014).

In order to exploit the potential of co-creation, companies need to successfully attract participants and, moreover, convince them to invest their resources, such as time and knowledge, for a particular project. These relations between companies and customers, encompassing

interactions beyond purchase, are defined as Customer Engagement (van Doorn et al., 2010). As stakeholders evaluate costs and benefits of engaging in co-creation (Etgar, 2008), customer engagement becomes a rare and valuable resource in modern knowledge and service economy. Therefore this thesis adopts a customer centric perspective by acknowledging customer

engagement as indispensable precondition for co-creation to thrive.

Furthermore, based on the argument by Gustafsson et al. (2012) that efficient

communication is a vital factor for co-creation to succeed, this thesis applies a communicative view on co-creation. Thereby, the importance of strategic corporate communication is

emphasized, to match organizational objectives with forms of communication. The persuasive nature of storytelling is widely acknowledged as initiating behaviors, in favor of a stories’ source (Barker & Gower, 2010; Bartel & Garud, 2009; Rob Gill, 2009). Consequently, it is argued that in order to attract participants and trigger customer engagement in the form of willingness to co-create value, organizations should promote co-creation projects with the use of storytelling.

Former research on the communicative aspects of co-creation was predominantly focused on when to monitor customers and how to listen to them, rather than how organizations should communicate during co-creation processes (Gustafsson et al., 2012). Furthermore, the concept of customers-willingness to co-create value with organizations has yet to be refined and explored,

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since “no research has so far empirically examined this theoretical proposition” (Heidenreich & Handrich, 2015, p. 46).

Therefore, this thesis aims at unlocking further insides on how to foster customer engagement in value co-creation processes via strategic communication, specifically with corporate storytelling. Moreover, a new conceptual design for customer willingness to co-create is proposed. Hence, the research question is presented as follows: What is the role of storytelling as a trigger for stakeholder willingness to engage in value co-creation with organizations?

Theoretical Framework

In the following the concepts of service-dominant logic as well customer engagement are discussed, which will serve as a theoretical lens to sufficiently comprehend the theory of co-creation. Both principles apply a customer centric perspective and therefore provide adequate and suitable theoretical depth to illustrate why storytelling is argued as the most efficient corporate communication form in co-creational contexts.

Co-Creation

Shifting towards a Service-Dominant Logic. The conceptual foundation of co-creation is to be found in the customer and relationship oriented service-dominant logic (S-D logic) as put forward by Vargo & Lusch (2004). According to Vargo (2009), S-D logic “takes into account the broader, relational context of mutual value creation” (p. 377) between organizations and their customers.

According to goods-dominant logic (G-D logic), a firm’s competitive advantage and central economic reason for existence is dependent upon producing and selling goods. Hence, customers and companies predominantly relate to each other by exchanging tangible and

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observable value. S-D logic on the other hand proposes a transcending perspective on relationships in networks of value creation (Vargo, 2009), which differs fundamentally from conventional transactional relationships (Vargo & Lusch, 2008b). While in a G-D perspective one can note that value in the form of goods is tangible and observable, in an S-D approach on the other hand, value is no longer determined by materiality or visibility. Therefore, the essential principle in an S-D logic is the exchange of service, which Vargo & Lusch (2008b) define as “the application of specialized competences (operant resources—knowledge and skills), through deeds, processes, and performances for the benefit of another entity or the entity itself” (p. 26).

The above-mentioned processes and performances are conducted in networks of value creation between individual customers, groups of customers as well as between customers and organizations. In order to gain further theoretical insides into these processes on the customer side, the concept of customer engagement is discussed in the following paragraph.

Customer Engagement (CE). Customer engagement is a relatively new research domain gaining increasing academic attention since 2005 (Brodie, Hollebeek, Juric, & Ilic, 2011). In general, the concept acknowledges the increasing influence Internet empowered customers have over organizations by studying the manifold customer behaviors and efforts, which are of relevance to organizations and brands, as well as their stakeholders (Brodie et al., 2011;

Hollebeek, 2011; van Doorn et al., 2010; Verhoef, Reinartz, & Krafft, 2010). More specifically, “Customer engagement becomes defined as … customer participation with both representatives of the organization and with other customers in a collaborative knowledge exchange process” (Wagner & Majchrzak, 2007, p. 20). Doorn et al. (2010) elaborate further on the concept, adding that customer engagement is “… customer’s behavioral manifestations that have a brand or firm

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focus, beyond purchase, resulting from motivational drivers” (p. 254). Co-creation, as discussed in the next paragraph, thus represents one variant of customer engagement (Mustak, 2013).

It becomes clear that both, CE as well as S-D logic apply customer centric perspectives and further emphasize the role customer networks play in a modern business environment (Sawhney et al., 2005). Similar to S-D logic, CE accentuates the importance of sustainable relationships between customers and organizations that expand beyond conventional purchasing and selling behavior.

Subsequently two fundamental shifts can be observed: first, the focus of connections between organizations and customers changed from transactions towards relationships. In general, it can be stated that due to customer empowerment, a business-with-customer perspective replaced the business-to-customer paradigm. Second, besides money and goods, companies and customers exchange their expertise by mutually allocating resources formerly withdrawn, such as knowledge and ideas, for the others good. Hence, it can be argued that the S-D logic and Customer engagement theory provide the theoretical groundwork for value co-creation (Füller, Mühlbacher, Matzler, & Jawecki, 2010; Hennig-Thurau et al., 2010; Wagner & Majchrzak, 2007).

Conceptualization of Co-Creation

While traditionally customers and organizations had discrete roles of consumption and production in value creation processes, with co-creation these borders become blurred (Prahalad & Ramaswamy, 2004). To an increasing extent, value is no longer exclusively created within the walls of organizations, but with the assistance of customers and other stakeholders. Therefore, customers and companies are no longer seen as opposites, merely connected through market exchanges, but interacting parties that work collaboratively towards a common goal (Galvagno

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& Dalli, 2014). Despite the fact that the concept was first introduced as co-production by Normann & Ramírez (1993, 1993a), its ever increasing popularity was set off by Prahalad & Ramaswamy (2004; 2004a) who also created the term co-creation. Theoretical proximity to S-D logic and customer engagement is particularly emphasized by Galvagno & Dalli (2014), as they define co-creation as “… the joint, collaborative, concurrent, peer-like process of producing new value, both materially and symbolically” (p. 3).

According to Etgar (2008), every co-creation process inherits five distinct stages: (1) development of antecedent conditions, (2) motivate possible co-creators to engage, (3) cost-benefit calculation of participation on the customer side, (4) the actual co-creation process as well as (5) evaluating the outcomes and the process itself. Applying a communication

perspective on the subject, the second stage in particular is expected to be of high relevance. Due to the S-D nature of co-creation, corporate communication in the context of co-creation needs to overcome conventional push marketing strategies and realign communication strategies with strategic goals of value creation (Schultz & Peltier, 2013). Hence, e.g. sales focused

communication as recurrent in an G-D logic should be exchanged with customer centric

approaches matching an S-D logic, explaining why engaging in a particular co-creation project is worth time and effort spent. Thereby, the cost-benefit calculation of engagement on the customer side, the third stage of co-creation processes as proposed by Etgar (2008), will likely shift for the organization’s good.

Since Co-Creation is expected to be the primary source of competitive advantage in near future (Gouillart, 2014), organizations face a former unknown kind of challenge. While

traditionally, as illustrated by the G-D logic, companies seek to attract buyers and consumers, they now additionally need to recruit stakeholders, eager to participate in co-creation. Hence,

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besides monetary indices, customer engagement becomes a currency on its own to measure organizational success, especially in the form of Willingness-to-Co-Create (WCC).

Willingness to co-create (WCC)

Heidenreich & Handrich (2015) recently observed an insufficient academic body of customer willingness to engage in value co-creation with organizations, since “…no research has so far empirically examined this theoretical proposition” (p. 46). Furthermore, a widely

acknowledged definition of WCC itself has yet to be found. Nonetheless, the following

explanation for WCC is proposed: “… a condition or state in which a customer is prepared and likely to create value together with the company” (Heidenreich & Handrich, 2015, p. 46). Thus, WCC can be understood as a behavioral intention, as in “… the intention to perform a particular behavior, a plan to put behavior into effect” (Perloff, 2003, p. 92). Measuring behavioral

intentions is a widely acknowledged method to predict actual behavior, since both constructs tend to be identical (Ki & Hon, 2007). Hence, this thesis follows this argumentative line and views the measurement of WCC as a sufficient way to predict actual customer engagement. According to Zhang & Chen (2008), “(…) meaningful co-creation with customers is a systematical process, which contains key co-creation activities that can most possibly to [sic] turn customers efforts, skills and knowledge into the unique competitive advantages” (p. 243). In line with this proposition as well as the prior discussed literature on customer engagement and co-creation, WCC is expected to comprise three main factors: likeliness to put effort, knowledge sharing as well as the willingness to collaborate. Since customers weigh the benefits and

sacrifices of engaging in a particular co-creation activity, the likeliness to put effort can be seen as the result of this calculation. Thus, if the benefits do not outweigh customer sacrifices such as time, energy and effort, the likeliness to put effort will be low (Aarikka-Stenroos & Jaakkola,

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2012; Etgar, 2008). Second, knowledge sharing is vital for co-creation to thrive. If customers withhold their expertise and knowledge, they cannot add value to the problem solving process. Finally, as the prefix co implies, collaboration constitutes another fundamental component of value co-creation (Kristensson, Matthing, & Johansson, 2008). Hence, customer’s willingness to collaborate also determines their overall WCC.

Storytelling

Stories1 enable organizations to communicate in a way that is both easy to understand as well as highly memorable (Barker & Gower, 2010). As commitment to and identification with organizations is known as majorly rhetorically constructed (Cheney, 1983), organizational rhetorics, such as storytelling, are of high relevance to internal as well as external corporate communication. Storytelling therefore is known as a powerful management, leadership and communication tool, since its persuasive appeal is suitable to initiate as well as to direct actions inside and outside of organizations (Denning, 2006). Hence, narratives are commonly applied in organizational change management (Kolb, 2003), in order to foster collaboration (Kahan, 2006), for branding purposes (Hojberg Christensen, 2002) as well as in innovation management (Bartel & Garud, 2009). Carefully planned storytelling from an authentic source (Guber, 2007) to the right audience (Marshall & Adamic, 2010) can lead to long standing business relationships as

1 Stories and narratives are used as equivalents during the course of this thesis

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well as competitive advantages in highly competitive markets, by carving out and displaying uniqueness to customers, share- and stakeholders (Barker & Gower, 2010; Herskovitz & Crystal, 2010). The most relevant function of storytelling with regard to this thesis is its ability to trigger behavioral actions in organizational contexts (Robert Gill, 2014). Stories foster alliance between organizations and stakeholders by yielding passion for and channeling attention towards shared goals. As a result, people are more eager to share their personal resources such as time,

knowledge and even money (Kaufman, 2003). It appears that storytelling comprises several advantages when compared to conventional communication strategies, with regard to organizations seeking to trigger customer engagement, particularly WCC. Hence, the first proposed hypothesis reads as follows.

H1: Stakeholders exposed to storytelling by an organization will exhibit higher

willingness to engage in value co-creation with this organization, than stakeholders not exposed to narratives.

Springboard stories in particular, as introduced by Denning (2001, 2006), are expected to be eminently suitable in the context of co-creation. Springboard stories are characterized as short anecdotes with an absence of excessive detail, either recapitulating episodes of a successful past and therefore with a closed ending, or elaborating on current issues or struggles with an open end to it. Either way these kinds of stories are theorized to initiate action and engagement.

Storytelling and Trust Hon & Grunig (1999) define trust as “One party’s level of confidence in and willingness to open oneself to the other party” (p. 19), consisting of three dimensions, namely: integrity, competence and dependability. Mayer, Davis, & Schoorman (1995) argue that ability2 and integrity are vital characteristics of an entity, for it to be perceived

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as trustworthy. Ability or competence refers to specific skills, knowledge and expertise with which a party can contribute to positive developments in particular domains. Perceived integrity, on the other hand, is dependent upon the degree to which both parties’basic principles of

behavior are aligned (Mayer et al., 1995). Swift (2001) argues, that in contexts of relationships between organizations and stakeholders, trust fosters the “…optimistic expectation that the organisation will behave in a socially responsible way;” (p.20) and “…will generally be associated with the willing co-operation of stakeholders with the organisation in which mutual benefit to the parties is assumed” (p.20). Consequently, trust is expected to positively influence stakeholders WCC, which is translated into the following hypothesis.

H2: Stakeholders who evaluate the organization as trustworthy will exhibit higher WCC than those, who perceive it less trustworthy.

Based on these arguments, organizations should actively communicate achievements of the past, such as successful problem solving, innovation, commendable citizenship or more generally, how issues relevant to the organization and society at large have been overcome. Narratives that elaborate upon what has been already achieved, by emphasizing the three dimension of trust as proposed by Hon & Grunig (1999) will ultimately benefit organization trustworthiness (Denning, 2002; Sole & Wilson, 1999). As trust towards companies increases, the likelihood to rely on them in the future improves as well (Eisenegger, 2009). As a result, trust strengthens organizational relationships and simultaneously fosters the propensity of customer engagement on the long term (van Doorn et al., 2010).

Narratives focused on communicating such past occurrences are consequently seen as closed stories, since their main storyline has come full circle. Prominent examples of these kinds of narratives are founder stories, elaborating upon how things came together and a company or

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organization was started. Since companies founding process has a clear ending and is not an ongoing procedure, telling about it as a narrative will form a closed storyline. Based on these arguments, the following hypotheses have been formulated:

H3 Exposure to closed stories will lead to higher trust towards the company, than exposure to open-ended stories.

H4 Stakeholders exposed to closed storytelling will exhibit higher WCC, than stakeholders not exposed to an organization narratives.

H5 The relationship between closed stories and WCC is mediated by trust.

Storytelling and perceived empowerment. Notwithstanding that trust recurrently encourages collaborative behavior such as co-creation, it is not the sole precondition for customer engagement or co-creation to take place (Mayer et al., 1995). Ardichvili, Page and Wentling (2006) conducted an exploratory study to research motives for sharing knowledge in virtual communication spheres. The results were headed by the finding that respondents believed their individual knowledge does not exclusively belong to them, but to everyone. Furthermore, the need to establish oneself as an expert in public was among the leading motives, as it is linked to higher status and empowerment. Spreitzer (1995) defines empowerment in an organizational context as a psychological response linked to an individual’s positive perception of work related efforts. Furthermore, Spreitzer (1995) proposes that psychological empowerment comprises four dimensions: meaning, competence, self-determination and impact.

Meaning refers to the meaningfulness of work; competence relates to individuals’ knowledge and skill that permit them to perform the task well; self-determination refers to workers’ freedom or autonomy in performing their tasks; and impact relates to

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individuals’ perception of influence on their tasks or importance of the work (Hon & Rensvold, 2006, p. 960).

The more stakeholders perceive their role in the co-creation process as meaningful, influential and self-determined, the greater the resulting perceived empowerment. Consequently, it can be summarized that if individuals perceive psychological benefits, such as a high degree of empowerment, it benefits their motivation to provide personal resources in contexts of

productive goals, such as co-creation (Etgar, 2008). Based on these arguments, the following hypothesis is proposed.

H6 Stakeholders with higher perceived empowerment will exhibit higher WCC, than stakeholders with lower perceived empowerment.

As McLellan (2006) argues, stories can inspire feelings of empowerment. From a communication perspective, this translates into the expectation that organizational storytelling aimed at increasing customers perceived empowerment, present a promising strategy in co-creation contexts. Based on the arguments presented above, stories should be open ended and emphasize the customer’s role in the current context of value creation as well as stimulate

positive perceptions of the proposed task. Since closed stories have come full circle, stakeholders can’t exercise influence over their ending. Narratives which storyline is left open on the other hand; enable their audience to craft a satisfying ending that they can identify with. A notable example is Procter & Gamble’s co-creation platform connect and develop. The company integrated a subsection titled P&G’s Needs, illustrating current needs and issues they seek to overcome with the help of their stakeholder. This strategy of actively seeking help emphasizes the importance of their customers input. Thereby readers a likely left with a feeling of

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knowledge in order solve problems, the multi-billion company seemingly cannot manage to overcome by themselves.

Stories’ length and level of detail in the context of organizational communication seem not arbitrative in regard to their success. To the contrary, by keeping stories short and simple, listeners are stimulated to “envision new narratives set in their own contexts” (Denning, 2006, p. 44). Hence, stories originated by organizations may be seen as blueprints, individually colored by their listeners. This is in line with Hojberg Christensen' (2002) argument, that in corporate communication, basic rhetoric fragments containing narrative elements can be enough to spark interest and attention. In conclusion, simple narratives with an open storyline enable stakeholders to integrate and picture themselves as actors in a bigger story (Denning, 2006). As a result it is argued that stakeholders feel empowered to modify the story’s outcome with their own actions, for example by providing knowledge and ideas in order to overcome the current issues. This in turn encourages customer engagement, such as willingness to co-create. Thus, the following hypotheses have been formulated:

H7 Exposure to open-ended stories will lead to higher perceived empowerment, than exposure to closed stories.

H8 Stakeholders exposed to open storytelling will exhibit higher WCC, than stakeholders not exposed to an organization narratives.

H9 The relationship between open-ended stories and WCC is mediated by perceived empowerment.

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Figure 2 Research model and hypotheses

Method

Procedure and experimental conditions

To test the proposed hypotheses, a survey experiment was conducted. Participants were randomly assigned to one of three groups, two of which were experimental groups and one was the control group. After confirming their agreement on the informed consent, participants were asked to carefully view and read a fictional website, corresponding to the group they were assigned to. All three groups were exposed to the landing page of Clean Water Foundation’s website, a fictional organization invented for the purpose of the study. Given the experimental character of the research, all three versions of the website were equal in style, typography, layout, color-scheme as well as the core information provided in promotional texts.

While in the control group participants received no storytelling treatment, both experimental groups were exposed to paragraphs containing narrative elements. The story

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a focus on achievements in the past and contained sentences like: “We already managed to boost reach and reliability of drinking water by supplying several million households with our

revolutionary water purification system - PURE”. Hence, the storyline was closed. Experimental group Open-Storyline on the other hand was exposed to paragraphs written with a focus on possible achievements in the future and contained sentences like: “If we accomplish to provide access to clean water for all people, an enormous battle against diseases will be won and many lives can be improved and even saved”. Hence, the storyline was left open. Please find an overview of each group’s characteristics in Table 1: Treatment characteristics per group. Subsequently all participants were asked to complete the survey, before they were debriefed in accordance to the ethical standards of the University of Amsterdam.

Table 1

Treatment Characteristics Per Group Control Group Closed Story Open Story Storytelling 0 1 1 Open Story 0 0 1 Closed Story 0 1 0 Manipulation check

In order to confirm if experimental treatments differed systematically enough and could be identified as such by participants, a manipulation check was conducted prior the hypotheses testing. A sample of N=33 university students from Germany, Denmark and the Netherlands was exposed to the three experimental condition. Participants were evenly distributed over the

conditions (N = 11, for each of the three conditions) and asked to fill out a short questionnaire assessing if the paragraph they were exposed to contains narrative elements as well as if

proposed definitions for open and closed stories apply. The answer categories for each item were YES and NO. “A closed-story describes how an issue or parts of an bigger issue/problem have

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been successfully managed in the past. The storyline is therefore closed. In your opinion, does this definition apply to the text you just read?”

An independent-samples t-test was conducted to compare if the proposed paragraph contains narrative elements in storytelling and control group conditions. The item in use was: “The text I just read, contains narrative elements”. There was a significant difference in the scores for storytelling (M=1.00, SD=.000) and non-storytelling (M=1.69, SD=.480) conditions; t (12)=-5.20, p = .000. This confirms that all participants in storytelling conditions recognized narrative elements in the paragraphs they were exposed to.

Second, an independent-samples t-test was conducted to test if the Open-Storyline

paragraph was identified as having an open storyline. To assess if participants perceive a story to be open-ended, the following question was used: “Open-stories describe issues or problematic situations, that have not been overcome yet. The storyline is therefore not closed and the ending still open. In your opinion, does this definition apply to the text you just read?” There was a significant difference in the scores for the experimental group Open-Storyline (M=1.08, SD=.277) and the group exposed to the Closed-Storyline (M=1.85, SD=.376); t (22)=-5.94, p = .000. This confirms that, to the contrary of participants exposed to the closed-story,

participants exposed to the Open-Storyline paragraph did recognize the proposed definition for open-stories as adequate.

Vice-versa the question “A closed-story describes how an issue, or parts of an bigger issue/problem, have been successfully managed in the past. The storyline is therefore closed. In your opinion, does this definition apply to the text you just read?” was used to assess if the Closed-Storyline paragraph was perceived as such. A final t-test revealed that there was a significant difference in the scores for the Open-Storyline group (M=2.00, SD=.000) and

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Closed-Storyline group(M=1.15, SD=.376) conditions; t (12)=-8.12, p = .000. Accordingly, those participants exposed to the closed story treatment did recognize the proposed definition for closed-stories as fitting, opposed to those participants exposed to the open-story. In conclusion, the manipulation material was verified and adopted in the main study.

Participants

Overall 350 surveys were distributed of which 326 were completed. As the average time to complete the questionnaire was six minutes, respondents spending only three minutes or less with the survey were excluded from the final dataset. This is due to the fact that the presented material and questions could not be processed adequately in such a short time span. In sum fifteen cases were removed from the final sample. While participants were spread equally among the control group (N=104) and experimental group Open-Storyline (N=104), the second

experimental group exposed to a Closed-Storyline (N=107) had slightly more participants in it. A variety of demographic items were assessed towards the end of the questionnaire, including age, gender, and level of education. As everyone over 18 years old was the target audience, age dispersion within the sample ranged from 18 years up to 65 years and older. The majority of participants, 30 % of the full sample, were between 25 and 34 years old, followed by the age group between 35 and 44 years with 24%. Amongst the 315 participants included in the final sample, 49% identified their gender as female, 48 % as male as well as 0.6% as trans*. Only 2% preferred not to disclose their gender. Furthermore 50% of participants had academic

background, of which the majority obtained a bachelor graduation, whereas 20% were high school graduates, 12% choose qualified job as highest education and 17% did not answer the question.

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Measurement of dependent variables

Trust. Perceived integrity, competence and dependability identify the presence or absence of trust towards organizations. A six-item scale (Cronbach's α = .83) as introduced by Hon & Grunig (1999) was used to measure the multi-dimensional construct. Minor adjustments were made in line with Kelleher & Miller (2006) as well as Ki & Hon (2007), replacing the original nine-point scale with a five-point Likert scale, ranging from 1 = strongly disagree to 5 = strongly agree. Sample questions were: “I feel very confident about this organization’s skills” measuring competence and “Sound principles seem to guide this organization’s behavior” to measure integrity.

Empowerment. Control mutuality is defined as the “the degree to which parties agree on who has the rightful power to influence one another” (Hon & Grunig, 1999, p. 19). Thus, it can reveal meaningful insight regarding the degree of perceived empowerment on the stakeholder side. Therefore empowerment was measured by combining two prior used scales, perceived empowerment by Füller et al., (2010) with two items and control mutuality as proposed by Hon & Brunner (2002) consisting of four items. Hence, the new scale empowerment consisted of six items (Cronbach's α = .83). Again all items were measured with a five-point Likert scale, ranging from 1 = strongly disagree to 5 = strongly agree. Sample questions were: “I expect to have some sense of control over the situation, when interacting with this organization” based on Hon & Brunner (2002) as well as “I have the feeling I can actively influence the development of products and solutions, created with this project” taken over from Füller et al. (2010).

Willingness to co-create (WCC). As argued in the theoretical framework, WCC is the behavioral intention to engage in value co-creation with organizations, by putting effort, sharing knowledge and collaborate in processes of customer engagement with a specific organization in focus.

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Co-creation, especially in contexts of NPD3, is dependent upon the sharing of knowledge and skills, in order to achieve innovative forward thinking results (Sawhney et al., 2005). The likelihood of knowledge sharing was measured with a six-item scale (Cronbach's α = .93) formerly used by Hooff & Ridder (2004). Sample questions to assess community knowledge sharing were: “When I learn something of relevance to the projects success, I would see to it that other participants can learn it as well” and “I would share my knowledge within the clean water community”. To measure the probability of direct knowledge sharing with the organization itself, sample questions were: “When I learn something of relevance to the projects success, I would see to it that the clean water foundation can learn it as well” as well as “I would share my knowledge directly with the clean water foundation”. In order to asses the probability of

knowledge sharing, all items were measured with a Likert type scale ranging from 1 = extremely unlikely to 5 = extremely likely.

Collaboration is another key factor leading up to successful co-creation projects (Kristensson et al., 2008). For the purpose of this study, likelihood of collaboration was measured with a five-item scale (Cronbach's α = .80) prior introduced and tested by Scott, Bishop, & Chen (2003). All items were measured with Likert scales ranging from 1 = strongly disagree to 5 = strongly agree. Among the items used was the following “I am willing to cooperate with other co-creators to support the clean water foundation”.

Effort is essential in processes of customer engagement, such as WCC. The more individuals are willing to put effort, the higher the probability of customer engagement, such as WCC. Based on Heidenreich & Handrich (2015), a five-item scale (Cronbach's α = .90) was adapted to measure the likelihood one would put effort, including the following sample

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statements: “To learn how the platform works, I would be very persistent” or “I would try very hard, to contribute to the projects success”. Again a Likert type scale ranging from 1 = extremely unlikely to 5 = extremely likely was used to assess the construct.

Assessing further interest allows predicting if an indicated willingness for engagement will translate into actual engagement behavior. To measure further interest a scale by Matzler, Füller, Kohler, & Stieger (2011) was adopted (Cronbach's α = .84), consisting of three items each assessed with a five-point scale ranging from 1 = strongly disagree to 5 = strongly agree. The items in use were: “I am interested in future developments regarding this co-creation project”, “I intend to engage in this co-creation activity”, “I would like to contribute to the projects success, even on long term”.

Results

As WCC is theorized as being a multidimensional construct composed of effort (Cronbach's α = .90), collaboration (initial Cronbach's α = .80), knowledge sharing

(Cronbach's α = .93) and further interest (Cronbach's α = .84), a principle component analysis (PCA) was conducted to confirm this assumption. A first PCA for WCC revealed that the

following two items of the collaboration subscale loaded remarkable lower on the factor than the average: “Cooperative problem solving is more effective than individual problem solving” and “Cooperation is the key to success of the co-creation project”. Given the meta-character of these questions, assessing general attitude towards the topic rather the participants’ willingness to cooperate, excluding the items appears logical. A reliability analysis yielded high scale reliability for WCC nonetheless (Cronbach's α = .94). In order to test if the overall reliability of WCC could be further improved, the two items were removed from the subscale. A first test of reliability for the adjusted subscale for collaboration revealed improved reliability

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(Cronbach's α = .83) compared to prior the adjustment (Cronbach's α = .80). Furthermore, a second reliability analysis for WCC, excluding the two items, yielded a slightly improved reliability (Cronbach's α = .95). Hence, all following analyses were conducted with the adjusted scale.

Subsequently, a PCA for all subscales was conducted with factor selection based on eigenvalue >1. The results yield that all items of each subscale form a single uni-dimensional scale, with only one component having an eigenvalue above one (effort eigenvalue = 3.60, collaboration eigenvalue = 2.23, knowledge sharing eigenvalue = 4.51 and further interest eigenvalue = 2.30). Furthermore the results yielded good scores for explained variance (effort 72.03%, collaboration 74.50%, knowledge sharing 75.24% and further interest 75.30%) as well as the Kaiser-Meyer-Olkin Measure (effort = .84, collaboration = .72, knowledge sharing = .89 and further interest = .72).

In order to assess WCC for a single observation, the overall mean for all seventeen items of the four subscales was computed. Since all items were measured with a five-point Likert scale, WCC is can take a value between one and five with mean = 3.53.

Hypotheses testing

The first proposed hypothesis reads as follows: “Stakeholders exposed to storytelling by an organization will exhibit higher willingness to engage in value co-creation with this

organization, than stakeholders not exposed to narratives”. In order to test H1 an independent sample t-test was conducted, with WCC as dependent variable and storytelling treatment as independent variable. Participants exposed to storytelling treatments scored significantly higher (M=3.60, SD=.57) on WCC than the control group (M=3.41, SD=.78), t (158) = -2.10, p = .013 (one-tailed), 95% CI [-.351, -.011]. Hence, promoting co-creation projects with storytelling has a

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more positive effect upon the willingness to engage in co-creation, than promoting co-creation projects without using narrative elements. Therefore, H1 is accepted.

In order to test the second hypothesis, “Stakeholders who evaluate the organization as trustworthy will exhibit higher WCC than those, who perceive it less trustworthy”, a linear regression with WCC as dependent variable and participants reported trust towards the

organization as independent variable, was carried out. The results yield a significant regression equation, F(1, 312)= 119.270, p<.001, with R2 = .28. Participants average WCC increased .64 units for every unit increase of trust. Hence, hypothesis two was accepted.

The third hypothesis, “Exposure to closed stories will lead to higher trust towards the company, than exposure to open-ended stories”, again was tested with an independent samples t-test. Participants exposed to the closed storytelling treatment did score significantly higher (M=3.86, SD=.46) on Trust than those exposed to open stories (M=3.64, SD=.53),

t (209) = -3.17, p < .001 (one-tailed), 95% CI [-.352, -.082]. Hence hypothesis two is accepted. Moreover the fourth hypothesis, “Stakeholders exposed to closed storytelling will exhibit higher WCC, than those not exposed to an organizations narratives”, is accepted. A independent samples t-test revealed that those participants exposed to the closed storyline showed higher WCC (M=3.66, SD=.47) than the control group (M=3.41, SD=.78), ), t (166) = -2.63, p < .001 (one-tailed), 95% CI [-.411, -.059].

The mediation was tested with PROCESS by Andrew F. Hayes, a custom dialog field for SPSS. Since conventional mediation analysis requires dichotomous or continuous independent variables and the independent variable in the present study is multicategorical, analysis was conducted according to the guidelines established by Hayes & Preacher (2013). Therefore two dummy variables were computed. Variable D1 codes 1 for participants exposed to closed

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storytelling treatment against 0 for those in the control group as well as Open-Story group. D2 on the other hand codes 1 for open storytelling against 0 for the control group and Closed-Story group. This approach allows establishing the experiments Non-Storytelling Group as reference group across all conditions, by holding its value constant across the two dummy variables. Consequently the mediation analysis can be conducted with dichotomous independent variables while respectively adding the second dummy variable as covariates.

The first mediation analysis was conducted with closed storytelling treatment as independent variable, WCC as dependent variable, trust as a mediator and D2 as covariate. Furthermore bootstrapping for 10000 cases was applied. The results for step one of the mediation analysis revealed that the regression of closed storytelling towards WCC, not including the mediator, was significant b = 0.23, t = 2.64, p=.009, 95% CI [.059, .410]. In the second step no significant direct effect of closed stories upon trust could be found b = 0.06, t = .86, p=.389, 95% CI [-.081, .207]. Hence, there is no significant relationship between the independent variable and the mediator. Finally the third stage of analysis yielded that the relationship between closed storytelling and the willingness to engage in co-creation is not mediated by trust b=.04 BCa CI[-.050, .138]. Accordingly, hypothesis five, “The relationship between closed stories and WCC is mediated by trust”, is not accepted.

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To test hypothesis six, ” Stakeholders with higher perceived empowerment will exhibit higher WCC, than stakeholders with lower perceived empowerment.”, a linear regression with WCC as dependent variable and participants perceived empowerment was carried out. The results show a significant regression calculation, F(1, 312)= 154.780, p<.001, with R2 of .33. Participants average WCC increased .66 units for every unit increase in perceived empowerment. Hence, hypothesis six was accepted.

Hypothesis seven predicted that “Exposure to open-ended stories will lead to higher perceived empowerment, than exposure to closed stories”. A independent samples t-test showed that participants exposed to the open ended stories treatment did not score significantly higher (M=3.69, SD=.610) on empowerment than those exposed to closed stories (M=3.72, SD=.466), t (190) = .219, p = .414 (one-tailed), 95% CI [-.130, .163]. Hence, hypothesis seven cannot be accepted.

Furthermore hypothesis eight, “Stakeholders exposed to open storytelling will exhibit higher WCC, than stakeholders not exposed to an organization narratives.”, was not accepted. An independent samples t-test revealed that those participants exposed to an open storyline did not show significant higher WCC (M=3.54, SD=.65) than the control group (M=3.42, SD=.78), t (205) = -1.25, p = 0.110 (one-tailed), 95% CI [-.323, .072].

Subsequently, a second mediation analysis was conducted with open stories as

independent variable, willingness to co-create as dependent variable, empowerment as moderator and D1 as covariate. Again, bootstrapping for 10000 cases was applied. The results for step one of the mediation analysis yielded that the regression of open storytelling towards the willingness to co-create, not including empowerment as mediator, was not significant b = 0.125, t = 1.40, p=.163, 95% CI [-.051, .302]. Furthermore, the second stage of analysis showed no significant

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direct effect of open stories upon empowerment b = -0.036, t =-.460, p=.645, 95%

CI [-.192, .119]. Thus, no significant relationship between the independent variable and the mediator was found. Finally, the third step of mediation analysis revealed that the relationship between open stories and the willingness to engage in co-creation is not mediated by

empowerment b = -.024, BCa CI[-.134, .089]. Hence, hypothesis nine “The relationship between open stories and WCC is mediated by empowerment", is not accepted.

Furthermore, a multiple regression was conducted to check if perceived empowerment and trust predicted WCC. The regression model was significant, F(2, 311) = 90.696, p < .001. Approximately 37% of the variance of WCC can be accounted for by the linear combination of trust and empowerment (R2 = .37). While trust towards the organization, b* = 0.26, t = 4.26, p < .001, 95% CI [.167, .454] has a significant weak association with WCC, perceived

empowerment, b* = 0.41, t = 6.72, p < .001, 95% CI [.329, .600], yields a significant moderately strong association with the willingness to engage in co-creation.

Conclusion & Discussion

This thesis aimed at empirically testing a model that posited a positive relationship between organizational storytelling and customer engagement, specifically the willingness to

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engage in co-creation activities with organizations. The analysis revealed results which support theoretical assumptions underlying the customer centricity perspective for management and public relations theory and practice. Furthermore, paths for future research are suggested, resulting from some of the studies’ unpredicted findings.

Overall, the findings presented in this thesis underpin the fundamental assumption of large bodies of academic public relations literature (Brønn, 2010; Eisenegger, 2009; Hon & Grunig, 1999) as well as the SD-Logic as put forward by Vargo & Lusch (2004) – that

organizations should put an emphasis on fostering and strengthening favorable relationships with key publics, in order to establish themselves as trustworthy institutions. There has been found a significant positive relationship between trust towards an organization and the propensity for customer engagement. Participants, who found the organization was trustworthy, were more likely to put effort, share knowledge and collaborate towards reaching common goals in co-creation contexts. Furthermore, perceived empowerment was revealed to have an even greater influence on WCC. Hence, if stakeholders perceive their relationships with organizations to be at eye level, they are more willing to share personal resources such as time, effort and knowledge.

With regard to the theses’ main research question, “What is the role of storytelling as a trigger for stakeholder willingness to engage in value co-creation with organizations?”, the results show that promoting co-creation projects by communicating stories, both with open- and closed storylines, translates into an increased likelihood of customer engagement4, when

compared to promoting the same project without the use of narrative elements. Additionally, participants exposed to narratives with a closed storyline, elaborating on the organizations past achievements, evaluated the organization as being more trustworthy than those participants

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exposed to open ended stories, focused on possible achievement in the future. Nonetheless, storytelling overall was not found to be a reliable predictor of either trust or perceived empowerment.

Practical implications

Consequently, organizations seeking to attract participants for co-creation projects such as new product development, design contests or any kind of collaborative idea generation, need to focus on establishing antecedent conditions (Etgar, 2008) for co-creation. As trust has been revealed to be positively associated with customer engagement and a good reputation is linked to increased trust towards organizations (Yang, 2007), building a favorable reputation is expected to be a promising antecedent condition for co-creation to thrive. As proposed by (Eisenegger, 2009) this can be achieved by fulfilling expectations regarding an organization’s functional performance, compliance to socio-ethical standards as well as cultivating an emotional attractive identity. From a communication perspective, using storytelling to communicate the above-mentioned characteristics presents a good fit. Hence, in accordance with the present survey experiment, functional performance ability of organizations should be illustrated by

communicating past achievements in the form of compelling stories. Thereby, the perceived trustworthiness of organizations can be enhanced, which in turn benefits customer engagement, especially the willingness to co-create.

Since this sturdy finds perceived empowerment also significantly positive related to WCC, companies are advised to create environments in which potential co-creators feel

empowered and enabled to contribute their ideas and skills. This is in line with SD-logic theory and its emphasis on customer centricity. Nambisan & Baron (2009) found that presumed benefits of participating in value creation is significantly associated with actual engagement.

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Furthermore, findings by Ardichvili et al. (2006) implicate that a possible increased social status is one of the main motivators to engage in co-creation. Hence, a social ranking system should be implemented on co-creation platforms and communities. Thereby lead-contributors receive status-benefits, which in turn may motivate other users to increasingly participate in order earn an equivalent status within the community or co-creation platform. That way the overall

performance of co-creation projects may be increased. As the results suggest, from a stakeholder perspective it appears important that companies allocate power to co-creators and give them a sense of control. This could be achieved by creating voting systems with which the community can actively take part in decision-making processes. Since total power egality is not desirable from an organization’s perspective, imbalanced power relations between organizations and co-creators can again be legitimized by building and maintaining a favorable reputation

(Eisenegger, 2009).

Limitations and paths for future research

Several limitations regarding this research need to be considered. First of all, the fictional co-creation project experimental subjects were confronted with, is of highly specific nature. The promoted goal of the co-creation process was to find solutions and new products, which give access to drinking water in developing countries. Thus, first and foremost the ultimate

beneficiary party would be those in need for drinking water in order to survive, rather than the project’s host company. Thus follow up research should address these issues by including diverse co-creation projects with a variety of parties benefiting from a possible success and re-asses the effects of communication efforts, including storytelling elements. Thereby, it can be tested if storytelling fosters beneficial outcomes across co-creation projects in general, or if the

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findings of the present study solely apply to co-creation projects with a third party as main beneficiary in particular.

Nonetheless that the initially proposed mediators, trust and perceived empowerment, do have significant positive effects upon the WCC outcome, they do not mediate the relationship with storytelling as independent variable. Hence, future research should address these findings by either redesigning the storytelling treatments, or test for which other relevant communication styles besides storytelling, mediation might be present. Furthermore, since trust and perceived empowerment do not mediate the significant positive relationship between promoting co-creation projects using narrative elements and WCC, other possible mediators should be identified and tested.

Moreover, the proposed theorization for “customer willingness to co-create value with organizations” needs elaborate testing and support by further empirical research. Appropriate steps were taken to ensure that the constructed scale for WCC matches high quality standards by extensively exploring all subscales as well as the constructed scale with PCA and standard reliability measures such as KMO and Cronbach’s alpha. Nevertheless, future research intending to assess WCC with the use of the proposed scale should be aware that this thesis was the first study to implement the instrument. Thus, further testing and, if applicable, customization is recommended.

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Appendices Appendix A: Scales

Trust (L. C. Hon & Grunig, 1999)

1. This organization treats people like me fairly and justly.

2. Whenever this organization makes an important decision, I know it will be concerned about people like me.

3. This organization can be relied on to keep its promises. 4. I feel very confident about this organization’s skills.

5. This organization has the ability to accomplish what it says it will do. 6. Sound principles seem to guide this organization’s behavior.

Perceived Empowerment (Füller et al., 2010; L. Hon & Brunner, 2002)

1. I have the feeling I can actively influence the development, of products and solutions, created with this project.

2. This project gives me the feeling that I am taken seriously.

3. This company will pay attention to what possible participants like me have to say. 4. The company believes, that opinions of possible participants like me are legitimate. 5. The company and possible participants like me are attentive to what each other say. 6. I expect to have some sense of control over the situation, when interacting with this

organization.

Willingness-to-collaborate (Scott et al., 2003)

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2. I am willing to enhance communication among other participants working on the same project.

3. I am willing to cooperate with others to support the clean water foundation. 4. Cooperative problem solving is more effective than individual problem solving. 5. Cooperation is the key to success of the co-creation project.

Effort (Heidenreich & Handrich, 2015)

1. To learn how the co-creation platform of the Clean Water Foundation works, I would exert a lot of energy.

2. I would be very persistent, to learn how the co-creation platform of the Clean Water Foundation works

3. To learn how the co-creation platform of the Clean Water Foundation works, I would spend much time .

4. I would try very hard, to contribute to the projects success. 5. I would put a lot of effort, to contribute to the projects success.

Knowledge Sharing (Hooff & Ridder, 2004)

1. When I learn something of relevance to the projects success, I would see to it that others can learn it as well.

2. I would share my knowledge within the clean water community. 3. I would share my skills within the clean water community.

4. When I learn something of relevance to the projects success, I would see to it that the Clean Water Foundation can learn it as well.

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