value creation research framework

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

The Future of Value Creation

• Michael J. Mauboussin

In this HBR webinar, Michael Mauboussin shares a framework to trace the process of value creation from the basic economic forces that shape a company’s performance to the resulting impact on value drivers.

Featuring Michael Mauboussin , Head of Consilient Research, Counterpoint Global, Morgan Stanley Investment Management

Complimentary HBR Video Webinar

Monday, March 11, 12:00 pm EDT

Most company leaders believe they know the essential ways their organization creates value. But how deep does that understanding go, and could some core beliefs be wrong?

In fact, many companies today are limited by using the wrong metrics, focusing almost exclusively on the profit and loss statement, while overlooking the power of free cash flow and return on capital as key ingredients in total shareholder return.

In this HBR webinar, Michael Mauboussin shared a framework to trace the process of value creation from the basic economic forces that shape a company’s performance—sales, costs, and investments—to the resulting impact on value drivers.

In addition, he discussed:

• How to determine the right metrics to guide organizational value and growth.
• How to use the resulting insights, with help from data analytics and artificial intelligence, to identify value creation and growth opportunities.
• How to communicate the key drivers of success, so that frontline employees have the information they need to understand the impact of their day-to-day actions on company cash flow as well as revenue.
• How to strategically allocate capital and resources to focus on the best bets.

This webinar was sponsored by EY. To learn more, visit ey.com/reimagine and read the related article sponsored by EY on HBR.org: Companies Need to Focus More on Cash Flow and Return on Capital .

• Michael J. Mauboussin is director of research at BlueMountain Capital Management and an adjunct professor at Columbia Business School in New York City. His latest book is The Success Equation .

Partner Center

Related Expertise: Value Creation Strategy , Corporate Finance and Strategy

Ten Lessons from 20 Years of Value Creation Insights

November 27, 2018  By  Gerry Hansell ,  Jeff Kotzen ,  Eric Olsen ,  Alexander Roos ,  Eric Wick ,  Ed Newman , and  Hady Farag

In 1602, commerce evolved into capitalism when the Dutch East India Company formally syndicated its ownership. The first dispute between managers and shareholders came shortly thereafter, in 1622, when a “complaining participant” sued for control rights, citing disagreements on transparency, governance, and capital allocation. Throughout the next four centuries, company owners and managers have wrestled with how best to handle the inherent tensions between long-term shareholder value creation and myriad other management objectives.

BCG has been advising companies on value creation since our founder, Bruce Henderson, opened its doors more than five decades ago. Indeed, many of the firm’s innovations—such as the growth share matrix, experience curves, and cash trap—stem from our early work on the ways that competitive advantage and capital allocation interact to create value for a company’s owners.

In 1998, the firm published the first BCG Value Creators Report, which ranked the top corporations on the basis of the value they’d created over the previous five years and also attempted to draw out lessons from the winners. Since then, we have expanded our databases, refined our methodologies, and—continually developing our thinking—shared our perspectives annually. For our 20th report, we have now diligently reassessed our cumulative experience and distilled our perspectives down to ten lessons—including the source of some of the most common managerial mistakes—that we think really matter. (See “Value Creation Insights Through the Years”)

Value Creation Insights Through the Years

• The 2017 Value Creators Report: Disruption and Reinvention in Value Creation
• The 2016 Value Creators Report: Creating Value Through Active Portfolio Management
• The 2015 Value Creators Report: Value Creation for the Rest of Us
• The 2014 Value Creators Report: Turnaround
• The 2013 Value Creators Report: Unlocking New Sources of Value Creation
• The 2012 Value Creators Report: Strategies for Superior Value Creation
• The 2011 Value Creators Report: Risky Business
• The 2010 Value Creators Report: Threading the Needle
• The 2009 Value Creators Report: Lessons from Consistent Value Creators in the Consumer Industry
• The 2008 Value Creators Report: Missing Link
• The 2007 Value Creators Report: Avoiding the Cash Trap
• The 2006 Value Creators Report: Spotlight on Growth
• The 2005 Value Creators Report: Balancing Act
• The 2004 Value Creators Report: The Next Frontier
• The 2003 Value Creators Report: Back to Fundamentals
• The 2002 Value Creators Report: Succeed in Uncertain Times
• The 2001 Value Creators Report: Dealing with Investors’ Expectations
• The 2000 Value Creators Report: New Perspectives on Value Creation
• The Value Creators Report: A Study of the World’s Top Performers

1. Value creation is not the only goal, but it is essential. The concept of shareholder value incites lots of debate. For some, it is the singular company objective. For others, it is a misguided target. There are plenty of points of view in between.

This debate sucks up a lot of air purposelessly, for two reasons. First, companies have shareholders, shareholders have rights, and shareholders are increasingly sophisticated, exercising their rights through activism and other channels. More often than not, a management team that loses the support of its investors also loses control of the company’s agenda, including the ability to pursue other, nonfinancial objectives.

Second, the conflicts among the differing points of view are not as intense as many believe them to be. There is a growing body of evidence that purpose-driven, sustainable strategies are also beneficial to shareholders. Our research on the impact of environmental, social, and governance (ESG) metrics shows that companies that perform well in terms of nonfinancial ESG measures also deliver better financial performance and command measurably higher valuation. (See Total Societal Impact: A New Lens for Strategy , BCG report, October 2017.)

Put another way, building a great company is not at all inconsistent with being a great stock.

2. Metrics alone are not enough to achieve this goal. Here are two points that they don’t teach in business school.

First, the theory that value creation comes solely from the act of making positive net present-value investments is of limited use in most modern public companies. Fundamentally, investors price a company’s shares on the basis of their views of the underlying business and the attractiveness of the available reinvestment opportunities. Because such expectations are priced into the stock today, the real value creation task confronting leaders of public companies is the need to make more and better investments than the ones already anticipated by investors or to increase—beyond expectations—the profits being earned on existing investments. Beating expectations as expectations evolve is what matters. It’s no small task, and it’s nearly impossible to achieve using metrics alone.

Second, strong and sustainable value creation is delivered in the trenches. Hardwiring value management principles into an organization’s systems and processes—including target setting, planning, capital allocation and risk assessment performance reviews, and incentive compensation—is just as important as getting the metrics right. (See Exhibit 1.) A comprehensive value creation agenda encompasses both the hard (performance) and soft (culture) sides of the challenge. (See “ VF Corporation’s TSR-Led Transformation ,” BCG article, September 2013.)

3. Medium-term TSR must be the capstone metric. Two truths are critical to understanding many of the common mistakes made in the name of value creation: TSR is the only metric that represents the shareholder’s bottom line, and the only metric that correlates 100% with TSR is TSR. (See “ Value Creation and Corporate Reinvention ,” BCG article, December 2017.) Medium-term TSR, measured over a three- to five-year time frame, gives strategies the chance to be implemented and investments the opportunity to mature.

Substituting any proxy metric for TSR inevitably leads companies off course. When earnings per share (EPS) is the principle governing metric, for example, managers can end up “buying” increased EPS by cutting important investments such as R&D or making excessive capital expenditures, ill-advised M&A moves, or poorly timed buybacks. In contrast, TSR is balanced, and it takes into account all the critical factors that drive fundamental value: revenue growth (from reinvestment in the business), margin expansion (from cost control and pricing), and cash flows (which can be reinvested in more growth or used for debt reduction, dividends, and buybacks). TSR also takes into account how managerial actions that determine the valuation multiple, such as investing in the future, optimally deploying capital, or reducing risk exposures, affect investor expectations.

The only metric that correlates 100% with TSR is TSR.

Copy Shareable Link

Medium-term TSR is the only performance metric that appropriately scores the game. This is why it is the only multiperiod metric mandated by the US Securities and Exchange Commission and why it’s the principle performance metric evaluated by Institutional Shareholder Services. These two bodies exert outsize influence on corporate reporting and governance around the world.

4. Every company can find a path to value creation.  Managers often feel trapped, or at least typecast, by industry expectations and macroeconomic factors. They overlook the inevitability that in every industry and for every cycle, there are winners—companies that outperform the pack.

Starting points matter, but for almost every starting point, there is a value-creating road forward. As always, in 2018, the leading companies in our sample of top value creators substantially outpaced their own industry as well as the total market. The median TSR of the top ten companies in each industry was higher than the industry’s median by 9 percentage points (in insurance) and 32 percentage points (in media and publishing as well as metals). (See Exhibit 2.)

The lesson is this: being in a sector whose market performance is below average is no excuse. TSR is a relative—as well as an absolute—metric, so whether an industry is under pressure or accelerating, every company has the opportunity to outperform its peers. No matter how bad an industry’s average performance is relative to other sectors and to the market as a whole, it is still possible for companies in that industry to deliver superior shareholder returns. (See “ How Top Value Creators Outpace the Market—for Decades ,” BCG article, July 2017.)

5. Growth is the most common path to TSR outperformance, but not the only path. Profitable revenue growth is often the primary driver of TSR outperformance over extended time horizons. For top performers during five- to ten-year periods, revenue growth accounts for an average of 50% to 70% of value creation. For this reason, it’s easy to forgive managers for concluding that growth is all that matters.

Still, this view is misguided for two reasons. First, it overlooks that myopic pursuit of growth is one of the most common paths to value destruction. (See Threading the Needle: Value Creation in a Low-Growth Economy , the 2010 BCG Value Creators Report, September 2010.) Aggressive growth can be a high-risk, high-reward proposition, and “bad” growth is a common cause of long-term TSR underperformance. There are many examples of companies that were able to sustain 10% or more top-line growth only to generate below-average or even negative TSR. In many cases, such disconnect is driven by M&A moves gone bad, prioritizing growth at the expense of margins, betting on a cycle that collapses, or investing in adjacencies in which the competitive advantages of the core business do not apply.

The second reason is that there are many examples of top-quartile value creators generating TSR from some combination of other factors, including margin improvement, cash return, and multiple expansion. Our 2017 list of the top consistent value creators over 20 years contained two tobacco companies, which, despite shrinking markets, adverse regulation, and ample brand disparagement, generated annual TSRs of 17% and 22% from 1997 through 2016.

There are many paths to top-quartile TSR.

6. Cash flow is underappreciated and often misunderstood. While growth is the most common route to top- and bottom-quartile performance, it is cash that accounts for most of the shareholder return that a company generates over time. Indeed, since 1926, about 40% of the TSR of the S&P 500 has come from cash returned through dividends—even more when buybacks are factored in. Furthermore, cash generation is the main driver for growth businesses, as it defines the magnitude of a company’s organic or M&A long-term reinvestment rate.

Beyond the simple truth that cash flow is king lies a less obvious point: investors do not value equally all dollars returned to shareholders. In fact, the method of return—share buybacks, dividends, or debt repayment—can have a powerful secondary effect on valuation. For 15 years, we have been arguing in our publications that dividends are especially important: material increases in payout often lead to a significant expansion of a company’s valuation multiple and therefore, in the right circumstances, can drive far greater TSR than buybacks. (See “Thinking Differently about Dividends,” BCG Perspectives, May 2003.)

7. M&A is a powerful tool—for those that commit to it. M&A has a bad rap, thanks to the commonly cited assertion that most deals destroy value. It is true that more than 50% of deals simply transfer wealth from buyer to seller. But there is an untold other side to that story: many long-term, top-quartile value creators engage in significant numbers of M&A deals. (See The 2015 M&A Report , BCG report, October 2015.) This should not be surprising: M&A is one way (and there are not that many others) to reinvest large amounts of capital. Furthermore, well-sourced and well-executed deals can serve up substantial returns. (See “ The Real Deal on M&A, Synergies, and Value ,” BCG article, November 2016.)

The factors that make successful acquirers successful are straightforward. These acquirers commit to M&A and approach it as they would any other industrial process: they climb an experience curve, become proficient over time, and scale up their capability. They also invest disproportionately in three key areas. (See “ Lessons from Successful Serial Acquirers ,” BCG Perspectives, October 2014.) First, they craft a proprietary view of the ways that they create value. This guides their M&A strategy. Second, senior leadership is deeply engaged in the M&A process, and managers at all levels of the organization are expected to source and cultivate relationships with potential targets. Finally, the most successful acquirers articulate a core set of operating principles that define the way that the M&A process will be managed with no additional bureaucracy.

8. Valuation multiples are no longer a black box.  In many cases, managers think that a company’s valuation multiple is a random and uncontrollable outcome and that fickle investors don’t truly understand the businesses in which they invest. We respectfully disagree. While multiples move somewhat randomly over short time periods as they incorporate a wide range of information about future profits and risk, they are not random and certainly not uncontrollable. We have invested more than 20 years in building an analytical tool set that helps companies understand how their shares trade in public markets and which financial KPIs investors take as signals of a healthy (or unhealthy) business outlook. Our tools reveal the key drivers of valuation, which, in turn, can reveal strategic information about a business. (See Exhibit 3.)

Our tools reveal the key drivers of valuation, which, in turn, can reveal strategic information about a business.

One can point to countless examples. In many industries, investors look at gross margin as a proxy for a business’s resistance to commoditization (in, for example, technology) or its brand power (apparel). Investors in financial services put a premium on return on tangible equity. Biotech investors value forward-growth expectations—almost without regard to current profitability. In other sectors, investors put a premium on dividends, which they view as signals of a company’s confidence in future earnings and its managers’ willingness to put their money where their mouth is.

The drivers of valuation provide a rich and refined tool for common managerial tradeoffs, such as driving growth at the expense of margins or reinvesting free cash flow instead of paying down debt. Indeed, the success of companies such as Church & Dwight and VF has been achieved, in part, on a strong understanding of the way that business fundamentals and valuation multiples interact to inform strategic decisions. (See Improving the Odds: Strategies for Superior Value Creation , the 2012 BCG Value Creators Report, September 2012.)

9. The shape and asymmetry of investment opportunities are far more important than the precision of the calculations behind them. Too often, senior management wastes time and energy trying to get the data inputs for their models precisely right. The leading example of this phenomenon is the fruitless fretting over a company’s weighted average cost of capital. (Charlie Munger, the vice chairman of Berkshire Hathaway, once said, “I’ve never heard an intelligent discussion about the cost of capital.” He’s right.) What managers should be evaluating is how a proposed investment compares with the next-best use of capital. If the difference in the cost of capital assumptions (within reasonable bounds) reduces the attractiveness of an investment, it has likely already failed the test.

Even more important, excessive focus on technical precision takes time and effort away from the more meaningful determinants of investment decisions, such as the reliability and asymmetry of the forecast and whether there are any accounting principles at play that decouple reported earnings from cash flow. Management time and attention are much better spent on pressure-testing key assumptions, contrasting different approaches for evaluation (such as cash versus accounting metrics), and considering the different competitive scenarios in which the investment could unfold. (See Risky Business: Value Creation in a Volatile Economy , the 2011 BCG Value Creators Report, September 2011.)

10. Treating your investors like customers pays dividends over time. Relatively few companies put anywhere near the level of time, effort, and intensity into learning why investors own their stock that they put into figuring out why customers buy their products. This is a mistake.

Some customers are more valuable than others, so it makes no sense to try to serve every customer equally. Similarly, there are investors that a company wants and those that it would just as soon not have. Each investor has its own investment process, capital allocation preferences, KPIs, and buy-sell triggers. Investors differ in their willingness to support a company’s mid-to-long-term strategy—especially when results are likely to take time to materialize. The smart play for management teams is to identify the “right” investors and go after them, just as they would pursue high-value customers.

Doing so takes more than the typical approach to investor relations. Value-oriented leadership teams seek to engage in a genuine dialogue with sophisticated investors about the ways value will be created. They use such opportunities to benefit from the experience of portfolio managers and analysts, whose insights can help challenge conventional wisdom within the company.

Company executives also need to appreciate that the support of patient and long-term-oriented investors comes at a price—in the form sometimes of inconvenient transparency. During both good and not-so-good times, investors want a candid assessment of key market forces, the company’s strategies to win, and the upsides for sticking around, as well as the roadmap for getting to the payoff and how they can track progress. And when mistakes are made, investors want to know what lessons have been learned. They increasingly also want reassurance that a solid governance system—one that includes a proven board of directors and executive compensation that emphasizes the right metrics—is in place. (See Winning Moves in the Age of Shareholder Activism , BCG Focus, August 2015.)

All this takes time and sophistication on the part of management, but the effort is worthwhile. Over and over, we see that well-aligned investors are critical to ensuring the success of well-designed strategies.

The shape of the playing field has changed many times since the early 17th century and, indeed, over the 20 years of our Value Creators series, which have seen the dot-com bubble expand and burst, the surges in the middle years of the first and second decades of this century, and the great financial crisis. One of the biggest changes has been to the nature of business itself.

Value management grew up in an economy that was dominated by capital-intensive companies, for which value creation was largely about squeezing out incremental returns on physical capital (accounted for on balance sheets). Recent decades have seen the rapid rise of “discovery” businesses—including IT, pharma, professional services, and medical technology—for which value creation is much more about driving top-line growth and generating returns from investments that flow through the income statement. (See “ Value Patterns: The Concept ,” BCG Perspectives, May 2012.)

This proliferation of new business models is, in many cases, interpreted as making value management less relevant when, of course, the opposite is true. The 2019 Value Creators report will examine some of the new challenges we expect managers to face as advancing technology causes the economy—and the managerial principles that govern value creation within it—to evolve. But the use of TSR as a North Star that guides value-creating agendas and the application of the hard-won, timeless principles of value creation are more important than ever. The game may be changing once again, but the rules—and the ways of winning—remain the same.

Managing Director & Senior Partner

Senior Advisor

Managing Director & Senior Partner; Global Leader, Center for CFO Excellence

Managing Director & Partner

Partner & Director, Shareholder Value Strategy

ABOUT BOSTON CONSULTING GROUP

Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

© Boston Consulting Group 2024. All rights reserved.

For information or permission to reprint, please contact BCG at [email protected] . To find the latest BCG content and register to receive e-alerts on this topic or others, please visit bcg.com . Follow Boston Consulting Group on Facebook and X (formerly Twitter) .

Perspectives on Strategy and Value: Insights on creating sustainable value in an uncertain world.

• Browse All Articles
• Newsletter Sign-Up

ValueCreation →

No results found in working knowledge.

• Were any results found in one of the other content buckets on the left?
• Try removing some search filters.
• Use different search filters.

• Scroll to top

•   / Sign Up
• HOW WE HELP CLIENTS
• schedule your conversation

Value Creation Definition, Model, and Examples in Business

Published: 15 January, 2024

Social Share:

Transformation

Get the Full Package for FREE & OpenSource

• Get instant access to this model including a full presentation, related tools and instructions!
• You will equally get instant access to all 50+ UNITE Innovation & Transformation Models!
• Completely FREE and OpenSource!

Table of Contents

Value creation is more than a business strategy ; it’s a fundamental approach that shapes the direction of organizations and defines their business purpose . It’s the synergy of innovative thinking , unwavering commitment, and an acute understanding of the diverse stakeholders in today’s interconnected world. From the boardroom to the digital frontier, value creation is the compass guiding businesses.

At Digital Leadership, we specialize in digital strategy and execution and use emerging technologies and innovative business models to serve customers better. Our Business Model Strategy service is designed to help organizations create and nurture value for everyone involved. Taking the first step toward innovative thinking, we offer an   Innovation Blueprint,  enabling businesses to assess and align their current innovation practices with specific needs and objectives.

Find out how we can help you

Corporate training, innovation consulting and much more.

We will illuminate the path to success by examining the strategies, innovations, and insights that fuel value creation in the business environment . Whether you’re an entrepreneur with a disruptive vision, a leader steering your organization through uncharted waters, or a professional seeking to make a profound impact, this article is your compass to navigate the intricate landscape of value creation, securing investment capital , and crafting a strategic business plan that aligns with your goals and aspirations.

What is Value Creation? Value Creation Definition

Value creation involves turning resources into something valuable through hard work, it’s a comprehensive concept encompassing the creation of tangible products and services. It refers to the process of generating additional value for stakeholders, going beyond the initial investment or input. 

It also involves investments in capital goods and intellectual property assets. In essence, value creation is about making more out of what you have, and it’s central to the success of any organization.

It’s important to highlight that the concept of value creation extends beyond just seeking profit. It encompasses a wider range of aspects, such as improving products and services, fostering stronger customer relationships , driving innovation, and making positive contributions to both the community and the environment.

At its core, grasping the meaning of value creation is closely tied to sustainability. Businesses need to continuously innovate and adapt to changing market conditions. This entails streamlining operations, refining products, and promoting a culture of excellence. Organizations must consistently aim to enhance their value creation strategies .

Moreover, Value creation involves aligning with the digital landscape, where data-driven insights, technology integration, and agile decision-making are pivotal. To truly excel in understanding the meaning of value creation , businesses must remain agile and responsive to the evolving needs and expectations of their stakeholders.

What Is Value Creation In Business ?

Value creation in business involves a multifaceted strategy for attaining enduring success. It goes beyond mere financial aspects, weaving together stakeholder relationships, innovation, efficiency, and distinctiveness. To thrive in the value creation process , businesses should embrace a comprehensive approach that emphasizes crucial strategies and practices, ensuring their continued competitiveness and relevance in a swiftly changing environment. Let’s explore the fundamental components of business value creation:

1) Enhancing Stakeholder Relations for Sustainable Success

In the complex world of modern business, achieving sustainable success goes beyond profit margins and bottom lines. It centres on the art of enhancing stakeholder relations, a concept that extends far beyond financial stakeholders. It encompasses a web of interconnected relationships with customers, employees, suppliers, and the broader community.

• Innovation and Differentiation Innovation is the driving force behind differentiation and a competitive edge in the market. It involves the creation of unique products, services, or processes that distinguish your business from competitors.
• Product Innovation : Developing new and improved products keeps your offerings fresh and appealing to customers. It can also lead to higher profit margins.
• Service Innovation : Innovative service delivery methods can enhance the customer experience and build loyalty. Think of the convenience introduced by online banking or food delivery apps.
• Process Innovation : Streamlining internal processes improves efficiency and reduces costs. This innovation can translate into better pricing or improved customer service.
• Customer-Centric Approach and Experience Putting customers at the centre of your business strategy is paramount for long-term success. It involves understanding their needs and delivering exceptional experiences.
• Needs Analysis : Conduct thorough market research to identify customer needs and preferences. This informs product development and marketing strategies.
• Personalization: Tailor your products or services to individual customer preferences when possible. Personalization enhances the customer experience and fosters loyalty.
• Feedback and Improvement : Solicit and act upon customer feedback to continuously improve your offerings. Customers appreciate when their opinions are valued.
• Employee Engagement and Development Engaging and developing employees is not just a moral imperative; it’s also a strategic advantage. Engaged employees are more productive, innovative, and committed to achieving organizational goals, thus contributing to creating value for customers .
• Training and Development: Invest in ongoing training and development programs to enhance employee skills and knowledge. This not only benefits the individual but also the organization.
• Recognition and Rewards: Acknowledge and reward employee contributions. This can boost morale, motivation, and overall job satisfaction.
• Open Communication : Encourage open and transparent communication throughout the organization. This helps foster a culture of collaboration and innovation.
• Wellness Programs : Promote employee well-being through wellness initiatives. Healthy and happy employees are more productive and engaged.  contributing to creating value for customers and stakeholders alike.

2) Efficiency and Cost Management

Efficiency and cost management are fundamental pillars of value creation in business. They involve the meticulous optimization of operations and resources to enhance overall profitability. Let’s delve deeper into this critical aspect:

• Resource Allocation : Efficient cost management ensures that resources, including finances, manpower, and time, are allocated judiciously to achieve maximum productivity and minimize waste.
• Improved Profit Margins : By identifying and eliminating inefficiencies, businesses can significantly enhance their profit margins, making every dollar count.
• Competitive Advantage : A company that excels in cost management can often offer more competitive prices in the market, attracting a larger customer base and gaining a strategic advantage.
• Sustainability: Streamlining operations and reducing waste not only bolsters profits but also aligns with sustainability goals, which can enhance a company’s reputation and appeal to environmentally conscious consumers.
• Innovation: Effective cost management encourages innovation as businesses seek creative ways to reduce expenses and enhance processes.

3) Innovation and Differentiation

In today’s fast-paced business environment, innovation and differentiation are critical elements of value creation. They set successful organizations apart by enabling them to not only keep up with changing market dynamics and evolving customer preferences but also lead the way in their respective industries. Let’s explore this concept in greater detail:

• Continuous Innovation: For businesses, innovation should be an ongoing process. It involves identifying opportunities for improvement, both in products and processes, and implementing changes to stay competitive. This may include technological advancements, new product features, or even entirely novel solutions to existing problems.
• Adaptation to Market Dynamics: Markets are dynamic, and what works today may not work tomorrow. Staying attuned to market shifts and emerging trends is essential. Businesses need to adapt quickly to seize new opportunities and mitigate potential risks.
• Customer-Centric Approach: Successful innovation is often customer-centric. Understanding customer needs and preferences is vital in creating products or services that resonate with the target audience. Regular feedback and engagement with customers can guide the innovation process.
• Creating Unique Value: Differentiation is about standing out from the competition. Through innovation, businesses can create unique value propositions that make their offerings more appealing to customers. This could involve superior quality, distinct features, or a one-of-a-kind customer experience.
• Sustainability: Innovation doesn’t just mean short-term improvements; it can also lead to long-term sustainability. Businesses that innovate with sustainability in mind can reduce costs, attract eco-conscious customers, and contribute positively to the environment, thereby enhancing their value creation efforts.
• Market Leadership: Continuous innovation and differentiation can position a business as a leader in its industry. Being at the forefront of change can open up new revenue streams and solidify a company’s reputation as an industry innovator.

4) Sustainability and Social Responsibility

Sustainability and social responsibility are integral facets of value creation in business. These practices not only benefit society and the planet but also bolster a company’s reputation and appeal to a growing base of socially conscious customers. Let’s explore this critical aspect in more detail:

• Environmental Sustainability: Businesses that incorporate environmentally friendly practices contribute positively to the planet. This includes minimizing waste, reducing energy consumption, and adopting eco-friendly technologies. Sustainability efforts can lead to cost savings, regulatory compliance, and alignment with global sustainability goals, such as the United Nations Sustainable Development Goals (SDGs).
• Social Responsibility: Beyond environmental concerns, social responsibility involves ethical behaviour and philanthropic initiatives. It includes fair treatment of employees, responsible supply chain management, and community engagement. Companies that prioritize social responsibility often build stronger relationships with employees, suppliers, and local communities.
• Enhanced Reputation: Demonstrating a commitment to sustainability and social responsibility can significantly enhance a company’s reputation. Customers and stakeholders increasingly prefer to support businesses that align with their values. A positive reputation can lead to customer loyalty, increased market share, and improved brand recognition.
• Appeal to Socially-Conscious Customers: Many consumers today make purchasing decisions based on a company’s social and environmental practices. Businesses that prioritize sustainability and social responsibility can tap into a growing market of socially-conscious customers. This can lead to increased sales and a  competitive advantage .
• Long-Term Viability: Sustainability practices aren’t just about short-term gains. They contribute to the long-term viability of a business. By reducing waste, conserving resources, and fostering responsible practices, companies can ensure their operations remain resilient and adaptable in a changing world.
• Regulatory Compliance: Many regions have implemented environmental and social regulations that businesses must adhere to. By proactively embracing sustainability and social responsibility, companies can avoid legal issues, fines, and negative publicity associated with non-compliance.

5) Measurement and Evaluation

Regularly assess and measure the impact of your value creation efforts to ensure they align with strategic objectives. They serve as a compass that guides organizations toward their strategic objectives. By regularly assessing and quantifying the impact of value creation efforts, businesses can ensure alignment with their overarching goals. Let’s take a closer look at this essential aspect:

• Key Performance Indicators (KPIs) : Defining clear KPIs is essential for measuring value creation. These indicators should be directly tied to the strategic objectives of the organization. They could include financial metrics like revenue growth and profitability, as well as non-financial metrics such as customer satisfaction, employee engagement, or sustainability targets.
• Data Collection and Analysis: Businesses should establish robust data collection mechanisms to gather relevant information related to their value creation efforts. This data can come from various sources, including customer surveys, financial reports, and operational data. Advanced data analytics tools can help in deriving meaningful insights from this data.
• Regular Reporting : To maintain a proactive approach to value creation, regular reporting is essential. Organizations should have processes in place to compile and analyze data at regular intervals, whether it’s on a monthly, quarterly, or annual basis. Reporting ensures that value creation efforts remain on track and are adjusted as needed.
• Benchmarking: Comparing your performance and value creation efforts against industry benchmarks and competitors can provide valuable insights. Benchmarking helps identify areas where improvements can be made and sets the standard for excellence in your industry.
• Feedback Loops: Soliciting feedback from customers, employees, and stakeholders is a valuable part of measurement and evaluation. Feedback can reveal areas of strength and areas in need of improvement. It also fosters a culture of continuous improvement within the organization.
• Strategic Alignment: Perhaps most importantly, measurement and evaluation should always be aligned with the organization’s strategic objectives. It ensures that value creation efforts are not just isolated activities but contribute directly to the fulfillment of the organization’s mission and vision.
• Course Correction: When measurement and evaluation reveal discrepancies between desired outcomes and actual results, it provides an opportunity for course correction. Businesses can adapt their strategies, allocate resources differently, or implement changes to optimize value creation.

6) Financial Performance and Adaptation to Market Dynamics

Monitoring financial performance and adeptly adapting to market dynamics is a pivotal aspect of value creation. This practice not only ensures a company’s survival but also its ability to thrive amidst ever-changing economic landscapes. Let’s delve deeper into this crucial element:

• Financial Metrics : The foundation of monitoring financial performance lies in the measurement of key financial metrics. This includes tracking revenue, profit margins, cash flow, and return on investment (ROI). These metrics provide essential insights into the financial health of the organization.
• Budgeting and Forecasting : Establishing a sound budget and forecasting system is vital. It allows businesses to set financial goals, allocate resources effectively, and plan for contingencies. Regularly revisiting and adjusting these budgets in response to market changes is essential for agility.
• Risk Management: Navigating market dynamics involves managing various risks. These risks can range from economic downturns to fluctuations in supply chain costs. Developing risk mitigation strategies and contingency plans is integral to maintaining financial stability.
• Competitor Analysis : Keeping a close eye on competitors’ financial performance and market strategies is invaluable. It helps businesses adapt and innovate to stay ahead or pivot in response to shifts in the competitive landscape.
• Customer Insights: Understanding customer behavior, preferences, and spending patterns is another dimension of financial performance. Customer insights can inform pricing strategies, product development, and marketing efforts, ultimately impacting the bottom line positively.
• Capital Allocation : Efficient allocation of capital is essential for value creation. This involves making informed decisions about investing in new projects, expanding into new markets, or optimizing existing operations to maximize returns.
• Adaptation Strategies : Businesses must be nimble and adaptive in the face of market dynamics. This may involve diversifying product offerings, entering new markets, or even pivoting the entire business model to address changing customer needs.
• Technology Integration: Leveraging technology and data analytics is becoming increasingly critical in financial performance monitoring. It allows for real-time data analysis, predictive modeling, and agile decision-making in response to market trends.
• Continuous Improvement: The process of monitoring financial performance should be iterative. Regular reviews, post-mortems, and performance assessments help identify areas for improvement and drive ongoing refinement of financial strategies.

Importance of Value Creation

Understanding the importance of value creation reveals its profound impact on businesses. This multidimensional concept extends its influence to various aspects of a company’s success, including customer satisfaction, loyalty, and maintaining a competitive edge. Here, we delve into the crucial dimensions of the importance of value creation :

1) Customer Satisfaction and Loyalty

Creating customer value lies at the heart of any business’s long-term success. Satisfied and loyal customers not only contribute to revenue but also serve as invaluable brand advocates, attracting new customers through positive word-of-mouth. Here’s a closer look at how customer satisfaction and loyalty are intertwined with value creation :

• Repeat Business: When a company consistently provides value to its customers, it fosters a sense of trust and reliability. This often results in repeat business, where satisfied customers return for additional products or services.
• Brand Advocacy: Happy customers often become brand advocates. They not only continue to support the business but also actively recommend it to their friends, family, and colleagues. This positive word-of-mouth marketing can significantly expand a company’s customer base.
• Reduced Churn: Customer loyalty, built through value creation , helps reduce churn rates. When customers feel they receive exceptional value, they are less likely to switch to a competitor.
• Feedback Loop: Engaging with customers in the value creation process can lead to valuable feedback. This feedback can be used to further enhance products and services, creating a continuous improvement cycle.

2) Competitive Advantage

Value creation plays a central role in establishing a lasting competitive advantage in today’s ever-changing business environment. When businesses consistently provide greater value to their customers compared to their competitors, they can secure their position in the market and effectively deter rivals. This strategy not only boosts profits but also guarantees sustained viability and expansion in today’s fiercely competitive markets. Let’s explore in more detail how value creation contributes to gaining a competitive edge:

• Market Differentiation : A business that consistently delivers more value to its customers stands out in the market. This unique value proposition differentiates it from competitors and often leads to a stronger market presence.
• Customer Retention : When customers perceive a business as providing superior value, they are more likely to remain loyal, reducing the risk of switching to competitors.
• Price Flexibility: Businesses with a strong value creation strategy can often maintain higher price points. Customers are often willing to pay more for products or services they perceive as having added value.
• Innovation Leadership: A commitment to value creation drives innovation. Companies focused on creating value are more likely to be at the forefront of industry advancements and trends.
• Barriers to Entry: A business known for value creation can create formidable barriers to entry for potential competitors. It’s challenging for newcomers to replicate the combination of reputation, customer loyalty, and innovation that established value-driven businesses possess.

3) Profitability

Profitability isn’t just a financial metric; it’s a natural consequence of effective value creation. When a business delivers products or services that customers perceive as valuable, several key factors come into play, collectively boosting profitability. Let’s explore these vital aspects:

• Premium Pricing: Customers are often willing to pay premium prices for products or services they perceive as valuable. This premium pricing not only enhances revenue but also contributes significantly to profit margins.
• Cost Efficiency: Value creation often involves streamlining processes and eliminating inefficiencies. This operational excellence leads to cost savings and higher profitability.
• Repeat Business: Satisfied customers tend to return for additional purchases. The cost of acquiring new customers is higher than retaining existing ones, making repeat business a profitable endeavour.
• Cross-Selling and Up-Selling: Providing value opens opportunities for cross-selling related products or up-selling to higher-value offerings. These strategies can substantially increase the average transaction value and profitability.
• Long-Term Growth: Sustainable profitability resulting from value creation enables businesses to reinvest in research and development, expanding their product or service offerings and fueling long-term growth.

4) Innovation and Adaptation

Innovation stands as the cornerstone of value creation . Companies that embrace innovation and adapt to evolving market conditions are not only better positioned to create value for their stakeholders but also to thrive in a dynamic and ever-changing business environment. Here’s a closer examination of the pivotal role of innovation in value creation:

• Market Responsiveness: Innovating in response to changing market conditions is a hallmark of value-centric organizations. These businesses not only survive but thrive by adapting their products, services, and strategies to meet shifting customer needs and expectations.
• Continuous Improvement: A commitment to value creation often leads to a culture of continuous improvement. This means refining existing processes, products, or services to make them more efficient and effective, ultimately enhancing their value.
• Risk Mitigation: Being innovative and adaptive allows businesses to mitigate risks associated with market disruptions. By staying ahead of the curve, they are less vulnerable to external shocks and can respond effectively when they occur.
• Competitive Edge: Innovation can result in the development of unique and market-differentiating products or services. This gives businesses a significant competitive edge and strengthens their position in the industry.
• Customer-Centricity : Innovative companies place a premium on understanding and addressing underserved customer needs. This customer-centric approach not only enhances value but also fosters stronger customer relationships .
• Investor Confidence: A track record of creating value for shareholders instils confidence in the company’s leadership and strategy. This confidence attracts new investors and encourages existing ones to stay committed.
• Capital Accessibility: Companies that consistently create shareholder value find it easier to access capital, whether through equity offerings, debt financing, or partnerships. Investors are more willing to invest in companies with a strong history of value creation.
• Long-Term Sustainability: Shareholder value creation is not just about short-term gains; it’s about ensuring the long-term sustainability of the business. Investors are more likely to support companies with a clear vision for sustained growth.
• Dividend and Buyback Potential: As a result of value creation , companies often have the resources to return value to shareholders through dividends or stock buyback programs, further enhancing investor returns.
• Alignment of Interests: When shareholders benefit from value creation, their interests become aligned with the company’s success. This alignment fosters a sense of partnership and collaboration between shareholders and the organization.

5) Shareholder Value Creation

Creating shareholder value is an indispensable element of business achievement. When shareholders witness their investments prosper, they are more inclined to endorse the company’s growth endeavours. Here’s an exploration of the significance of shareholder value creation:

• Investor Confidence: A track record of creating value for shareholders instils confidence in the company’s leadership and strategy. This confidence attracts new investors and encourages existing ones to stay committed
• Dividend and Buyback Potential: As a result of value creation, companies often have the resources to return value to shareholders through dividends or stock buyback programs, further enhancing investor returns.
• Alignment of Interests: When shareholders benefi t from value creation, their interests become aligned with the company’s success. This alignment fosters a sense of partnership and collaboration between shareholders and the organization.

6) Employee Engagement and Retention

Value creation isn’t limited to customers and shareholders; it also extends to employees. Engaged and satisfied employees not only contribute to increased productivity but also tend to remain with the company longer, reducing turnover costs. Here’s a closer look at the pivotal role of employee engagement and retention in value creation:

• Enhanced Productivity: Engaged employees are more motivated and committed to their work. They take pride in contributing to a company that values their input, leading to higher productivity and better overall performance.
• Reduced Turnover: Value-centric organizations tend to have lower turnover rates. When employees feel their work is meaningful and aligned with the company’s goals, they are more likely to stay, reducing recruitment and training costs.
• Knowledge Retention: Retaining experienced employees means retaining valuable institutional knowledge. This knowledge is often critical for maintaining operational efficiency and competitiveness.
• Positive Work Culture: A focus on value creation fosters a positive work culture. Employees feel a sense of purpose and are more likely to collaborate and contribute to a harmonious and innovative workplace.
• Talent Attraction: Companies known for creating value and fostering employee satisfaction are attractive to top talent. They find it easier to recruit the best candidates, further strengthening their workforce.

The UNITE Value Creation Model:

Value creation lies at the heart of every successful organization’s mission and strategy. It is the fundamental process through which businesses not only generate value for themselves but also contribute positively to society as a whole. The UNITE Value Creation Model serves as a powerful tool to dissect, understand, and harness this crucial process effectively. By meticulously examining the Resource Inputs, Value Creation , Value Outputs, and Impact aspects, organizations gain a holistic view of their operations.

This comprehensive perspective enables them to make informed decisions, enhance their offerings, and ultimately maximize their profitability. Furthermore, it underscores the importance of aligning organizational goals with societal well-being, emphasizing the need for businesses to act responsibly, sustainably, and with a long-term perspective. In a rapidly evolving and interconnected world, the ability to grasp and leverage the nuances of value creation, as outlined in this framework, is paramount for achieving lasting success and significance in today’s business landscape.

The UNITE Value Creation Framework, which comprises four distinct sections—Resource Inputs, Value Creation, Value Outputs, and Impact—provides a structured approach to comprehending and communicating the value creation process . You can download it now.

Download the Complete Value Creation Model package, including instructions for putting it to work for you today.

The UNITE Value Creation framework

 Let’s delve into each section of the framework:

• Resource Inputs: This section offers an overview of the various inputs contributed by your organization and society as a whole, which play a role in the value-creation process . These resources can encompass financial investments, human capital, technology, and more.
• Value Creation : In this section, the central process of value creation is detailed. It encompasses your value propositions, overarching business intentions and purpose, as well as your target audience. It’s the core engine that drives your organization’s value-creation journey.
• Value Outputs : Here, the results generated through the value-creation process are defined and elaborated upon. These outputs can include products, services, innovations, and customer experiences that resonate with your audience.
• Impact : This section goes a step further by exploring the broader impact your organization has on both itself and society at large. It delves into the consequences of your value creation efforts, considering aspects such as social responsibility, sustainability, and long-term societal benefits.

Understanding and optimizing these value-creation factors empowers organizations to create more value for customers and boost profitability. This versatile framework is applicable in diverse contexts, from startups and business model innovation to corporate communication and boardroom presentations, making it an invaluable and adaptable tool.

Value Creation Dimensions

The value creation model is adaptable, and contingent on factors such as industry, market dynamics, and the specific objectives of a company. In essence, it revolves around crafting a distinctive solution that effectively addresses a particular customer need or problem, surpassing existing alternatives in various aspects.

This achievement is realized through a focus on differentiating factors, which may encompass aspects such as quality, convenience, price, or innovation. Typically, the value created is evaluated by multiple stakeholders, including customers, investors, and internal teams or employees.

As we move towards a more sustainable model, it becomes imperative to extend the value assessment to encompass its impact on the planet and the broader ecosystem.

For a comprehensive exploration of value creation and innovative strategies, we invite you to explore our book, “How to Create Innovation .” In this resource, you’ll find valuable insights, including guidance on developing a business plan and establishing a clear business purpose that aligns with your value creation objectives.

The Only Book On Innovation You’ll Ever Need

+FREE access to 50+ complimentary download packages covering the details with plenty of helpful background information

Dimensions of Value Creation Dimension Model:

1) value creation for a customer.

Maximizing customer value begins with a thorough understanding of the unique needs and preferences of high-value customers. This entails a multifaceted approach that delves deep into customer data and behavior. By segmenting the customer base, analyzing historical behavior, and conducting in-depth surveys and feedback sessions, businesses can uncover valuable insights.

Additionally, creating customer journey maps, studying competitors, and employing predictive analytics all contribute to a comprehensive understanding. Social listening and cross-functional collaboration enhance this process further. The integration of data from various sources and the establishment of feedback loops ensure that this understanding remains dynamic and up-to-date. Armed with this knowledge, businesses can tailor their offerings and strategies to deliver exceptional value, ultimately fostering long-term customer loyalty and business success.

• Understanding Customer Needs: The first step in maximizing customer value is understanding the specific needs and preferences of your high-value customers . This involves market research, customer surveys, and feedback analysis to gain insights into what they value.
• Product or Service Quality: Providing high-quality products or services is essential for value creation. Quality ensures that customers receive what they expect and minimizes the likelihood of dissatisfaction.
• Features and Benefits: Offering features and benefits that align with customer needs and preferences can enhance the perceived value of your offering. Highlighting how your product or service solves their problems or fulfills their desires is crucial.
• Personalization: Tailoring your offerings to individual customer preferences can create a unique and personalized experience. This might include customization options, product recommendations, or personalized communication.
• Convenience and Accessibility: Customers value convenience and accessibility. Make it easy for them to purchase, use, or access your products or services. This can involve user-friendly interfaces, efficient customer service, and multiple distribution channels .
• Competitive Pricing: While value creation doesn’t solely depend on low prices, offering competitive pricing that aligns with the perceived value of your product or service is important. Customers should feel they are getting a fair deal.
• Customer Service and Support: Exceptional customer service and support can significantly enhance value creation. Being responsive to customer inquiries, resolving issues promptly, and providing post-purchase support are essential components.
• Trust and Reputation: Building trust through transparency, reliability, and a positive reputation is crucial for value creation. Customers are more likely to engage with businesses they trust.
• Innovation: Continuously innovating and staying ahead of competitors can create value by offering customers new and improved solutions that meet emerging needs.
• Sustainability and Social Responsibility: Many customers today value businesses that demonstrate social and environmental responsibility. Incorporating sustainability into your business practices can enhance value creation.
• Communication and Engagement: Effective communication with customers, through marketing, social media, and other channels, can help convey the value of your offerings and build relationships.
• Feedback and Improvement: Actively seeking customer feedback and using it to make improvements demonstrates a commitment to customer satisfaction and continuous value creation.

2) Value Creation for Employees

Value creation for employees is essential for building a satisfied and engaged workforce, which, in turn, significantly contributes to the overall success and sustainability of a business. Here are some key aspects of value creation for employees:

• Competitive Compensation and Benefits: Offering competitive salaries and benefits helps attract and retain top talent. Fair compensation demonstrates that the organization values its employees and their contributions.
• Career Development Opportunities: Providing opportunities for skill development, training, and advancement within the company shows a commitment to employees’ professional growth. This can include mentorship programs, tuition reimbursement, and clear career paths.
• Work-Life Balance: Supporting a healthy work-life balance through flexible scheduling, remote work options, and paid time off can improve employee well-being and job satisfaction.
• Recognition and Rewards: Recognizing and rewarding employees for their achievements and contributions boosts morale and motivation. This can include bonuses, awards, and public acknowledgement.
• Safe and Inclusive Work Environment: Ensuring a safe, inclusive, and diverse workplace is crucial for employee satisfaction. A culture that values diversity and inclusion fosters creativity and innovation .
• Empowerment and Autonomy: Allowing employees to have a say in decision-making, encouraging creativity, and providing autonomy in their roles can lead to higher job satisfaction and engagement.
• Clear Communication and Feedback: Open and transparent communication channels, as well as regular feedback sessions, help employees understand their role in the organization and provide opportunities for improvement.
• Health and Wellness Programs: Offering wellness programs, such as gym memberships, mental health support, and health insurance, can promote employee well-being.
• Company Culture and Values: Fostering a positive company culture that aligns with the organization’s values can create a sense of belonging and purpose among employees.
• Social Responsibility and Sustainability: Demonstrating a commitment to social responsibility and sustainability can attract employees who are aligned with these values and create a sense of pride in their work.
• Employee Engagement and Feedback: Actively involving employees in decision-making processes, seeking their input, and acting on their feedback can make them feel more valued and engaged.
• Fair and Ethical Treatment: Treating employees fairly and ethically, addressing concerns promptly, and ensuring a safe and respectful workplace environment is fundamental to value creation for employees.
• Team Building and Collaboration: Encouraging teamwork, collaboration, and a sense of belonging can enhance job satisfaction and create a positive work atmosphere.
• Leadership Development: Investing in leadership development programs can help employees progress into leadership roles within the company, providing a clear path for growth.

3) Value Creation for Investors

 Value creation for investors is a fundamental objective for any business, as it directly affects the attractiveness of the company’s investment proposition. Investors, whether they are shareholders, bondholders, or other stakeholders, seek opportunities that offer the potential for sustained value growth. Here are key aspects of value creation for investors:

• Financial Performance: Investors primarily assess a company’s financial performance and its potential for generating returns on their investment. Consistent revenue growth, profitability, and prudent financial management are essential.
• Dividend Payments: Dividend payments to shareholders provide a direct return on investment. Companies that regularly pay dividends or increase them over time often attract income-oriented investors.
• Capital Appreciation: Investors also seek capital appreciation, which means an increase in the value of their investment over time. A rising stock price or bond value reflects this capital growth.
• Transparency and Disclosure: Maintaining transparent financial reporting and disclosing relevant information ensures that investors have access to accurate data for informed decision-making.
• Risk Management: Implementing effective risk management strategies and providing clear insights into risk factors and mitigation plans is crucial for investor confidence.
• Sustainable Growth: Investors increasingly value companies with strategies for long-term, sustainable growth. This includes considerations for environmental, social, and governance (ESG) factors.
• Effective Governance: Strong corporate governance practices, such as an independent board of directors and executive compensation aligned with performance, can enhance investor trust.
• Efficient Capital Allocation: Investors look for companies that efficiently allocate capital to projects and initiatives that offer the highest returns, rather than wasteful spending.
• Clear Strategic Vision: Companies with a clear and well-communicated strategic vision and execution plan are more likely to attract investors seeking long-term value creation .
• Communication with Investors: Regular communication with investors through financial reports, conference calls, and investor relations teams helps maintain investor confidence.
• Return on Investment (ROI): Providing investors with a competitive return on their investment is the ultimate goal. Demonstrating a track record of delivering solid ROI is vital.
• Market Position and Competitive Advantage: Companies that have a strong market position and a sustainable competitive advantage are often seen as more attractive investment opportunities.
• Adaptability and Innovation: Investors value companies that can adapt to changing market conditions and innovate to stay competitive and grow.
• Legal and Regulatory Compliance:
• Ensuring compliance with all relevant laws and regulations is critical to avoid legal issues that can erode investor trust.

Value Creation Model Examples in Business

Integrated reporting framework example.

• The Integrated Reporting Framework aims to establish a conceptual foundation for linking the IFRS Accounting Standards with the emerging IFRS Sustainability Disclosure Standards. One of its key focal points is the inputs and outputs within an organization’s value creation process, although the structure of this process is less defined. 
• At its core, the framework strives to foster a more coherent and streamlined approach to corporate reporting. Its primary objective is to enhance the quality of information accessible to those who provide financial capital. By achieving this, the framework aims to facilitate a more efficient and effective allocation of capital resources, ultimately benefitting both businesses and investors.

Dutch Post (PostNL) Value Creation Model Example

• The Dutch Post’s value creation model provides a structured overview of key elements within its value creation process , allowing stakeholders to grasp its fundamental components. However, it falls short of providing detailed explanations for these components, which can make it feel somewhat abstract and challenging to fully comprehend.
• While the model may appear somewhat disconnected due to its high-level nature, it does offer a noteworthy feature. It establishes a link between the outputs and outcomes of the value creation process and the Sustainable Development Goals (SDGs) set forth by the United Nations. This alignment demonstrates the company’s commitment to addressing global sustainability challenges and contributing to broader societal goals through its operations.

Bekaert Value Creation Model Example

• Bekaert, headquartered in Belgium, operates as a prominent global player in the steel wire transformation and coating industry. With a rich history dating back to its establishment in 1880, the company has continuously evolved and expanded its operations to become a leading innovator in its field.
• Bekaert’s value creation model delves into a detailed analysis of inputs and outputs, emphasizing a quantitative approach. This focus allows the company to meticulously measure and evaluate various aspects of its operations, from resource utilization to product outcomes. By doing so, Bekaert strives to achieve greater efficiency and sustainability in its processes.
• The company’s commitment to quantifying and optimizing resource utilization aligns with its dedication to responsible business practices and environmental stewardship. Bekaert’s efforts in value creation extend beyond merely economic considerations to encompass environmental and social aspects, contributing to a more holistic and sustainable approach to its operations.

Westpac Value Creation Model Example

• Westpac, headquartered in Sydney, Australia, is a prominent multinational banking and financial services corporation. With a global presence, the company serves a wide range of customers and offers various financial products and services.
• Westpac’s value creation model places a strong emphasis on the clear communication of its high-level strategic vision. It delves into how this overarching strategy aligns with and is reinforced by a set of core values that are deeply ingrained in the company’s culture. These values guide Westpac in its day-to-day operations, decision-making processes, and interactions with stakeholders.
• The model further illustrates how these values are translated into actions and initiatives that drive value creation for both the company and its stakeholders. It may encompass aspects such as responsible banking practices, customer-centricity, sustainability efforts, and community engagement.
• Westpac’s approach to value creation underscores not only financial performance but also its commitment to ethical and responsible business practices, contributing to its reputation as a socially responsible financial institution.

Alliander Value Creation Model Example

• Alliander, a Dutch energy network company, is dedicated to value creation through a three-fold approach: sustainability, innovation, and customer-centricity. The company harnesses the power of technology and data analytics to enhance the efficiency and optimization of its energy network. Simultaneously, it commits to investing in renewable energy sources, thereby lessening its environmental footprint.
• Moreover, Alliander places a significant emphasis on elevating customer service standards. It accomplishes this by providing an array of digital tools and services designed to enhance the overall customer experience.
• By making sustainability, innovation, and customer satisfaction its focal point, Alliander successfully generates enduring value that benefits both its customers and shareholders in the long run.

Van Lanschot Kempen Value Creation Model Example

• Van Lanschot Kempen, a renowned Dutch wealth management and investment firm, employs a value creation model rooted in a deep understanding of customer needs and the delivery of personalized solutions through a blend of expertise and innovation. 
• This model prominently features sustainability, emphasizes long-term investment strategies, and upholds an unwavering commitment to delivering exceptional customer service. By harnessing its profound financial industry knowledge and adopting a forward-looking approach to investment opportunities, Van Lanschot Kempen consistently generates value for its clients. 
• These endeavors forge enduring relationships grounded in trust and transparency. Furthermore, the firm’s steadfast focus on sustainability aligns seamlessly with the burgeoning trend of socially responsible investing, solidifying Van Lanschot Kempen’s position as an industry trailblazer.

Value Creation Through Growth and Innovation

Achieving sustainable growth and maintaining competitiveness requires a proactive approach that embraces fresh ideas, emerging technologies, and innovative processes.

The growth through innovation value creation model focuses on achieving growth and competitiveness by identifying and harnessing fresh ideas, technologies, and processes. This model places a strong emphasis on ongoing enhancement, experimentation, and collaboration across various organizational functions. You can download it now.

Download the Complete GROWTH THROUGH INNOVATION VALUE CREATION MODEL package, including instructions for putting it to work for you today.

The UNITE Business Model Canvas

Its core elements involve conducting thorough market research, nurturing an innovative culture, allocating resources to research and development, and establishing strategic alliances with suppliers, customers, and stakeholders. Embracing growth through an innovation approach enables organizations to introduce novel products and services, enhance existing ones, and gain a distinct competitive advantage in the market. You can download it now.

Key Elements of the Growth Through Innovation Model:

• Market Research: Conducting thorough market research is fundamental to identifying opportunities for growth and innovation. It involves studying market trends, customer needs, and emerging technologies.
• Innovation Culture : Nurturing an organizational culture that values innovation is essential. Encouraging employees to generate and implement creative ideas fosters a fertile ground for innovation.
• Research and Development: Allocating resources to research and development (R&D) is crucial for innovation. This includes investing in the exploration of new technologies, processes, and product/service enhancements.
• Strategic Alliances: Establishing strategic partnerships with suppliers, customers, and stakeholders can provide access to valuable resources and expertise. Collaborative relationships often lead to innovative solutions.
• New Products and Services: Embracing growth through an innovation approach allows organizations to introduce novel products and services to the market. These innovations can attract new customer segments and revenue streams .

Our Approach to Value Creation: Growth and Innovation

1) innovation as a catalyst.

Innovation stands as a powerful catalyst for value creation within organizations. It drives growth, enhances competitiveness, and fosters sustainability by introducing novel ideas, processes, and technologies. Let’s explore how innovation fuels value creation:

• Product Innovation: Introducing new or improved products can capture fresh markets and customer segments, boosting revenue and market share.
• Process Innovation : Streamlining internal processes leads to cost reductions and increased efficiency, contributing to higher profitability.
• Customer-Centric Innovation: Tailoring products or services to customer needs not only strengthens customer loyalty but also attracts new clientele.
• Market Expansion: Innovations can open doors to new markets and geographic regions, broadening an organization’s reach.
• Competitive Advantage: Staying at the forefront of innovation helps organizations outshine competitors and maintain a strong market position.

2) Technological Advancements

Technological advancements play a pivotal role in modern business environments, acting as a catalyst for value creation in numerous ways. These innovations continually reshape industries and market dynamics. Let’s delve into how technological advancements drive value creation:

• Enhanced Efficiency: Adopting cutting-edge technologies streamlines processes, reduces operational costs, and improves overall efficiency.
• New Revenue Streams: Technological innovations often lead to the development of new products or services, tapping into previously unexplored markets.
• Improved Customer Experience: Advanced tech solutions can enhance the customer experience, resulting in increased satisfaction and loyalty.
• Data-Driven Insights: Big data analytics and artificial intelligence empower organizations to make informed decisions, identify trends, and optimize strategies.
• Competitive Edge : Staying updated with the latest technologies ensures a competitive advantage, attracting both customers and investors.

3) Cross-Functional Collaboration

Cross-functional collaboration within organizations is a fundamental strategy for value creation. It involves breaking down silos between different departments or teams to work together seamlessly toward common goals. Here’s how cross-functional collaboration contributes to value creation:

• Diverse Expertise: By bringing together individuals with diverse skills and knowledge, organizations can approach challenges and opportunities from multiple angles.
• Innovation Incubator: Collaborative environments often breed innovation, as the exchange of ideas and perspectives can lead to creative solutions and breakthroughs.
• Efficient Problem-Solving: Cross-functional teams can address complex issues more efficiently, drawing upon a broader range of resources and expertise.
• Customer-Centric Approach: Collaboration helps ensure that all departments align their efforts with the goal of meeting customer needs and delivering exceptional value.
• Strategic Alignment: When various functions collaborate, they are better positioned to align their activities with the organization’s strategic objectives, leading to more effective value creation.

4) Risk and Experimentation

To create value,  one often overlooked yet crucial factor aspect is the willingness to take calculated risks and engage in experimentation. Here’s an exploration of how risk and experimentation can drive value:

• Innovative Solutions: Embracing risk allows organizations to experiment with new ideas and approaches, potentially leading to groundbreaking innovations.
• Market Leadership: Companies that are willing to take calculated risks often become market leaders, as they are more likely to seize opportunities and navigate uncertainties.
• Adaptability: A culture of experimentation fosters adaptability, helping organizations respond effectively to changing market conditions and consumer preferences.
• Learning and Growth: Even if an experiment doesn’t yield the desired results, it offers valuable insights and learning opportunities that can inform future strategies.
• Competitive Advantage: Bold experimentation can set organizations apart from competitors, attracting customers who value innovation and risk-taking.

5) Sustainability and Responsible Innovation

Sustainability and responsible innovation are integral to value creation. These principles not only contribute to ethical and environmental responsibility but also drive long-term success. Let’s explore how sustainability and responsible innovation play a crucial role in value creation:

• Environmental Stewardship: Sustainable practices minimize environmental impact, reduce waste, and lower resource consumption, ultimately cutting costs and enhancing reputation.
• Long-Term Viability: Responsible innovation takes into account the long-term consequences of decisions, ensuring that actions taken today do not compromise future value.
• Consumer Demand: Increasingly, consumers prioritize products and services that align with sustainable and ethical values, creating opportunities for businesses to meet this demand.
• Regulatory Compliance: Complying with environmental and ethical regulations not only mitigates risks but can also lead to cost savings and improved public perception.
• Reputation and Brand Equity: Organizations that champion sustainability and responsible innovation often enjoy stronger brand loyalty and trust among consumers.

6) Measuring Innovation Success

In the process of value creation through innovation, measuring success is essential to ensure that efforts align with strategic objectives and provide a return on investment. Here’s how organizations can effectively measure the success of their innovation endeavors:

• Key Performance Indicators (KPIs) : Establishing KPIs specific to innovation initiatives helps track progress and evaluate outcomes. These might include metrics like revenue growth from new products, the number of successful product launches, or customer satisfaction scores related to innovations.
• Return on Investment (ROI) : Calculating the ROI for innovation projects is crucial. It involves comparing the gains, such as increased revenue or cost savings, to the costs associated with the innovation, including research and development expenses.
• Market Impact: Assessing how an innovation impacts the market, such as gaining market share or expanding into new customer segments, provides insights into its success.
• Customer Feedback : Soliciting feedback from customers who have experienced the innovation can provide valuable qualitative data on its perceived value and effectiveness.
• Time-to-Market: Measuring the time it takes to move from ideation to product launch can indicate the efficiency and success of the innovation process .
• Competitive Benchmarking: Comparing the innovation’s performance to competitors in the market can help organizations gauge their relative success.
• Innovation Portfolio Analysis: Organizations can assess the overall health and performance of their innovation portfolio by categorizing innovations as incremental improvements or disruptive breakthroughs and tracking their impact over time.

7) Adaptability and Agility

To create value, adaptability, and agility are indispensable qualities that enable organizations to respond effectively to changing circumstances and seize emerging opportunities. Here’s how adaptability and agility contribute to value creation:

• Responsive Decision-Making: An adaptable organization can quickly assess changing market conditions and make informed decisions, maximizing the potential for value creation.
• Innovation Facilitation: Agility fosters an environment where new ideas can be tested and implemented swiftly, driving innovation and staying ahead of competitors.
• Customer-Centric Approach : Adaptability allows organizations to align their strategies with evolving customer needs and preferences, ensuring that they continue to deliver value.
• Risk Management: An agile organization is better equipped to manage and mitigate risks, safeguarding against potential value erosion.
• Operational Efficiency : Adaptable processes and structures enable organizations to streamline operations and reduce costs, contributing to overall value creation.
• Scalability: The ability to adapt and scale resources and operations as needed ensures that organizations can seize growth opportunities when they arise.

8) Long-Term Perspective

Taking a long-term perspective is a fundamental aspect of value creation, ensuring that organizations not only thrive in the present but also lay the groundwork for sustained success in the future. Here’s how adopting a long-term view contributes to value creation:

• Strategic Planning: Long-term thinking guides strategic planning, enabling organizations to set clear objectives and develop comprehensive strategies that align with their mission and vision.
• Investment in Research and Development : Organizations that prioritize the long term are more likely to invest in research and development, leading to innovation and the creation of new value streams.
• Customer Relationships : A long-term perspective fosters the cultivation of enduring customer relationships, which can result in continued revenue streams and brand loyalty.
• Risk Mitigation : It allows organizations to anticipate and mitigate potential risks and challenges that may arise in the future, safeguarding against value erosion.
• Corporate Responsibility : Organizations committed to the long term often embrace corporate social responsibility, contributing positively to society and the environment, which can enhance their reputation and long-term value.
• Adaptability : A long-term view encourages adaptability and flexibility, ensuring that organizations can weather changing market dynamics and remain relevant.

Steps for Formulating a Value Creation

T he value creation process is a deliberate and structured journey that begins with defining your purpose and extends to crafting a detailed plan for execution. These steps, encompassing both strategy and planning, serve as the backbone for organizations striving to create value effectively and efficiently. Here, we explore these crucial steps for formulating a value creation strategy and plan.

1- Creating Value Creation Strategy

• Define Your Business Purpose To embark on a journey of value creation, the first step is to establish a clear and compelling business purpose and mission. This sets the foundation for all your subsequent efforts.
• Define your business’s overarching purpose and mission.
• Clearly articulate what your organization aims to achieve in the long term.
• Ensure that your purpose aligns with the values and aspirations of your stakeholders.
• Comprehend Your Target Audience Understanding your target audience is vital for creating value that resonates with them. It forms the basis for tailoring your products or services to meet their specific needs and preferences.
• Conduct thorough research to comprehend the needs and preferences of your target audience.
• Segment your audience to better tailor your value creation efforts.
• Identify pain points and challenges your audience faces that your business can address.
• Analyze the Market and Competitors A deep understanding of the market and your competitors is crucial to position your business effectively and identifying opportunities for value creation.
• Conduct a comprehensive analysis of the market in which you operate.
• Study your competitors to identify gaps in their offerings and areas where you can excel.
• Recognize emerging trends and market dynamics that may impact your value creation strategy.
• Leverage Core Competencie s Identifying and utilizing your organization’s core competencies and strengths is key to creating a sustainable competitive advantage.
• Identify the unique strengths and capabilities that set your business apart.
• Determine how these strengths can be harnessed to create additional value.
• Explore opportunities for further developing and leveraging these competencies.
• Craft a Compelling Value Proposition A well-crafted value proposition is the cornerstone of effective value creation. It should clearly communicate the benefits you offer to your target audience.
• Create a value proposition that addresses the specific needs and pain points of your audience.
• Highlight what makes your products or services unique and superior.
• Ensure that your value proposition resonates emotionally with your customers.
• Set Strategic Objectives To guide your value creation efforts , establish clear and measurable strategic objectives. These objectives will serve as benchmarks for your progress.
• Define strategic objectives that align with your business purpose and value proposition.
• Ensure that these objectives are specific, measurable, achievable, relevant, and time-bound (SMART).
• Use these objectives to track your progress and make adjustments to your value creation strategy as needed.

2- Creating Value Creation Plan

• Detailed Execution:
• Creating a value creation plan begins with a clear and comprehensive execution strategy.
• This step involves laying out the specific actions and tasks required to bring your value creation concept to life. It includes defining roles and responsibilities, setting deadlines, and establishing a detailed workflow.
• Budgeting and Resource Allocation:
• Effective resource management is crucial for value creation success.
• Here, you determine the financial and non-financial resources needed for your plan. It includes budgeting for expenses and allocating personnel, technology, and other assets required to execute your strategy efficiently.
• Timeline and Milestones:
• A well-defined timeline and milestones are essential for tracking progress.
• This step involves creating a timeline that outlines when specific tasks and milestones should be achieved. Milestones serve as checkpoints to ensure your value creation plan stays on track.
• Key Performance Indicators (KPIs):
• Measuring success requires establishing key performance indicators.
• Identify and define KPIs that will gauge the effectiveness of your value creation efforts . These metrics could include customer satisfaction scores, revenue growth, market share, or any other relevant benchmarks.
• Risk Assessment and Mitigation:
• Anticipating and managing risks is vital to avoid setbacks.
• This step involves identifying potential obstacles or challenges that could hinder your value creation plan’s progress . Develop strategies to mitigate these risks and establish contingency plans.
• Communication, Alignment, and Feedback:
• Effective communication and feedback loops ensure everyone is aligned with the value creation plan.
• Implement communication channels to keep stakeholders informed and engaged throughout the execution process. Regularly gather feedback and make necessary adjustments to optimize your value creation strategy.

Value Creation Examples

Value creation is a multifaceted concept that finds application across various industries and sectors. Organizations continually seek innovative ways to generate value for their customers, stakeholders, and shareholders. Here, we explore examples of industries demonstrating value creation models and delve into some prominent value creation frameworks employed by successful companies.

1) Industries Demonstrating Value Creation Models

Various industries have harnessed value creation models to drive their success. These models encompass strategies and practices that go beyond traditional approaches, resulting in enhanced outcomes and stakeholder satisfaction. Here, we delve into some key industries and their value creation examples:

Technology and Software Industry

The technology and software industry thrives on continuous innovation and adaptation, exemplifying value creation in its purest form. Value Creation Examples in Technology and Software:

• Developing cutting-edge software solutions that streamline processes and boost productivity.
• Introducing new features and updates to meet evolving customer needs.
• Leveraging data analytics for informed decision-making and personalized user experiences.

Retail and E-commerce

Retail and e-commerce have witnessed a transformative shift, largely driven by digitalization and customer-centric approaches.

Value Creation Examples in Retail and E-Commerce

• Implementing user-friendly online shopping experiences with intuitive interfaces.
• Utilizing customer data to provide tailored product recommendations.
• Efficient supply chain management to ensure prompt deliveries and minimize costs.

Healthcare Sector

The healthcare sector places immense importance on value creation, as it directly impacts patient care and overall well-being.

Value Creation Examples in Healthcare

• Telehealth services that enhance accessibility to medical consultations.
• Developing innovative medical devices and treatments to improve patient outcomes.
• Cost-effective healthcare management systems that optimize resource allocation.

Financial Services:

Financial institutions are adopting value creation models to provide better financial products and services.

Value Creation Examples in Financial Services

• Offering digital banking solutions for convenient and secure transactions.
• Personalized financial advice and investment strategies.
• Implementing robust cybersecurity measures to safeguard customer assets.

Environmental Services:

Environmental services focus on sustainable practices, aligning with the broader goal of preserving our planet.

Value Creation Examples of Environmental Services

• Renewable energy solutions to reduce carbon footprints.
• Waste management innovations, such as recycling and waste-to-energy technologies.
• Conservation efforts and eco-friendly product development.

Transportation and Logistics:

Transportation and logistics are crucial for the global movement of goods and people, and value creation plays a pivotal role.

Value Creation Examples of Transportation and Logistics

• Efficient route optimization to reduce fuel consumption and emissions.
• Real-time tracking systems for enhanced supply chain visibility.
• Adoption of electric and autonomous vehicles to improve sustainability.

2) Value Creation Models And Frameworks

In the business environment, numerous value creation models and frameworks provide organizations with structured approaches to articulate and enhance their value creation strategies.  

These models serve as invaluable tools for businesses of all sizes and across various industries, helping them communicate their value creation narratives effectively and align their efforts with the expectations of stakeholders. 

Here, we explore some notable value creation models and frameworks that guide businesses in their journey to create value and thrive in the marketplace.

Frequently Asked Questions

1) how is value creation measured.

Value creation can be measured through various metrics, providing a comprehensive assessment of an organization’s performance. These metrics include:

• Revenue Growth: Increasing revenue over time indicates the creation of economic value.
• Return on Investment (ROI): ROI measures the profitability of investments, reflecting the value generated compared to the resources invested.
• Customer Satisfaction: High customer satisfaction scores often correlate with value creation, as satisfied customers are more likely to continue doing business with an organization.
• Social Impact: Assessing the positive social impact of a company’s activities, such as community development or environmental stewardship, contributes to understanding value creation’s broader implications.

2) What are the key components of value creation?

The key components of value creation form the foundation of a successful business strategy . To thrive in today’s competitive landscape, organizations must grasp these fundamental elements. 

• Understanding Customer Needs: Value creation begins with a deep understanding of customer needs, allowing organizations to tailor their offerings effectively.
• Leveraging Core Competencies: Organizations identify and leverage their core strengths and competencies to create value.
• Innovation: Innovation fuels value creation by introducing new products, services, or processes that address evolving market demands.
• Efficient Resource Allocation : Optimizing the allocation of resources, including financial, human, and technological, is crucial for value creation.

3) What are the six capitals of value creation?

The six capitals of value creation encompass various forms of resources and assets that contribute to value generation:

• Financial Capital: The monetary resources a company possesses.
• Human Capital: The skills, knowledge, and expertise of an organization’s workforce.
• Social Capital : The relationships and networks a company builds with stakeholders, contributing to reputation and trust.
• Intellectual Capital: Intellectual property, patents, copyrights, and proprietary knowledge.
• Natural Capital : Environmental resources, such as clean air, water, and ecosystems.

4) What is the difference between Value Co-Creation and Value Creation?

In the realm of business and innovation, two closely related concepts, Value Creation and Value Capture play a pivotal role in shaping organizational success. These terms may sound similar, but they represent distinct approaches to delivering value to stakeholders. Let’s explore the key differences between them:

• Value Creation: This term refers to the process of generating value for stakeholders through an organization’s activities, products, or services. It primarily focuses on how an organization produces and delivers value.
• Value Co-Creation : Value co-creation extends the concept by emphasizing collaboration with customers and other stakeholders. It involves actively involving them in the value generation process, often leading to more personalized and innovative solutions.

5) What is the difference between value creation and value capture?

Value Creation and Value Capture , hold distinct roles in determining an organization’s success. These concepts may seem closely related, but they serve different purposes and strategies within the business realm.

• Value Creation: Value creation is the process of generating additional value, whether through innovation, efficient operations, or customer-centric approaches. It is about expanding the overall value pool.
• Value Capture: Value capture involves retaining a portion of the value created as profit or return on investment. It focuses on the organization’s ability to capture a share of the value it contributes to, often through pricing strategies, cost management, or market positioning.

Related Posts

Business level strategy: examples & types for business strategy success.

In strategic management, businesses use a variety of approaches to craft a1

50 Innovation Examples: Exciting Innovative Ideas in Business

In the Business environment, strategic innovation has taken centre stage as a1

Innovation Strategy: Developing Innovative Strategies in Business

Innovation has become an imperative for organizations worldwide, yet the multitude of1

Porter’s Generic Strategies Tips for Business Competitive Strategy 

In business competition, understanding and effectively implementing strategic frameworks are crucial for1

Recent Posts

Examples and Types of Effective Functional Level Strategy for Business Support

A key objective of any business strategy is to improve operational efficiencies...

The Three Levels of Strategy: Corporate Strategy, Business Strategy, and Functional Strategy

Understanding the intricate levels of strategy is crucial for any organization aiming...

• FREE LIVE TRAINING

How To Overcome The 90% Failure Rate in Innovation

Learn the winning formula from over 80+ successful innovation projects

SAVE MY FREE SPOT NOW

Learn how to overcome the 90% failure rate in innovation from a master innovator & bestselling author!

Your e-mail address: * Your first name: *

One Last Step..

Help us better understand the UNITE community

Free guide to improve your innovation success rate*

Our 35-page comprehensive innovation guide covers the key areas why innovation fails. While it cannot cover all the solutions (that would take books to fill), it provides you with a convenient starting point for your analysis and provides further resources and links to the corresponding UNITE models, ultimately allowing you to work towards a doubling and tripling your chances of success.

Discover the largest library of innovation & transformation tools on the entire Internet!

LOG IN VIA E-MAIL

Forgot password?

New to Digital Leadership? Create your account

Get access to the UNITE Models now!

Discover the largest library of innovation & transformation tools on the internet!

First name *

Last name *

Professional E-mail *

Choose Your Password *

Confirm Your Password *

I want to be kept up-to-date and accept the privacy statement *

By signing up, you agree to receive news and accept the privacy statement (mandatory)

Already have an account? Log in

Verify your e-mail address now by entering the 6-digit code we’ve just sent to your inbox

Don't receive Code? Resend code

Country * Please Select Afghanistan Albania Algeria Andorra Angola Antigua and Barbuda Argentina Armenia Australia Austria Azerbaijan Bahamas Bahrain Bangladesh Barbados Belarus Belgium Belize Benin (Dahomey) Bolivia Bosnia and Herzegovina Botswana Brazil Brunei Brunswick and Lüneburg Bhutan Bulgaria Burkina Faso (Upper Volta) Burundi Cabo Verde Cambodia Cameroon Canada Cayman Islands Central African Republic Central American Federation Chad Chile China Colombia Comoros Congo Free State Costa Rica Cote d’Ivoire (Ivory Coast) Croatia Cuba Cyprus Czechia Democratic Republic of the Congo Denmark Djibouti Dominica Dominican Republic Ecuador Egypt El Salvador Equatorial Guinea Eritrea Estonia Eswatini Ethiopia Fiji Finland France Gabon Gambia Georgia Germany Ghana Grand Duchy of Tuscany Greece Grenada Guatemala Guinea Guinea-Bissau Guyana Haiti Holy See Honduras Hungary Iceland India Indonesia Iran Iraq Ireland Israel Italy Jamaica Japan Jordan Kazakhstan Kenya Kiribati Korea Kosovo Kuwait Kyrgyzstan Laos Latvia Lebanon Lesotho Liberia Libya Liechtenstein Lithuania Luxembourg Madagascar Malawi Malaysia Maldives Mali Malta Marshall Islands Mauritania Mauritius Mexico Micronesia Moldova Monaco Mongolia Montenegro Morocco Mozambique Myanmar Namibia Nassau Nauru Nepal Netherlands New Zealand Nicaragua Niger Nigeria North Macedonia Norway Oman Pakistan Palau Panama Papal States Papua New Guinea Paraguay Peru Philippines Piedmont-Sardinia Poland Portugal Qatar Republic of Congo Republic of Korea (South Korea) Republic of the Congo Romania Russia Rwanda Saint Kitts and Nevis Saint Lucia Saint Vincent and the Grenadines Samoa San Marino Sao Tome and Principe Saudi Arabia Schaumburg-Lippe Senegal Serbia Seychelles Sierra Leone Singapore Slovakia Slovenia Solomon Islands Somalia South Africa South Sudan Spain Sri Lanka Sudan Suriname Sweden Switzerland State of Palestine Syria Tajikistan Tanzania Thailand Timor-Leste Togo Tonga Trinidad and Tobago Tunisia Turkey Turkmenistan Tuvalu Uganda Ukraine United States United Arab Emirates United Kingdom Uruguay Uzbekistan Vanuatu Venezuela Vietnam Württemberg Yemen Zambia Zimbabwe Industry * Please Select Automotive, mobilty & transport Financial Services Chemical & agriculture Construction & Real Estate Consulting Education Energy Banking, insurance & FS FMCG Food Gov / Public Industry Health & lifestyle Logistics, Aero & Shipping Media & Entertainment Natural resources & mining Pharma & Biotech Retail & trade Tech & E-Commerce Telco Tourism design Information technology & services Management consulting Retail Pharmaceuticals International trade & development Professional training & coaching luxury goods & jewelry Automotive Insurance Mechanical or industrial engineering Company Size * XS - 1-10 S - 10-100 M - 100-1000 L - 1000-5000 XL - > 5000

Seniority * Please Select Junior Consultant Senior Consultant Manager Senior Manager Director VP SVP Partner CXO Board Member

Areas of interest * Innovation Digital Transformation Culture & Organization IT Strategy & Bus. Alignment Customer Experience

Editable UNITE models (PowerPoint) included

Most of our models and canvases are designed to be applied! 


To help you personalize them to your exact business requirements, you can download fully editable versions of the UNITE models available (PowerPoint format)!

They are straightforward to work with, and you can directly incorporate them into your presentations as you need…thus saving countless hours of replication!

PS: did you know that you are also getting hi-res print-ready versions for your workshops?

Monthly live webinars

Each month we host our exclusive, invitation-only webinar series where one of our industry-leading experts updates our members on the latest news, progress and concepts around business strategy, innovation and digital transformation, as well as other related topics. 



You will receive the book in PDF and EPUB formats, ideal for your computer, Kindle, Tablet or other eReading device.

Bi-weekly live group Q&A sessions

These sessions are your opportunity to bring any questions or challenges you’re facing and receive expert guidance on the spot. 


Come and be a part of engaging discussions where your unique concerns are heard and addressed.

1x personal coaching session / month

If you are occasionally looking for a sparring partner or you need limited support, then this option will be ideal for you. Coaching sessions are 1-2 hours where we can discuss any challenge or opportunity you are currently facing.

If you need a few more hours outside of this provision, then these could be billed transparently.

Unlimited video call support! – it’s like always making the right decision!

We believe support shouldn’t be limited. Because we typically find that the occasional hour just doesn’t cut it – particularly if you and your team are in the midst of a large and complex project.

Your time with Stefan is therefore unlimited (fair usage applies) – in his function as coach and sparring partner. That does mean that you will still have to do the work – we cannot take that off you, unless you hire us as consultants. But you will get valuable strategic insight and direction to make sure you are always focusing your efforts where they will lead to the best results.

One personal coaching session / month 
+ unlimited support via e-mail & WhatsApp

We believe support shouldn’t be limited. If you generally know what you are doing but want a sparring partner to frequently raise questions to, this is the perfect choice!

In addition to your monthly 1-1 live coaching sessions with Stefan, you will also get unlimited support from him via email and WhatsApp messaging (fair usage applies). This not only allows you to get valuable strategic direction in your calls, but also gives you instant access to expert help as you work through your plans each month.



The fact that support is text-based means that we can speed up our responses to you while keeping the overall cost of support down.

Welcome gift of our book 
 “How to Create Innovation” 
 (digital + physical editions)*

As a welcome gift, you will receive the both the digital and physical version of our book “How to Create Innovation”, which covers numerous relevant resources and provides additional deep dives into our UNITE models and concepts.


The print version will be shipped out to you on sign-up. The digital version will be emailed to you, and comes in PDF and EPUB formats, ideal for your computer, Kindle, Tablet or other eReading device.

1x major workshop or 2x smaller workshops / month

1x major or 2x smaller workshops based on the UNITE models.

• Topics covered: almost any challenge under the header of #strategy, #innovation or #transformation, leveraging the UNITE models.
• Hands-On Learning: solve your challenges while learning the practical application of the UNITE models and walk away with concrete plans and tools to take your next steps.
• Industry thought leadership: facilitated by Stefan, the founder of Digital Leadership and the main author of the UNITE models, ensuring top-tier guidance and knowledge sharing.
• Collaborative approach: engage in interactive sessions that foster collaboration, idea exchange, and real-time problem-solving among peers and industry leaders.
• Continuous Improvement: Regular workshops ensure ongoing development in your organization staying ahead of industry trends and customer needs.

Access all of our UNITE models, 
 (incl. editable & print versions)

All of our Professional plans offer full access to the following:

• 6x UNITE model package downloads are included per month, if you need something in addition to these however, please let us know!
• Hi-res, print-ready versions you can use in your workshops
• Fully editable PowerPoint versions where applicable – personalize to your needs.
• Exclusive access to our vault of never-before-published strategic materials. We have much more to share – a lot of our concepts have never been published!

Exclusive access to our private UNITE community (upcoming)

We are currently in the process of launching our brand new community., we are designing our community to specifically help you:.

• Get answers to questions (“How do I …”)
• Share leading practices & knowledge
• Jointly develop new models
• Network amongst a highly qualified group of peers

Please, select the reason

Cancelling your plan will deactivate your plan after the current billing period ends. You will not be charged further, but also won’t be able to access [exclusive features/services].

• Cost-related issues
• Unsatisfied with the service
• Features I need are missing
• Switching to a different service
• Other (Please specify)

Book Your Initial Blueprint Session Now

Simply fill out the below form and book in a time for our initial session that works for you. This initial session is free, no strings attached, and is where we can discuss your Blueprint needs more in-depth before moving forward.

Stefan F. Dieffenbacher

Founder of digital leadership.

Adam D. Wisniewski

Partner for it strategy & business alignment.

Get in touch with Digital Leadership

Speak to our team today to find the best solution for your business to grow and scale.

We are here to support you across the entire lifecycle in all topics related to #digital, #innovation, #transformation and #marketing!

Stefan F. Dieffenbacher Founder of Digital Leadership

Contact Us!

Contact form, contact details, book a call.

Title, first name & last name * Email address * Phone number Please let us know how we can best support you! *

By clicking “Send”, I agree to Terms of Service and Privacy Policy.

Let’s have a conversation!

“Please be invited to reach out! We are happy to help and look forward to a first meeting!”

+41 (0) 44 562 42 24

[email protected]

Schedule Your Call With Our Team

Find a time on our calender that best suits you !

Founder and CEO of Digital Leadership

SCHEDULE YOUR INITIAL CALL

A Quick Survey!

What is the main challenge you're currently facing in your business?

You Want To Drive Change?

Let’s find the best solution for your business to grow and scale sustainably!

Let’s kick start it!

We will uncover your current business situation and goals and provide you with a bespoke solution that helps you drastically grow your business working with us.

Stefan F. Dieffenbacher, M.B.A.

Feedback about our consulting that we are proud of

Read the reviews and make sure that this is not a waste of time, but a super effective tool.

You want to drive change?

Schedule your free business assessment call with our founder.

On this call, we will uncover your current business situation and goals and talk about how to drive change and solve your need.

Choose the meeting type that applies to your needs and schedule a time to meet with someone from our team. We look forward to speaking with you soon!

Thanks, We’ve Received Your Updated Details

Schedule Your Free Business Assessment

Schedule Your Free Business Assessment Call With Adam D. Wisniewski

Welcome to our scheduling page.

Let’s Design your Customer Experience Blueprint !

In a uniquely designed 60 or 90 minute session* , we will …

• > identify where to start with near-certainty
• > define what approach it takes to create success in your organization

Based on the Blueprinting session, you will receive a tailored blueprint that aligns with your objectives, vision and goals, ensuring that your initiative is a success from start to finish.

In this session, you will be working together with Patrick Zimmermann, Associate Partner for Customer Experience

Let’s Design your Culture & Org-Change Blueprint !

In this session, you will be working together with Dr. Andreas Rein, Partner at Digital Leadership for Culture & Org Change

Let’s Design your Innovation Blueprint !

In this session, you will be working together with Sascha Martini, Partner at Digital Leadership for Innovation and Digital Transformation

Let’s Design your Transformation Blueprint !

In this session, you will be working together with Stefan F. Dieffenbacher, Founder of Digital Leadership Stefan is a global thought leader in the innovation space

Let’s Design your IT Strategy & Business Alignment Blueprint !

In this session, you will be working together with Adam D. Wisniewski, Partner for IT Strategy & Business Alignment

Patrick Zimmermann

Sascha Martini

Dr. Andreas Rein

Write a personalized review! Log in

Create Review

Move fast, think slow: How financial services can strike a balance with GenAI

Take on Tomorrow @ the World Economic Forum in Davos: Energy demand

PwC’s Global Investor Survey 2023

Climate risk, resilience and adaptation

Business transformation

Sustainability assurance

The Leadership Agenda

PwC’s Voice of the Consumer Survey 2024

The s+b digital issue: Corporate “power changers”

The New Equation

PwC’s Global Annual Review

Committing to Net Zero

The Solvers Challenge

Loading Results

No Match Found

Value Creation

Turning the bottom line into a bigger picture

As businesses around the world continue to adapt to unprecedented challenges, the traditional view of value is due for an overhaul. A strategic pivot. A broader, bolder perspective.

But in pursuing a holistic transformation, which levers of growth should you pull to achieve long-term, sustained outcomes?

Whether you’re targeting an acquisition, considering a divestiture or looking to improve your enterprise performance, a Value Creation mindset goes beyond the expected to reveal untapped sources of growth.

See more about how can we help

Playback of this video is not currently available

Value Creation with PwC

Empower your purpose with an intelligent purchase.

Companies adapting to a COVID-changed world are rushing to reconfigure their businesses and capabilities, fueling M&A activity. But history shows that deals don’t always create value. How can corporate leaders ensure they are allocating capital to create sustained outcomes?

Our research reveals that acquisitions based on a capabilities strategy will generate the best returns. To avoid value loss, learn how to integrate capabilities consideration into impactful deal-making.

Read more on doing the right deals

What about non-financial drivers of value?

For businesses looking for innovative growth solutions, it’s no longer enough to focus on financial drivers of value.

To create, protect and sustain enterprise value, executives must do more—and consider both a diverse set of stakeholders and a broad set of intangible considerations such as resilience, societal changes and ESG opportunities.

How can a company’s values be activated to drive value creation? Discover five actions that leaders can take to execute effective strategies in the context of a broader value creation ecosystem.

Read more on today's VC ecosystem

How can you create value amid disruption? Use a value bridge.

For companies surrounded by economic uncertainty mixed with a competitive surge of deals worldwide, creating value is a real challenge. A value bridge can be used to identify actions that can prevent value loss and preserve value in times of disruption, while also strengthening your company's competitive positioning to help it come out ahead.

Every company situation is unique, so the application of the value bridge will vary by sector and for different circumstances.

Value decline  

Business impact of covid-19.

Phasellus efficitur blandit erat, vitae accumsan nisl porta ut. Maecenas tincidunt mi ligula, in interdum ligula dapibus eu. Pellentesque massa eros, pharetra quis metus sed, laoreet lobortis mauris. Morbi ac metus non tellus feugiat tempor. Duis finibus libero cursus ipsum elementum gravida.

Explanation copy about nos atur, vendi cullorum eatem velitatur adit quatiur? Occae nobis eumque eritatur ant eum renim ut

Continue to value preservation

Value preservation Initiatives to protect company and company value

Streamline and remove inefficiencies and cost from your business. Or explore how technology such as automation can relieve pressure on your existing operations and resources.

Liquidity and cash

Reducing debt, increasing available working capital or accessing the most efficient form of cash to finance acquisitions.

Financial restructuring

Restructuring options to improve your financial position and address covenant pressure, credit challenges or improve transparency to keep your creditors onside.

Strategic mechanism

Strategic options such as mergers and acquisitions through to wind-downs of company structures

Continue to value creation

Value creation Strategic, operational and financial initiatives to create value

Strategic repositioning.

Maximise value of the business by effective changes in portfolio, capital allocation or through transformative M&A.

Performance improvement

Drive opportunities for transformational business improvement through growth and operational efficiencies, whilst considering any potential headwinds.

Asset optimisation

Optimise net working capital, capex, tax and other balance sheet items, considering the implications of different strategic and operational choices

Multiple impact

Apply a stakeholder expectations lens to the business to identify areas of opportunity and risk including purpose, resilience and ESG that impact the multiple of a business.

How we can help

Exploring unexpected angles, our agile community of solvers works with you to define new approaches to value creation—from making your business more resilient to bolstering your ESG framework. We look holistically at all aspects of an organisation’s performance to propose enterprise-wide transformation initiatives or smaller scale optimisation programmes.

Driven by data, our tech-powered teams use AI, machine learning and cutting-edge analytics to build scenarios for your value chain. Our expertise in finance, operations, deals, strategy, tax and accounting, enables us to go wide and take the long-view to ensure your business is positioned to deliver sustained outcomes for the future.

Get in touch

Featured content

Global m&a industry trends.

Now is not the time to fall out of love with M&A. We believe transformation and transactions will be at the forefront of CEOs’ value creation strategies in 2023.

Act now to recover

As we manage the fallout and uncertainty of today’s challenging environment, a strong plan to maximize value creation is more important than ever. We help you act fast so you can stay ahead and own every moment.

Private equity’s ESG journey: From compliance to value creation

Multiple crises over the past 18 months have delivered a stark wake-up call to the world. If we’re going to prevent further pandemics, reduce the risks of climate change, build a more equitable society and still generate growth, it’s clear that we’ll have to create more sustainable economies and systems.

{{filterContent.facetedTitle}}

{{item.publishDate}}

{{item.title}}

{{item.text}}

We welcome your comments

Your request / feedback has been routed to the appropriate person. Should you need to reference this in the future we have assigned it the reference number "refID" .

Thank you for your comments / suggestions.

Required fields are marked with an asterisk( * )

Please correct the errors and send your information again.

By submitting your email address, you acknowledge that you have read the Privacy Statement and that you consent to our processing data in accordance with the Privacy Statement (including international transfers). If you change your mind at any time about wishing to receive the information from us, you can send us an email message using the Contact Us page.

Malcolm Lloyd

Global, EMEA and Spain Deals Leader, Partner, PwC Spain

Tel: +34 629 11 83 08

Hein Marais

Global Value Creation Leader, Partner, PwC United Kingdom

Tel: +44 (0)7740 064729

Heather Swanston

Global Business Restructuring Services Leader, Partner, PwC Japan

© 2017 - 2024 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

• Legal notices
• Cookie policy
• Legal disclaimer
• Terms and conditions

Value creation disclosure: the international integrated reporting framework revisited in the light of stakeholder theory

Meditari Accountancy Research

ISSN : 2049-372X

Article publication date: 1 December 2021

Issue publication date: 26 May 2022

The paper aims to propose an integrated reporting (IR) framework rooted in Freeman’s stakeholder theory (ST). The proposed framework modifies the international integrated reporting framework (IIRF) and aims to overcome criticisms related to its focus on investors and the abandonment of sustainability.

Design/methodology/approach

The paper develops a modified IIRF based on an in-depth analysis of the IR and ST literature. The framework was then applied to a non-profit health-care organisation to verify its theoretical assumptions.

The modified IIRF was conceived as a ready-to-use tool. By applying it to a business case, it was validated with respect to whether and how it could help achieve better and more stakeholder-oriented reporting. The findings enabled us to validate the use of the tool not only for reporting but also for the self-assessment of organisations with respect to embedding ST.

Research limitations/implications

The modified IIRF was implemented only in one case, and further implementations are needed to comprehensively identify its strengths and weaknesses, both in for-profit and non-profit organisations.

Practical implications

The revised IIRF represents an updated tool for reporting and disclosing the value created by an organisation for itself and for its stakeholders including the external entities affected by the impacts engendered by the organisation. In this way, the IIRF can give visibility to all value created and the value creation process, including sustainability matters. This allows integrated thinking processes to be incorporated accordingly, supporting better management.

Originality/value

This paper suggests three adjustments to improve the IIRF’s ability to incorporate ST as a theoretical foundation. The adjusted IIRF is a ready to-use-tool specifically highlighting what value or values an organisation delivers (its outcomes), for whom (its stakeholders) and how (its specific business processes) within a business model effectively connecting them. From this point of view, it fits the rising stream about the evolution of the sustainability reporting fostered jointly by the international integrated reporting council and sustainability accounting standard board, and by the European Union.

• Stakeholder theory
• Integrated reporting
• Non-financial disclosure
• Value creation
• Purpose firm

Dameri, R.P. and Ferrando, P.M. (2022), "Value creation disclosure: the international integrated reporting framework revisited in the light of stakeholder theory", Meditari Accountancy Research , Vol. 30 No. 3, pp. 739-761. https://doi.org/10.1108/MEDAR-11-2020-1103

Emerald Publishing Limited

Copyright © 2021, Renata Paola Dameri and Pier Maria Ferrando.

Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence maybe seen at http://creativecommons.org/licences/by/4.0/legalcode

1. Introduction

Since it was published in 2013, the international integrated reporting framework (IIRF) has gained consensus worldwide as a tool for the non-financial disclosure of corporations, public bodies and non-profit organisations ( Samy, 2015 ; De Villiers et al. , 2017 ; Guthrie et al. , 2017 ; Adams and Simnett, 2011 ). The aim of the IIRF is to report on an organisation’s ability to create value. It is based on the concept of integrated thinking ( Adams, 2015 ), which is the active consideration by an organisation of the relationships between its various operating and functional units and the capitals that the organisation uses or affects ( Coulson et al. , 2015 ).

However, the IIRF is not without its critics ( Flower, 2015 ; Biondi et al. , 2020 ), with some claiming that it is primarily for the benefit of providers of financial capital rather than organisational stakeholders ( IIRC, 2013 , p. 2). Even though stakeholder relationships are a basic principle of integrated reporting (IR) ( Rensburg and Botha, 2014 ; García-Sánchez and Noguera-Gámez, 2017 ), the IIRF mainly focusses on the value that an organisation creates for itself, whilst the value it creates for others plays a subordinate role (IIRC, p. 10). Sukhari and De Villiers (2019) found that stakeholder relationships are one of the more neglected aspects of IR, despite it being one of the pillars of the IIRF.

The aim of this paper is to overcome the limitations of traditional IR and its focus on investors by suggesting a modified IR framework rooted in creating value for stakeholders and using Freeman’s stakeholder theory (ST) as the theoretical lens.

Since the mid-1980s, value creation for stakeholders has increasingly emerged as a key aspect of strategic management ( Harrison et al. , 2020 ). ST posits that to be successful, organisations must serve the interests and expectations of all their stakeholders rather than focussing on a particular group ( Freeman, 1984 ; Friedman and Miles, 2006 ; Phillips and Freeman, 2010 ). ST is contrary to the notion that the ultimate aim of the corporation is to maximise shareholder returns ( Jensen, 2001 ; Barney, 2018 ).

ST is an ante litteram version of the concept of integrated thinking upon which the IIRF is based because it affirms that all stakeholder interests should be managed as a whole ( Harrison et al. , 2020 ). However, the IIRF is not based on ST and focuses on the value an organisation creates for itself rather than on the explicit causal links between business practices, key stakeholders, value creation and increases or decreases in six capitals.

However, the IIRF focusses on the value an organisation creates for itself and stakeholders are not the primary recipients of value creation. As a consequence, this setting blurs the explicit casual links between business practices, key stakeholders, value creation and increases or decreases in the six capitals, limiting the integrated thinking enabled by the IIRF ( De Villiers et al. , 2014 ; Dumay et al. , 2016 ). These relationships have not been sufficiently highlighted ( De Villiers et al. , 2017 ; Zambon et al. , 2019 ) and deserve to be examined more comprehensively.

To incorporate ST into IR, a modified framework was developed based on an in-depth analysis of the IR and ST literature and an empirical study to verify the theoretical assumptions. The modified framework emerged from adjustments made to the IIRF to improve the disclosure of an organisation’s ability to create value for all of its stakeholders in an integrated way ( Dameri and Ferrando, 2020 ). The modified IIRF includes some original details and provides operational implications that are worth highlighting. Firstly, the traditional IIRF defines value creation as merely an increase in any of the six capitals, whilst the modified IIRF includes the fulfilment of stakeholder expectations in value creation. Secondly, the modified IIRF is more suitable for stakeholder- and purpose-oriented organisations because it enables the reporting of stakeholder satisfaction and firm purpose, which are increasingly required ( Millstein et al. , 2019 ). Finally, the modified IIRF is a ready-to-use tool, supporting IR preparers to write stakeholder-oriented reports, filling the gap in the research on the relationships between ST and IR and the implementation of these relationships ( Vitolla et al. , 2019a , 2019b ).

The modified IIRF was validated by empirically investigating its use in a non-profit health-care organisation. The findings enabled to the refinement of the modified IIRF, which was found to be more effective in disclosing and reporting value creation for stakeholders. Moreover, the research outcomes can be extended to for-profit corporations.

The remainder of the paper is structured as follows. Section 2 describes the methodology for the structured literature review and case study. Section 3 presents the literature and defines the theoretical lens supporting the research. Section 4 introduces adjustments to the IIRF, Section 5 explains its implementation in a case study and Section 6 discusses the findings. Section 7 outlines the research limitations and makes recommendations for future research.

2. Methodology

2.1 literature review on stakeholder theory and integrated reporting.

A systematic literature review ( Fink, 2005 ) was conducted to identify the basic features of ST, its evolution over the past 30 years and whether and how it intersects with IR. We adopted a systematic, explicit, comprehensive and reproducible method, including both bibliographic and thematic analyses, to support the robustness of our results ( Rowley and Slack, 2004 ).

Vitolla et al. (2019a) conducted a systematic review of the literature on ST and IR to classify the research according to normative and descriptive perspectives and identify an agenda that will be able to guide future studies. We refer to this paper, but we have used a different literature review protocol: Vitolla et al. root their protocol in their previous knowledge on integrated reporting to define the space of research and identify the research keywords before the survey (Vitolla et al. , p. 519). We have adopted the conventional content analysis as suggested by Hsieh and Shannon (2005) , therefore, we did not define the keywords before the survey: we simply defined the space of research as ST; then, we derived codes from the reading of the papers, counting and comparing the text’s content.

Identify the scope and aims of the literature review.

Choose the parameters for paper selection, including keywords, sources and period of publication.

Analyse the selected papers to extract knowledge.

Classify the findings and report the results.

1. Firstly, the aims of the literature review were identified. These aims were to investigate the meaning and evolution of ST over the past 30 years and understand whether and how ST intersects with the IIRF to enhance its ability to report on and disclose the value an organisation creates for its stakeholders.

2. These aims determined the choice of parameters for paper selection. The Scopus database was used to search for papers because it includes highly ranked journals in business, management and accounting. Accordingly, two different searches were carried out: ST meanings and evolution and the link between ST and IR. To search for articles on ST, the search term “stakeholder theory” was entered into the “title” field, returning 325 papers. Only papers from the business, management and accounting disciplines were selected to ensure they aligned with the aims of our review. Moreover, only journal articles and book chapters were included to examine the most valuable works. This reduced the sample size to 192 papers. The second search on the link between ST and IR was conducted by entering the phrase “integrated reporting AND stakeholder theory” into the “title” field, which returned only one paper. The search was then repeated with the same search terms entered into the “title”, “abstract” and “keywords” fields. This yielded 24 papers from 2013 onwards, with 20 of these papers published in the past 2 years.

3. To analyse the selected papers, we adopted conventional content analysis ( Hsieh and Shannon, 2005 ) aimed at identifying recurring themes with respect to ST. Our approach was rooted in inductive coding ( Chandra and Shang, 2019 ), a data analysis process whereby the researcher repeatedly reads, compares and interprets raw textual data to develop concepts or themes. We used inductive coding without a predefined code frame because this was less prone to bias and more flexible. The aim was to identify codes linked to the research aims:

Text analysis was applied to the title, keywords and abstracts of the 192 papers on ST and to the title, keywords, abstract and text of the 24 papers on ST and IR. The process began with first-order coding of key sentences explaining the aim of each paper. Then, the assigned labels were shared and reviewed by members of the research team, who combined the codes into themes. To summarise the findings, all 192 papers on ST were assigned to a category depending on the coding for the main topic of each paper. These findings are summarised in Table 1 .

Table 1 highlights the research fields in which ST has been linked to key topics in business management. The first group of papers ( n = 53) pertained to managerial practices, correlating with Freeman’s (1984) original formulation of ST and including strategic management ( n = 28), corporate governance ( n = 11) and performance ( n = 14). The second group of papers ( n = 22) pertained to the relationship between ST and the nature and aims of the firm ( n = 18) and non-profit organisations ( n = 4). The third group of papers ( n = 68) investigated ST through an ethical lens, with papers pertaining to ethical issues ( n = 30), corporate social responsibility ( n = 21) and, from 2003, the environmental impact of business activities ( n = 17). The fourth group of papers ( n = 39) pertained to the evolution of ST with respect to relations and communications with stakeholders, including their classification and involvement ( n = 27) and disclosure activities ( n = 12). This last group of papers was concentrated from 2005 onwards. A small group of papers ( n = 10) pertained to public policies, a topic more likely to be addressed in journals outside of the business, management and accounting discipline.

The results of this systematic literature review were used to build the theoretical framework (Section 3).

With respect to the analysis of the literature on ST and IR, the 24 papers were read in their entirety. The common aspect linking them was their reference to ST as the theoretical lens on which to base research ( Vitolla et al. , 2019a , 2019b ). Some authors referred to the need for more (or better) information on stakeholder pressures ( Farneti et al. , 2019 ), whilst others used ST to justify the commitment of companies and IR preparers to improve disclosure ( Dameri and Ferrando, 2020 ). Finally, several studies used ST to justify the ethical behaviours of companies in improving the disclosure of non-financial information regarding sustainability, environmental preservation or the common good ( Frias-Aceituno et al. , 2013 ). None of the 24 papers used ST to modify the IIRF or the disclosure content of IR.

Given that these topics were intertwined and often occurred concurrently in papers, it is only possible to report the topics linking IR to ST rather than build a taxonomy (similar to that in Table 1 ).

2.2 Action research to validate the theoretical findings

A case study ( Yin, 1994 ) was undertaken to test the theoretical framework that emerged from the literature review and validate the theoretical constructs ( Eisenhardt, 1989 ). The case study involved an in-depth investigation of an organisation that wished to use IR to disclose the value created for its stakeholders. The case study enabled the collection, analysis and interpretation of primary data on the topic ( Yin, 1994 ).

Given that the authors participated in the preparation and drafting of the first edition of the integrated report, the case study was based on action research ( Kemmis et al. , 2013 ), which involved concurrently conducting research and taking action, then reflecting on the consequences of actions to understand, develop and improve managerial practices ( Burns, 2007 ). Indeed, being personally involved in the preparation of the integrated report, the authors of this paper had the opportunity to operationalise their theoretical framework. In this case, action research was confirmatory ( Janssens et al. , 1995 ) because it made it possible to test and validate the theoretical hypotheses emerging from the results of the systematic literature review.

The case study was the Gigi Ghirotti Association (GGA), a medium-sized, non-profit health-care organisation established in 1984 in Genoa, Italy. GGA provides palliative care and assistance to patients with terminal cancer, acquired immune deficiency syndrome and amyotrophic lateral sclerosis (motor neuron disease), as well as their families. GGA owns two premises in the city and provides both in-home and hospice-based services. It is a well-known and highly regarded organisation that plays a pivotal role in the local area, satisfying health needs and expectations that would otherwise remain unfulfiled. With respect to its relations with its stakeholders and the local community, GGA faces challenges in making its outcomes known and promoting its image. For this reason, the association has been issuing a social report since 2009. At the end of 2017, unsatisfied with the quality and effectiveness of its disclosure to stakeholders, GGA requested support from the Department of Economics and Business Studies at Genoa University in updating and improving its long-standing social report. Thus, cooperation was born, providing the opportunity to test the adjusted IIRF.

To conduct the empirical research, a project team was formed, including four academic researchers (the authors of this paper and two postgraduate students) and three GGA managers: the chief financial officer (CFO), the chief operating officer (COO) and a member of the GGA supervisory board. The work was organised as a series of learning and action meetings ( Carr and Kemmis, 1986 ) to diagnose problems, plan actions, implement solutions and reflect on outcomes.

Meeting minutes: Over the course of six meetings, GGA representatives discussed solutions and obtained feedback about the gradual implementation of the adjusted IIRF. Following each GGA meeting, the researchers attended academic meetings, seeking to learn from the actions taken and improve the solutions at each cycle.

Semi-structured interviews: These involved the CFO, COO and member of the supervisory board of GGA. The questions pertained to the association’s aims and mission, internal processes, disclosure documents, perceived importance of different stakeholders and awareness about critical resources.

Proprietary reports and documents.

Interviews were transcribed and coded in conjunction with the proprietary documents, particularly those on financial and social reporting.

The project was completed at the beginning of 2019 and GGA’s Integrated Report 2018 ( www.gigighirotti.it/wp-content/uploads/2019/05/integrated-report.pdf ) was released in the spring of 2019. GGA is committed to issuing a regular integrated report in the long term.

3. Background and theoretical framework

3.1 evolution of stakeholder theory: embedding stakeholder theory into the purpose view of the firm.

Although it has been rooted in numerous previous works ( Dodd, 1932 ; Stewart et al. , 1963 ; Pitelis and Wahl, 1998 ), ST was officially born in 1984, when R. E. Freeman published his book Strategic Management : A Stakeholder Approach . As the title of this book makes clear, ST was conceived as a managerial practice to improve the success of corporations by pursuing value creation for all stakeholders rather than only shareholders using an integrated approach ( Smith, 2003 ; Phillips et al. , 2003 ).

ST was originally defined by Freeman (1984) as a managerial practice to help companies operate in complex environments in which rapid changes and environmental problems were acquiring increasing importance. Management can no longer be based on simple input-output mechanisms but must be based on a “hub and spoke” model in which firms affect and are affected by multiple factors ( Freeman, 1984 ; Donaldson and Preston, 1995 ). A corporation’s success depends on the quality of these relationships.

Freeman proposed an innovative vision of the firm in which strategies are aimed at balancing the needs of all stakeholders. This requires a redefinition of the nature and role of the firm that opposes the notion of shareholder primacy ( Jensen, 2001 ) and the firm as an instrument to accomplish shareholders’ goals ( Asher et al. , 2005 ; Balmer et al. , 2007 ). Consequently, the so-called normative ST ( Donaldson and Preston, 1995 ) was used to interpret the function of the firm, including the identification of moral or philosophical guidelines for its operation and management ( Cragg, 2002 ). In this light, ST has an ethical dimension ( Purnell and Freeman, 2012 ) because relationships with stakeholders reflect not only economics but also ethical and moral principles ( Jones and Wicks, 1999 ). In other words, stakeholders should be considered the aim of the organisation rather than instruments to increase profitability.

This topic is logically connected with the concept and definition of an organisation’s stakeholders. Freeman (1984 , p. 46) broadly defined stakeholders (including shareholders) as “any group or individual who can affect or is affected by the achievement of corporation’s purpose”. Over time the term “stakeholders” has assumed a broader meaning to include individuals who affect or are affected by organisations but have no direct economic relationship to them ( Steurer, 2006 ). This includes local community members and inhabitants of the city or region in which the organisation is located, gradually extending out to all of humanity, the natural environment and the planet ( Byrd, 2007 ; Zhao et al. , 2011 ). ST did not originally include these aspects because it did not consider the external impacts of organisational activities. Thus, over the course of its evolution, ST has become intertwined with corporate social responsibility and sustainability ( Balmer et al. , 2007 ; Hörisch et al. , 2014 ).

More recently, firms are facing the evolution of socio-economic systems and problems such as climate change, economic inequality and global ecosystem risks (such as the COVID-19 pandemic). These issues require new answers, exceeding the boundaries of ST. In this regard, the consideration of stakeholders as the sole aim of organisations risks leaving them without strategic direction and bound to a mere survival perspective. The shared value approach of Porter and Kramer (2011) may provide an answer to this question, even if it appears to focus more on merging economic and social issues into business strategies than on firms as holistic systems.

Therefore, rather than evolving further, ST needs to be reconceived in light of the new challenges faced by organisations. In other words, ST should complement the purpose view of the firm claiming, according to Mayer ( Millstein et al. , 2019 , p. 15), that “the purpose of business is not to produce profits. The purpose of business is to produce profitable solutions to the problems of people and the planet”. A firm is an autonomous institution identified by its purpose and its executives, stakeholders (including shareholders), management and corporate governance systems must be aligned to that purpose rather than to profit.

The fundamental tenet of ST is the value created for stakeholders, who are grouped into different categories. Initially, stakeholders were divided into primary stakeholders, the ones influencing the company ( Clarkson, 1995 ), claimants ( Kaler, 2002 ), legitimate ( Freeman et al. , 2012 ), towards whom the organisation has obligations or duties ( Donaldson and Preston, 1995 ) and secondary stakeholders, those who affect or are affected by the organisation but do not have the power to influence management decisions ( Dunham et al. , 2006 ). However, over its evolution, ST has expanded the concept of stakeholders to include all of humanity and the planet ( Freeman, 2017 ). However, it is difficult to calculate the value created for stakeholders and define to whom this value should be disclosed. Managerial ST addressed relations with and disclosure to primary stakeholders, given their power to influence the organisation. With respect to normative ST and the purpose of the organisation, all stakeholders are potentially interested in understanding the mission of the organisation and in verifying whether and how this mission is being accomplished, whilst organisations are interested in stakeholder legitimacy.

However, until now, the measurement, reporting and disclosure of created value for stakeholders have been underexplored and they deserve to be better investigated because they are necessary to concretely fulfil ST. Indeed, only by measuring, reporting and disclosing created value is it possible to verify the effective pursuit of an organisation’s mission.

3.2 When stakeholder theory intersects the international integrated reporting framework: past and future development

The IIRF is a well-known tool for the non-financial disclosure of organisations. It aims to enable organisations to report and disclose their ability to create value in the medium and long term ( Cheng et al. , 2014 ; Dumay et al. , 2016 ; De Villiers et al. , 2020 ).

The IIRF is based on integrated thinking, a multi-capital management approach that enables organisations to disclose their purpose to the benefit of their key stakeholders’ overtime ( Guthrie et al. , 2017 ; Feng et al. , 2017 ; Al-Htaybat and von Alberti-Alhtaybat, 2018 ). The IIRF has adopted a multi-capital perspective assuming that the ability of an organisation to create value in the long term depends on its stock of six different capitals (financial, manufactured, intellectual, human, social/relational and natural) and is measured by the increase or decrease in these capitals through its business model and processes ( Camilleri, 2018 ).

The IIRF is rooted in theories such as the resource-based view ( Barnabè et al. , 2019 ) or intellectual capital ( Melloni, 2015 ; Garanina and Dumay, 2017 ); it is built on the idea that an organisation’s success depends not only on its financial capital but also on a broader range of various financial and non-financial, tangible and intangible capitals ( Coulson et al. , 2015 ). IR is primarily aimed at the providers of financial capital ( Flower, 2015 ), even if it can benefit all stakeholders interested in an organisation’s ability to create value. The concept of created value refers to the value an organisation creates for itself, as well as (in a subordinate way) for external “others” ( Barnabé, 2016 ; Barnabè et al. , 2019 ). From this perspective, the IIRF seems aligned with ST ( Rowbottom and Locke, 2016 ).

In the IIRF, stakeholders are defined as “others”; they include both main stakeholders and society at large. Key stakeholders are the legitimate individuals or groups that have needs or expectations to be satisfied by the organisation and are used to delimit the boundaries of IR ( Mio and Fasan, 2013 ), with consideration of the risks, opportunities and outcomes attributable to or associated with well-defined stakeholders (IIRF, p. 19). Stakeholders are considered only if they have a significant impact on the ability of the organisation to create value. This notion of stakeholders recalls the traditional concept suggested by ST, meaning only primary stakeholders, whilst secondary stakeholders, including humanity and the environment, are excluded because they lack materiality ( Fasan and Mio, 2017 ). Following this idea, IR only discloses the relationships an organisation creates and maintains with its key stakeholders and how and to what extent the organisation takes into consideration their legitimate expectations and needs ( Vitolla et al. , 2019a , 2019b ).

The IIRF limits value creation to the value the organisation creates for itself and measures it by changes in six different capitals. This concept overcomes the idea of value creation as the change in financial capital but neglects the value that organisations create for stakeholders ( Flower, 2015 ; Vitolla et al. , 2019a , 2019b ).

Integrated reporting is only addressed to providers of financial capital, even if all stakeholders can benefit from it ( Sukhari and De Villiers, 2019 ). IR beneficiaries should comprise all stakeholders, including primary stakeholders being informed about the value created for them and secondary stakeholders (including humanity and the environment) being informed about how the organisation contributes to solving global problems in following its purpose and implementing its mission.

Finally, stakeholders are considered in an opportunistic manner ( Farneti et al. , 2019 ) and IR only discloses the relationships the organisation creates and maintains with them ( Brown and Dillard, 2014 ; Mio and Fasan, 2013 ). However, stakeholders should be considered as actors participating in the pursuit of the organisation’s mission and aims and be included in the organisation’s business model and IR should disclose the value created by and for them.

Therefore, the IIRF could undergo some adjustments to enable the better disclosure of the role of all stakeholders in value creation.

4. Revisited integrated reporting framework

The previous sections highlighted the main features of ST and the limitations of IIRF in disclosing the value created for stakeholders. To improve these limitations, adjustments to the IIRF are suggested, derived from a deductive process in which ST was matched with the weaknesses of the IIRF.

4.1 First adjustment: the need to identify organisational stakeholders

According to ST and the purpose view of firms, all organisations exist to meet the needs and expectations of stakeholders by creating value ( Freeman and Ginena, 2015 ; Mayer, 2018 ). This reveals the first critical limitation of the IIRF, which assumes that value creation consists only in increases in the organisation’s capitals and overlooks stakeholder satisfaction. Moreover, it does not include stakeholders in the business model, instead of relegating them to social and relational capital.

To overcome this limitation, an organisation’s stakeholders must be recognised in the business model. Stakeholder recognition should follow a clear statement of the organisation’s value proposition, including the firm’s purpose and mission in terms of the needs and expectations to be met ( Lanning and Michaels, 1988 ; Kaplan and Norton, 2004 ). According to Osterwalder et al. (2014) , a value proposition enables the identification of those to whom a firm’s offerings are directed – its customers and users. These are the main stakeholders because their needs and expectations are at the core of the organisation’s mission. In this sense, they can be considered primary stakeholders, in contrast to the definitions prevailing in the ST literature. Furthermore, a value proposition enables an organisation to identify other stakeholders (including shareholders) important for business success whose expectations must be fulfiled to maintain their cooperation over time. These stakeholders may be considered secondary stakeholders, also in contrast to definitions in the ST literature. These stakeholders must be identified, engaged and managed to implement the value proposition.

It is worth noting that this distinction between primary and secondary stakeholders only underlines the different roles they play in the business model, but both of them are considered essential to the survival of the firm. In this way, humanity and the environment are excluded from the business model but not from IR. Humanity can be included in the social and relational capital in terms of the impacts engendered by an organisation when following its purpose and mission and the environment can similarly be included in Natural capital. The social and relational capital is still one of the six capitals including assets such as corporate image, reputation and affordability; it concurs with value creation as it fosters relationships and attraction of qualified resources, whilst stakeholders are specifically identified in the business model; the satisfying answer to their expectations contributes to increasing the social and relational capital.

To highlight the organisation’s stakeholders as components of the business model instead of leaving them hidden into social and relational capital and to classify them into primary and secondary stakeholders.

4.2 Second adjustment: the need to focus on the real meaning and recipients of value creation

The IIRF considers created value only in terms of increased capital, but value creation should consider an organisation’s impact on sustainability and its ability to fulfil stakeholders’ needs and expectations ( Freeman and Ginena, 2015 ). To overcome this second limitation, it is useful to refer to the impact value chain model (IVCM) developed by scholars and institutions focussing on social enterprise value creation. This model focusses on how organisations affect people, communities and the natural environment through their production of both outputs, outcomes and social impact. In the IVCM, outputs are the measurable units of production yielded by the organisation, whilst outcomes are the benefits for stakeholder well-being ( GECES Social, 2014 ; Hehemberger et al. , 2015 ). Therefore, The IVCM also considers the benefits delivered to the stakeholders as value created by the organisation.

Reporting changes in both capital and stakeholder satisfaction is important because there must be a long-term equilibrium kept between and within them. The various capitals must be balanced and strengthened to implement the value proposition and ensure value creation for stakeholders ( Rusconi, 2019 ). However, the measurement of these components in the reporting and disclosure of value creation is challenging. Capitals can be tangible or intangible and maybe measured objectively or subjectively. Similarly, stakeholder satisfaction is a complex and qualitative value that depends on tangible and intangible factors such as financial remuneration, just and fair treatment, the benefits of being affiliated with the organisation and possible alternative treatment by other firms ( Harrison and Wicks, 2013 ). Therefore, an appropriate and firm-specific mix of key performance indicators (KPIs) needs to be developed and possibly integrated by some narrative able to improve the information quality: KPIs validate the narrative by objective references and narrative provides KPIs with a framework useful to better appreciate them.

Report and disclose both the changes in capitals and the outcomes produced in fulfiling stakeholder needs and expectations.

4.3 Third adjustment: Capacity and means to create value for stakeholders

ST suggests an innovative vision of firms in which the expectations of all categories of stakeholders are considered. In contrast, the IIRF is directed at providers of financial capital and neglects the capacity of organisations to satisfy stakeholder needs. For this reason, the IIRF does not analyse the activities conducted by the organisation to implement its value proposition nor does it classify these activities as drivers of value creation. In other words, it fails to reveal how capitals affect outputs and outcomes, making the organisation’s processes a “black box”. This is another limitation of the IIRF that requires specific adjustments.

Direct processes refer to the production and delivery of valuable goods and services.

Indirect processes refer to the resources and services that support direct processes (e.g. human resource management, quality management systems, logistics systems, product and process innovation).

Supporting processes refer to the acquisition and development of organisational resources (e.g. manufacturing and logistic infrastructure, research and development and recruitment).

An analysis of business processes is important to explain how they are connected to capitals, stakeholders and value creation, shedding light on the drivers of value and highlighting relevant interdependencies amongst the components of the business model. Value for stakeholders, in particular, arises from the business processes fed by the capitals that are continuously used and (re)produced by firms. An organisation produces capital as an effect of its own processes; for example, the production of financial resources from selling goods and services, the development of skills and knowledge through personnel training, increasing experience through operations, improving technology through research and development and working with partners and improving the environment through the adoption of green processes and products. Conversely, an organisation attracts capital and stakeholders as a consequence of its ability to reward them; for example, it attracts financial resources from shareholders, human resources through recruitment, knowledge from partners and suppliers and technology through licensing ( Farneti et al. , 2019 ).

A value proposition that is consistent with an organisation’s mission and purpose and safeguards social and natural capitals involves the use of resources and processes with positive economic, social and environmental impacts, improving natural, social and relational capitals and corporate image and reputation and making the organisation more attractive to stakeholders.

Disclose direct, indirect and supporting business processes to highlight how the organisation creates value for each category of stakeholders.

5. Testing and validating the modified international integrated reporting framework: the Gigi Ghirotti Association

In 2018, GGA management contacted the Department of Economics and Business Studies at the University of Genoa because it was unsatisfied with the ability of its social reporting to effectively communicate its created and distributed value to stakeholders. According to the GGA president:

Even if GGA has been issuing a social report from 2009, we think that this document is not effective in disclosing the value the association creates for both the patients and the community. However, we are not able to clearly explain the reasons for our dissatisfaction nor how to improve the social report.

Although GGA primarily offers services to specific patients, it also plays a pivotal role in serving indirect beneficiaries and the wider community. GGA needs to identify and classify its broad range of stakeholders and communicate its role and mission to all stakeholder categories.

GGA currently issues two separate documents – a financial report and a social report. It is unable to measure and report their joint performance nor link them with its mission.

Although the GGA is aware of its processes, it does not understand how they create and deliver value to all stakeholders, thus, is unable to communicate and report them.

According to the CFO, “We would like to inform all the people getting in touch with us about what we do, why we do it and how and how well we pursue our purpose”.

adopt a multi capital vision of the organisation that considers both financial and non-financial capitals, including relational, human and intellectual capitals, which are essential for the specific activities of GGA;

adopt integrated thinking, overcoming the limitations of issuing separate reports on the financial and non-financial performance of the organisation.

does not require an explicit statement of the organisation’s purpose and value proposition; in fact, the “Organisational overview and external environment” content element focusses mainly on the external context and environmental changes rather than on the role the organisation intends to play; if drawn up, it should include a clear statement of the business purpose or raison d’etre;

does not include stakeholders as part of the business model but considers them components of social and relational capital;

lacks an explicit link between business processes and stakeholders, thus, fails to disclose how the organisation creates value for them.

The disclosure needs of the GGA and the weaknesses of the IIRF provided an opportunity to test and validate the modified IIRF. During the action research, the research team in cooperation with the GGA delegates implemented the modified IIRF, collecting empirical evidence about the validity of the suggested framework.

5.1 The need to identify and communicate with stakeholders

provide patients and their families with high-quality services;

play a high-level role in the local context, fulfiling the needs and expectations of the community.

primary stakeholders: those directly benefiting from GGA services (patients and their families);

secondary stakeholders: those receiving indirect benefits from the organisation, including volunteers and donors, who receive satisfaction from their philanthropic activities; employees and professionals, who are rewarded by their work; and local health services, which expect a high-quality health-care service.

The expectations of the primary stakeholders are at the core of the GGA’s mission. Secondary stakeholders provide the organisation with resources and legitimacy that are critical for its survival and their satisfaction is crucial to maintain their cooperation over time:

Therefore, we implemented the first IIRF adjustment by extracting stakeholders from social and relational capital, including them in the business model and classifying them as primary and secondary stakeholders. In this way, stakeholders were clearly linked with the organisation’s value proposition. The COO commented, “This classification permits GGA to clearly communicate that patients are not the only recipients of our value proposition, as a broader set of actors are involved in the value creation process, including the whole local community”.

5.2 Demonstrating delivered value

In its report, GGA must clearly demonstrate the value created and delivered to all stakeholders. A limitation of the IIRF is that it only considers the value the organisation creates for itself, measured by variations in the six capitals and neglects outcomes with respect to stakeholder satisfaction. To overcome this limitation, the organisation’s business processes were analysed on two levels: their effect on the six capitals and their contributions to the needs of primary and secondary stakeholders.

human capital, especially staff and volunteers, including their duties and competencies;

organisational capital, comprising operating procedures and quality management systems;

social and relational capital is reflected in the organisation’s image and reputation.

The second level of analysis pertained to organisational outcomes in terms of stakeholder satisfaction. Primary stakeholder satisfaction was based on surveys of service quality. Secondary stakeholder satisfaction was based on the following indicators:

the number and continuity of volunteers as a proxy of their satisfaction with working at GGA;

the level and continuity of grants as a proxy of GGA’s image and reputation;

staff conflicts as a proxy of organisational climate;

disputes with health service agencies as a proxy of institutional compliance.

According to the president of the GGA, “Our work is well done and our mission is reached if all the stakeholders are satisfied and all of them legitimise our role in the community”.

The second adjustment is realised reporting not only the increase in capitals, reflecting the value the organisation creates for itself but also KPIs to measure the value it creates for stakeholders.

5.3 Connecting value creation, stakeholders and business processes

The GGA needed a better understanding of how its business processes create value for each category of stakeholders by connecting its six capitals – especially the crucial ones – to its outcomes. Another limitation of the IIRF is that it considers the business model a “black box” and fails to analyse the organisation’s activities to transform the capital into outputs and outcomes.

direct processes: the assistance delivered to patients at home and in hospices;

indirect processes: human resource and quality system management;

supporting processes: development, innovation, communication and fundraising.

The report was then drafted to classify business processes as direct, indirect and supporting processes and highlight the relevant capitals, processes, stakeholders and values, as well as the strategic interdependencies between these elements. The CFO commented, “This integrated reporting permits to us to foster awareness of our business model, making clear the value creation process and the role the intangible capitals play in it”. According to the COO, “Thanks to the IR and the clarification of our business processes, we have a sound basis to enable organisational learning and integrated thinking, as well as proactive management practices”.

This implementation activity enabled us to validate the adjusted IIRF, emerging from both the quality of the report and the satisfaction of the GGA managers. According to the CFO, “The IR can deliver a comprehensive narrative about our purpose, to link the purpose with the people receiving benefits in a different way and to measure intangible performance through ad-hoc KPIs”. Similarly, the GGA president commented, “This document will be crucial to communicate with both patients and other stakeholders, especially the ones by which we expect legitimation, consensus and […] funding!”. The COO further remarked:

[The] IR demonstrates to be useful not only as a disclosure instrument but also as a management tool as we are now more aware of who are our stakeholders and which processes deliver value to each of them; therefore, we can also be more effective in managing these processes for value delivered.

Table 2 summarises the findings of the research, linking the ST assumptions, IIRF weaknesses and the suggested adjustments. Column 4 describes the empirical implications and possible generalisations arising from the implementation of the adjusted IIRF in the GGA. The following section discusses these findings further.

Figure 1 shows how the adjustments modify the original IIRF. Stakeholders are no longer hidden in the social and relational capital but are part of the business model; the value creation is reported not only as increasing (or decreasing) of the six capitals but also as stakeholders’ satisfaction; and finally, the satisfaction of the stakeholders’ expectations is casually linked with the direct, indirect and supporting business processes. This suggested new setting improves the integrated reporting further, feeding the integrated thinking.

6. Findings and discussion

In suggesting that the role of a firm is not only to create value for shareholders but also to satisfy the expectations of a broad range of stakeholders, ST requires organisations to find a different way of measuring, disclosing and communicating created value. The IIRF appears to offer this because it considers value creation to be more than simply an increase in financial capital. However, a deeper comparison of ST and the IIRF and an analysis of the extensive literature on these topics revealed the limitations of the IIRF that prevent its reporting and disclosure capacity in the light of ST.

ST is based on the fundamental role of stakeholders in contributing to the success of a company. Beginning from a managerial point of view, it is gradually evolving to incorporate ethics and the purpose view of the firm. Whilst primary and secondary stakeholders actively contribute to a firm’s mission and value proposition, other stakeholders are satisfied that the firm is making positive impacts on social and natural capital.

Three pivotal aspects must be considered: overcoming the primacy of shareholders, the analysis and classification of stakeholders and the need to understand how organisation can satisfy stakeholders’ expectations through its processes. The IIRF is lacking in all of these aspects: it considers the providers of financial capital the primary recipients of IR, allocates stakeholders to social and relational capital without any analysis or classification and fails to disclose business processes with respect to how an organisation creates value for its stakeholders.

Although these limitations have been highlighted previously, until now, there have been no practical attempts to overcome these weaknesses. Several researchers have also investigated how ST may affect IR, including the content of disclosed information, stakeholder pressure with respect to reporting quality and attention paid to social and environmental issues. However, no studies have investigated whether the IIRF satisfies ST with respect to reporting and disclosure.

The aim of the present study was to overcome this final hurdle by reviewing the studies on the relationship between ST and IIRF and making modifications to the IIRF to implement ST. Three adjustments were applied to the IIRF to improve its ability to incorporate ST as a theoretical foundation. The three adjustments were made following a deductive process in which the weaknesses of the IIRF were matched with the assumptions of ST. The following three adjustments were made in an attempt to solve the issues revealed by the literature review: the removal of stakeholders from the social and relational capital to overcome the shallow and opportunistic view of stakeholders conceived by the IIRF; the addition of KPIs to measure the value created for stakeholders and overcome the outdated consideration of providers of financial capital as the primary addressers of value creation and the disclosure of business processes to clarify how organisations can satisfy stakeholder expectations.

Firstly, individuating stakeholders is a way of improving the quality of reporting. Extracting stakeholders from social and relational capital gives them visibility and legitimacy whilst classifying them enables organisations to better address both their value proposition and communications.

Secondly, defining value creation not only in terms of increased capital but also increased stakeholder satisfaction can improve the design of the value proposition and verify the function of the organisation with respect to its stakeholders. The modified IIRF facilitated the identification of appropriate KPIs by which to measure value creation for stakeholders.

Thirdly, disclosing the business processes enabled the organisation to highlight its pursuit of stakeholder satisfaction. The modified IIRF links each category of stakeholders with specific KPIs through the organisation’s business processes. This is in contrast to the traditional IIRF, where stakeholders are hidden in social and relational capital and business processes are hidden in the “black box” of the business model. The IIRF conceives the business model as an empty box, without specifying which business processes do what and for whom. The case study demonstrated that the modified IIRF is not only an effective disclosure instrument but also an effective managerial tool because it links business processes to performance and supports integrated thinking and strategic decisions.

7. Conclusion

The modified IIRF proposed in this paper is a promising reporting and disclosure tool for stakeholder- and purpose-oriented organisations aimed at better focussing the role of stakeholders in value creation.

This work fits with a wider stream, regarding the future of the international integrated reporting council (IIRC)/IIRF and its convergence towards sustainability reporting. The announcement of the merging of IIRC, which is currently focussed on reporting value creation in the medium/long term and sustainability accounting standard board, which is committed to standards for monitoring sustainability into the Value Reporting Foundation, certainly represents a step forward in the direction of a unified sustainability reporting model. Moreover, it is worth remembering that the European Union is launching a new directive on sustainability reporting intended to replace the old one on non-financial information.

the belief that the future of an organisation depends on its ability to create value by carrying out an economically, socially and ethically useful function, starting with a clear identification of its purpose and value proposition;

that implementing purpose and value proposition involves satisfying the expectations of shareholders and stakeholders bringing the organisation resources, skills and legitimacy, but to do so, the organisation has to generate resources enough to feed these responses; in other words, there has to be a balance between the value shareholders and stakeholders create and receive;

that there is, however, a difference between shareholders and stakeholders directly involved in value creation and distribution and the external entities that benefit from or are damaged by the economic, social and environmental impacts engendered by an organisation.

Based on these considerations, it should be emphasised that the revised IIRF represents an updated reporting and disclosure tool for the value created in a broad sense by an organisation. On the one hand, it can encompass financial, manufactured, intellectual, human, social and relational and natural capital and on the other, the answers provided both to shareholders and stakeholders directly involved in value creation and external entities the organisation impacts through its activities. In this way, the IIRF can give visibility to all value created and the value creation process, including sustainability matters as external impacts; it allows the integrated thinking processes to be incorporated accordingly. Therefore, the modified IIRF can provide better information not only to capital providers but also to all stakeholders (including shareholders) interested in the sustainable success of the business model.

Despite the suggested modifications being based on well-founded theories and concepts, the modified framework has some theoretical problems that need suitable solutions. In particular, some capitals are intangible, whilst stakeholder satisfaction is linked to complex qualitative values that depend on both material and immaterial factors. In both cases, new metrics should be developed and tested for their ability to report and disclose created value.

Moreover, the modified IIRF was implemented only in one case and further implementations are needed to comprehensively identify its strengths and weaknesses, both in for-profit and non-profit organisations. In for-profit organisations, the organisation’s purpose, as well as its value proposition as a link with business activities, must be clearly highlighted. A dynamic balance must be found between shareholders’ and stakeholders’ expectations. In non-profit organisations, primary stakeholders and their expectations are usually implicit in the institutional nature of the organisation. Further studies should be conducted to overcome the limitations of the present work by applying the modified framework to a large sample of organisations from both the private and non-profit sectors.

The adjusted IIRF

Result of the literature review on ST

Theoretical and empirical implications of the research

Adams , C.A. ( 2015 ), “ The international integrated reporting council: a call to action ”, Critical Perspectives on Accounting , Vol. 27 , pp. 23 - 28 .

Adams , S. and Simnett , R. ( 2011 ), “ Integrated reporting: an opportunity for Australia's not‐for‐profit sector ”, Australian Accounting Review , Vol. 21 No. 3 , pp. 292 - 301 .

Al-Htaybat , K. and von Alberti-Alhtaybat , L. ( 2018 ), “ Integrated thinking leading to integrated reporting: case study insights from a global player ”, Accounting, Auditing and Accountability Journal , Vol. 31 No. 5 , pp. 1435 - 1460 .

Asher , C.C. , Mahoney , J.M. and Mahoney , J.T. ( 2005 ), “ Towards a property rights foundation for a stakeholder theory of the firm ”, Journal of Management and Governance , Vol. 9 No. 1 , pp. 5 - 32 .

Balmer , J.M. , Fukukawa , K. and Gray , E.R. ( 2007 ), “ The nature and management of ethical corporate identity: a commentary on corporate identity, corporate social responsibility and ethics ”, Journal of Business Ethics , Vol. 76 No. 1 , pp. 7 - 15 .

Barnabé , F. ( 2016 ), “ Representing' value creation: a combined approach of system dynamics and integrated reporting for the airline sector ”, International Journal of Applied Systemic Studies , Vol. 6 No. 3 , pp. 202 - 222 .

Barnabè , F. , Giorgino , M.C. and Kunc , M. ( 2019 ), “ Visualizing and managing value creation through integrated reporting practices: a dynamic resource-based perspective ”, Journal of Management and Governance , Vol. 23 No. 2 , pp. 537 - 575 .

Barney , J.B. ( 2018 ), “ Why resource‐based theory's model of profit appropriation must incorporate a stakeholder perspective ”, Strategic Management Journal , Vol. 39 No. 13 , pp. 3305 - 3325 .

Biondi , L. , Dumay , J. and Monciardini , D. ( 2020 ), “ Using the international integrated reporting framework to comply with EU directive 2014/95/EU: can we afford another reporting façade? ”, Meditari Accountancy Research , Vol. 28 No. 5 , pp. 889 - 914 .

Brown , J. and Dillard , J. ( 2014 ), “ Integrated reporting: on the need for broadening out and opening up ”, Accounting, Auditing and Accountability Journal , Vol. 27 No. 7 , pp. 1120 - 1156 .

Burns , D. ( 2007 ), Systemic Action Research: A Strategy for Whole System Change , Policy Press , Bristol .

Byrd , E.T. ( 2007 ), “ Stakeholders in sustainable tourism development and their roles: applying stakeholder theory to sustainable tourism development ”, Tourism Review , Vol. 62 No. 2 , pp. 6 - 13 .

Camilleri , M.A. ( 2018 ), “ Theoretical insights on integrated reporting: the inclusion of Non-Financial capitals in corporate disclosures ”, Corporate Communications: An International Journal , Vol. 23 No. 4 , pp. 567 - 581 .

Carr , W. and Kemmis , S. ( 1986 ), Becoming Critical: education Knowledge and Action Research , Falmer Press . Philadelphia .

Chandra , Y. and Shang , L. ( 2019 ), “ Inductive coding ”, in Chandra Y. and Shang L. (Eds), Qualitative Research Using R: A Systematic Approach , Springer , Singapore .

Cheng , M. , Green , W. , Conradie , P. , Konishi , N. and Romi , A. ( 2014 ), “ The international integrated reporting framework: key issues and future research opportunities ”, Journal of International Financial Management and Accounting , Vol. 25 No. 1 , pp. 90 - 119 .

Clarkson , M.E. ( 1995 ), “ A stakeholder framework for analyzing and evaluating corporate social performance ”, Academy of Management Review , Vol. 20 No. 1 , pp. 92 - 117 .

Coulson , A.B. , Adams , C.A. , Nugent , M.N. and Haynes , K. ( 2015 ), “ Exploring metaphors of capitals and the framing of multiple capitals: challenges and opportunities for. Sustainability accounting ”, Management and Policy Journal , Vol. 6 No. 3 , pp. 290 - 314 .

Cragg , W. ( 2002 ), “ Business ethics and stakeholder theory ”, Business Ethics Quarterly , Vol. 1 , pp. 113 - 142 .

Dameri , R.P. and Ferrando , P.M. ( 2020 ), “ Implementing integrated reporting to disclose intellectual Capital in health organisations: a case study ”, Journal of Intellectual Capital , Vol. 22 No. 2 , No

De Villiers , C. , Rinaldi , L. and Unerman , J. ( 2014 ), “ Integrated reporting: insights, gaps and an agenda for future research ”, Accounting, Auditing and Accountability Journal , Vol. 27 No. 7 , pp. 1042 - 1067 .

De Villiers , C. , Venter , E.R. and Hsiao , P.C.K. ( 2017 ), “ Integrated reporting: background, measurement issues, approaches and an agenda for future research ”, Accounting and Finance , Vol. 57 No. 4 , pp. 937 - 959 .

De Villiers , C. , Hsiao , P.C. , K. and Maroun , W. ( 2020 ), The Routledge Handbook of Integrated Reporting , Routledge , London .

Dodd , C.H. ( 1932 ), “ The framemork of the gospel narrative ”, The Expository Times , Vol. 43 No. 9 , pp. 396 - 400 .

Donaldson , T. and Preston , L.E. ( 1995 ), “ The stakeholder theory of the corporation: Concepts, evidence and implication ”. Academy of Management Review , Vol. 20 .

Donna , G. ( 1992 ), L’impresa Competitiva , Un approccio sistemico . Giuffré, Milano .

Dumay , J. , Bernardi , C. , Guthrie , J. and Demartini , P. ( 2016 ), “ Integrated reporting: a structured literature review ”, Accounting Forum , Vol. 40 No. 3 , pp. 166 - 185 .

Dunham , L. , Freeman , R.E. and Liedtka , J. ( 2006 ), “ Enhancing stakeholder practice: a particularized exploration of community ”, Business Ethics Quarterly , Vol. 16 No. 1 , pp. 23 - 42 .

Eisenhardt , K.M. ( 1989 ), “ Building theories from case study research ”, Academy of Management Review , Vol. 14 No. 4 , pp. 532 - 550 .

Farneti , F. , Casonato , F. , Montecalvo , M. and De Villiers , C. ( 2019 ), “ The influence of integrated reporting and stakeholder information needs on the disclosure of social information in a state-owned enterprise ”, Meditari Accountancy Research , Vol. 27 No. 4 , pp. 556 - 579 .

Fasan , M. and Mio , C. ( 2017 ), “ Fostering stakeholder engagement: the role of materiality disclosure in integrated reporting ”, Business Strategy and the Environment , Vol. 26 No. 3 , pp. 288 - 305 .

Feng , T. , Cummings , L. and Tweedie , D. ( 2017 ), “ Exploring integrated thinking in integrated reporting–an exploratory study in Australia ”, Journal of Intellectual Capital , Vol. 18 No. 2 , pp. 330 - 353 .

Fink , A. ( 2005 ), Conducting Research Literature Reviews: From the Internet to Paper , 2nd ed. , Sage Publications . Thousand Oaks, CA .

Flower , J. ( 2015 ), “ The international integrated reporting council: a story of failure ”, Critical Perspectives on Accounting , Vol. 27 , pp. 1 - 17 .

Freeman , R.E. ( 1984 ), Strategic Management: A Stakeholder Approach , Pitman . Marshfield, MA .

Freeman , R.E. , Rusconi , G. , Signori , S. and Strudler , A. ( 2012 ), “ Stakeholder theory (ies): ethical ideas and managerial action ”, Journal of Business Ethics , Vol. 109 No. 1 , p. 1 .

Freeman , R.E. and Ginena , K. ( 2015 ), “ Rethinking the purpose of the corporation: challenges from stakeholder theory ”, Notizie di Politeia , Vol. 31 No. 117 , pp. 9 - 18 .

Freeman , R.E. ( 2017 ), “ Five challenges to stakeholder theory: a report on research in progress ”, In Stakeholder Management , Emerald Publishing Limited .

Frias-Aceituno , J.V. , Rodríguez-Ariza , L. and García-Sánchez , I.M. ( 2013 ), “ Is integrated reporting determined by a country’s legal system? An exploratory study ”, Journal of Cleaner Production , Vol. 44 , pp. 45 - 55 .

Friedman , A.L. and Miles , S. ( 2006 ), Stakeholders: Theory and Practice , Oxford University Press , Oxford .

Garanina , T. and Dumay , J. ( 2017 ), “ Forward-looking intellectual Capital disclosure in IPOs ”, Journal of Intellectual Capital , Vol. 18 No. 1 , pp. 128 - 148 .

García-Sánchez , I.M. and Noguera-Gámez , L. ( 2017 ), “ Integrated reporting and stakeholder engagement: the effect on information asymmetry ”, Corporate Social Responsibility and Environmental Management , Vol. 24 No. 5 , pp. 395 - 413 .

GECES Social ( 2014 ), “ Impact measurement SubGroup ”, Report adopted , available at: www.febea.org

Guthrie , J. , Manes-Rossi , F. and Orelli , R.L. ( 2017 ), “ Integrated reporting and integrated thinking in italian public sector organisations ”, Meditari Accountancy Research , Vol. 25 No. 4 , pp. 553 - 573 .

Harrison , J.S. and Wicks , A.C. ( 2013 ), “ Stakeholder theory, value, and firm performance ”, Business Ethics Quarterly , Vol. 23 No. 1 , pp. 97 - 124 .

Harrison , J.S. , Phillips , R.A. and Freeman , R.E. ( 2020 ), “ On the 2019 business roundtable “statement on the purpose of a corporation ”, Journal of Management , Vol. 46 No. 7 , pp. 1223 - 1237 .

Hehemberger , L. Harling , A.M. and Sholten , P. ( 2015 ), “ A practical guide to measuring and managing impact ”, EVPA , available at: https://evpa.eu.com/

Hörisch , J. , Freeman , R.E. and Schaltegger , S. ( 2014 ), “ Applying stakeholder theory in sustainability management: links, similarities, dissimilarities, and a conceptual framework ”, Organization and Environment , Vol. 27 No. 4 , pp. 328 - 346 .

Hsieh , H.F. and Shannon , S.E. ( 2005 ), “ Three approaches to qualitative content analysis ”, Qualitative Health Research , Vol. 15 No. 9 , pp. 1277 - 1288 .

International Integrated Reporting Council (IIRC) ( 2013 ), “ The international integrated reporting framework ”, available at: www.theiirc.org

Janssens , M. , Brett , J.M. and Smith , F.J. ( 1995 ), “ Confirmatory cross-cultural research: testing the viability of a corporation-wide safety policy ”, Academy of Management Journal , Vol. 38 No. 2 , pp. 364 - 382 .

Jensen , M.C. ( 2001 ), “ Value maximization, stakeholder theory, and the corporate objective function ”, Journal of Applied Corporate Finance , Vol. 14 No. 3 , pp. 8 - 21 .

Jones , T.M. and Wicks , A.C. ( 1999 ), “ Convergent stakeholder theory ”, Academy of Management Review , Vol. 24 No. 2 , pp. 206 - 221 .

Kaler , J. ( 2002 ), “ Morality and strategy in stakeholder identification ”, Journal of Business Ethics , Vol. 39 Nos 1/2 , pp. 91 - 100 .

Kaplan , R.S. and Norton , D.P. ( 2004 ), Strategy Maps: converting Intangible Assets into Tangible Outcomes , Harvard Business School Press , Boston , p. 10 .

Kemmis , S. , McTaggart , R. and Nixon , R. ( 2013 ), The Action Research Planner: Doing Critical Participatory Action Research , Springer Science and Business Media . New York, NY .

Lanning , M.J. and Michaels , E.G. ( 1988 ), “ A business is a value delivery system ”, McKinsey Staff Paper , Vol. 41 , No. July.

Mayer , C. ( 2018 ), Prosperity. Better Business Makes the Greater Good , Oxford University Press , Oxford .

Melloni , G. ( 2015 ), “ Intellectual capital disclosure in integrated reporting: an impression management analysis ”, Journal of Intellectual Capital , Vol. 16 No. 3 , pp. 661 - 680 .

Millstein , I. , Gordon , J. , Gilson , R. , Mayer , C. , Bresnahan , K. and Lipton , M. ( 2019 ), “ Session I: corporate purpose and governance ”, Journal of Applied Corporate Finance , Vol. 31 No. 3 , pp. 10 - 25 .

Mio , C. and Fasan , M. ( 2013 ), “ The case of ENEL ”, in Busco , C. , Frigo , M.L. , Riccaboni , A. , Quattrone , P. (Eds), Integrated Reporting. Concepts and Cases That Redefine Corporate Accountability , Springer International Publishing Switzerland , 225 - 236 .

Osterwalder , A. , Pigneur , Y. , Bernarda , G. and Smith , A. ( 2014 ), Value Proposition Design: How to Create Products and Services Customers Want , New York, NY John Wiley and Sons .

Phillips , R. , Freeman , R.E. and Wicks , A.C. ( 2003 ), “ What stakeholder theory is not ”, Business Ethics Quarterly , Vol. 13 No. 4 , pp. 479 - 502 .

Phillips , R.A. and Freeman , R.E. ( 2010 ), Stakeholders , Edward Elgar Publishing .

Pitelis , C.N. and Wahl , M.W. ( 1998 ), “ Edith penrose: Pioneer of stakeholder theory ”, Long Range Planning , Vol. 31 No. 2 , pp. 252 - 261 .

Porter , M.E. and Kramer , M.R. ( 2011 ), “ Creating shared value ”, Harvard Business Review , Vol. 89 Nos. 1/2 .

Purnell , L.S. and Freeman , R.E. ( 2012 ), “ Stakeholder theory, fact/value dichotomy, and the normative core: how wall street stops the ethics conversation ”, Journal of Business Ethics , Vol. 109 No. 1 , pp. 109 - 116 .

Rensburg , R. and Botha , E. ( 2014 ), “ Is integrated reporting the silver bullet of financial communication? A stakeholder perspective from South Africa ”, Public Relations Review , Vol. 40 No. 2 , pp. 144 - 152 .

Rowbottom , N. and Locke , J. ( 2016 ), “ The emergence of <IR> ”, Accounting and Business Research , Vol. 46 No. 1 , pp. 83 - 115 .

Rowley , J. and Slack , F. ( 2004 ), “ Conducting a literature review ”, Management Research News , Vol. 27 No. 6 , pp. 31 - 39 .

Rusconi , G. ( 2019 ), “ Ethical firm system and stakeholder management theories: a possible convergence ”, European Management Review , Vol. 16 No. 1 , pp. 147 - 166 .

Samy , M. ( 2015 ), “ Factors affecting the diffusion of integrated reporting–a UK FTSE 100 perspective ”, Sustainability Accounting, Management and Policy Journal , Vol. 6 No. 2 , pp. 190 - 223 .

Smith , H.J. ( 2003 ), “ The shareholders vs. stakeholders debate ”, MIT Sloan Management Review , Vol. 44 No. 4 , pp. 85 - 90 .

Steurer , R. ( 2006 ), “ Mapping stakeholder theory anew: from the ‘stakeholder theory of the firm’to three perspectives on business–society relations ”, Business Strategy and the Environment , Vol. 15 No. 1 , pp. 55 - 69 .

Stewart , R.F. , Allen , J.K. and Cavender , J.M. ( 1963 ), “ The strategic plan – LRPS report no. 168 ”, Long Range Planning Service , Stanford Research Institute , Menlo Park .

Sukhari , A. and De Villiers , C. ( 2019 ), “ The influence of integrated reporting on business model and strategy disclosures ”, Australian Accounting Review , Vol. 29 No. 4 , pp. 708 - 725 .

Vitolla , F. , Raimo , N. and Rubino , M. ( 2019a ), “ Appreciations, criticisms, determinants, and effects of integrated reporting: a systematic literature review ”, Corporate Social Responsibility and Environmental Management , Vol. 26 No. 2 , pp. 518 - 528 .

Vitolla , F. , Raimo , N. , Rubino , M. and Garzoni , A. ( 2019b ), “ The impact of national culture on integrated reporting quality. A stakeholder theory approach ”, Business Strategy and the Environment , Vol. 28 No. 8 , pp. 1558 - 1571 .

Yin , R.K. ( 1994 ), Case Study Research: design and Methods , 2nd ed. Sage . Newbury Park, CA .

Zambon , S. , Marasca , S. and Chiucchi , M.S. ( 2019 ), “ Special issue on the role of intellectual capital and integrated reporting in management and governance: a performative perspective ”, Journal of Management and Governance , Vol. 23 No. 2 , pp. 291 - 297 .

Zhao , J. , Wu , M. , Qian , G. and L. , F. ( 2011 ), “ An empirical research on the driving mechanism of corporation environmental performance based on stakeholder theory ”, China Environmental Science , Vol. 31 No. 11 , pp. 1931 - 1936 .

Further reading

Abhayawansa , S. , Guthrie , J. and Bernardi , C. ( 2019 ), “ Intellectual capital accounting in the age of integrated reporting: a commentary ”, Journal of Intellectual Capital , Vol. 20 No. 1 .

Laplume , A.O. , Sonpar , K. and Litz , R.A. ( 2008 ), “ Stakeholder theory: reviewing a theory that moves us ”, Journal of Management , Vol. 34 No. 6 , pp. 1152 - 1189 .

Corresponding author

About the authors.

Renata Paola Dameri is an Associate Professor in Accounting at the University of Genoa, Department of Economics and Business Studies. Her research interests regard intellectual capital, not-for-profit organisations, non-financial disclosure, management information systems, smart city and smart city performance measurement, innovation, entrepreneurship and entrepreneurial university, management and entrepreneurship in the creative and cultural sector. She has published in Journal of Intellectual capital, IMA Journal of Managerial Mathematics, Journal of Information Systems, Knowledge Management Research and Practices, Technological Forecasting and Social Changes and Social Science Computer Review .

Pier Maria Ferrando is a Professor in Business Administration at the University of Genoa, Department of Economics and Business Studies and former Dean of the same Department. His research interests regard intellectual capital, value creation, business performance, non-profit organisations, non-financial disclosure, entrepreneurship and entrepreneurial university, innovative start-ups. He is the Editor in chief of the online scientific journal impresaprogetto – Electronic Journal of Management.

Related articles

We’re listening — tell us what you think, something didn’t work….

Report bugs here

All feedback is valuable

Please share your general feedback

Join us on our journey

Platform update page.

Visit emeraldpublishing.com/platformupdate to discover the latest news and updates

Questions & More Information

Answers to the most commonly asked questions here

Executive Insights on Value Creation Frameworks

Q&A with Robert “Rob” Schriesheim, Chairman at Truax Partners LLC.

November 08, 2021

In this exclusive series, FTI Consulting experts interview industry executives to explore how innovative leaders are adopting new strategies to drive value creation.

Featured Guest: Robert “Rob” Schriesheim, Chairman at Truax Partners LLC. FTI Panel: Sazz Ariyanayagam

Question: Over the course of your career, how have you seen the definition of “value creation” evolve? What does the uncertainty of the last two years mean for the future of value creation?

Rob: Organizations now take a more holistic approach to value creation. Often, in the past value creation was code for a playbook focused on cost reduction. Sustainable, long-term growth and prosperity come from taking a broader perspective to creating stakeholder value.

As things have evolved, boards and CEOs now explicitly recognize that they need to employ a consistent framework focused on two critical issues which both fall under the category of resource optimization – specifically the allocation of financial capital and human capital.

Organizations are finding that consistent focus on measuring, monitoring and incentivizing behaviors that underlie value creation go a long way to driving the right outcomes. Successful companies prioritize these areas; in summary, activity is nice, but outcomes are what count.

Regarding the future of value creation, the last few years were difficult for many companies. However, any crisis tends to bring more focus and realization that financial capital and human resources are not infinite.

With a once-in-a-lifetime crisis like the pandemic, leaders of all types of enterprises are forced to make difficult decisions. In addition, institutional investors have now incorporated measures of environmental, sustainability and governance (ESG) – including diversity - into the value creation framework.

All of this is part of their assessment of performance, as it should be. ESG, organizational values and value creation are connected, are here to stay and will pay off in tangible results.

Question: The need to balance immediate and longer-term sustainable value is hardly a new concept. What strategies have you seen and used to navigate this balance, especially in the wake of increasing stakeholder activism?

Rob: Focus on the concept of “sustainable value creation” and then follow through with measurement and execution. Based on my experience, the best approach is to first define a strategy, or range of strategies, steer the organization in the right direction, and then push the business to execute – and hold the organization accountable to deliver against the plan. Of course, these things are never static, and there is always a need to recalibrate and adjust.

Differences in perspective with investors and other stakeholders with diverse priorities often develop over the near vs longer term. Leadership needs to proactively address these situations because they typically do not simply fade away.

Successful leadership teams actively seek out and partner with the investors who are willing to march in sync with a longer-term vision and strategy as long as they can see a clearly articulated value creation pathway with measurable milestones and potential for attractive returns.

Once the leadership team identifies these “anchor” investors, it is important to articulate the business strategy and demonstrate a track record of operational execution. Getting them bought-in to these areas and sharing the performance metrics you are presenting to the market is a good way to build trust and bring investors along for the journey.

Overall, companies should welcome the dialogue that often comes from considering the differing views and priorities of a firm’s shareholders.

Nobody has a monopoly on the best ideas — and leveraging the fresh perspectives of an outsider may be a critical piece to the value creation puzzle.

As an example of the shift, years ago many activists developed a reputation for being focused on delivering short-term stock price gains. But it is too easy and convenient to paint the activist investment community with a broad brush. My experience with activists has been positive in that they focus on true structural change to generate sustainable business improvement and value creation.

The framework for corporate governance is much evolved over the years. CEOs and boards have an increased focus on sustainable value creation and disciplined allocation of resources – and the need to articulate their approach to the investment community. This shift was in part the result of the broader community seeing the positive tangible results from productive partnerships that various activist stakeholder groups formed with public companies.

These partnerships influence everything from capital allocation to talent development.

Question: To that point, how has the pandemic influenced the tools and methods for addressing these areas? Can you talk to your experience leading the transformation of Frontier Communications which had over $7 billion in revenue and $17.5 billion in debt?

Rob: The pandemic may have put more pressure on the system, but the basic tools and approaches to capital allocation and talent development, work in nearly all circumstances. When companies focus on these two areas and lay the groundwork for accountability, they position themselves for success with growth and other transformation efforts.

At Frontier Communications, we brought the company through a pre-arranged Chapter 11 that emerged in April 2021. During that process, from bankruptcy to emergence, the value realized by the bondholders was about $5 billion. It was different in that the process included not only a balance sheet restructuring – but also bringing in a new CEO during the roughly 18-month Chapter 11 process, implementing an operational turn-around and developing and initiating a new strategy for growth.

We enabled this through a consistent focus on putting the right people in the right roles and holding them accountable. We were clear about the activities that needed to happen and how we defined and measured success – and were always mindful to solicit the input of the debt investors as the future owners of the company.

Our success at Frontier Communications was clearly linked to these areas and priorities.

The other point that was relevant pre-pandemic, but is just as true now, is the importance of assessing, presenting and working with the facts. Judgment is equally as important but different. We can debate the approach, but the facts need to be objectively reviewed. Outlining the facts is one of the most critical actions that should be taken to define and refine an approach and help leadership prioritize their efforts. Answering the question “what’s the size of the prize” when evaluating alternative courses of action is very helpful in setting priorities.

Question: We see how critical it is to align the strategies for value creation and business transformation. How have you approached this throughout your career?

Rob: First, we all need to be lifelong learners. You take away something from every experience – and not every situation will work out according to the initial premise. It really is critical to align and adjust your value creation framework with new learning as it becomes available. Too often transformations are viewed as cost-takeout exercises — but while it’s an arrow in your quiver, it’s nearly impossible to cut your way to sustainable growth or value creation.

One way to approach transformation through the lens of value creation is to first disaggregate the business between areas where acceptable returns are generated and those which are yielding low or even negative returns. Clearly you have to factor in the fact that new areas designated for growth investments may require a longer measurement time period. By taking complexity out of the business ecosystem – it makes it easier to run the business.

In my experience, this leads to several workstreams where leadership needs to simultaneously transform the business model while making strategic changes to the business portfolio, restructuring the balance sheet, divesting or managing down businesses with poor returns that are not viewed as core to the longer-term strategy – and focusing on those segments where you can profitably grow the business, earning returns in excess of your cost of capital.

Separating these efforts into their respective focus areas — with distinct teams of people — is critical to their success.

These workstreams should be united with a single view from the top but ultimately operate separately, given they require distinct skillsets, definitions for success, timelines and people.

We already spoke about the successful outcome at Frontier Communications in which we made sure we had a clear strategy with distinct workstreams and the right people in the right positions.

Earlier, upon joining Hewitt Associates as CFO, the CEO leadership team had already done an excellent job of identifying the problematic loss-making parts of the business and then turning around a very complex global business services enterprise. This was executed to a large degree by ensuring the right people were in the right places focusing on the issues specific to their respective lines of business. The business was then in a condition to pursue a growth agenda – but value had been recognized and, in that case, realized when we were acquired by Aon.

Prior to joining the board and then serving as CFO at Lawson Software in the late 2000s, it was underperforming and undermanaged.

Partnering with private equity Firm Symphony Technology group, we took the approach of internally disaggregating the business into segments each having a P&L Head. We refocused investments on a more vertically focused sales and marketing strategy within our customer base while also making decisions about which segments to manage for growth. The result was operating margin improvement which tripled while growing software revenue at a mature provider at an attractive rate during the financial crisis which was also realized in value creation when we were acquired by Infor/Golden Gate Capital.

I learned the same thing years earlier working with an investor who acquired control of Western Union. We developed and executed a strategy of transforming the company from an asset intensive provider of telecommunications services into a value added provider of consumer financial services. We separated the company into a CoreCo and NonCoreCo to clarify the focus on the go forward financial services segment. That experience demonstrated to me the value in taking a complex problem and breaking it down into its core pieces — it’s much more manageable and clarifies the process of making tough and complicated decisions while allowing the team to focus on those areas with attractive prospects for profitable growth.

Question: In summary, how would you describe the most important considerations other leaders and executives need to take and add to their “value creation” playbooks?

Rob: It comes down to objectively assessing the business, defining the strategy and options, putting in place the right people, identifying and rigorously measuring the right metrics for success, and partnering with stakeholders to drive execution. So much of this comes down to a willingness to make decisions and business judgment.

Doing all of these things with a constant focus on hiring the right people and holding the organization accountable is a strong recipe for success — both in the short-term and to generating longer-term sustainable value that we know is critical to business health and stakeholder value.

About Robert Schriesheim Taking a holistic approach to value creation while partnering with institutional investors, Rob has led large enterprises through complex transformations serving in various executive leadership and board roles. Recently, he led the successful restructuring and transformation of Frontier Communications, earning M&A Advisor’s Annual Turnaround Award for Telecommunications Services Deal of the Year. He has served on 11 public boards including as chairman and as CFO of public companies with revenues ranging from under $1 billion to $40 billion. He is currently a board member of publicly traded Houlihan Lokey, Inc. and Skyworks Solutions Inc. He graduated from Princeton University and received his MBA from The University of Chicago Booth School of Business.

Key Contacts

Sazz Ariyanayagam

Senior Managing Director, Co-Leader of Revenue Transformation

Danny Loomans

Lauren Hepburn

Senior Consultant

• Download Article

Most Popular Insights

• Retail Distress is Making a Comeback
• The SEC Climate Disclosure Rule: Separating Signal from Noise
• Five Insurance Trends To Keep an Eye on in 2024
• The Evolution of Healthcare: Trends to Watch in 2024
• New SEC Rules To Enhance Compliance Efforts for Fund Managers

Sign up to get access to FTI Consulting Insights

An official website of the United States government

The .gov means it’s official. Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

The site is secure. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

• Publications
• Account settings

Preview improvements coming to the PMC website in October 2024. Learn More or Try it out now .

• Advanced Search
• Journal List
• Front Psychol

A Practical Framework for Value Creation in Health Information Systems From an Ecosystem Perspective: Evaluated in the South African Context

Sanelisiwe hlongwane.

1 Department of Industrial Engineering, Faculty of Engineering, Stellenbosch University, Stellenbosch, South Africa

Sara S. Grobbelaar

2 Department of Industrial Engineering, DSI-NRF Centre of Excellence in Scientometrics and Science, Technology and Innovation Policy, Stellenbosch University, Stellenbosch, South Africa

Associated Data

The datasets presented in this article are not readily available because in-depth experts interviews were conducted and was analyzed through qualitative analysis techniques. Requests to access the datasets should be directed to SG, az.ca.nus@raalebborgss .

Performance improvement in any field depends on establishing goals that align the interests of relevant stakeholders, which may be defined as creating value for stakeholders. In the healthcare context, the concept of value creation and its analysis from an ecosystem perspective has been neglected and is hard to achieve in practice. This research adopts an innovation ecosystem perspective to develop and evaluate a practical framework to guide value creation for healthcare settings in a developing country context. The resulting framework serves as a tool that can guide stakeholders to co-create value by defining the inputs, activities, and outputs/outcomes to enable the process of value co-creation through a heath information system. Design Science Research Methodology (DSRM) was followed to develop the framework (artifact); it entailed the evaluation of the preliminary framework through a range of cycles. A relevance cycle was completed through a literature review. Since the investigation was done from an ecosystem perspective, it provided an understanding of the core characteristics of ecosystems, information systems, and value to inform the development of a preliminary framework. The preliminary framework was evaluated through two design cycles: the first was based on in-depth semi-structured interviews with six industry experts, and the second comprised a framework ranking exercise. The observations from the two stages informed the modification and refinement of framework items. The evaluated framework provides practical and actionable elements of a value creation system based on three canvasses: (1) the pre-use canvas defines the healthcare system and its stakeholders; (2) the tool guideline provides an overview of the development of ecosystem canvas elements; and (3) the ecosystem canvas represents the process of value creation along with a conceptual canvas with descriptions or implications of each of the framework’s concepts.

Introduction

The emergence of healthcare as an important research area is attributed to the critical role of healthcare in modern socio-economic development ( Lee et al., 2015 ). Investing in healthcare contributes to a country’s economic growth, improved living conditions, and social infrastructures ( Assamala, 2014 ). In particular, Health Information Systems (HIS) are considered as key investments to address rising challenges, and are fundamental in the delivery of healthcare ( Lee et al., 2015 ; Sligo et al., 2017 ).

The healthcare industry, compared with other industries, is lagging in the adoption of formal strategies for information systems planning. This is partly due to the complexity of the healthcare system and, in South Africa, to disparate legacy systems that are difficult to integrate. In addition to recognizing the crucial issue of strategic planning, it is also imperative to elucidate the impact of value co-creation in the success of health information systems ( Al-yaseen et al., 2010 ).

Improving performance and accountability in any field is dependent on establishing goals that unite the interests of all stakeholders. This goal could be defined as: “to create value for stakeholders.” In healthcare, value encompasses and integrates many of the already existing goals within the healthcare system such as quality, safety, patient centricity, and cost management, which bring together the interests of actors such as patients, payers, providers, and suppliers ( Porter, 2010 ; Kupfer and Bond, 2012 ; McColl-Kennedy et al., 2012 ).

Value co-creation is the process by which value is generated through interactions between multiple stakeholder groups ( Thomas and Autio, 2012 ; Hardyman et al., 2015 ). Ecosystems provide a means of analyzing dynamic and massively interconnected organizations, technologies, and actors through a holistic and multi-actor lens ( Anggraeni et al., 2007 ). Understanding multiple stakeholder ecosystems and how the process of value creation takes place is an important enabler of a holistic view of the system ( Pinho et al., 2014 ). It allows for a focus on the whole complex ecosystem to gain a deeper understanding of where and how value emerges from the collaboration of ecosystem actors.

While a thriving body of literature exists on the development of ecosystems and the process of value capture ( Khademi, 2020 ) it mostly explores business and private sector domains, with some studies focusing on data-based value through big data ( Grover et al., 2018 ; Lim et al., 2018 ), business models, and business performance ( Di et al., 2021 ). Further, a recent review highlighted the importance of considering ecosystem actors at a micro level to obtain a holistic understanding of ecosystem and how it functions. In addition, it is important to understand that ecosystem formation does not necessarily lead to value creation, only the opportunity to do so; the latter remains largely dependent on how participants behave and pursue opportunities through value co-creation ( Hlongwane and Grobbelaar, 2020 ). The literature review further indicated that there are no papers with a specific focus on Africa. The void of relevant literature substantiated the need to gain insight into the challenges facing digital systems and their ability to create value in the South African context. Therefore, while a focus on value systems and co-creation from an ecosystem perspective is a growing area of research, the development and evaluation of grounded frameworks and models in an African context remains scarce ( Ketonen-Oksi and Valkokari, 2019 ; Laubscher and Saville, 2021 ) [see section “Literature Review (Part 1 – Relevance and Rigor Cycle)” for more information].

From a contextual point of view, South Africa’s (SA) history of discrimination of individuals based on race and gender has profoundly affected its health policies and services ( Coovadia et al., 2009 ). Post 1994, the ruling African National Congress (ANC) aimed to address the disempowerment, discrimination, and underdevelopment that characterized the delivery of healthcare services ( Coovadia et al., 2009 ). The public healthcare system was made the cornerstone of health policy and the intention was to transform the healthcare system into an integrated and comprehensive national service that would allow all people access to essential healthcare ( Coovadia et al., 2009 ). Despite breakthroughs achieved through post-1994 innovations, their success has been restricted by the failure to delegate authority and by the erosion of efficiencies due to factors such as lack of leadership, corruption, low staff morale, and financial constraints ( Harrison, 2009 ; Ratshidi et al., 2020 ; Spies et al., 2020 ). South Africa is thus still grappling with massive healthcare inequalities ( Coovadia et al., 2009 ; Marten et al., 2014 ). Evidence shows that the COVID-19 pandemic has exacerbated this situation by driving further inequalities in access to healthcare services, and in particular community healthcare ( Okoi and Bwawa, 2020 ; Nwosu and Oyenubi, 2021 ).

This motivates the development of an HIS management tool to ensure long-lasting economic and environmental sustainability in healthcare by considering the roles, mechanisms, and individual actors that form part of the healthcare system.

The study addressed the following main research question: “What constitutes a practical framework to guide the development of value creation processes in information systems in the South African healthcare ecosystem?”

The South African case illustrates that numerous challenges affect a healthcare system’s ability to deliver value to its stakeholders in an efficient and effective manner through health information systems. The research objective is to develop a guideline and tool to explore various co-creation practices to generate value for all stakeholders and approaches in developing an HIS. We take an ecosystem perspective to this problem.

To develop successful HISs, literature has shown (1) the importance of a clear vision and a shared value base; and (2) the facilitation of engagement by ecosystem actors to engage and make connection and diversity to drive value co-creation processes ( Ketonen-Oksi and Valkokari, 2019 ).

This article develops and evaluates the utility of a practical framework in developing HISs in a developing country context:

• 1. The practical framework must assist in defining the relevant healthcare ecosystem and its stakeholders by identifying the requirements and considerations that need to be noted for successful co-creation of value for the HIS; and
• 2. The practical framework must outline how to define the inputs, activities, and output/outcomes to enable development of a clear implementation strategy to enable value co-creation in the healthcare ecosystem when developing the HIS.

A Design Science Research (DSR) methodology was adopted, as motivated and mapped to the layout of this article in section “Methodology.” Section “Literature Review (Part 1 – Relevance and Rigor Cycle)” outlines the literature review, section “The Preliminary Framework (Part 2)” presents a preliminary framework (artifact), section “Results: Framework Evaluation in the South African Context (Part 3 – Design cycles)” presents the results, and section “Discussion (Part 4)” presents the evaluated framework (artifact), discusses the findings, and reflects on managerial implications and future work.

Methodology

“Design science research is a “lens” or set of synthetic and analytical techniques and perspectives” ( Hevner and Chatterjee, 2010 : 1). DSR is widely used in the area of information systems, health care, education, engineering, and computer science to create new or expand existing knowledge and improve current practices by creating artifacts and analyzing the use or performance thereof through iterative evaluations and reflections ( Hevner, 2007 ). DSR – sometimes referred to as improvement science – is used to address complex real-world problems that occur in complex settings and involve various stakeholders ( Dreschler and Hevner, 2016 ).

DSR applies to Socio-Technical Systems such as IS and is often used in IS research ( Hevner et al., 2004 ). DSR “seeks to create innovations that define ideas, practices, technical capabilities, and products through which the analysis, design, implementation, management, and use of IS can be effectively and efficiently accomplished” ( Hevner et al., 2004 : 76).

The size and complexity of the problems and solution spaces when applying DSR in IS means that it is not always possible to identify an optimal solution. Instead, DSR focuses on discovering satisfactory solutions that suffice the solution space without explicitly specifying all possible solutions. The design involves creating, utilizing, and assessing heuristic search strategies and emphasizing that the solution works in context. The iterative process of DSR makes it possible to simplify the complex problem into smaller subsystems and then improve the satisfactory solution or expand the scope of interest with each iteration ( Gregor and Hevner, 2013 ). It is therefore considered as a suitable approach to this research study.

The goal of this study is to develop a management framework and tool for assisting developers of health information systems to consider value creation from an ecosystem perspective. We followed the Design Science Research Methodology (DSRM), as proposed by Peffers et al. (2008) , to develop the management framework (artifact). This consisted of six activities: (1) problem identification and motivation; (2) defining solution objectives; (3) design and development; (4) demonstration; (5) evaluation; and (6) communication ( Hevner and Chatterjee, 2010 ).

Design Science Research as defined by Hevner and Chatterjee (2010) requires that knowledge and understanding of the design problem and solutions be acquired throughout the process of building and applying the artifact. The final outcome of DSR is to deliver an evaluated artifact that creates knowledge about the design problem and the solution; it is tested and developed throughout the DSR process and therefore has utility to users ( Hevner and Chatterjee, 2010 ).

Hevner (2007) makes the point that DSR is dependent on a process that integrates a series of cycles in the development of an artifact, namely, (1) the relevance cycle; (2) the design cycle; and (3) the rigor cycle.

As shown in Figure 1 , the relevance cycle triggers the research and helps to formulate the problem statement and the framework requirements (see section “Introduction”) ( Hevner, 2007 ; Dreschler and Hevner, 2016 ). This is an important phase of the work, as the level to which the development of the artifact is appropriate, applicable, and implementable needs to be ensured to fit its implementation environment ( Hevner, 2007 ).

Overview of theDSR process followed in this research.

The rigor cycle refers to the development of legitimacy to ensure that the artifact is grounded in knowledge by drawing on the knowledge base. This may include exploring existing frameworks, theories, models, and instruments that may be used in the development or evaluation of the research artifact ( Dreschler and Hevner, 2016 ; Scribante et al., 2019 ). Part 2 (Theoretical component) of the study presents the knowledge base from published literature and explores the problem landscape. Section “Literature Review (Part 1 – Relevance and Rigor Cycle)” presents the outcome of a literature review to obtain an overview of the multidisciplinary literature related to value, information systems, and ecosystems. The outcome of section “Literature Review (Part 1 – Relevance and Rigor Cycle)” inspired the development of the subsequent preliminary framework through a rigor cycle as prescribed in the DSR process [discussed in section “The Preliminary Framework (Part 2)”].

The design cycle involves the rapid, iterative construction, and evaluation of the artifact that draws from both the real-world environment and knowledge bases ( Hevner and Chatterjee, 2010 ; Hevner, 2007 ). Dreschler and Hevner (2016) note that the evaluation of the artifact could be done in an artificial setting (e.g., conceptual applications) or directly through an application. Part 3 comprises a process, discussed in section “Results: Framework Evaluation in the South African Context (Part 3 – Design cycles),” that iteratively refined and evaluated the framework. This was achieved through semi-structured interviews with industry experts to evaluate the concepts in the framework and to gain additional insight. A framework-ranking exercise was used to evaluate the relevance and utility of various aspects and dimensions of the framework. The findings and results of the evaluation process are discussed in section “Results: Framework Evaluation in the South African Context (Part 3 – Design cycles).” The communication activity of the DSR process is contained in section “Discussion (Part 4),” which presents the final framework and tool.

With reference to Figure 1 , the article is organized in three major sections. The detailed methods followed in Parts 1 to 3 are presented in sections “Part 1: Outcome of a Literature Review (Rigor Cycle),” “Part 2: Preliminary Framework Development (First Development of an Artifact),” “Part 3: Framework Evaluation: Methods for the Interviews and Framework Ranking Exercise (Design Cycles to Refine the Artifact),” and “Part 4: Discussion.”

Part 1: Outcome of a Literature Review (Rigor Cycle)

The review and identification of core concepts in section “Ecosystems as Concept for Value Creation and Value Capture” presents the fundamental concepts identified in the literature review, and illuminates the interpretation by this study of value logic, stakeholder symbiosis, and institutional stability. It links the ecosystem literature with HIS.

The selected papers were critically appraised. This process involved identifying the main attributes, characteristics, and assumptions from the papers and then categorizing the concepts based on their ontological, epistemological, and methodological roles. The outcomes of the literature review are discussed in section “Literature Review (Part 1 – Relevance and Rigor Cycle),” specifically to show the synthesis framework that could be developed from the core concepts identified.

Part 2: Preliminary Framework Development (First Development of an Artifact)

Based on the understanding of the main concepts derived in Part 1, this stage of the investigation provided an understanding of the core characteristics of ecosystems, information systems, and value, which in turn informed the development of the preliminary framework, along with the inventory of important concepts identified through the literature process.

Part 3: Framework Evaluation: Methods for the Interviews and Framework Ranking Exercise (Design Cycles to Refine the Artifact)

The first stage of the evaluation process included semi-structured interviews with industry experts, who were selected based on a snowball sampling process. The process of saturation was applied to determine the number of interviews that were conducted. Although the sample is small, it is regarded as sufficient to arrive at a more refined framework through various steps and iterations.

The purpose of the interviews was to gain insight from three perspectives, namely, (1) researcher; (2) developer; and (3) healthcare perspectives. Interviewees were selected based on their expertise in value creation, ecosystem management, governance, health national standards, and health information systems. The designations, qualifications, and reason for the inclusion of each participant is presented in Table 1 . The first four interviewees formed part of the interviewee process, and later participated in the framework ranking process together with the remaining three participants.

Interviewee and framework ranking participants.

The interview questions were categorized into the six development parts: (1) governance; (2) co-creation; (3) information and knowledge sharing; (4) external environment; (5) organizations/institutions; and (6) stakeholders. This simplified the structure of the data that were transcribed, as the data gathered from the interviews were easily divided into one of the six parts (see section “Interview Discussion Guidelines for Semi-Structured Interviews” in Supplementary Material for detailed interview questions).

Following the interviews, Creswell’s approach for analyzing and interpreting data were used to make sense of the data gathered (see Figure 2 ). Creswell’s approach suggests segmenting the data into smaller parts for investigation and putting it back together again. The first cycle focused on determining whether the interviews validated the concepts included in the framework based on the perspectives and worldviews of the interviewees. A second, hybrid cycle was incorporated to ensure that the data were sufficiently analyzed. The final cycle yielded refined data that consisted of themes, patterns, and deeper insight into the relationships and links between the data.

Coding cycles of interview data ( Saldaña, 2013 ).

The second stage of the evaluation process consisted of a framework ranking exercise. The framework ranking exercise, which used the framework ranking sheet presented in Supplementary Table 6 in the Supplementary Material , provided an opportunity to confirm the transferability of the framework, given its development from multiple literature sources that spanned across multiple disciplines and varying developed countries. The valuable observations from the two activities led to the modification and refinement of the framework items, which resulted in the evaluated framework [Presented in section “Discussion (Part 4)”].

Part 4: Discussion

The interviews and examination of the interview data transformed the one-dimensional framework into a three-dimensional framework consisting of canvases specific to the South African health context (see Part 4). This part of the article presents the evaluated framework, followed by a conclusion section that outlines managerial implications and shortcomings of the research (see section “Conclusion”).

Literature Review (Part 1 – Relevance and Rigor Cycle)

Ecosystems as concept for value creation and value capture.

This study adopts and ecosystem perspective that has become progressively common in both research and in practice. It draws on the concept of natural ecosystems to provide a way of looking at a business’ structure, interactions, and exchanges, and achieves this by shifting the analysis of a business network to the systems level by focusing on the relations, interactions, and dynamics of massively interconnected organizations, technologies, and actors ( Anggraeni et al., 2007 ). The attractiveness of the approach and the driving force behind selecting the ecosystem perspective for this study lies in its ability to provide a lens that focuses on self-organization, coevolution, adaption, and co-creation of value ( Peltoniemi and Vuori, 2004 ; Thomas and Autio, 2012 ).

The “ecosystem” term has grown in its ecological meaning and has raised awareness of new models of value creation and value capture ( Aarikka-Stenroos and Ritala, 2017 ; Adner, 2017 ). Two views that have enabled conceptualization of these models in the ecosystem context include: ecosystem-as-affiliation and ecosystem-as-structure. The ecosystem-as-affiliation realm is a strategy that views ecosystems as a community of interconnected actors, technologies, and institutions that are defined by their network and platform affiliations ( Aarikka-Stenroos and Ritala, 2017 ; Adner, 2017 ). The strategy offers an appealing metaphor that is helpful for the description of interactions and links between actors at the macro level. However, the ecosystem-as-affiliation perspective is limited in its ability to provide a comprehensive understanding of value creation. This is mainly due to its focus on general governance and community enhancements. The alternative perspective, the ecosystem-as-structure, offers an approach that considers interdependent value creation. The approach starts with a value proposition that is linked to a business model that focuses on achieving sustainable development and offering long-term solutions to for multiple stakeholders ( Bocken et al., 2014 ). The approach obtains a constellation of stakeholders that need to interact in order for the value proposition to come to a realization ( Adner, 2017 ; Jacobides et al., 2018 ).

Three key defining characteristics of an ecosystem provide a framework to better understand ecosystems and also serve to set the boundaries for the ecosystem construct ( Thomas and Autio, 2012 ). The first characteristic is the importance of the value logic , in particular the source of value and how it is created. The second characteristic is the symbiotic relations of stakeholders in the ecosystem, as each stakeholder provides specialized and complementary inputs for value creation and co-evolve to maintain the stability and health of the ecosystem. The last characteristic is the institutional stability within an ecosystem, in which a locus of coordination is established to provide structure for the operation of governance mechanisms that coordinate the ecosystem ( Thomas and Autio, 2012 ; Anomah and Agyabeng, 2013 ). These concepts are briefly introduced and defined in the sections below.

Defining “Value Logic”

Several attempts have been made to create a holistic conceptualization of value, which include defining value as: (1) the amount that a consumer is willing to pay for a firm’s offerings; and (2) the properties of the products or services that provide benefits to the consumer ( Grönroos and Voima, 2013 ; Garriga, 2014 ). These conceptualizations are traditional ideologies of value and are grounded in the conventions and models of an industrial economy. The concept of value has grown to include new ideologies that consider the value creating system itself. Here different actors such as suppliers, customers, and business partners work together to co-produce value ( Grönroos and Voima, 2013 ; Garriga, 2014 ). This ideology suggests understanding the boundaries of value logic by including the notion of the source of value and value co-creation, as these are key elements of the construct ( Saarijärvi et al., 2013 ).

Different forms of value emerge for different actors through different processes when it comes to “value,” “co,” and “creation” ( Saarijärvi et al., 2013 ). The difference lies therein that value creation refers to a consumer’s creation of value-in-use, where value emerges for the user during a goods or service activity; however, value co-creation is a function of interactions between ecosystem actors ( Alves et al., 2016 ). Successful value co-creation requires ecosystem actors to be able to interact with one another through the exchange and integration of resources within the context of their own reality ( Breidbach and Maglio, 2016 ).

Defining “Stakeholder Symbiosis”

Literature proposes a narrow and instrumental definition of stakeholders as a group of individuals without whose support the organization would cease to exist ( Reed et al., 2009 ). Broader and more normative definitions also exist that view stakeholders as entities that are affected by the performance of the organization ( Reed et al., 2009 ). This study considers a combined definition that views the stakeholder(s) as “any group or individual who can affect or is affected by the achievement of the organization’s objectives” ( Reed et al., 2009 ). This definition was further adapted by replacing “achievement of the organization’s objectives” with “creating, maintaining, or extending a symbiosis” ( Hein et al., 2017 ). This is owed to the fact that the idea that stakeholders are interdependent and have the ability to forge symbiotic relationships, and therefore have a “stake” in a symbiosis ( Hein et al., 2017 ), is central to most interpretations of stakeholder theory. The symbiosis concept is essential to explore due to its collaborative properties that allows for traditionally separate actors to collaborate for the purpose of gaining a competitive advantage ( Gibson, 2012 ).

The symbiotic relationship between stakeholders in an ecosystem builds upon the notion of co-evolution, which is considered as a joint outcome of both co-specialization and complementariness in an ecosystem ( Ekanayake et al., 2017 ). From the co-evolution perspective, ecosystems are shaped by stakeholders who continuously act and react to the environmental changes and pressures that arise as a result of other stakeholders ( Verdu et al., 2012 ). In this regard, ecosystems evolve by means of mutual influences, which are the inputs that facilitate value co-creation. Co-specialization emanates from the need to support the ecosystem and therefore drive its performance by providing specialized inputs. From the stakeholder’s perspective, co-specialization enables each stakeholder to contribute their core capabilities through collaboration in order to drive the ability to create value. Interactions are an important dimension that is necessary to ensure the success of co-specialization and therefore the realization of value creation. It is expressed through the functional characteristics of each stakeholder, as well as through their responsibility in the ecosystem ( Thomas and Autio, 2012 ).

Defining “Institutional Stability”

From the ecosystem perspective, emphasis is placed on the central role of actor-generated institutions and institutional arrangements that influence the trajectory of institutional stability and change ( Verdu et al., 2012 ; Siltaloppi et al., 2016 ). This perspective suggests that actors are embedded in a set of interrelated rules and norms that encompass coordination, legitimacy and trust, and governance mechanisms. Here, actors can jointly reconstruct and change value co-creation practices to allow for new solutions to emerge, which ultimately advance change in the institutional arrangement. This is vital for the creation, development, health, and maintenance of an ecosystem ( Thomas and Autio, 2012 ; Siltaloppi et al., 2016 ). Institutional theory provides a useful lens to understand the organizing principles, rules, and norms in ecosystems. The three institutional characteristics of Institutional stability include: coordination , legitimacy and reputation , and governance mechanisms.

Ecosystem coordination drives the network’s performance by enabling both value creation and sharing. A critical element of coordination is the underlying architecture that connects all participating actors ( Jacobides et al., 2018 ). This underlying architecture forms the central actor that coordinates the ecosystem, which is vital for its health and stability ( Thomas and Autio, 2012 ).

Legitimacy and reputation provide the validity that organizations seek in their decision to participate and remain in an ecosystem ( Stoll et al., 2010 ). These aspects are vital for its survival and to ensure that the ecosystem is greater than the sum of its parts. Through active management of reputations and relationships, the uncertainty, ambiguity, and conflict among ecosystem participants can be minimized ( Thomas and Autio, 2012 ).

The governance structure is perhaps the most salient aspect of an ecosystem ( Sharapov et al., 2013 ). These mechanisms exercise power and authority in ecosystems by instilling conventions such as rules and norms to govern the behavior of participants in the ecosystem ( Sharapov et al., 2013 ). Accordingly, governance is an important mechanism that orchestrates and manages the manner of communication between different parties ( Thomas and Autio, 2012 ). For an ecosystem to be successful and for its robustness not to be threatened, participants must conform to the values, rules, and norms shared within the ecosystem ( Thomas and Autio, 2012 ; Sharapov et al., 2013 ).

Mapping the Concepts: Synthesis From the Literature Review

Following the search strategy and methodology discussed in section “Part 1: Outcome of a Literature Review (Rigor Cycle),” the review was conducted to develop an initial synthesis of the landscape of value creation and information systems research from an ecosystems perspective. The investigation of the diverse ecosystem literature led to the identification of important and frequently emerging concepts relating to value, information systems, and ecosystems (see Figure 3 ). These concepts are presented in Supplementary Table 4 in the Supplementary Material . A brief reflection on the initial concepts included in the framework follows below.

Synthesis of concepts from the literature review.

Information Systems Concepts Synthesis

Information systems introduce new ways to combine and exchange resources to create value for the actors in the exchange ( Barrett et al., 2015 ). Information systems need standards enforced by a regulating body to integrate dissimilar systems and to support interactions across networks regardless of the physical and operating systems ( Serbanati et al., 2011 ; Schiza et al., 2019 ). Supplementary Table 4 in the Supplementary Material outlines four subcategories related to information systems, namely, interoperability, sustainability, pluggability, and stakeholder-related concepts. Interoperability relates to ability to share and make use of information ( Salih Zeki et al., 2011 ). Sustainability relates to developing innovative digital data-based designs that transform businesses and drive economic development, leading to greater efficiency and cost reduction ( Barrett et al., 2015 ; Pappas et al., 2018 ). Pluggability refers to incorporating quality standards that are a reflection of the external quality criteria for information technology services. These standards are equivalent to reliability, efficiency, and/or maintainability ( Aulkemeier et al., 2016 ).

The last subcategory for information systems relates to stakeholder-related concepts. These concepts are key, since information systems are used by interconnected actors. The value created by information systems, and therefore its success, is largely dependent on the behavior, capabilities, and needs of the stakeholders; thus, it is important to ensure that the information needs and requirements of the stakeholders are satisfied ( Pappas et al., 2018 ).

Ecosystem Concepts Synthesis

The ecosystem concept yields fundamental aspects to be considered regarding how information systems function from a holistic perspective. The first subcategory includes concepts that influence the resilience of the ecosystem such as adaptability, actors, and duality. It is important to acknowledge that different actors function at different stages with the system. This ultimately affects the systems adaptability when disturbance in the system occurs ( Kharrazi et al., 2016 ). The second subcategory is the functioning category, which focuses on evolving the way in which ecosystem actors interact, cooperate, and collaborate to create value ( Barrett et al., 2015 ; Pappas et al., 2018 ; Heim et al., 2019 ). The final subcategory, ecology, focuses on biological community, and considers the interaction between entities with their environment. Ecology also draws from the business ecosystem literature.

Value Concepts Synthesis

According to the primary studies, there are several theoretical concepts that need to be considered with respect to value. These concepts include data-driven culture, dynamic capabilities, learning, and communities. In a data-driven culture, value is created by extracting data that have purpose and meaning in giving actionable insight and allowing actors to base their decisions on insight instead of instinct ( Pappas et al., 2018 ; Joda et al., 2019 ). These actors are actively integrated with varying needs and capabilities in order to foster collaboration and a bond through competences, relationships, information, and a shared vision ( Osório et al., 2010 ; Barrett et al., 2015 ; Adler-Milstein et al., 2017 ; Pappas et al., 2018 ). The evolving perceptions and needs of the actors should be continuously monitored and studied to increase this value ( Tarafdar and Tanriverdi, 2018 ).

Structural Component of Studies for Supporting the Relevance Cycle

The unit of analysis of the entities studied in each of the ecosystems varied. These entities were grouped into three broad categories, and included: the political and economic environment, the organization, and the primary stakeholders.

These factors play an important role in defining requirements as per the DSR process, where the environment and the requirements of the artifact are explored.

External Environment

The literature indicated that the environment may be unpredictable due to political, economic, and social instability ( Primmer et al., 2015 ). The external environment has been found to form pre-existing conditions that either provide new opportunities for value creation or hinder the success of the value creation system ( Mainardes et al., 2012 ). This is largely because these factors may act as constraints that shape the environmental structure ( Barrett et al., 2015 ). The strategic behavior of the organization is subject to these factors, with the organization needing to respond in accordance with their respective importance ( Primmer et al., 2015 ). Due to the impact that the external environment has on the organization, it was considered that its role in the value creation process could be of importance to encourage flexibility and adaptability in changing circumstances that may arise ( Medema et al., 2017 ).

The Organization

The organization, which is termed the “bridging organization” in the framework, is recognized in literature as a key feature for collaboration, as it forms an intermediary between the diverse stakeholders and their networks in support of the value creation process ( Barrett et al., 2015 ). The main purpose of the bridging organization is to facilitate the development of a network that brings together multiple positions, knowledge types, and sources while providing a platform for value creation ( Medema et al., 2017 ). The idea is for these collaborative networks to become learning networks that cultivate continuous value co-creation, improvement of practices, and institutional development. The bridging organization therefore provides an environment for new collaborative networks to arise for the purpose of developing new social practices and interactions ( Medema et al., 2017 ).

The literature indicated that deliberate co-creation processes, enabled by the organization, may be necessary to facilitate a neutral space for open and iterative dialog so as to allow stakeholders to learn and share knowledge for the purpose of co-constructing new, innovative, and personalized experiences ( Medema et al., 2017 ). Though co-creation is considered to be the center of gravity in the design of organizational services, literature suggests a shift from the inside of the organization to its environment for the purpose of stimulating innovativeness ( Adamik et al., 2018 ). A deeper understanding of the environmental factors of the organization’s networks may be necessary to understand their impact on the organization’s desired outcomes. This is important as these networks are dynamic in nature and continuously changing ( Adamik et al., 2018 ). Further, these political, cultural, and institutional factors play a large role in the power and therefore information asymmetries within the organization, which in turn influences the organization’s co-creation process ( Adamik et al., 2018 ).

Information sharing through the use of information systems is a notable concept that emerged from the literature, as it is said to be essential to the survival of an organization in the environment ( Panetto et al., 2016 ). Information systems form an integral part of efficient and effective information sharing within an organization. Literature suggests that seamless interfaces to facilitate sharing of vital information may be needed to perform varying functions using the same set of resources ( Medema et al., 2017 ). Information sharing therefore encourages the distribution of useful information for systems, people and organizational units ( Panetto et al., 2016 ). Repeated interactions through information sharing have the potential to build strong network ties between network members, which could eventually lead to high levels of trust. It also leads to the development of a shared understanding, vision, purpose, and culture ( Lotfi et al., 2013 ). Literature emphasizes the contribution of information sharing to the success of the value creation process, and its role in the value creation system is therefore considered. This success includes how information sharing: (1) reduces costs; (2) improves relationships with stakeholders; (3) increases the flow of resources; (4) enables efficient delivery of services; and (5) facilitates the achievement of a competitive advantage ( Medema et al., 2017 ). To attain this success, the information systems that facilitate information sharing must have semantic interoperable capabilities that support collaboration across platforms ( Salih Zeki et al., 2011 ). Semantic interoperability goes beyond merely sharing information, and deals with its interpretation to ensure that the transmitted information is fully understood by the receiver ( Panetto et al., 2016 ).

The Stakeholder

Evidence from literature has shown that the power of stakeholder networks lies in their diversity, which may lead to a more robust value creation system ( Panetto et al., 2016 ). The network refers to a set of relationships that connect the participating stakeholders to one another. Elements from governance mechanisms, namely, hierarchical governance, scientific-technical governance, adaptive collaborative governance, and the governance of strategic behavior are used to characterize the stakeholder network in the framework. This is mainly due to the findings that suggest that these governance modes influence how the ecosystem functions by taking into account the people and the organization’s decision-making processes ( Thomas and Autio, 2012 ; Primmer et al., 2015 ).

The consideration of readiness together with the ability of stakeholders to engage in value co-creation practices also emerged as important ( Medema et al., 2017 ). It was found that this aspect naturally encourages stakeholders to form symbiotic relationships that allow for traditionally separate stakeholders to engage in the value co-creation process ( Medema et al., 2017 ). To successfully facilitate the co-creation process and therefore create value, it is suggested that stakeholders may need to be jointly involved in the process to ensure value formation. However, value formation is not necessarily guaranteed, as the process can be either creative or destructive. The quality of the interactions between stakeholders are fundamental to successfully create value, as is the organization’s understanding of the stakeholder outside of the value creation process ( Hein et al., 2017 ). Understanding and learning more about the stakeholder and their individual context and how that influences the value creation process aid in the effective management of these interactions ( Grönroos and Voima, 2013 ).

Outcomes of Value Creation Processes

Understanding the desired outcomes of the value creation process may be needed to determine the necessary activities to be performed by the organization. These outcomes are dependent on the credibility, salience, and legitimacy of the value creation efforts ( Medema et al., 2017 ). For the value creation process to be considered credible, the collaborative stakeholder network should deliver timely and useful outputs; These include synthesized feedback meetings and reports that discuss the rigorous measurement of the value created. This essentially allows for: (1) ongoing reflection on the effectiveness of the value creation process and its outcomes; (2) the discussion of lessons learnt; and (3) driving systemic progress ( Grönroos and Voima, 2013 ; Medema et al., 2017 ). Legitimacy refers to the extent to which the value creation efforts acknowledge the sources of value, which differ for different participating stakeholders in the ecosystem ( Medema et al., 2017 ). Flexibility, efficiency, and innovation form the unique sources of value that govern and henceforth act as drivers of the legitimacy of the value creation system ( Medema et al., 2017 ). The salience of the value creation process refers to the quality of the knowledge that is used, modified, and shared within the value creation system ( Thomas and Autio, 2012 ).

The Requirements for the Artifact

A key practice in designing a solution through DSR is developing a sound relevance cycle outcome. The design outline essentially provides an idea of the intended solution prior to the development of the fully detailed design, and involves formulating key requirements that are needed to guide the design process. Van Aken and Berends (2018) use categories to group the different requirements that should be addressed by a design. These include:

• 1. Functional and structural requirements: key specifications that usually relate to the performance or the demands of the designed solution;
• 2. Boundary conditions: the design requirements that need to be met and cannot be negotiated; and
• 3. User requirements: the requirements relating to the use of the framework.

The research draws inspiration from these categories to develop the design requirements of the framework. The latter were deduced from the literature and are linked to the strategic categories discussed in section “Literature Review (Part 1 – Relevance and Rigor Cycle).” The set of requirements to be met by the framework needed to meet are summarized in Table 2 .

Artifact requirements deduced from literature.

The Preliminary Framework (Part 2)

The preliminary framework of the value creation system aimed to include the factors that could address the complexities within healthcare systems, and further aimed to determine how value could emerge from the collaboration between participants who interact using HISs. Trends and key elements were used as building blocks to formulate the preliminary inventory framework for the interpretation of a value creation process in healthcare ecosystems (see Figure 4 ). This framework identifies the main factors that may be considered in improving the value creation process that is supported by information systems in a healthcare ecosystem. A more detailed account of the various factors is provided in Supplementary Table 5 in the Supplementary Material .

Preliminary framework.

The integrated structural components and functions of the value creation system (as defined by the systems requirement) provide a view of different units of analysis and groups of stakeholders that can guide the strategy development process. This organization of structural concepts provides a perspective that encourages the consideration of the three health system levels, which include: the political and economic environment of the health system, the healthcare facility, and primary stakeholders. These three levels shape the healthcare system and were used in the development of the framework to explore their inter-relatedness.

The functional components of the ecosystem perspective highlight the co-creation aspect, such as readiness to co-create, appropriate resources for the co-creation process, knowledge sharing, and reducing the complexity of interaction between stakeholders, technology systems, and the facility/organization structure. The value of strengthening relationships and networks is seen as central to achieving this. Governance is a core aspect of achieving institutional stability; it relies on the institutions and institutional arrangements and needs to acknowledge the different governance modes that influence ecosystem functioning.

Value outcomes consider factors that influence the desired outcomes of the value creation process and reflect the findings that were incorporated into the framework due to their role and significance in the value creation process.

Results: Framework Evaluation in the South African Context (Part 3 – Design Cycles)

The DSR evaluation process and design cycles comprised semi-structured expert interviews to evaluate the framework. The results from the evaluation process informed the progressive modification of the framework, resulting in the refined framework and management tool (artifact).

Results From Semi-Structured Interviews

The reflection on findings from the expert interviews (1) identified additional concepts to incorporate into the framework and (2) highlighted areas of disagreement. These results are presented in Table 3 .

Results of the semi-structured interviews.

Certain topics and concepts, which were continuously mentioned and discussed throughout the interviews, were identified as trends and patterns following application of the four analytical lenses. These trends and patterns were considered in the design and development of the value creation system in the South African healthcare context.

The first trend/pattern is governance and its role in the healthcare system. Various standards and guidelines were designed to manage the functions, activities, processes, and structures of the healthcare system and its components. Involvement of relevant stakeholders in the decision-making processes and development of these standards and guidelines broadens the consensus on the most appropriate strategy for success. While development of standards is important, the crux of their importance lies in their ease and effective implementation to ensure that the desired goals and objectives are reached.

The next set of trends relates to information systems, and included information and knowledge sharing, interoperability and standards, value of information and the adoption of information systems. Information and knowledge sharing are essential for decision making, healthcare improvement, value creation, and identifying value opportunities. Lack of information and knowledge sharing can be detrimental and affect the success of the healthcare system. Interoperability and standards play a crucial role in information sharing to harness the value of information and knowledge by providing a fundamental linkage and integration of information and knowledge in a way that enriches healthcare data. The value of information and knowledge that is used and shared through these systems increases when it is accurate, reliable, and up to date. To further harness the value of information, information systems must be stable. This means that information systems must encompass resilience in the face of disturbances that transcend the scope of known properties to ensure that that system does not fail or lose information. There is value in ensuring that information systems are adaptable in such a way that people can adopt it. This is achieved through simplicity, autonomy, localization, ease of use, and ease of implementation.

The following set of trends relates to the co-creation of value creation in healthcare. The aim of co-creation differs between interacting stakeholders, as stakeholders have different agendas and objectives with the co-creation process. While co-creation is for some intended to improve systems, processes, and the overall experience and satisfaction of the patient, others may co-create for economic purposes. This can result in individuals behaving purely for the benefit of their own interest rather than for that of the collective. The aim of co-creation also varies with the level at which co-creation takes place. Co-creation can scale from the healthcare provider and patient levels to healthcare workers co-creating one electronic health record, which in turn can contribute to co-creation at the provincial and country levels. A variety of factors influence the co-creation process and its success, and can be viewed as either obstacles to, or supporters of, the process. In this sense, these factors are considered to be “two sides of the same coin.”

The final two trends relate to healthcare and to stakeholders. Both these trends have a significant influence on the design, development, and implementation of the value creation system. The notion of the healthcare organization and what it encompasses needs to be emphasized as healthcare differs in scope and level. This is especially important in the South African healthcare context that requires the consideration of varying constraints and complexities. This will further assist in the identification of the relevant stakeholders that need to be considered as stakeholders vary in healthcare environments.

Results From Framework Ranking Exercise

A framework ranking exercise was conducted to explore the relevance and usefulness of the framework. The outcomes from framework ranking were used to gain insight into the importance and implementation difficulty of various framework items.

An analysis of the data collected during the ranking exercise is discussed in this section. Feedback regarding the consideration of the framework’s concepts in the applied world is presented in Figures 5 – 7 . From the graphs, it is clear that the majority of the framework’s concepts were considered by all participants, with only 15 concepts classified as not considered by some participants. Here, Incentives ranked the highest overall as the concept that is not considered in the design, development, and implementation of digital interventions. This is followed by Silos, Symbiotic relationships, Sources of value, and Compatibility of co-creation variables. It was deduced from the notes provided by the participants and from further enquiry that lack of knowledge, limited resources, and the nature of some of the concepts in given instances contribute to why some concepts are not considered.

Consideration of external influencing concepts.

Consideration of concepts that address desired value outcomes.

A primary motivation behind the framework ranking exercise was for the researcher to identify the impact and effort required to address the framework’s concepts from a collective group of industry experts. Figure 8 presented at the end of this section, maps the impact of the respective concept on the success of a digital intervention against the effort required to address the concept. The graph compares the cumulative frequency at which the respective degrees of impact and effort was selected by the participants for each concept. These data were subsequently useful as an indication of what experts regard as priorities. This was done by identifying concepts that were deemed to have a positive or an extremely positive impact, but that require a moderate, high, or extremely high degree of effort to address or implement.

Comparison of the respective degrees of impact and effort for each concept Discussion (Part 4).

In Figure 8 , each concept was coded using a label and a color that represents the category under which it falls. Indicators that are deemed as input [input category (IC)] are represented by the yellow blocks in the graph; strategic priorities and activities (SPA) are shown in white; and indicators that may be seen as outputs [Output category (OC)] are presented in green.

In Figure 8 , concepts that have a positive or an extremely positive impact with a moderate, high, or extremely high degree of effort need to be prioritized in a value creation system. This “cut off” is indicated by the red dotted lines, and these concepts fall above and to the right of these lines, as well as on the red dotted lines. Four concepts, labelled IC3 (Corruption), IC4 (Healthcare reform), IC8 (Information asymmetries), and SPA3 (Alignment of values and interests) fall slightly below the red dotted line but still above the blue line. This means that these concepts have a moderate to positive impact with a high to an extremely high degree of effort needed to address or implement. These four concepts also present the need to be prioritized due to their positions on the graph. This decision is further supported by Figures 5 , ​ ,6, 6 , as these concepts are considered in the applied world by majority of the participants. The final concept that needs to be prioritized is SPA2, as this concept is deemed to have a positive impact with a minor degree of effort needed to address it. The selection of this concept is also supported by Figure 6 , which shows the concept ranked as considered by all industry experts.

Consideration of concepts used to strategically prioritize and conduct activities.

The ranking exercise enabled the researcher to identify concepts that were deemed to have no impact, a negative impact, or an extremely negative impact, but require a moderate, high, or extremely high degree of effort. These concepts include IC6 (incentives), IC7 (healthcare uncertainty), SPA19 (attitude toward stakeholder participation), and SPA23 (silos). The discussion of this outcome, together with the investigation into the prioritization of IC6, IC7, and SPA19, is beyond the scope of this study. In regard to SPA3, the insight gained through interviews suggests that data silos significantly contribute to interoperability challenges and therefore need to be addressed. This notion is also confirmed by Reda et al. (2018) .

Discussion (Part 4)

Evaluated framework.

The proposed management tool consists of three overarching dimensions, each with their own canvases. (1) The first dimension, the pre-use canvas, supports definition of the healthcare system and its stakeholders by highlighting the requirements and considerations to be noted prior to the use of the tool. (2) Dimension two forms the tool guideline, which gives an overview of the development parts of the ecosystem canvas. These development parts were formulated with the South African healthcare context in mind. (3) The final and third dimension forms the ecosystem canvas, which represents the process of value creation in the healthcare context. This canvas is accompanied by an additional conceptual canvas that provides the descriptions or implications of each of the framework’s concepts to complete it.

The dimensions and their canvases characterize important strategic features of a value creation system that have been considered in a healthcare ecosystem. These dimensions are intended to assist researchers, policymakers, and health care workers to understand how a value creation system, which is supported by information systems, can be used to address and possibly overcome challenges faced within a healthcare organization. The final dimensions and their canvases are discussed in the sections that follow, and are presented in a legible size at the end of the chapter.

Dimension One: The Pre-use Canvas

Healthcare is not an activity that has one type of action; hence, setting a perspective to narrow the scope is important. Throughout the process of evaluating the framework, the researcher realized the importance of clearly defining the healthcare profile as it greatly influences the lens used to view the framework. The Pre-use canvas, presented in Figure 9 , highlights the importance of establishing the healthcare profile. Here, the notion of the healthcare system, healthcare scope, and stakeholder profile are the three factors comprising the healthcare profile that were found to influence the approach toward the framework. These factors need to be established prior to the use of the framework.

The pre-use canvas of the final management tool.

There is value in starting the value creation process with a clearly defined healthcare profile. This is important, as there are implications that need to be considered for each of the components comprising the healthcare profile when using the framework. The notion of the healthcare system type is used to establish the unit of analysis and whether the healthcare system is a primary healthcare facility, hospital, or digital health organization. The framework was developed to be as generalized as possible, thereby allowing it to be utilized in these varying healthcare system types. Defining the healthcare system type is important as it results in an emphasis on certain framework items. The healthcare scope forms the second component that is used to define the healthcare profile. Here, the scope of the healthcare system under which the framework is used needs to be defined. This is essential, as the framework needs to be adjusted to fit the context or the circumstance of the scope, which in turn will place further emphasis on certain framework items.

Following the first two components of the healthcare profile is the consideration of the stakeholder profile. Stakeholders have the potential and ability to affect the success of a healthcare system. This is largely based on the magnitude of the influence that they have, which varies from stakeholder to stakeholder. Defining the stakeholder profile is therefore necessary to determine which relevant stakeholders are considered. The range of stakeholders involved in a healthcare system forms the foundation for value creation and co-creation. Therefore, the decision to involve or not involve certain stakeholders has the potential to impact the success of the value creation system.

Dimension Two: The Tool Guideline

The second dimension of the framework is the tool guideline, which has two overarching aims, the first of which is to facilitate the design, development, and implementation of a value creation strategy used within a healthcare ecosystem. The tool guideline aims to achieve this by guiding the user through the typical development parts that form the dynamic building blocks of a successful value creation system. The second aim is to educate users by providing them with a branch of knowledge on the various development parts that form the foundation for value creation in a healthcare system. Here, the users are informed about the practical and actionable elements of a value creation system that draws from the literature review and interviews.

The tool guideline, of which the structure is presented in Figure 10 , was developed with the South African healthcare context in mind. The layout of the tool guideline includes the six development parts that form the functions and structural components of the value creation system. The figure clarifies the terminology used in the discussion of the tool guideline, and highlights the possible actions that are required or should be considered within each development stage.

The tool guideline of the final management tool.

The tool guideline presents the six development parts of the value creation system, namely: (1) governance; (2) co-creation; (3) information and knowledge sharing; (4) external environment; (5) healthcare organization; and (6) stakeholders. These development parts form the functions and structural components of the value creation system and are grouped accordingly. Governance, co-creation, and information and knowledge sharing are classified as the functions of the value creation system. The remaining development parts, namely the external environment, healthcare organization, and stakeholders are classified as the structural components of the value creation system.

Governance forms the first development part, classified as a function of the value creation system. Governance refers to the actions and rules used to govern the healthcare system and considers the people and the organization’s decision-making processes. Governance influences how the ecosystem functions and is therefore key for the success of the healthcare system. The second function of the value creation system is co-creation. Co-creation elucidates the importance of fostering collaboration between healthcare system actors as a neutral space for open and iterative dialog. Co-creation essentially allows stakeholders to learn and share knowledge between one another to attain personal and institutional capacity for the purpose of co-constructing new and innovative solutions in an efficient manner. The last development part, classified as a function of the value creation system, is information and knowledge sharing. This development part considers the management and use of information and knowledge to support healthcare processes in creating value. Here, the “what,” “who,” “how,” and “when” information should be shared is considered. Sharing information and knowledge encourages co-creation, and by facilitating the sharing of information, through governance and standards, the care that people receive improves.

The external environment forms the first development part, classified as a structural component of the value creation system, and refers to the external influences that shape the strategic behavior of a healthcare system. These influences form the pre-existing conditions that either hinder or provide new opportunities to create value. For this reason, the external environment plays a vital role in the structure of the healthcare system. The healthcare organization forms the second structural component of the value creation system, and is recognized as a key feature that is necessary to foster a collaborative environment between diverse stakeholders within their networks. In this sense, the healthcare organization forms an intermediary between these stakeholders, which encourages co-creation and therefore value creation. The final structural component of the value creation system is the stakeholder development part; this refers to the group of individuals whose “stake” and influence has a great impact on the success of the value creation system. Stakeholders play an important role in the healthcare ecosystem as they shape the ecosystem by continuously acting and reacting to environmental changes and pressures that arise because of other stakeholders and additional influencing factors.

The structural components, together with the previously discussed functions, are arranged to form Dimension three of the management tool (see section “Dimension Three: The Ecosystem Canvas”). It is important to note that the governance, information and knowledge sharing, and stakeholder development parts were not designed to stand alone in Dimension three due to their significance in multiple framework items. The elements of these development parts were therefore integrated into one or more of the framework’s items as supporters/influences of the respective concepts.

Dimension Three: The Ecosystem Canvas

The ecosystem canvas, discussed in this section, forms part of Dimension three and includes the newly termed ecosystem levels, namely, the external environment, the organization, and the stakeholders. These ecosystem levels form subcategories to three categories, namely the input, strategic priorities, and activities, and output. These categories and subcategories are discussed in detail in the sections to follow.

The layout of the Ecosystem Canvas is presented in Figure 11 . The canvas is firstly presented in the format of a feedback loop to illustrate the structure of the value creation system, which consists of the most notable concepts from literature that need to be considered when creating value centered around information systems in a healthcare ecosystem. This part of the canvas is structured in this manner to encourage and support the continuous growth, development, and improvement of a healthcare system.

Part one of the ecosystem canvas.

The concepts included in the ecosystem canvas and their respective descriptions/implications form the second part of the canvas. An extract from this part of the canvas is presented in Figure 12 . The purpose of this part is to provide the user with a better understanding of the categories and concepts that constitute the canvas. All the concepts are uniquely arranged as an appropriate way to convey the required information.

Second part of the ecosystem canvas.

The Input Category

In a healthcare ecosystem, the healthcare organization (which includes healthcare facilities for the sake of this explanation) does not stand alone. It consists of a network of explicit and implicit relationships that span both the internal and external environment. It is for this reason that the ecosystem canvas suggests the consideration of not only the internal factors of the organization, but also its external influences (see Figure 13 ). This is motivated by the need to gain a deeper understanding of the influence that these environmental factors have on the organization’s desired outcomes and to stimulate innovativeness within the healthcare organization. The healthcare organization relies on, and is greatly influenced by, changes within its external environment. These external influences govern the healthcare ecosystem and therefore shapes the structure of the healthcare organization. It is for this reason that the external environment is considered an input that drives the strategic behavior of a healthcare system, hence its placement in the input category of the ecosystem canvas. The most notable external influences from literature are included in the input category. These influences should be considered as constraints or enablers of the healthcare system’s ability to reach the desired healthcare outcomes. The input category recommends that users of the canvas consider the external influences shown in Figure 13 , which span the healthcare organization’s external environment, to make informed decisions.

Recommended external influences consider.

These external influences have an important role in the complexity of the healthcare system, as the external environment is dynamic and continuously changing. It is important to consider these influences to reduce the impact of the complexity of the external environment, to adapt faster to changes and make better decisions.

The Strategic Priorities and Activities Category

Strategic priorities and activities are in place to define and redefine the way in which a healthcare system operates. This category represents concepts that were thoughtfully put together in response to the challenges within the healthcare system that affect value creation. This category is designed to equip users to effectively engage and support one another during the value creation process. Its focus is to highlight recommended concepts to consider regarding, first, the properties of a value creating healthcare system; second, factors influencing stakeholder involvement and co-creation success; and, third, factors influencing information and knowledge sharing. These concepts are presented in Figure 14 .

Recommended strategies and activities to consider.

The properties of a value creating healthcare system provide a general understanding of how a healthcare ecosystem could function, as well as what needs to be considered to cultivate a collaborative environment. This type of environment is essential for bringing together multiple stakeholders with varying stakes in the healthcare system for the purpose of jointly developing sustainable solutions, while still providing a platform for value creation. Each property in the healthcare system has a role in the value creation process. Lack of attention and recognition of this role can result in the structure and initiatives of the healthcare system becoming inadequate. It is therefore important to have a holistic view of all the parts of the system to understand the interrelatedness of the components and to gain a deeper understanding of where and how value emerges. The idea is to foster learning networks in healthcare systems that encourage and support continuous improvement of practices and institutional development.

The healthcare system provides a space for learning and knowledge sharing, co-construction of new innovations, and value creation. It is important for collaborative networks to exist in such a space, as they play a vital role in ensuring that these objectives are met through the continuous use of co-creation practices. Deliberate implementation of the latter is necessary, as the degree of advancement of the healthcare organization within its ecosystem heavily depends on these co-creation practices; further, they are necessary for a competitive advantage and to drive innovation. A key enabler of co-creation is stakeholder involvement, since co-creation is a function of stakeholder interactions. Exploring co-creation through the engagement of multiple stakeholder groups is essential for the improvement of healthcare services. Successful co-creation requires stakeholders to interact and build strong relationships through the exchange and integration of resources in the healthcare system; hence, the ecosystem canvas focuses on the factors that influence stakeholder involvement. These factors can be viewed as either obstacles to, or supporters of, the process, and comprise notable factors that were identified from literature and interviews, which were considered as important to the context.

Information and knowledge sharing is essential for the survival of a healthcare organization within its ecosystem, and it is therefore, in the context of the use of information systems, another prominent concept in the ecosystem canvas. Lack of information and knowledge sharing can be detrimental and affect the success of the healthcare system. It is therefore necessary to encourage transparency within the healthcare system, where free and unrestricted information and knowledge is available for use by relevant stakeholders. The successful adoption and implementation of information systems play a larger role here. In the healthcare system, information systems have the potential to improve the quality of care received by patients and the management of healthcare costs. Furthermore, if well directed, information systems can be used to facilitate information and knowledge sharing between stakeholders for the purpose of co-producing value for the healthcare system. Literature and interview data confirm the importance of information and knowledge sharing in the success of value creation, hence its inclusion in the ecosystem canvas. Information and knowledge sharing streamlines the health system through information systems, thus creating value. This ultimately results in improved communication, effective management of healthcare practices, improved resource allocation, and efficient resource flow; all of which are essential to efficient service delivery. To harness value from information and knowledge in the healthcare system, the ecosystem canvas places emphasis on the components that facilitate the adoption, use, and management of information and knowledge to support the healthcare processes to create value. In this way, the canvas encourages the need to understand the environment that the information system functions and how it links to the success of the healthcare system.

The Output Category

Through a comprehensive and holistic view of the healthcare system, the ecosystem canvas links the preceding categories of the canvas to the output category, as they directly and indirectly affect the desired value outcomes. The structure of the canvas therefore suggests that a deeper understanding of the two preceding categories is necessary to understand the impact that they have on the desired outcomes of the healthcare system. Further, an understanding of the desired outcomes of a value creation process is important to identify areas for improvement, as this determines the necessary activities that need to be performed by the organization. The output category recommends users of the canvas to consider the factors shown in Figure 15 , as they compare to the operational and strategic performance of the healthcare system.

Recommended value outcomes to be consider.

The value outcomes included in the ecosystem canvas are important to be achieved as they encompass many of the goals inherent to healthcare such as quality, patient centeredness, and cost management. The factors in the output category were included for their role and significance.

The Value Creation Aim

The Value Creation (VC) aim was included in the management tool to serve as guide to track the success of the healthcare system and to drive progress. It intends to achieve this by focusing on the following four integrated objectives: (1) optimal flow of quality knowledge and resources; (2) conformation to values, rules, and norms shared within the ecosystem; (3) quality interactions and relationships between stakeholders; and (4) flexibility and adaptability of the system. These objectives are important as they recognize the fundamental principles of value creation and the role of key stakeholders that are needed to achieve systemic excellence.

The optimal flow of quality knowledge and resources considers how quality information and knowledge is streamlined in the healthcare system to improve communication between stakeholders, management of healthcare practices, resource allocation, and efficient resource flow. Conformation to values, rules, and norms shared within the ecosystem considers the governance mechanisms that are in place to support key actors in co-creating value in a manner that can advance the healthcare system. This is vital for the creation, development, health, and maintenance of the healthcare ecosystem. Quality interactions and relationships between stakeholders is an essential dimension that is necessary in realizing value creation. These interactions and relationships are expressed through the functional characteristics of each stakeholder, as well as through their responsibility in the ecosystem. Flexibility and adaptability of the system refers to the systems’ ability to adapt to changes or disturbances in the healthcare ecosystem. The healthcare system needs to have the ability to either return to its original state of equilibrium, or adapt to a new equilibrium.

The implementation of the management tool and framework needs to occur through the activities of the healthcare system’s business/operating model, which is central to the value creation process. The business model considers all the resources, capital, and relationships in an integrated manner, and turns these valuable resources into desired outputs. Implementation of the management tool is proposed to be done in a three-stage process, managed by project management practices, to ensure that the appropriate knowledge, skills, and resources are used to achieve the objectives. This is essential as the healthcare ecosystem is complex in nature. The three-stage process should include: (1) planning; (2) execution; and (3) evaluation. During the planning stage, the healthcare organization will need to define their goals by describing how they intend on moving from the system’s current state to their envisioned state. The implementation of the management tool takes place during the execution stage. The researcher suggests the use of change management tools to assist in managing the launch of the value creation management tool to minimize the impact on the various stakeholder groups and the healthcare organization. Finally, the implementation process can be evaluated to monitor the use of the management tool in the healthcare organization and to ensure the transition to newly implemented practices is seamless. To this end, is important to consider the people, processes, and culture of the healthcare organization.

Contribution to the Literature

The framework and management tool conceptualizes and characterizes important strategic features of a value creation system from a holistic perspective. The framework comprises interdependent components that were identified from existing literature [see section “Literature Review (Part 1 – Relevance and Rigor Cycle)”] and synthesized and organized into a practical management tool. This work contributes to a burgeoning literature on better understanding and managing value creation from an ecosystem perspective ( Matthies et al., 2016 ; Barile et al., 2020 ; Botti and Monda, 2020 ; Autio, 2021 ).

The content of the framework is intended to stimulate thought and provide users with an understanding of how elements within a healthcare ecosystem can influence the value creation process. The tool offers a novel course of action that can be taken to create sustainable value in a healthcare system by considering: (1) important input factors and external influences; (2) strategic activities that can be performed; and (3) the desired outcomes that may be achieved. The desired value outcomes highlighted in the framework, together with co-creation matrix, the VC Aim and structure of the framework, inform the continuous improvement initiatives within a healthcare system to drive efficiencies through the use of information systems. Furthermore, the structure of the framework encourages the need to feed value created within a healthcare system back into the system to drive progress. The contribution made in this article is evaluated in the South African context where a proven gap exists for the evaluation of practical solutions ( Hlongwane and Grobbelaar, 2020 ).

Managerial Implications

The framework and management tool comprises interdependent components that were uniquely organized to stimulate thought and provide users with an understanding of how elements within a healthcare ecosystem can influence the value creation process. The tool offers a course of action that can be taken to create sustainable value in a healthcare system by considering: (1) important input factors and external influences; (2) strategic activities that can be performed; and (3) the desired outcomes that may be achieved. The framework informs the continuous improvement initiatives within a healthcare system to drive efficiencies using information systems. Furthermore, the structure of the framework encourages the need to feed the value created within a healthcare system back into the system to drive progress.

When using the management tool, it is important to consider the following:

• 1. The management tool provides a broad conceptualization of value creation in healthcare. Users need to contextualize the management tool to align with the intended scope.
• 2. Though an ecosystem perspective was adopted, the management tool does not account for every possible aspect that is associated with value creation in the context of health information systems.
• 3. The management tool is one that is conceptual and therefore a sufficient understanding of the healthcare environment prior to its use is essential. This is necessary to utilize the framework in a way that ensures that the best solutions are developed in an efficient manner.
• 4. Although the ecosystem canvas presents a simplistic value creation process, the value creation system considers multiple variables that are intrinsically complex. Therefore, iteration between categories may be necessary to ensure that each is addressed comprehensively. The illustration of how and where the iteration may take place falls beyond the scope of the research. This may be further investigated in future research.
• 5. The management tool was not designed to predict an outcome. It was designed as a conceptual framework with the intention of only improving our understanding of the phenomena in question. The use of the tool serves to inform the user’s interpretation of the phenomena in a specific context.

Limitations and Further Research

A critical reflection on the literature reviews, evaluation processes, and final tool revealed several aspects that were not pursued within the scope of the study; these may be explored during future research:

• 1. The literature review was only conducted by one researcher, leaving the characterization and interpretation of the findings subject to reviewer bias.
• 2. The semi-structured interviews were limited in number. Therefore, more interviews with individuals from varying disciplines could have led to more complete results.
• 3. Only one researcher analyzed the interview data, which may have introduced bias during the coding cycle process and use of the analytical lenses.
• 4. The framework ranking exercise was limited in the number of participants and diversity of their backgrounds. More participants from varying disciplines and backgrounds could have led to better and possibly different results.
• 5. The interpretation of the findings from the evaluation processes depended on the researcher’s understanding, and could have been subject to bias.
• 6. The framework comprises several concepts and elements that were not investigated in-depth.
• 7. The framework only includes the most notable concepts from literature to comprise the input category, the strategic priorities and activities category, and the output category. The consideration of additional concepts may influence the framework.
• 8. The framework does not show the relative importance and actual weight of each concept regarding value and its creation.
• 9. The framework was developed to be a s general as possible; it does not account for all the complex and diverse aspects of a healthcare system.
• 10. The framework needs to continuously evolve to remain usable within complex healthcare ecosystems supported by information systems.

Data Availability Statement

Ethics statement.

The studies involving human participants were reviewed and approved by Research and Ethics Committee (REC) of Stellenbosch University; NG-2020-16817. The patients/participants provided their written informed consent to participate in this study.

Author Contributions

Both authors actively and significantly participated in the drafting of the article and approved the submitted version.

Conflict of Interest

The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Publisher’s Note

All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article, or claim that may be made by its manufacturer, is not guaranteed or endorsed by the publisher.

Acknowledgments

This manuscript is based on the thesis for the degree of Master of Engineering in Engineering Management, completed by SH under the supervision of SG. We thank all the individuals who participated in the interview process for their time and insights.

This work was supported by the Council of Scientific Industrial Research, Pricewaterhouse Coopers and the DSI-NRF Centre of Excellence in Scientometrics and Science, Technology and Innovation Policy, Stellenbosch, South Africa.

Supplementary Material

The Supplementary Material for this article can be found online at: https://www.frontiersin.org/articles/10.3389/fpsyg.2022.637883/full#supplementary-material

• Aarikka-Stenroos L., Ritala P. (2017). Network management in the era of ecosystems: systematic review and management framework. Ind. Mark. Manage. 67 23–36. 10.1016/j.indmarman.2017.08.010 [ CrossRef ] [ Google Scholar ]
• Abellá-garcía A., Ortiz- M., De-pablos-heredero C. (2015). The ecosystem of services around Smart cities: an exploratory analysis. Procedia Comput. Sci. 64 1075–1080. 10.1016/j.procs.2015.08.554 [ CrossRef ] [ Google Scholar ]
• Adamik A., Nowicki M., Szymańska K. (2018). Openness to co-creation as a method of reducing the complexity of the environment and dynamizing companies’ competitive advantages. Manage. Mark. 13 880–896. 10.2478/mmcks-2018-0011 [ CrossRef ] [ Google Scholar ]
• Adler-Milstein J., Embi P. J., Middleton B., Sarkar I. N., Smith J. (2017). Crossing the health IT chasm: considerations and policy recommendations to overcome current challenges andenable value-based care. J. Am. Med. Inform. Assoc. 24 1036–1043. 10.1093/jamia/ocx017 [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Adner R. (2017). Ecosystem as structure: an actionable construct for strategy. J. Manage. 43 39–58. 10.1177/0149206316678451 [ CrossRef ] [ Google Scholar ]
• Alves H., Fernandes C., Raposo M. (2016). Value co-creation: concept and contexts of application and study ?. J. Bus. Res. 69 1626–1633. 10.1016/j.jbusres.2015.10.029 [ CrossRef ] [ Google Scholar ]
• Al-yaseen H., Al-jaghoub S., Al-shorbaji M., Salim M. (2010). Post-implementation evaluation of healthcare information systems in developing countries. Electron. J. Inform. Syst. Eval. 13 9–16. 10.1371/journal.pone.0135361 [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Anggraeni E., Den Hartigh E., Zegveld M. (2007). “ Business ecosystem as a perspective for studying the relations between firms and their business networks the need for a new perspective ,” in Phase Transitions in Ortanisations , eds van Eijnatten F. M., Peters J. (Veldhoven: TVA; ), 1–28. [ Google Scholar ]
• Anomah S., Agyabeng O. (2013). The art of value creation with information technology potentials in business planning – the role strategic information systems. Inform. Syst. Manage. 3 49–59. [ Google Scholar ]
• Assamala (2014). African Regional Health Report 2014. (Geneva: World Health Organisation; ), 187. [ Google Scholar ]
• Aulkemeier F., Paramartha M. A., Iacob M., Hillegersberg J. (2016). A pluggable service platform architecture for e-commerce. Inform. Syst. e Bus. Manage. 14 469–489. 10.1007/s10257-015-0291-6 [ CrossRef ] [ Google Scholar ]
• Autio E. (2021). Orchestrating ecosystems: a multi-layered framework. Innovation 24 96–109. 10.1080/14479338.2021.1919120 [ CrossRef ] [ Google Scholar ]
• Barile S., Grimaldi M., Loia F., Sirianni C. A. (2020). Technology, value co-creation and innovation in service ecosystems: toward sustainable co-innovation. Sustainability 12 :2759. 10.3390/su12072759 [ CrossRef ] [ Google Scholar ]
• Barrett M., Davidson E., Vargo S. L. (2015). Service innovation in the digital age: key contributions and future directions. MIS Q. 39 135–154. [ Google Scholar ]
• Bezák P., Bezáková M. (2014). Landscape capacity for ecosystem services provision based on expert knowledge and public perception (case study from the north- west Slovakia). Ekol. Bratisl. 33 344–353. 10.2478/eko-2014-0031 [ CrossRef ] [ Google Scholar ]
• Bocken N. M. P., Short S. W., Rana P., Evans S. (2014). A literature and practice review to develop sustainable business model archetypes. J. Clean. Prod. 65 42–56. 10.1016/j.jclepro.2013.11.039 [ CrossRef ] [ Google Scholar ]
• Botti A., Monda A. (2020). Sustainable value co-creation and digital health: the case of trentino eHealth ecosystem. Sustainability 12 :5263. 10.3390/su12135263 [ CrossRef ] [ Google Scholar ]
• Breidbach C. F., Maglio P. P. (2016). Technology-enabled value co-creation: an empirical analysis of actors, resources, and practices. Ind. Mark. Manage. 56 73–85. 10.1016/j.indmarman.2016.03.011 [ CrossRef ] [ Google Scholar ]
• Coovadia H., Jewkes R., Barron P., Sanders D., McIntyre D. (2009). The health and health system of South Africa: historical roots of current public health challenges. Lancet 374 817–834. 10.1016/S0140-6736(09)60951-X [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Dell’Era C., Di Minin A., Ferrigno G., Frattini F., Landoni P., Verganti R. (2020). Value capture in open innovation processes with radical circles: a qualitative analysis of firms’ collaborations with Slow Food, Memphis, and Free Software Foundation. Technol. Forecast. Soc. Change 158 :120128. 10.1016/j.techfore.2020.120128 [ CrossRef ] [ Google Scholar ]
• Di A., Palladino R., Pezzi A., Kalisz D. E. (2021). The role of digital innovation in knowledge management systems: a systematic literature review. J. Bus. Res. 123 220–231. 10.1016/j.jbusres.2020.09.042 [ CrossRef ] [ Google Scholar ]
• Dreschler A., Hevner A. R. (2016). “ A four-cycle model of IS design science research: capturing the dynamic nature of IS artifact design ,” in Breakthroughs and Emerging Insights from Ongoing Design Science Projects: Research-in-Progress Papers and poster presentations from the 11th International Conference on Design Science Research in Information Systems and Technology (DESRIST) , eds Parsons J., Tuunanen T., Venable J. R., Helfert M., Donnellan B., Kenneally J. (St. John: DESRIST), 1–8. [ Google Scholar ]
• Ekanayake S., Childerhouse P., Sun P. (2017). The symbiotic existence of interorganizational and interpersonal ties in supply chain collaboration. Int. J. Logist. Manage. 28 723–754. 10.1108/IJLM-12-2014-0198 [ CrossRef ] [ Google Scholar ]
• Ferreira L. M., Menezes J. C. (2020). How costumers’ way of life influence the value co-creation. Int. J. Econ. Bus. Adm. 8 72–93. 10.35808/ijeba/410 [ CrossRef ] [ Google Scholar ]
• Garriga E. (2014). Beyond stakeholder utility function: stakeholder capability in the value creation process. J. Bus. Ethics 120 489–507. 10.1007/s10551-013-2001-y [ CrossRef ] [ Google Scholar ]
• Geersbro J., Ritter T. (2010). External performance barriers in business networks: uncertainty, ambiguity, and conflict. J. Bus. Ind. Mark. 25 196–201. 10.1108/08858621011027786 [ CrossRef ] [ Google Scholar ]
• Gibson K. (2012). Stakeholders and sustainability: an evolving theory. J. Bus. Ethics 109 15–25. 10.1007/s10551-012-1376-5 [ CrossRef ] [ Google Scholar ]
• Gregor S., Hevner A. R. (2013). Positioning and presenting design science research for maximum impact. MIS Q. 37 337–356. 10.25300/MISQ/2013/37.2.01 [ CrossRef ] [ Google Scholar ]
• Grêt-regamey A., Altwegg J., Sirén E. A., Van Strien M. J., Weibel B. (2017). Landscape and Urban Planning Integrating ecosystem services into spatial planning — A spatial decision support tool. Landsc. Urban Plan. 165 206–219. 10.1016/j.landurbplan.2016.05.003 [ CrossRef ] [ Google Scholar ]
• Grönroos C., Voima P. (2013). Critical service logic: making sense of value creation and co-creation. J. Acad. Mark. Sci. 41 133–150. 10.1007/s11747-012-0308-3 [ CrossRef ] [ Google Scholar ]
• Grover V., Chiang R. H. L., Liang T.-P., Zhang D. (2018). Creating strategic business value from big data analytics: a research framework creating strategic business value from big data analytics: a research framework. J. Manage. Inform. Syst. 35 388–423. 10.1080/07421222.2018.1451951 [ CrossRef ] [ Google Scholar ]
• Hardyman W., Daunt K. L., Kitchener M. (2015). Value co-creation through patient engagement in health care: a micro-level approach and research agenda. Public Manage. Rev. 17 90–107. 10.1080/14719037.2014.881539 [ CrossRef ] [ Google Scholar ]
• Harrison D. (2009). An Overview of Health and Health Care in South Africa 1994–2010: Priorities, Progress and Prospects for New Gains. Washington, DC: Henry J Kaiser Family Foundation. [ Google Scholar ]
• Heim I., Kalyuzhnova Y., Li W., Liu K. (2019). Value co-creation between foreign firms and indigenous small- and medium-sized enterprises (SMEs) in Kazakhstan’s oil and gas industry: the role of information technology spillovers. Thunderbird Int. Bus. Rev. 61 911–927. 10.1002/tie.22067 [ CrossRef ] [ Google Scholar ]
• Hein A., Schreieck M., Wiesche M., Krcmar H. (2016). “ Multiple-case analysis on governance mechanisms of multi-sided platforms ,” in Proceedings of the Multikonferenz Wirtschaftsinformatik , Ilmenau. [ Google Scholar ]
• Hein A. M., Jankovic M., Feng W., Farel R., Heiarii Yune J., Yannou B. (2017). Stakeholder power in industrial symbioses: a stakeholder value network approach. J. Clean. Prod. 148 923–933. 10.1016/j.jclepro.2017.01.136 [ CrossRef ] [ Google Scholar ]
• Hevner A., Chatterjee S. (2010). “ Design science research in information systems ,” in Design Research in Information Systems (Boston, MA: Springer; ), 9–22. [ Google Scholar ]
• Hevner A. R. (2007). A three cycle view of Design Science Research. Scand. J. Inform. Syst. 19 :4. [ Google Scholar ]
• Hevner A. R., Chatterjee S. (2010). “ Design science research in information systems, ” in Design Research in Information Systems. Integrated Series in Information Systems , Vol. 22 (Boston, MA: Springer; ). [ Google Scholar ]
• Hevner A. R., March S. T., Park J., Ram S. (2004). Design science in information systems research. MIS Q. 28 75–105. 10.2307/25148625 [ CrossRef ] [ Google Scholar ]
• Hlongwane S., Grobbelaar S. S. (2020). “ Information systems for value creation in health ecosystems: a systematic literature review ,” in Proceedings of the 2020 IEEE International Conference on Engineering, Technology and Innovation, ICE/ITMC 2020 , Cardiff. 10.1109/ICE/ITMC49519.2020.9198612 [ CrossRef ] [ Google Scholar ]
• Iansiti M., Levien R. (2017). The keystone advantage: What the new dynamics of business ecosystems mean for strategy, innovation, and sustainability. Acad. Manage. Perspect. 20 88–90. [ Google Scholar ]
• Jacobides M. G., Cennamo C., Gawer A. (2018). Towards a theory of ecosystems. Strateg. Manage. J. 39 2255–2276. 10.1002/smj.2904 [ CrossRef ] [ Google Scholar ]
• Joda T., Waltimo T., Probst-Hensch N., Pauli-Magnus C., Zitzmann N. U. (2019). Health data in dentistry: an attempt to master the digital challenge. Public Health Genomics 22 1–7. 10.1159/000501643 [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Ketonen-Oksi S., Valkokari K. (2019). Innovation ecosystems as structures for value co-creation. Technol. Innov. Manage. Rev. 9 24–34. 10.22215/TIMREVIEW/1216 [ CrossRef ] [ Google Scholar ]
• Khademi B. (2020). Ecosystem value creation and capture: a systematic review of literature and potential research opportunities. Technol. Innov. Manage. Rev. 10 16–34. 10.22215/timreview/1311 [ CrossRef ] [ Google Scholar ]
• Kharrazi A., Fath B. D., Katzmair H. (2016). Advancing empirical approaches to the concept of resilience: a critical examination of panarchy, ecological information, and statistical evidence. Sustainability 8 :935. 10.3390/su8090935 [ CrossRef ] [ Google Scholar ]
• Kupfer J. M., Bond E. U. (2012). Patient satisfaction and patient-centered care: necessary but not equal. JAMA 308 139–140. 10.1097/00005110-198905010-00003 [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Laubscher A., Saville A. (2021). The Influence of Value Perspectives on Decision-Making in the South African Private Healthcare Sector. Available online at: https://ssrn.com/abstract=3778654 (accessed May 15, 2022). [ Google Scholar ]
• Lee T., Ghapanchi A. H., Talaei-Khoei A., Ray P. (2015). Strategic information system planning in healthcare organizations. J. Organ. End User Comput. 27 1–31. 10.4018/joeuc.2015040101 [ CrossRef ] [ Google Scholar ]
• Lim C., Kim K.-H., Kim M. J., Heo J. Y., Kim K. J., Maglio P. P. (2018). A nine-factor framework for data-based value creation in information-intensive services. Int. J. Inform. Manage. 39 121–135. 10.1016/j.ijinfomgt.2017.12.007 [ CrossRef ] [ Google Scholar ]
• Liu D., Hao S. (2017). Ecosystem health assessment at county-scale using the pressure-state-response framework on the loess plateau, China. Int. J. Environ. Res. Public Health 14 :2. 10.3390/ijerph14010002 [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Lotfi Z., Mukhtar M., Sahran S., Zadeh A. T. (2013). Information sharing in supply chain management. Procedia Technol. 11 298–304. [ Google Scholar ]
• Mainardes E. W., Alves H., Raposo M. (2012). A model for stakeholder classification and stakeholder relationships. Manage. Decis. 50 1861–1879. 10.1108/00251741211279648 [ CrossRef ] [ Google Scholar ]
• Marten R., McIntyre D., Travassos C., Shishkin S., Longde W., Reddy S., et al. (2014). An assessment of progress towards universal health coverage in Brazil, Russia, India, China, and South Africa (BRICS). Lancet 384 2164–2171. 10.1016/S0140-6736(14)60075-1 [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Matthies B. D., D’Amato D., Berghäll S., Ekholm T., Hoen H. F., Holopainen J., et al. (2016). An ecosystem service-dominant logic? - Integrating the ecosystem service approach and the service-dominant logic. J. Clean. Prod. 124 51–64. 10.1016/j.jclepro.2016.02.109 [ CrossRef ] [ Google Scholar ]
• McColl-Kennedy J. R., Vargo S. L., Dagger T. S., Sweeney J. C., van Kasteren Y. (2012). Health care customer value cocreation practice styles. J. Serv. Res. 15 370–389. 10.1177/1094670512442806 [ CrossRef ] [ Google Scholar ]
• Medema W., Adamowski J., Orr C., Furber A., Wals A., Milot N. (2017). Building a foundation for knowledge co-creation in collaborative water governance: dimensions of stakeholder networks facilitated through bridging organizations. Water 9 :60. 10.3390/w9010060 [ CrossRef ] [ Google Scholar ]
• Müller M., Vorraber W. (2019). Open principles in new business models for information systems. J. Open Innov. Technol. Mark. Complex 5 :6. 10.3390/joitmc5010006 [ CrossRef ] [ Google Scholar ]
• Nöjd S., Trischler J. W., Otterbring T., Andersson P. K., Wästlund E. (2020). Bridging the valuescape with digital technology: a mixed methods study on customers’ value creation process in the physical retail space. J. Retailing Consum. Serv. 56 :102161. 10.1016/j.jretconser.2020.102161 [ CrossRef ] [ Google Scholar ]
• Nwosu C. O., Oyenubi A. (2021). Income-related health inequalities associated with the coronavirus pandemic in South Africa: a decomposition analysis. Int. J. Equity Health 20 1–12. 10.1186/s12939-020-01361-7 [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Okoi O., Bwawa T. (2020). How health inequality affect responses to the COVID-19 pandemic in Sub-Saharan Africa. World Dev. 135 :105067. 10.1016/j.worlddev.2020.105067 [ PMC free article ] [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Osório A. L., Afsarmanesh H., Camarinha-Matos L. M. (2010). “ Open Services ecosystem supporting collaborative networks ,” in IFIP Advances in Information and Communication Technology , eds Ortiz Á, Franco R. D., Gasquet P. G. (Berlin: Springer; ), 80–91. 10.1007/978-3-642-14341-0_10 [ CrossRef ] [ Google Scholar ]
• Panetto H., Zdravkovic M., Jardim-Goncalves R., Romero D., Cecil J., Mezgárhi I. (2016). New perspectives for the future interoperable enterprise systems. Comput. Ind. 79 47–63. 10.1016/j.compind.2015.08.001 [ CrossRef ] [ Google Scholar ]
• Pappas I. O., Mikalef P., Giannakos M. N., Krogstie J., Lekakos G. (2018). Big data and business analytics ecosystems: paving the way towards digital transformation and sustainable societies. Inform. Syst. e Bus. Manage. 16 479–491. 10.1007/s10257-018-0377-z [ CrossRef ] [ Google Scholar ]
• Park S. (2017). A preliminary study on connectivity and perceived values of community green spaces. Sustainability 9 :692. 10.3390/su9050692 [ CrossRef ] [ Google Scholar ]
• Peffers K., Tuunanen T., Rothenberger M. A., Chatterjee S. (2008). A design science research methodology for information systems research. J. Manage. Inform. Syst. 24 45–77. [ Google Scholar ]
• Peltoniemi M., Vuori E. (2004). Business ecosystem as the new approach to complex adaptive business environments. Proc. eBus. Res. Forum 2 267–281. [ Google Scholar ]
• Pesce D., Neirotti P., Paolucci E. (2019). When culture meets digital platforms: value creation and stakeholders’ alignment in big data use. Curr. Issues Tour . 22 1883–1903. 10.1080/13683500.2019.1591354 [ CrossRef ] [ Google Scholar ]
• Pinho N., Beirão G., Patrício L., Fisk P. R. (2014). Understanding value co-creation in complex services with many actors. J. Serv. Manage. 25 470–493. 10.1108/JOSM-02-2014-0055 [ CrossRef ] [ Google Scholar ]
• Porter M. E. (2010). What Is Value in Health Care? N. Engl. J. Med. 363 2477–2481. [ PubMed ] [ Google Scholar ]
• Primmer E., Jokinen P., Blicharska M., Barton D. N., Bugter R., Potschin M. (2015). Governance of ecosystem services: a framework for empirical analysis. Ecosyst. Serv. 16 158–166. 10.1016/j.ecoser.2015.05.002 [ CrossRef ] [ Google Scholar ]
• Rabionet S. E. (2011). How I learned to design and conduct semi-structured interviews: an ongoing and continuous journey. Qual. Rep. 16 563–566. [ Google Scholar ]
• Ratshidi L., Grobbelaar S., Botha A. (2020). “ Categorization of factors influencing community health workers from a socio-technical systems perspective ,” in Lecture Notes in Computer Science (Including Subseries Lecture Notes in Artificial Intelligence and Lecture Notes in Bioinformatics) , eds Hattingh M., Matthee M., Smuts H., Pappas I., Dwivedi Y. K., Mäntymäki M. (Cham: Springer; ), 84–95. 10.1007/978-3-030-45002-1_8 [ CrossRef ] [ Google Scholar ]
• Reda R., Piccinini F., Carbonaro A. (2018). “ Towards consistent data representation in the IoT healthcare landscape ,” in Proceedings of the 2018 ACM International Conference Proceeding Series , Shanghai, 5–10. 10.1145/3194658.3194668 [ CrossRef ] [ Google Scholar ]
• Reed M. S., Graves A., Dandy N., Posthumus H., Hubacek K., Morris J., et al. (2009). Who’ s in and why? A typology of stakeholder analysis methods for natural resource management. J. Environ. Manage . 90 1933–1949. 10.1016/j.jenvman.2009.01.001 [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Saarijärvi H., Kannan P. K., Kuusela H. (2013). Value co-creation: theoretical approaches and practical implications. Eur. Bus. Rev. 25 6–19. 10.1108/09555341311287718 [ CrossRef ] [ Google Scholar ]
• Sachdeva S., Bhalla S. (2012). Semantic interoperability in standardized electronic health records databases. J. Data Inf. Qual. 3 1–37. 10.1145/2166788.2166789 [ CrossRef ] [ Google Scholar ]
• Saldaña J. (2013). The Coding Manual for Qualitative Researchers , 2nd Edn. Los Angeles, CA: SAGE Publications. 10.1017/CBO9781107415324.004 [ CrossRef ] [ Google Scholar ]
• Salih Zeki Í., Keskin H., Ípek K., Hüseyin Í. (2011). The effect of supply chain integration on information sharing: enhancing the supply chain performance. Procedia Soc. Behav. Sci. 24 1630–1649. 10.1016/j.sbspro.2011.09.016 [ CrossRef ] [ Google Scholar ]
• Schiza E. C., Kyprianou T. C., Petkov N., Schizas C. N., Member L. S. (2019). Proposal for an eHealth based ecosystem serving national healthcare. J. Biomed. Health Inform. 23 1346–1357. 10.1109/JBHI.2018.2834230 [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Scribante N. P., Pretorius L., Benade S. (2019). The design of a research tool for conducting research in a complex socio-technical system. S. Afr. J. Ind. Eng. 30 143–155. 10.7166/30-4-2191 [ CrossRef ] [ Google Scholar ]
• Serbanati L. D., Ricci F. L., Mercurio G., Vasilateanu A. (2011). Steps towards a digital health ecosystem. J. Biomed. Inf. 44 621–636. 10.1016/j.jbi.2011.02.011 [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Sharapov D., Thomas L. D. W., Autio E. (2013). Building ecosystem momentum: the case of AppCampus. Paper Presented at the Academy of Management Entrepreneurship Exemplars Conference , Catania. [ Google Scholar ]
• Siltaloppi J., Koskela-Huotari K., Vargo S. L. (2016). Institutional complexity as a driver for innovation in service ecosystems. Serv. Sci. 8 333–343. 10.1287/serv.2016.0151 [ CrossRef ] [ Google Scholar ]
• Sim S., King H., Price E. (2016). “ The role of science in shaping sustainable business: unilever case study ,” in Taking Stock of Industrial Ecology , eds Clift R., Druckman A. (Cham: Springer; ). 10.1007/978-3-319-20571-7 [ CrossRef ] [ Google Scholar ]
• Sligo J., Gauld R., Roberts V., Villa L. (2017). A literature review for large-scale health information system project planning, implementation and evaluation. Int. J. Med. Inform . 97 86–97. 10.1016/j.ijmedinf.2016.09.007 [ PubMed ] [ CrossRef ] [ Google Scholar ]
• Spies R., Grobbelaar S., Botha A. (2020). “ A scoping review of the application of the task-technology fit theory ,” in Responsible Design, Implementation and Use of Information and Communication Technology , eds Hattingh M., Matthee M., Smuts H., Pappas I., Dwivedi Y. K., Mäntymäki M. (Cham: Springer; ), 397–408. 10.1007/978-3-030-44999-5_33 [ CrossRef ] [ Google Scholar ]
• Stoll J., Edwards W. K., Mynatt E. D. (2010). “ Interorganizational Coordination and Awareness in a Nonprofit Ecosystem ,” in Proceedings of the 2010 ACM Conference on Computer Supported Cooperative Work , Savannah, GA, 51–60. [ Google Scholar ]
• Talmar M., Walrave B., Podoynitsyna K. S., Holmström J., Romme A. G. L. (2020). Mapping, analyzing and designing innovation ecosystems: the Ecosystem Pie Model. Long Range Plann. 53 :101850. 10.1016/j.lrp.2018.09.002 [ CrossRef ] [ Google Scholar ]
• Tarafdar M., Tanriverdi H. (2018). Impact of the information technology unit on information technology-embedded product innovation. J. Assoc. Inf. Syst. 19 716–751. 10.17705/1jais.00507 [ CrossRef ] [ Google Scholar ]
• Thomas L. D. W., Autio E. (2012). “ Modeling the ecosystem: a meta-synthesis of ecosystem and related literatures ,” in Proceedings of the 2012 DRUID Society Conference on Innovation and Competitiveness - Dynamics of Organizations, Industries, Systems and Regions , Copenhague. [ Google Scholar ]
• Van Aken J., Berends H. (2018). Problem Solving in Organizations: A Methodology Handbook for Business and Management Students , 3rd Edn. Cambridge: Cambridge University Press. [ Google Scholar ]
• Verdu A. J., Gómez-Gras J. M., Martínez-Mateo J. (2012). Value creation through production offshore-inshore strategies in a footwear industry cluster: a coevolutionary perspective. Int. Bus. Rev. 21 342–356. 10.1016/j.ibusrev.2011.04.001 [ CrossRef ] [ Google Scholar ]
• Whiteside A. (2014). South Africa’s Key Health Challenges. Ann. Am. Acad. Polit. Soc. Sci. 652 166–185. 10.1177/0002716213508067 [ CrossRef ] [ Google Scholar ]
• Zhang M., Gable G., Rai A. (2016). Toward principles of construct clarity: exploring the usefulness of facet theory in guiding conceptualization. Austral. J. Information Syst . 20 1–16. 10.3127/ajis.v20i0.1123 [ CrossRef ] [ Google Scholar ]

Jumpstarting value creation with data and analytics in fashion and luxury

The COVID-19 crisis is first and foremost a humanitarian crisis, but its economic impacts are far-reaching. Fashion is no exception: apparel companies lost 90 percent of their profits in 2020, according to the McKinsey Global Fashion Index . Consumer confidence plummeted during the pandemic, and it has yet to recover.

Data will be the key to unlocking the insights needed to adapt to change and to reengage customers in the coming months and years. Yet the pandemic has exposed a major shortfall in data gathering and analysis across much of the industry. The gap between data leaders and laggards has widened: some data-savvy fashion and luxury companies have dramatically increased their market value, while others have lost ground to competitors. Indeed, the 25 top-performing retailers—most of which epitomize the powerful shift to digital, data, and analytics—represent more than 90 percent of the sector’s increase in global market capitalization during the pandemic.

Simply put, the sooner fashion and luxury companies learn to harness the power of data, the better.

Data gold mines in the value chain

Data are more abundant than ever—and the COVID-19 crisis has made the case for building data capability even more pressing. The fashion and luxury firms that are likely to come out of the crisis stronger than before are tapping into their data to stay a step ahead.

The use cases for data and analytics are varied, numerous, and fairly well known, but where to focus along the value chain isn’t always intuitive. The challenge often lies in pinpointing where and how to integrate data into the business in a cross-functional way, and building the appropriate operating model to do so. Over the past 12 months, we’ve seen fashion companies navigate and extract value across the whole value chain.

Fashion companies that have harnessed the power of data to personalize customer e-commerce experiences have grown digital sales by between 30 and 50 percent.

In particular, fashion and luxury companies that have integrated data into their planning, merchandising, and supply-chain processes have seen tangible results. Data-driven decisions around stock and store optimization have increased sales by 10 percent. And enhancing visibility throughout the supply chain has streamlined inventory management, improved returns forecasting, and optimized transport networks—reducing inventory costs by up to 15 percent. Most significantly, fashion companies that have harnessed the power of data to personalize customer e-commerce experiences have grown digital sales by between 30 and 50 percent (Exhibit 1).

While it is evident that data and analytics can unlock significant value in e-commerce sales, the potential for improving physical sales should not be ignored. In an omnichannel world like the one we are heading toward in the aftermath of the COVID-19 crisis, businesses need the flexibility to respond and adjust to shifting customer preferences. As pandemic-related restrictions ease, physical sales may pick up again. Data capabilities are relevant for getting the omnichannel model right.

Four pillars for building data capabilities in fashion and luxury

Data are a precious resource. Leaving such information untapped leaves value on the table. Fashion and luxury companies can build four critical capabilities to unlock their data’s value: strategy and use-case battlegrounds, data architecture and platforms, governance and operating model, and talent and culture.

Define the data strategy and prioritize the ‘battlegrounds’

The data journey starts with setting a vision for how data will support business goals over the next two to four years. A shorter horizon may be too shortsighted and not ambitious enough for fashion and luxury businesses. Any longer, and time to impact makes the upfront investment untenable. This vision-setting process is best led by a chief data officer (CDO), someone senior in the organization who can champion the change through the many competing business priorities. The data journey is a collaborative process including most executives, since use cases hit so many parts of the value chain. The CDO translates that vision into a set of core priority business domains—the company’s data and analytics “battlegrounds”—and defines specific use cases for each priority domain.

The following example brings this process to life: A leading digital-native fashion marketplace declared “size and fit” its top data and analytics battleground. The firm created a team of researchers, data scientists, and engineers embedded in the merchandising and product teams to solve the persistent returns–fit-optimization problem. The firm defined the initial size-curve buy as a single use case and set out to make it a much more data-driven and dynamic decision.

Customer personalization should be on every fashion player’s data and analytics road map, as this is table stakes today. A leading sports-apparel retailer developed an ambitious data vision to power one-to-one relationships with consumers through data-driven personalized experiences. The firm collects huge volumes of data generated from customer-facing apps that enable it to offer more targeted and personalized experiences. The firm has also acquired predictive analytics platforms that forecast the behavior and lifetime value of customers, among other capabilities. Personalization as a battleground has enabled this retailer to develop a whole series of use cases to drive one-to-one engagement with customers.

The COVID-19 crisis has accelerated technology use along the value chain, significantly increasing the ‘data footprint’

The pandemic has catalyzed the adoption of many tech tools across the fashion and luxury value chain. For example, many brands and wholesalers have adopted buying platforms such as JOOR or NuORDER, use enhanced digital-imaging tools including ORDRE or Product Lifecycle Management (PLM), and use 3-D design tools such as Backbone, Optitex, and Browzwear to help improve the product-design process.

These tools not only boost digitization of key processes but also significantly improve the quality and quantity of the data generated—which in turn accelerate the quality of the insights gleaned.

Other fashion companies have personalized their customers’ e-commerce journeys, and in doing so have been able to offer customers what they want when they want it and build brand loyalty. Data and analytics applications have helped these companies to optimize assortment, reduce returns, and launch new brands (see sidebar “The COVID-19 crisis has accelerated technology use along the value chain, significantly increasing the ‘data footprint’”). Building a personalized interaction with customers across multiple channels has led to a 20 percent increase in revenue, and companies that have used data to optimize price have also been able to increase margins by up to 10 percent (Exhibit 2).

Invest in data architecture and platforms aligned with ‘battlegrounds’

Modern fashion data architectures handle core retail day-to-day data sets that are large and unstructured, such as SKUs, sales, point-of-sale (POS) transactions, stock transactions, e-commerce touchpoints, customer 360 information, and radio-frequency identification (RFID). The truth is, most fashion and luxury companies have expensive legacy systems built on inflexible, nonscalable, and limited data warehouses that cannot integrate new data sources.

Most turn to data lakes as a solution, which serves as the organization’s single source of truth and features several layers for data consumption. However, modern data architectures must evolve  across all layers, drawing on new architectural paradigms including cloud-based data platforms, serverless and containerized data platforms and applications, no-SQL databases, flexible data schemas, and solutions that provide real-time data-processing capabilities.

To picture these innovations in practice, consider the following example: A leading fashion player built a new data architecture, and most of the company’s databases and systems have been migrated in the past three to four years. This retailer made a significant investment to develop a massive multilayer data lake in the private cloud and consolidate hundreds of internal and external data repositories. In addition, the retailer set up a data-architecture lab and is continually experimenting with new data tools to support and improve performance. For instance, the firm recently deployed a real-time data-streaming platform to power a wide range of business use cases across its priority domains of digital personalization and real-time supply-chain management. Thanks to these efforts, it has achieved processing power of several petabytes of data per hour, enabling a rapid response to market changes while also acquiring the capacity to identify trending products and introduce them earlier than competitors.

However, many fashion and luxury companies fall into blind investment traps. Too often, the CDO will ask for the freedom to get the data fixed before committing to value creation through data use cases. It’s a common fallacy. Successful fashion players scale data-platform investments alongside real value delivery. This phased approach allows firms to pace investment as the benefits materialize—saving on upfront investment. Firms that get this right typically invest in the resources they need to deliver the first set of use cases, and then build on this in an incremental way, ensuring development of road-tested assets (in particular, data protocols, ontologies, models, and data products) to ensure faster time to market with every new use case.

Define a high-performing data and analytics operating model

Data management is often the Achilles’ heel of many fashion and luxury companies. The absence of high-quality data and clean taxonomies, and the general lack of common language and understanding around data across the organization, wreak havoc when starting on an analytics journey. This could not be more true for core data sets; data from POS transactions, for example, are a mix of structured and unstructured data and include sensitive personal information such as credit card numbers. And SKU–product data, which is key to managing integrated omnichannel stock, typically comes with unstandardized formats from suppliers, generating a need for tight master-data management and integration of several merchandising and vendor-management systems.

Fashion companies have tackled the problem by setting up a value-backed data-operating-model framework  across 20 to 30 data domains—such as sales, stock, and store transactions, among others—that have a clear owner in each business unit. These owners are best placed to define what kind of information is needed from various business functions and understand what such data can measure. They can also work collaboratively to ensure that the organization has a uniform definition of data and put processes in place to monitor data quality. Ownership is important, as it builds the mindset that the process of getting data right is not just an IT issue, but it is critical for decision making across the organization.

A leading integrated omnichannel fast-fashion player followed this approach, with tangible results. The firm defined a data-governance framework—including roles, responsibilities, and processes—to improve data quality and build an understanding of key data sets necessary to provide insight and enhance decision making. The firm set up teams responsible for developing tools or sets of use cases for the business, and those same teams were also responsible for defining and integrating data governance. The firm saw a 50 percent improvement in data quality, measured as compliance with business-defined data-quality rules.

A more sophisticated solution is to use machine-learning algorithms to improve data quality in key data assets such as customer information. For instance, fashion retailers have used pattern-recognition algorithms to eliminate duplicates in customer databases. And other machine-learning techniques such as data imputation and natural language processing can improve demand forecasting (Exhibit 3).

Develop talent and build a data and analytics culture

Many fashion and luxury companies have taken the leap of upskilling their workforces and reinventing talent and culture practices. We see fashion companies grabbing talent from academia, digital natives, and start-ups; few build their bench purely in-house. However, talent is often hidden in plain sight. Some leading businesses have found success with data academies to train new data professionals—such as data architects, data scientists, and data stewards—and ensure that core decision makers, such as designers, merchandising teams, and e-commerce teams, can translate data and analytics to fit business needs. A data culture that not only accepts data-driven insights and modeling, but also is hungry for it, is critical to get value from the data investment. Too many fashion companies make the leap only to find the business is stuck in old ways of working, and these firms tend to view data and analytics with an unfair amount of skepticism .

How to get started and shape a winning data road map

How a north american fast-fashion firm turned to data in a crisis.

In March 2020, stores across the United States closed overnight, sales plummeted by 80 percent, and a leading fast-fashion player was sitting on inventory locked in the back rooms of its stores. The firm had a few months of runway and was facing bankruptcy.

Fast on their feet, executives at the company created three cross-functional teams to accelerate one-to-one personalized marketing, launch ship-from-store, and mine merchandising insights using the rich data they were getting from their online channel. In weeks, the firm was operating in a fundamentally different way—testing and learning, driving data-backed actions, and making decisions as a cohesive unit.

The business also avoided massive discounting as other apparel retailers raced to the bottom through promotional offers. Instead, the firm canceled its fall-season orders and was able to quickly respond to the at-home casual trends that were gaining momentum. By the end of 2020, the business was picking up market share, a first in ten years.

The firm’s leap into data and analytics set it on a course of transformation—the business went on to create cross-functional teams across all major steps in the value chain. In 2021, it launched teams for buy online, pick up in store; price and promo; and digital experience and started a new subscription business and a new marketplace business.

Many fashion and luxury companies have harnessed the power of data to build stronger relationships with their customers and drive sales (see sidebar “How a North American fast-fashion firm turned to data in a crisis”). They have also achieved operational efficiencies that have increased margins. But building data capability is only half of the equation. A data-transformation strategy and road map can put it into practice and set companies on a path to unlocking value. Fashion and luxury companies seeking to extract value from data can implement a sustained campaign in four phases:

• A North Star definition phase, headed up by the CDO, to define the vision, priority domains, and key battlegrounds across the value chain. During this phase, the company creates the data strategy, establishes the data team, selects data-architecture tools, and identifies pilot use cases for high-impact, quick-win opportunities in priority domains. This phase typically lasts six to ten weeks.
• The value-creation phase, where the company starts generating value through two or three quick-win use cases. In this phase, the company also migrates data to the new architecture, sets up data governance, and launches training and change-management programs. This phase lasts four to six months.
• Scale, where the transformation is scaled to tens of use cases in parallel, in three- to four-month development cycles, with many rounds of two-week sprints. In this phase, it is critical to tackle the topic of data culture, which is typically the most formidable barrier to scaling digital and analytics transformations. In fact, 33 percent of executives cited culture as the top challenge  in meeting their digital and analytics priorities. This phase lasts six to nine months.
• The final phase of data and analytics transformation, when data and analytics are fully embedded within the company value-creation machine. By now, the company will have data capabilities spread across the organization and will have hundreds of use cases in production that deliver value.

The initial leap into data should not be daunting for fashion and luxury companies; many have proven the investment worthwhile. What’s more, investment in data and analytics could pay for itself—the upfront cash investment can be scaled as value is created. The sooner fashion and luxury companies leap in, the better. And help is at hand—a strategic approach can structure an effective data-transformation program, build momentum through realizing quick wins, and create long-term value.

Sandrine Devillard is a senior partner in McKinsey’s Montreal office, Holger Harreis is a senior partner in the Düsseldorf office, Nicholas Landry is an associate partner in the Vancouver office, and Carlos Sanchez Altable is an associate partner in the Madrid office.

The authors wish to thank Anita Balchandani, Achim Berg, Antonio Gonzalo, Carly Donovan, Davide Grande, Kayvaun Rowshankish, Kate Smaje, and Asin Tavakoli for their contributions to this article.

Explore a career with us

Related articles.

The State of Fashion 2024: Finding pockets of growth as uncertainty reigns

Six vectors of success in online fashion

Thank you for visiting nature.com. You are using a browser version with limited support for CSS. To obtain the best experience, we recommend you use a more up to date browser (or turn off compatibility mode in Internet Explorer). In the meantime, to ensure continued support, we are displaying the site without styles and JavaScript.

• View all journals
• My Account Login
• Explore content
• About the journal
• Publish with us
• Sign up for alerts
• Open access
• Published: 08 May 2024

Exploring the dynamics of consumer engagement in social media influencer marketing: from the self-determination theory perspective

• Chenyu Gu   ORCID: orcid.org/0000-0001-6059-0573 1 &
• Qiuting Duan 2  

Humanities and Social Sciences Communications volume  11 , Article number:  587 ( 2024 ) Cite this article

404 Accesses

2 Altmetric

Metrics details

• Business and management
• Cultural and media studies

Influencer advertising has emerged as an integral part of social media marketing. Within this realm, consumer engagement is a critical indicator for gauging the impact of influencer advertisements, as it encompasses the proactive involvement of consumers in spreading advertisements and creating value. Therefore, investigating the mechanisms behind consumer engagement holds significant relevance for formulating effective influencer advertising strategies. The current study, grounded in self-determination theory and employing a stimulus-organism-response framework, constructs a general model to assess the impact of influencer factors, advertisement information, and social factors on consumer engagement. Analyzing data from 522 samples using structural equation modeling, the findings reveal: (1) Social media influencers are effective at generating initial online traffic but have limited influence on deeper levels of consumer engagement, cautioning advertisers against overestimating their impact; (2) The essence of higher-level engagement lies in the ad information factor, affirming that in the new media era, content remains ‘king’; (3) Interpersonal factors should also be given importance, as influencing the surrounding social groups of consumers is one of the effective ways to enhance the impact of advertising. Theoretically, current research broadens the scope of both social media and advertising effectiveness studies, forming a bridge between influencer marketing and consumer engagement. Practically, the findings offer macro-level strategic insights for influencer marketing.

Similar content being viewed by others

Exploring the effects of audience and strategies used by beauty vloggers on behavioural intention towards endorsed brands

COBRAs and virality: viral campaign values on consumer behaviour

Exploring the impact of beauty vloggers’ credible attributes, parasocial interaction, and trust on consumer purchase intention in influencer marketing

Introduction.

Recent studies have highlighted an escalating aversion among audiences towards traditional online ads, leading to a diminishing effectiveness of traditional online advertising methods (Lou et al., 2019 ). In an effort to overcome these challenges, an increasing number of brands are turning to influencers as their spokespersons for advertising. Utilizing influencers not only capitalizes on their significant influence over their fan base but also allows for the dissemination of advertising messages in a more native and organic manner. Consequently, influencer-endorsed advertising has become a pivotal component and a growing trend in social media advertising (Gräve & Bartsch, 2022 ). Although the topic of influencer-endorsed advertising has garnered increasing attention from scholars, the field is still in its infancy, offering ample opportunities for in-depth research and exploration (Barta et al., 2023 ).

Presently, social media influencers—individuals with substantial follower bases—have emerged as the new vanguard in advertising (Hudders & Lou, 2023 ). Their tweets and videos possess the remarkable potential to sway the purchasing decisions of thousands if not millions. This influence largely hinges on consumer engagement behaviors, implying that the impact of advertising can proliferate throughout a consumer’s entire social network (Abbasi et al., 2023 ). Consequently, exploring ways to enhance consumer engagement is of paramount theoretical and practical significance for advertising effectiveness research (Xiao et al., 2023 ). This necessitates researchers to delve deeper into the exploration of the stimulating factors and psychological mechanisms influencing consumer engagement behaviors (Vander Schee et al., 2020 ), which is the gap this study seeks to address.

The Stimulus-Organism-Response (S-O-R) framework has been extensively applied in the study of consumer engagement behaviors (Tak & Gupta, 2021 ) and has been shown to integrate effectively with self-determination theory (Yang et al., 2019 ). Therefore, employing the S-O-R framework to investigate consumer engagement behaviors in the context of influencer advertising is considered a rational approach. The current study embarks on an in-depth analysis of the transformation process from three distinct dimensions. In the Stimulus (S) phase, we focus on how influencer factors, advertising message factors, and social influence factors act as external stimuli. This phase scrutinizes the external environment’s role in triggering consumer reactions. During the Organism (O) phase, the research explores the intrinsic psychological motivations affecting individual behavior as posited in self-determination theory. This includes the willingness for self-disclosure, the desire for innovation, and trust in advertising messages. The investigation in this phase aims to understand how these internal motivations shape consumer attitudes and perceptions in the context of influencer marketing. Finally, in the Response (R) phase, the study examines how these psychological factors influence consumer engagement behavior. This part of the research seeks to understand the transition from internal psychological states to actual consumer behavior, particularly how these states drive the consumers’ deep integration and interaction with the influencer content.

Despite the inherent limitations of cross-sectional analysis in capturing the full temporal dynamics of consumer engagement, this study seeks to unveil the dynamic interplay between consumers’ psychological needs—autonomy, competence, and relatedness—and their varying engagement levels in social media influencer marketing, grounded in self-determination theory. Through this lens, by analyzing factors related to influencers, content, and social context, we aim to infer potential dynamic shifts in engagement behaviors as psychological needs evolve. This approach allows us to offer a snapshot of the complex, multi-dimensional nature of consumer engagement dynamics, providing valuable insights for both theoretical exploration and practical application in the constantly evolving domain of social media marketing. Moreover, the current study underscores the significance of adapting to the dynamic digital environment and highlights the evolving nature of consumer engagement in the realm of digital marketing.

Literature review

Stimulus-organism-response (s-o-r) model.

The Stimulus-Response (S-R) model, originating from behaviorist psychology and introduced by psychologist Watson ( 1917 ), posits that individual behaviors are directly induced by external environmental stimuli. However, this model overlooks internal personal factors, complicating the explanation of psychological states. Mehrabian and Russell ( 1974 ) expanded this by incorporating the individual’s cognitive component (organism) into the model, creating the Stimulus-Organism-Response (S-O-R) framework. This model has become a crucial theoretical framework in consumer psychology as it interprets internal psychological cognitions as mediators between stimuli and responses. Integrating with psychological theories, the S-O-R model effectively analyzes and explains the significant impact of internal psychological factors on behavior (Koay et al., 2020 ; Zhang et al., 2021 ), and is extensively applied in investigating user behavior on social media platforms (Hewei & Youngsook, 2022 ). This study combines the S-O-R framework with self-determination theory to examine consumer engagement behaviors in the context of social media influencer advertising, a logic also supported by some studies (Yang et al., 2021 ).

Self-determination theory

Self-determination theory, proposed by Richard and Edward (2000), is a theoretical framework exploring human behavioral motivation and personality. The theory emphasizes motivational processes, positing that individual behaviors are developed based on factors satisfying their psychological needs. It suggests that individual behavioral tendencies are influenced by the needs for competence, relatedness, and autonomy. Furthermore, self-determination theory, along with organic integration theory, indicates that individual behavioral tendencies are also affected by internal psychological motivations and external situational factors.

Self-determination theory has been validated by scholars in the study of online user behaviors. For example, Sweet applied the theory to the investigation of community building in online networks, analyzing knowledge-sharing behaviors among online community members (Sweet et al., 2020 ). Further literature review reveals the applicability of self-determination theory to consumer engagement behaviors, particularly in the context of influencer marketing advertisements. Firstly, self-determination theory is widely applied in studying the psychological motivations behind online behaviors, suggesting that the internal and external motivations outlined within the theory might also apply to exploring consumer behaviors in influencer marketing scenarios (Itani et al., 2022 ). Secondly, although research on consumer engagement in the social media influencer advertising context is still in its early stages, some studies have utilized SDT to explore behaviors such as information sharing and electronic word-of-mouth dissemination (Astuti & Hariyawan, 2021 ). These behaviors, which are part of the content contribution and creation dimensions of consumer engagement, may share similarities in the underlying psychological motivational mechanisms. Thus, this study will build upon these foundations to construct the Organism (O) component of the S-O-R model, integrating insights from SDT to further understand consumer engagement in influencer marketing.

Consumer engagement

Although scholars generally agree at a macro level to define consumer engagement as the creation of additional value by consumers or customers beyond purchasing products, the specific categorization of consumer engagement varies in different studies. For instance, Simon and Tossan interpret consumer engagement as a psychological willingness to interact with influencers (Simon & Tossan, 2018 ). However, such a broad definition lacks precision in describing various levels of engagement. Other scholars directly use tangible metrics on social media platforms, such as likes, saves, comments, and shares, to represent consumer engagement (Lee et al., 2018 ). While this quantitative approach is not flawed and can be highly effective in practical applications, it overlooks the content aspect of engagement, contradicting the “content is king” principle of advertising and marketing. We advocate for combining consumer engagement with the content aspect, as content engagement not only generates more traces of consumer online behavior (Oestreicher-Singer & Zalmanson, 2013 ) but, more importantly, content contribution and creation are central to social media advertising and marketing, going beyond mere content consumption (Qiu & Kumar, 2017 ). Meanwhile, we also need to emphasize that engagement is not a fixed state but a fluctuating process influenced by ongoing interactions between consumers and influencers, mediated by the evolving nature of social media platforms and the shifting sands of consumer preferences (Pradhan et al., 2023 ). Consumer engagement in digital environments undergoes continuous change, reflecting a journey rather than a destination (Viswanathan et al., 2017 ).

The current study adopts a widely accepted definition of consumer engagement from existing research, offering operational feasibility and aligning well with the research objectives of this paper. Consumer engagement behaviors in the context of this study encompass three dimensions: content consumption, content contribution, and content creation (Muntinga et al., 2011 ). These dimensions reflect a spectrum of digital engagement behaviors ranging from low to high levels (Schivinski et al., 2016 ). Specifically, content consumption on social media platforms represents a lower level of engagement, where consumers merely click and read the information but do not actively contribute or create user-generated content. Some studies consider this level of engagement as less significant for in-depth exploration because content consumption, compared to other forms, generates fewer visible traces of consumer behavior (Brodie et al., 2013 ). Even in a study by Qiu and Kumar, it was noted that the conversion rate of content consumption is low, contributing minimally to the success of social media marketing (Qiu & Kumar, 2017 ).

On the other hand, content contribution, especially content creation, is central to social media marketing. When consumers comment on influencer content or share information with their network nodes, it is termed content contribution, representing a medium level of online consumer engagement (Piehler et al., 2019 ). Furthermore, when consumers actively upload and post brand-related content on social media, this higher level of behavior is referred to as content creation. Content creation represents the highest level of consumer engagement (Cheung et al., 2021 ). Although medium and high levels of consumer engagement are more valuable for social media advertising and marketing, this exploratory study still retains the content consumption dimension of consumer engagement behaviors.

Theoretical framework

Internal organism factors: self-disclosure willingness, innovativeness, and information trust.

In existing research based on self-determination theory that focuses on online behavior, competence, relatedness, and autonomy are commonly considered as internal factors influencing users’ online behaviors. However, this approach sometimes strays from the context of online consumption. Therefore, in studies related to online consumption, scholars often use self-disclosure willingness as an overt representation of autonomy, innovativeness as a representation of competence, and trust as a representation of relatedness (Mahmood et al., 2019 ).

The use of these overt variables can be logically explained as follows: According to self-determination theory, individuals with a higher level of self-determination are more likely to adopt compensatory mechanisms to facilitate behavior compared to those with lower self-determination (Wehmeyer, 1999 ). Self-disclosure, a voluntary act of sharing personal information with others, is considered a key behavior in the development of interpersonal relationships. In social environments, self-disclosure can effectively alleviate stress and build social connections, while also seeking societal validation of personal ideas (Altman & Taylor, 1973 ). Social networks, as para-social entities, possess the interactive attributes of real societies and are likely to exhibit similar mechanisms. In consumer contexts, personal disclosures can include voluntary sharing of product interests, consumption experiences, and future purchase intentions (Robertshaw & Marr, 2006 ). While material incentives can prompt personal information disclosure, many consumers disclose personal information online voluntarily, which can be traced back to an intrinsic need for autonomy (Stutzman et al., 2011 ). Thus, in this study, we consider the self-disclosure willingness as a representation of high autonomy.

Innovativeness refers to an individual’s internal level of seeking novelty and represents their personality and tendency for novelty (Okazaki, 2009 ). Often used in consumer research, innovative consumers are inclined to try new technologies and possess an intrinsic motivation to use new products. Previous studies have shown that consumers with high innovativeness are more likely to search for information on new products and share their experiences and expertise with others, reflecting a recognition of their own competence (Kaushik & Rahman, 2014 ). Therefore, in consumer contexts, innovativeness is often regarded as the competence dimension within the intrinsic factors of self-determination (Wang et al., 2016 ), with external motivations like information novelty enhancing this intrinsic motivation (Lee et al., 2015 ).

Trust refers to an individual’s willingness to rely on the opinions of others they believe in. From a social psychological perspective, trust indicates the willingness to assume the risk of being harmed by another party (McAllister, 1995 ). Widely applied in social media contexts for relational marketing, information trust has been proven to positively influence the exchange and dissemination of consumer information, representing a close and advanced relationship between consumers and businesses, brands, or advertising endorsers (Steinhoff et al., 2019 ). Consumers who trust brands or social media influencers are more willing to share information without fear of exploitation (Pop et al., 2022 ), making trust a commonly used representation of the relatedness dimension in self-determination within consumer contexts.

Construction of the path from organism to response: self-determination internal factors and consumer engagement behavior

Following the logic outlined above, the current study represents the internal factors of self-determination theory through three variables: self-disclosure willingness, innovativeness, and information trust. Next, the study explores the association between these self-determination internal factors and consumer engagement behavior, thereby constructing the link between Organism (O) and Response (R).

Self-disclosure willingness and consumer engagement behavior

In the realm of social sciences, the concept of self-disclosure willingness has been thoroughly examined from diverse disciplinary perspectives, encompassing communication studies, sociology, and psychology. Viewing from the lens of social interaction dynamics, self-disclosure is acknowledged as a fundamental precondition for the initiation and development of online social relationships and interactive engagements (Luo & Hancock, 2020 ). It constitutes an indispensable component within the spectrum of interactive behaviors and the evolution of interpersonal connections. Voluntary self-disclosure is characterized by individuals divulging information about themselves, which typically remains unknown to others and is inaccessible through alternative sources. This concept aligns with the tenets of uncertainty reduction theory, which argues that during interpersonal engagements, individuals seek information about their counterparts as a means to mitigate uncertainties inherent in social interactions (Lee et al., 2008 ). Self-disclosure allows others to gain more personal information, thereby helping to reduce the uncertainty in interpersonal relationships. Such disclosure is voluntary rather than coerced, and this sharing of information can facilitate the development of relationships between individuals (Towner et al., 2022 ). Furthermore, individuals who actively engage in social media interactions (such as liking, sharing, and commenting on others’ content) often exhibit higher levels of self-disclosure (Chu et al., 2023 ); additional research indicates a positive correlation between self-disclosure and online engagement behaviors (Lee et al., 2023 ). Taking the context of the current study, the autonomous self-disclosure willingness can incline social media users to read advertising content more attentively and share information with others, and even create evaluative content. Therefore, this paper proposes the following research hypothesis:

H1a: The self-disclosure willingness is positively correlated with content consumption in consumer engagement behavior.

H1b: The self-disclosure willingness is positively correlated with content contribution in consumer engagement behavior.

H1c: The self-disclosure willingness is positively correlated with content creation in consumer engagement behavior.

Innovativeness and consumer engagement behavior

Innovativeness represents an individual’s propensity to favor new technologies and the motivation to use new products, associated with the cognitive perception of one’s self-competence. Individuals with a need for self-competence recognition often exhibit higher innovativeness (Kelley & Alden, 2016 ). Existing research indicates that users with higher levels of innovativeness are more inclined to accept new product information and share their experiences and discoveries with others in their social networks (Yusuf & Busalim, 2018 ). Similarly, in the context of this study, individuals, as followers of influencers, signify an endorsement of the influencer. Driven by innovativeness, they may be more eager to actively receive information from influencers. If they find the information valuable, they are likely to share it and even engage in active content re-creation to meet their expectations of self-image. Therefore, this paper proposes the following research hypotheses:

H2a: The innovativeness of social media users is positively correlated with content consumption in consumer engagement behavior.

H2b: The innovativeness of social media users is positively correlated with content contribution in consumer engagement behavior.

H2c: The innovativeness of social media users is positively correlated with content creation in consumer engagement behavior.

Information trust and consumer engagement

Trust refers to an individual’s willingness to rely on the statements and opinions of a target object (Moorman et al., 1993 ). Extensive research indicates that trust positively impacts information dissemination and content sharing in interpersonal communication environments (Majerczak & Strzelecki, 2022 ); when trust is established, individuals are more willing to share their resources and less suspicious of being exploited. Trust has also been shown to influence consumers’ participation in community building and content sharing on social media, demonstrating cross-cultural universality (Anaya-Sánchez et al., 2020 ).

Trust in influencer advertising information is also a key predictor of consumers’ information exchange online. With many social media users now operating under real-name policies, there is an increased inclination to trust information shared on social media over that posted by corporate accounts or anonymously. Additionally, as users’ social networks partially overlap with their real-life interpersonal networks, extensive research shows that more consumers increasingly rely on information posted and shared on social networks when making purchase decisions (Wang et al., 2016 ). This aligns with the effectiveness goals of influencer marketing advertisements and the characteristics of consumer engagement. Trust in the content posted by influencers is considered a manifestation of a strong relationship between fans and influencers, central to relationship marketing (Kim & Kim, 2021 ). Based on trust in the influencer, which then extends to trust in their content, people are more inclined to browse information posted by influencers, share this information with others, and even create their own content without fear of exploitation or negative consequences. Therefore, this paper proposes the following research hypotheses:

H3a: Information trust is positively correlated with content consumption in consumer engagement behavior.

H3b: Information trust is positively correlated with content contribution in consumer engagement behavior.

H3c: Information trust is positively correlated with content creation in consumer engagement behavior.

Construction of the path from stimulus to organism: influencer factors, advertising information factors, social factors, and self-determination internal factors

Having established the logical connection from Organism (O) to Response (R), we further construct the influence path from Stimulus (S) to Organism (O). Revisiting the definition of influencer advertising in social media, companies, and brands leverage influencers on social media platforms to disseminate advertising content, utilizing the influencers’ relationships and influence over consumers for marketing purposes. In addition to consumer’s internal factors, elements such as companies, brands, influencers, and the advertisements themselves also impact consumer behavior. Although factors like the brand image perception of companies may influence consumer behavior, considering that in influencer marketing, companies and brands do not directly interact with consumers, this study prioritizes the dimensions of influencers and advertisements. Furthermore, the impact of social factors on individual cognition and behavior is significant, thus, the current study integrates influencers, advertisements, and social dimensions as the Stimulus (S) component.

Influencer factors: parasocial identification

Self-determination theory posits that relationships are one of the key motivators influencing individual behavior. In the context of social media research, users anticipate establishing a parasocial relationship with influencers, resembling real-life relationships. Hence, we consider the parasocial identification arising from users’ parasocial interactions with influencers as the relational motivator. Parasocial interaction refers to the one-sided personal relationship that individuals develop with media characters (Donald & Richard, 1956 ). During this process, individuals believe that the media character is directly communicating with them, creating a sense of positive intimacy (Giles, 2002 ). Over time, through repeated unilateral interactions with media characters, individuals develop a parasocial relationship, leading to parasocial identification. However, parasocial identification should not be directly equated with the concept of social identification in social identity theory. Social identification occurs when individuals psychologically de-individualize themselves, perceiving the characteristics of their social group as their own, upon identifying themselves as part of that group. In contrast, parasocial identification refers to the one-sided interactional identification with media characters (such as celebrities or influencers) over time (Chen et al., 2021 ). Particularly when individuals’ needs for interpersonal interaction are not met in their daily lives, they turn to parasocial interactions to fulfill these needs (Shan et al., 2020 ). Especially on social media, which is characterized by its high visibility and interactivity, users can easily develop a strong parasocial identification with the influencers they follow (Wei et al., 2022 ).

Parasocial identification and self-disclosure willingness

Theories like uncertainty reduction, personal construct, and social exchange are often applied to explain the emergence of parasocial identification. Social media, with its convenient and interactive modes of information dissemination, enables consumers to easily follow influencers on media platforms. They can perceive the personality of influencers through their online content, viewing them as familiar individuals or even friends. Once parasocial identification develops, this pleasurable experience can significantly influence consumers’ cognitions and thus their behavioral responses. Research has explored the impact of parasocial identification on consumer behavior. For instance, Bond et al. found that on Twitter, the intensity of users’ parasocial identification with influencers positively correlates with their continuous monitoring of these influencers’ activities (Bond, 2016 ). Analogous to real life, where we tend to pay more attention to our friends in our social networks, a similar phenomenon occurs in the relationship between consumers and brands. This type of parasocial identification not only makes consumers willing to follow brand pages but also more inclined to voluntarily provide personal information (Chen et al., 2021 ). Based on this logic, we speculate that a similar relationship may exist between social media influencers and their fans. Fans develop parasocial identification with influencers through social media interactions, making them more willing to disclose their information, opinions, and views in the comment sections of the influencers they follow, engaging in more frequent social interactions (Chung & Cho, 2017 ), even if the content at times may be brand or company-embedded marketing advertisements. In other words, in the presence of influencers with whom they have established parasocial relationships, they are more inclined to disclose personal information, thereby promoting consumer engagement behavior. Therefore, we propose the following research hypotheses:

H4: Parasocial identification is positively correlated with consumer self-disclosure willingness.

H4a: Self-disclosure willingness mediates the impact of parasocial identification on content consumption in consumer engagement behavior.

H4b: Self-disclosure willingness mediates the impact of parasocial identification on content contribution in consumer engagement behavior.

H4c: Self-disclosure willingness mediates the impact of parasocial identification on content creation in consumer engagement behavior.

Parasocial identification and information trust

Information Trust refers to consumers’ willingness to trust the information contained in advertisements and to place themselves at risk. These risks include purchasing products inconsistent with the advertised information and the negative social consequences of erroneously spreading this information to others, leading to unpleasant consumption experiences (Minton, 2015 ). In advertising marketing, gaining consumers’ trust in advertising information is crucial. In the context of influencer marketing on social media, companies, and brands leverage the social connection between influencers and their fans. According to cognitive empathy theory, consumers project their trust in influencers onto the products endorsed, explaining the phenomenon of ‘loving the house for the crow on its roof.’ Research indicates that parasocial identification with influencers is a necessary condition for trust development. Consumers engage in parasocial interactions with influencers on social media, leading to parasocial identification (Jin et al., 2021 ). Consumers tend to reduce their cognitive load and simplify their decision-making processes, thus naturally adopting a positive attitude and trust towards advertising information disseminated by influencers with whom they have established parasocial identification. This forms the core logic behind the success of influencer marketing advertisements (Breves et al., 2021 ); furthermore, as mentioned earlier, because consumers trust these advertisements, they are also willing to share this information with friends and family and even engage in content re-creation. Therefore, we propose the following research hypotheses:

H5: Parasocial identification is positively correlated with information trust.

H5a: Information trust mediates the impact of parasocial identification on content consumption in consumer engagement behavior.

H5b: Information trust mediates the impact of parasocial identification on content contribution in consumer engagement behavior.

H5c: Information trust mediates the impact of parasocial identification on content creation in consumer engagement behavior.

Influencer factors: source credibility

Source credibility refers to the degree of trust consumers place in the influencer as a source, based on the influencer’s reliability and expertise. Numerous studies have validated the effectiveness of the endorsement effect in advertising (Schouten et al., 2021 ). The Source Credibility Model, proposed by the renowned American communication scholar Hovland and the “Yale School,” posits that in the process of information dissemination, the credibility of the source can influence the audience’s decision to accept the information. The credibility of the information is determined by two aspects of the source: reliability and expertise. Reliability refers to the audience’s trust in the “communicator’s objective and honest approach to providing information,” while expertise refers to the audience’s trust in the “communicator being perceived as an effective source of information” (Hovland et al., 1953 ). Hovland’s definitions reveal that the interpretation of source credibility is not about the inherent traits of the source itself but rather the audience’s perception of the source (Jang et al., 2021 ). This differs from trust and serves as a precursor to the development of trust. Specifically, reliability and expertise are based on the audience’s perception; thus, this aligns closely with the audience’s perception of influencers (Kim & Kim, 2021 ). This credibility is a cognitive statement about the source of information.

Source credibility and self-disclosure willingness

Some studies have confirmed the positive impact of an influencer’s self-disclosure on their credibility as a source (Leite & Baptista, 2022 ). However, few have explored the impact of an influencer’s credibility, as a source, on consumers’ self-disclosure willingness. Undoubtedly, an impact exists; self-disclosure is considered a method to attempt to increase intimacy with others (Leite et al., 2022 ). According to social exchange theory, people promote relationships through the exchange of information in interpersonal communication to gain benefits (Cropanzano & Mitchell, 2005 ). Credibility, deriving from an influencer’s expertise and reliability, means that a highly credible influencer may provide more valuable information to consumers. Therefore, based on the social exchange theory’s logic of reciprocal benefits, consumers might be more willing to disclose their information to trustworthy influencers, potentially even expanding social interactions through further consumer engagement behaviors. Thus, we propose the following research hypotheses:

H6: Source credibility is positively correlated with self-disclosure willingness.

H6a: Self-disclosure willingness mediates the impact of Source credibility on content consumption in consumer engagement behavior.

H6b: Self-disclosure willingness mediates the impact of Source credibility on content contribution in consumer engagement behavior.

H6c: Self-disclosure willingness mediates the impact of Source credibility on content creation in consumer engagement behavior.

Source credibility and information trust

Based on the Source Credibility Model, the credibility of an endorser as an information source can significantly influence consumers’ acceptance of the information (Shan et al., 2020 ). Existing research has demonstrated the positive impact of source credibility on consumers. Djafarova, in a study based on Instagram, noted through in-depth interviews with 18 users that an influencer’s credibility significantly affects respondents’ trust in the information they post. This credibility is composed of expertise and relevance to consumers, and influencers on social media are considered more trustworthy than traditional celebrities (Djafarova & Rushworth, 2017 ). Subsequently, Bao and colleagues validated in the Chinese consumer context, based on the ELM model and commitment-trust theory, that the credibility of brand pages on Weibo effectively fosters consumer trust in the brand, encouraging participation in marketing activities (Bao & Wang, 2021 ). Moreover, Hsieh et al. found that in e-commerce contexts, the credibility of the source is a significant factor influencing consumers’ trust in advertising information (Hsieh & Li, 2020 ). In summary, existing research has proven that the credibility of the source can promote consumer trust. Influencer credibility is a significant antecedent affecting consumers’ trust in the advertised content they publish. In brand communities, trust can foster consumer engagement behaviors (Habibi et al., 2014 ). Specifically, consumers are more likely to trust the advertising content published by influencers with higher credibility (more expertise and reliability), and as previously mentioned, consumer engagement behavior is more likely to occur. Based on this, the study proposes the following research hypotheses:

H7: Source credibility is positively correlated with information trust.

H7a: Information trust mediates the impact of source credibility on content consumption in consumer engagement behavior.

H7b: Information trust mediates the impact of source credibility on content contribution in consumer engagement behavior.

H7c: Information trust mediates the impact of source credibility on content creation in consumer engagement behavior.

Advertising information factors: informative value

Advertising value refers to “the relative utility value of advertising information to consumers and is a subjective evaluation by consumers.” In his research, Ducoffe pointed out that in the context of online advertising, the informative value of advertising is a significant component of advertising value (Ducoffe, 1995 ). Subsequent studies have proven that consumers’ perception of advertising value can effectively promote their behavioral response to advertisements (Van-Tien Dao et al., 2014 ). Informative value of advertising refers to “the information about products needed by consumers provided by the advertisement and its ability to enhance consumer purchase satisfaction.” From the perspective of information dissemination, valuable advertising information should help consumers make better purchasing decisions and reduce the effort spent searching for product information. The informational aspect of advertising has been proven to effectively influence consumers’ cognition and, in turn, their behavior (Haida & Rahim, 2015 ).

Informative value and innovativeness

As previously discussed, consumers’ innovativeness refers to their psychological trait of favoring new things. Studies have shown that consumers with high innovativeness prefer novel and valuable product information, as it satisfies their need for newness and information about new products, making it an important factor in social media advertising engagement (Shi, 2018 ). This paper also hypothesizes that advertisements with high informative value can activate consumers’ innovativeness, as the novelty of information is one of the measures of informative value (León et al., 2009 ). Acquiring valuable information can make individuals feel good about themselves and fulfill their perception of a “novel image.” According to social exchange theory, consumers can gain social capital in interpersonal interactions (such as social recognition) by sharing information about these new products they perceive as valuable. Therefore, the current study proposes the following research hypothesis:

H8: Informative value is positively correlated with innovativeness.

H8a: Innovativeness mediates the impact of informative value on content consumption in consumer engagement behavior.

H8b: Innovativeness mediates the impact of informative value on content contribution in consumer engagement behavior.

H8c: Innovativeness mediates the impact of informative value on content creation in consumer engagement behavior.

Informative value and information trust

Trust is a multi-layered concept explored across various disciplines, including communication, marketing, sociology, and psychology. For the purposes of this paper, a deep analysis of different levels of trust is not undertaken. Here, trust specifically refers to the trust in influencer advertising information within the context of social media marketing, denoting consumers’ belief in and reliance on the advertising information endorsed by influencers. Racherla et al. investigated the factors influencing consumers’ trust in online reviews, suggesting that information quality and value contribute to increasing trust (Racherla et al., 2012 ). Similarly, Luo and Yuan, in a study based on social media marketing, also confirmed that the value of advertising information posted on brand pages can foster consumer trust in the content (Lou & Yuan, 2019 ). Therefore, by analogy, this paper posits that the informative value of influencer-endorsed advertising can also promote consumer trust in that advertising information. The relationship between trust in advertising information and consumer engagement behavior has been discussed earlier. Thus, the current study proposes the following research hypotheses:

H9: Informative value is positively correlated with information trust.

H9a: Information trust mediates the impact of informative value on content consumption in consumer engagement behavior.

H9b: Information trust mediates the impact of informative value on content contribution in consumer engagement behavior.

H9c: Information trust mediates the impact of informative value on content creation in consumer engagement behavior.

Advertising information factors: ad targeting accuracy

Ad targeting accuracy refers to the degree of match between the substantive information contained in advertising content and consumer needs. Advertisements containing precise information often yield good advertising outcomes. In marketing practice, advertisers frequently use information technology to analyze the characteristics of different consumer groups in the target market and then target their advertisements accordingly to achieve precise dissemination and, consequently, effective advertising results. The utility of ad targeting accuracy has been confirmed by many studies. For instance, in the research by Qiu and Chen, using a modified UTAUT model, it was demonstrated that the accuracy of advertising effectively promotes consumer acceptance of advertisements in WeChat Moments (Qiu & Chen, 2018 ). Although some studies on targeted advertising also indicate that overly precise ads may raise concerns about personal privacy (Zhang et al., 2019 ), overall, the accuracy of advertising information is effective in enhancing advertising outcomes and is a key element in the success of targeted advertising.

Ad targeting accuracy and information trust

In influencer marketing advertisements, due to the special relationship recognition between consumers and influencers, the privacy concerns associated with ad targeting accuracy are alleviated (Vrontis et al., 2021 ). Meanwhile, the informative value brought by targeting accuracy is highlighted. More precise advertising content implies higher informative value and also signifies that the advertising content is more worthy of consumer trust (Della Vigna, Gentzkow, 2010 ). As previously discussed, people are more inclined to read and engage with advertising content they trust and recognize. Therefore, the current study proposes the following research hypotheses:

H10: Ad targeting accuracy is positively correlated with information trust.

H10a: Information trust mediates the impact of ad targeting accuracy on content consumption in consumer engagement behavior.

H10b: Information trust mediates the impact of ad targeting accuracy on content contribution in consumer engagement behavior.

H10c: Information trust mediates the impact of ad targeting accuracy on content creation in consumer engagement behavior.

Social factors: subjective norm

The Theory of Planned Behavior, proposed by Ajzen ( 1991 ), suggests that individuals’ actions are preceded by conscious choices and are underlain by plans. TPB has been widely used by scholars in studying personal online behaviors, these studies collectively validate the applicability of TPB in the context of social media for researching online behaviors (Huang, 2023 ). Additionally, the self-determination theory, which underpins this chapter’s research, also supports the notion that individuals’ behavioral decisions are based on internal cognitions, aligning with TPB’s assertions. Therefore, this paper intends to select subjective norms from TPB as a factor of social influence. Subjective norm refers to an individual’s perception of the expectations of significant others in their social relationships regarding their behavior. Empirical research in the consumption field has demonstrated the significant impact of subjective norms on individual psychological cognition (Yang & Jolly, 2009 ). A meta-analysis by Hagger, Chatzisarantis ( 2009 ) even highlighted the statistically significant association between subjective norms and self-determination factors. Consequently, this study further explores its application in the context of influencer marketing advertisements on social media.

Subjective norm and self-disclosure willingness

In numerous studies on social media privacy, subjective norms significantly influence an individual’s self-disclosure willingness. Wirth et al. ( 2019 ) based on the privacy calculus theory, surveyed 1,466 participants and found that personal self-disclosure on social media is influenced by the behavioral expectations of other significant reference groups around them. Their research confirmed that subjective norms positively influence self-disclosure of information and highlighted that individuals’ cognitions and behaviors cannot ignore social and environmental factors. Heirman et al. ( 2013 ) in an experiment with Instagram users, also noted that subjective norms could promote positive consumer behavioral responses. Specifically, when important family members and friends highly regard social media influencers as trustworthy, we may also be more inclined to disclose our information to influencers and share this information with our surrounding family and friends without fear of disapproval. In our subjective norms, this is considered a positive and valuable interactive behavior, leading us to exhibit engagement behaviors. Based on this logic, we propose the following research hypotheses:

H11: Subjective norms are positively correlated with self-disclosure willingness.

H11a: Self-disclosure willingness mediates the impact of subjective norms on content consumption in consumer engagement behavior.

H11b: Self-disclosure willingness mediates the impact of subjective norms on content contribution in consumer engagement behavior.

H11c: Self-disclosure willingness mediates the impact of subjective norms on content creation in consumer engagement behavior.

Subjective norm and information trust

Numerous studies have indicated that subjective norms significantly influence trust (Roh et al., 2022 ). This can be explained by reference group theory, suggesting people tend to minimize the effort expended in decision-making processes, often looking to the behaviors or attitudes of others as a point of reference; for instance, subjective norms can foster acceptance of technology by enhancing trust (Gupta et al., 2021 ). Analogously, if a consumer’s social network generally holds positive attitudes toward influencer advertising, they are also more likely to trust the endorsed advertisement information, as it conserves the extensive effort required in gathering product information (Chetioui et al., 2020 ). Therefore, this paper proposes the following research hypotheses:

H12: Subjective norms are positively correlated with information trust.

H12a: Information trust mediates the impact of subjective norms on content consumption in consumer engagement behavior.

H12b: Information trust mediates the impact of subjective norms on content contribution in consumer engagement behavior.

H12c: Information trust mediates the impact of subjective norms on content creation in consumer engagement behavior.

Conceptual model

In summary, based on the Stimulus (S)-Organism (O)-Response (R) framework, this study constructs the external stimulus factors (S) from three dimensions: influencer factors (parasocial identification, source credibility), advertising information factors (informative value, Ad targeting accuracy), and social influence factors (subjective norms). This is grounded in social capital theory and the theory of planned behavior. drawing on self-determination theory, the current study constructs the individual psychological factors (O) using self-disclosure willingness, innovativeness, and information trust. Finally, the behavioral response (R) is constructed using consumer engagement, which includes content consumption, content contribution, and content creation, as illustrated in Fig. 1 .

Consumer engagement behavior impact model based on SOR framework.

Materials and methods

Participants and procedures.

The current study conducted a survey through the Wenjuanxing platform to collect data. Participants were recruited through social media platforms such as WeChat, Douyin, Weibo et al., as samples drawn from social media users better align with the research purpose of our research and ensure the validity of the sample. Before the survey commenced, all participants were explicitly informed about the purpose of this study, and it was made clear that volunteers could withdraw from the survey at any time. Initially, 600 questionnaires were collected, with 78 invalid responses excluded. The criteria for valid questionnaires were as follows: (1) Respondents must have answered “Yes” to the question, “Do you follow any influencers (internet celebrities) on social media platforms?” as samples not using social media or not following influencers do not meet the study’s objective, making this question a prerequisite for continuing the survey; (2) Respondents had to correctly answer two hidden screening questions within the questionnaire to ensure that they did not randomly select scores; (3) The total time taken to complete the questionnaire had to exceed one minute, ensuring that respondents had sufficient time to understand and thoughtfully answer each question; (4) Respondents were not allowed to choose the same score for eight consecutive questions. Ultimately, 522 valid questionnaires were obtained, with an effective rate of 87.00%, meeting the basic sample size requirements for research models (Gefen et al., 2011 ). Detailed demographic information of the study participants is presented in Table 1 .

Measurements

To ensure the validity and reliability of the data analysis results in this study, the measurement tools and scales used in this chapter were designed with reference to existing established research. The main variables in the survey questionnaire include parasocial identification, source credibility, informative value, ad targeting accuracy, subjective norms, self-disclosure willingness, innovativeness, information trust, content consumption, content contribution, and content creation. The measurement scale for parasocial identification was adapted from the research of Schramm and Hartmann, comprising 6 items (Schramm & Hartmann, 2008 ). The source credibility scale was combined from the studies of Cheung et al. and Luo & Yuan’s research in the context of social media influencer marketing, including 4 items (Cheung et al., 2009 ; Lou & Yuan, 2019 ). The scale for informative value was modified based on Voss et al.‘s research, consisting of 4 items (Voss et al., 2003 ). The ad targeting accuracy scale was derived from the research by Qiu Aimei et al., 2018 ) including 3 items. The subjective norm scale was adapted from Ajzen’s original scale, comprising 3 items (Ajzen, 2002 ). The self-disclosure willingness scale was developed based on Chu and Kim’s research, including 3 items (Chu & Kim, 2011 ). The innovativeness scale was formulated following the study by Sun et al., comprising 4 items (Sun et al., 2006 ). The information trust scale was created in reference to Chu and Choi’s research, including 3 items (Chu & Choi, 2011 ). The scales for the three components of social media consumer engagement—content consumption, content contribution, and content creation—were sourced from the research by Buzeta et al., encompassing 8 items in total (Buzeta et al., 2020 ).

All scales were appropriately revised for the context of social media influencer marketing. To avoid issues with scoring neutral attitudes, a uniform Likert seven-point scale was used for each measurement item (ranging from 1 to 7, representing a spectrum from ‘strongly disagree’ to ‘strongly agree’). After the overall design of the questionnaire was completed, a pre-test was conducted with 30 social media users to ensure that potential respondents could clearly understand the meaning of each question and that there were no obstacles to answering. This pre-test aimed to prevent any difficulties or misunderstandings in the questionnaire items. The final version of the questionnaire is presented in Table 2 .

Data analysis

Since the model framework of the current study is derived from theoretical deductions of existing research and, while logically constructed, does not originate from an existing research model, this study still falls under the category of exploratory research. According to the analysis suggestions of Hair and other scholars, in cases of exploratory research model frameworks, it is more appropriate to choose Smart PLS for Partial Least Squares Path Analysis (PLS) to conduct data analysis and testing of the research model (Hair et al., 2012 ).

Measurement of model

In this study, careful data collection and management resulted in no missing values in the dataset. This ensured the integrity and reliability of the subsequent data analysis. As shown in Table 3 , after deleting measurement items with factor loadings below 0.5, the final factor loadings of the measurement items in this study range from 0.730 to 0.964. This indicates that all measurement items meet the retention criteria. Additionally, the Cronbach’s α values of the latent variables range from 0.805 to 0.924, and all latent variables have Composite Reliability (CR) values greater than the acceptable value of 0.7, demonstrating that the scales of this study have passed the reliability test requirements (Hair et al., 2019 ). All latent variables in this study have Average Variance Extracted (AVE) values greater than the standard acceptance value of 0.5, indicating that the convergent validity of the variables also meets the standard (Fornell & Larcker, 1981 ). Furthermore, the results show that the Variance Inflation Factor (VIF) values for each factor are below 10, indicating that there are no multicollinearity issues with the scales in this study (Hair, 2009 ).

The current study then further verified the discriminant validity of the variables, with specific results shown in Table 4 . The square roots of the average variance extracted (AVE) values for all variables (bolded on the diagonal) are greater than the Pearson correlation coefficients between the variables, indicating that the discriminant validity of the scales in this study meets the required standards (Fornell & Larcker, 1981 ). Additionally, a single-factor test method was employed to examine common method bias in the data. The first unrotated factor accounted for 29.71% of the variance, which is less than the critical threshold of 40%. Therefore, the study passed the test and did not exhibit serious common method bias (Podsakoff et al., 2003 ).

To ensure the robustness and appropriateness of our structural equation model, we also conducted a thorough evaluation of the model fit. Initially, through PLS Algorithm calculations, the R 2 values of each variable were greater than the standard acceptance value of 0.1, indicating good predictive accuracy of the model. Subsequently, Blindfolding calculations were performed, and the results showed that the Stone-Geisser Q 2 values of each variable were greater than 0, demonstrating that the model of this study effectively predicts the relationships between variables (Dijkstra & Henseler, 2015 ). In addition, through CFA, we also obtained some indicator values, specifically, χ 2 /df = 2.528 < 0.3, RMSEA = 0.059 < 0.06, SRMR = 0.055 < 0.08. Given its sensitivity to sample size, we primarily focused on the CFI, TLI, and NFI values, CFI = 0.953 > 0.9, TLI = 0.942 > 0.9, and NFI = 0.923 > 0.9 indicating a good fit. Additionally, RMSEA values below 0.06 and SRMR values below 0.08 were considered indicative of a good model fit. These indices collectively suggested that our model demonstrates a satisfactory fit with the data, thereby reinforcing the validity of our findings.

Research hypothesis testing

The current study employed a Bootstrapping test with a sample size of 5000 on the collected raw data to explore the coefficients and significance of the paths in the research model. The final test data results of this study’s model are presented in Table 5 .

The current study employs S-O-R model as the framework, grounded in theories such as self-determination theory and theory of planned behavior, to construct an influence model of consumer engagement behavior in the context of social media influencer marketing. It examines how influencer factors, advertisement information factors, and social influence factors affect consumer engagement behavior by impacting consumers’ psychological cognitions. Using structural equation modeling to analyze collected data ( N  = 522), it was found that self-disclosure willingness, innovativeness, and information trust positively influence consumer engagement behavior, with innovativeness having the largest impact on higher levels of engagement. Influencer factors, advertisement information factors, and social factors serve as effective external stimuli, influencing psychological motivators and, consequently, consumer engagement behavior. The specific research results are illustrated in Fig. 2 .

Tested structural model of consumer engagement behavior.

The impact of psychological motivators on different levels of consumer engagement: self-disclosure willingness, innovativeness, and information trust

The research analysis indicates that self-disclosure willingness and information trust are key drivers for content consumption (H1a, H2a validated). This aligns with previous findings that individuals with a higher willingness to disclose themselves show greater levels of engagement behavior (Chu et al., 2023 ); likewise, individuals who trust advertisement information are more inclined to engage with advertisement content (Kim, Kim, 2021 ). Moreover, our study finds that information trust has a stronger impact on content consumption, underscoring the importance of trust in the dissemination of advertisement information. However, no significant association was found between individual innovativeness and content consumption (H3a not validated).

Regarding the dimension of content contribution in consumer engagement, self-disclosure willingness, information trust, and innovativeness all positively impact it (H1b, H2b, and H3b all validated). This is consistent with earlier research findings that individuals with higher self-disclosure willingness are more likely to like, comment on, or share content posted by influencers on social media platforms (Towner et al., 2022 ); the conclusions of this paper also support that innovativeness is an important psychological driver for active participation in social media interactions (Kamboj & Sharma, 2023 ). However, at the level of consumer engagement in content contribution, while information trust also exerts a positive effect, its impact is the weakest, although information trust has the strongest impact on content consumption.

In social media advertising, the ideal outcome is the highest level of consumer engagement, i.e., content creation, meaning consumers actively join in brand content creation, seeing themselves as co-creators with the brand (Nadeem et al., 2021 ). Our findings reveal that self-disclosure willingness, innovativeness, and information trust all positively influence content creation (H1c, H2c, and H3c all validated). The analysis found that similar to the impact on content contribution, innovativeness has the most significant effect on encouraging individual content creation, followed by self-disclosure willingness, with information trust having the least impact.

In summary, while some previous studies have shown that self-disclosure willingness, innovativeness, and information trust are important factors in promoting consumer engagement (Chu et al., 2023 ; Nadeem et al., 2021 ; Geng et al., 2021 ), this study goes further by integrating and comparing all three within the same research framework. It was found that to trigger higher levels of consumer engagement behavior, trust is not the most crucial psychological motivator; rather, the most effective method is to stimulate consumers’ innovativeness, thus complementing previous research. Subsequently, this study further explores the impact of different stimulus factors on various psychological motivators.

The influence of external stimulus factors on psychological motivators: influencer factors, advertisement information factors, and social factors

The current findings indicate that influencer factors, such as parasocial identification and source credibility, effectively enhance consumer engagement by influencing self-disclosure willingness and information trust. This aligns with prior research highlighting the significance of parasocial identification (Shan et al., 2020 ). Studies suggest parasocial identification positively impacts consumer engagement by boosting self-disclosure willingness and information trust (validated H4a, H4b, H4c, and H5a), but not content contribution or creation through information trust (H5b, H5c not validated). Source credibility’s influence on self-disclosure willingness was not significant (H6 not validated), thus negating the mediating effect of self-disclosure willingness (H6a, H6b, H6c not validated). Influencer credibility mainly affects engagement through information trust (H7a, H7b, H7c validated), supporting previous findings (Shan et al., 2020 ).

Advertisement factors (informative value and ad targeting accuracy) promote engagement through innovativeness and information trust. Informative value significantly impacts higher-level content contribution and creation through innovativeness (H8b, H8c validated), while ad targeting accuracy influences consumer engagement at all levels mainly through information trust (H10a, H10b, H10c validated).

Social factors (subjective norms) enhance self-disclosure willingness and information trust, consistent with previous research (Wirth et al., 2019 ; Gupta et al., 2021 ), and further promote consumer engagement across all levels (H11a, H11b, H11c, H12a, H12b, and H12c all validated).

In summary, influencer, advertisement, and social factors impact consumer engagement behavior by influencing psychological motivators, with influencer factors having the greatest effect on content consumption, advertisement content factors significantly raising higher-level consumer engagement through innovativeness, and social factors also influencing engagement through self-disclosure willingness and information trust.

Implication

From a theoretical perspective, current research presents a comprehensive model of consumer engagement within the context of influencer advertising on social media. This model not only expands the research horizon in the fields of social media influencer advertising and consumer engagement but also serves as a bridge between two crucial themes in new media advertising studies. Influencer advertising has become an integral part of social media advertising, and the construction of a macro model aids researchers in understanding consumer psychological processes and behavioral patterns. It also assists advertisers in formulating more effective strategies. Consumer engagement, focusing on the active role of consumers in disseminating information and the long-term impact on advertising effectiveness, aligns more closely with the advertising effectiveness measures in the new media context than traditional advertising metrics. However, the intersection of these two vital themes lacks comprehensive research and a universal model. This study constructs a model that elucidates the effects of various stimuli on consumer psychology and engagement behaviors, exploring the connections and mechanisms through different mediating pathways. By differentiating levels of engagement, the study offers more nuanced conclusions for diverse advertising objectives. Furthermore, this research validates the applicability of self-determination theory in the context of influencer advertising effectiveness. While this psychological theory has been utilized in communication behavior research, its effectiveness in the field of advertising requires further exploration. The current study introduces self-determination theory into the realm of influencer advertising and consumer engagement, thereby expanding its application in the field of advertising communication. It also responds to the call from the advertising and marketing academic community to incorporate more psychological theories to explain the ‘black box’ of consumer psychology. The inclusion of this theory re-emphasizes the people-centric approach of this research and highlights the primary role of individuals in advertising communication studies.

From a practical perspective, this study provides significant insights for adapting marketing strategies to the evolving media landscape and the empowered role of audiences. Firstly, in the face of changes in the communication environment and the empowerment of audience communication capabilities, traditional marketing approaches are becoming inadequate for new media advertising needs. Traditional advertising focuses on direct, point-to-point effects, whereas social media advertising aims for broader, point-to-mass communication, leveraging audience proactivity to facilitate the viral spread of content across online social networks. Secondly, for brands, the general influence model proposed in this study offers guidance for influencer advertising strategy. If the goal is to maximize reach and brand recognition with a substantial advertising budget, partnering with top influencers who have a large following can be an effective strategy. However, if the objective is to maximize cost-effectiveness with a limited budget by leveraging consumer initiative for secondary spread, the focus should be on designing advertising content that stimulates consumer creativity and willingness to innovate. Thirdly, influencers are advised to remain true to their followers. In influencer marketing, influencers attract advertisers through their influence over followers, converting this influence into commercial gain. This influence stems from the trust followers place in the influencer, thus influencers should maintain professional integrity and prioritize the quality of information they share, even when presented with advertising opportunities. Lastly, influencers should assert more control over their relationships with advertisers. In traditional advertising, companies and brands often exert significant control over the content. However, in the social media era, influencers should negotiate more creative freedom in their advertising partnerships, asserting a more equal relationship with advertisers. This approach ensures that content quality remains high, maintaining the trust influencers have built with their followers.

Limitations and future directions

while this study offers valuable insights into the dynamics of influencer marketing and consumer engagement on social media, several limitations should be acknowledged: Firstly, constrained by the research objectives and scope, this study’s proposed general impact model covers three dimensions: influencers, advertisement information, and social factors. However, these dimensions are not limited to the five variables discussed in this paper. Therefore, we call for future research to supplement and explore more crucial factors. Secondly, in the actual communication environment, there may be differences in the impact of communication effectiveness across various social media platforms. Thus, future research could also involve comparative studies and explorations between different social media platforms. Thirdly, the current study primarily examines the direct effects of various factors on consumer engagement. However, the potential interaction effects between these variables (e.g., how influencers’ credibility might interact with advertisement information quality) are not extensively explored. Future research could investigate these complex interrelationships for a more holistic understanding. Lastly, our study, being cross-sectional, offers preliminary insights into the complex and dynamic nature of engagement between social media influencers and consumers, yet it does not incorporate the temporal dimension. The diverse impacts of psychological needs on engagement behaviors hint at an underlying dynamism that merits further investigation. Future research should consider employing longitudinal designs to directly observe how these dynamics evolve over time.

The findings of the current study not only theoretically validate the applicability of self-determination theory in the field of social media influencer marketing advertising research but also broaden the scope of advertising effectiveness research from the perspective of consumer engagement. Moreover, the research framework offers strategic guidance and reference for influencer marketing strategies. The main conclusions of this study can be summarized as follows.

Innovativeness is the key factor in high-level consumer engagement behavior. Content contribution represents a higher level of consumer engagement compared to content consumption, as it not only requires consumers to dedicate attention to viewing advertising content but also to share this information across adjacent nodes within their social networks. This dissemination of information is a pivotal factor in the success of influencer marketing advertisements. Hence, companies and brands prioritize consumers’ content contribution over mere viewing of advertising content (Qiu & Kumar, 2017 ). Compared to content consumption and contribution, content creation is considered the highest level of consumer engagement, where consumers actively create and upload brand-related content, and it represents the most advanced outcome sought by enterprises and brands in advertising campaigns (Cheung et al., 2021 ). The current study posits that to pursue better outcomes in social media influencer advertising marketing, enhancing consumers’ willingness for self-disclosure, innovativeness, and trust in advertising information are effective strategies. However, the crux lies in leveraging the consumer’s subjective initiative, particularly in boosting their innovativeness. If the goal is simply to achieve content consumption rather than higher levels of consumer engagement, the focus should be on fostering trust in advertising information. There is no hierarchy in the efficacy of different strategies; they should align with varying marketing contexts and advertising objectives.

The greatest role of social media influencers lies in attracting online traffic. information trust is the core element driving content consumption, and influencer factors mainly affect consumer engagement behaviors through information trust. Therefore, this study suggests that the primary role of influencers in social media advertising is to attract online traffic, i.e., increase consumer behavior regarding ad content consumption (reducing avoidance of ad content), and help brands achieve the initial goal of making consumers “see and complete ads.” However, their impact on further high-level consumer engagement behaviors is limited. This mechanism serves as a reminder to advertisers not to overestimate the effects of influencers in marketing. Currently, top influencers command a significant portion of the ad budget, which could squeeze the budget for other aspects of advertising, potentially affecting the overall effectiveness of the campaign. Businesses and brands should consider deeper strategic implications when planning their advertising campaigns.

Valuing Advertising Information Factors, Content Remains King. Our study posits that in the social media influencer marketing context, the key to enhancing consumer contribution and creation of advertising content lies primarily in the advertising information factors. In other words, while content consumption is important, advertisers should objectively assess the role influencers play in advertising. In the era of social media, content remains ‘king’ in advertising. This view indirectly echoes the points made in the previous paragraph: influencers effectively perform initial ‘online traffic generation’ tasks in social media, but this role should not be overly romanticized or exaggerated. Whether it’s companies, brands, or influencers, providing consumers with advertisements rich in informational value is crucial to achieving better advertising outcomes and potentially converting consumers into stakeholders.

Subjective norm is an unignorable social influence factor. Social media is characterized by its network structure of information dissemination, where a node’s information is visible to adjacent nodes. For instance, if user A likes a piece of content C from influencer I, A’s follower B, who may not follow influencer I, can still see content C via user A’s page. The aim of marketing in the social media era is to influence a node and then spread the information to adjacent nodes, either secondarily or multiple times (Kumar & Panda, 2020 ). According to the Theory of Planned Behavior, an individual’s actions are influenced by significant others in their lives, such as family and friends. Previous studies have proven the effectiveness of the Theory of Planned Behavior in influencing attitudes toward social media advertising (Ranjbarian et al., 2012 ). Current research further confirms that subjective norms also influence consumer engagement behaviors in influencer marketing on social media. Therefore, in advertising practice, brands should not only focus on individual consumers but also invest efforts in groups that can influence consumer decisions. Changing consumer behavior in the era of social media marketing doesn’t solely rely on the company’s efforts.

As communication technology advances, media platforms will further empower individual communicative capabilities, moving beyond the era of the “magic bullet” theory. The distinction between being a recipient and a transmitter of information is increasingly blurred. In an era where everyone is both an audience and an influencer, research confined to the role of the ‘recipient’ falls short of addressing the dynamics of ‘transmission’. Future research in marketing and advertising should thus focus more on the power of individual transmission. Furthermore, as Marshall McLuhan famously said, “the medium is the extension of man.” The evolution of media technology remains human-centric. Accordingly, future marketing research, while paying heed to media transformations, should emphasize the centrality of the ‘human’ element.

Data availability

The datasets generated and/or analyzed during the current study are not publicly available due to privacy issues. Making the full data set publicly available could potentially breach the privacy that was promised to participants when they agreed to take part, and may breach the ethics approval for the study. The data are available from the corresponding author on reasonable request.

Abbasi AZ, Tsiotsou RH, Hussain K, Rather RA, Ting DH (2023) Investigating the impact of social media images’ value, consumer engagement, and involvement on eWOM of a tourism destination: a transmittal mediation approach. J Retail Consum Serv 71:103231. https://doi.org/10.1016/j.jretconser.2022.103231

Article   Google Scholar  

Ajzen I (2002) Perceived behavioral control, self‐efficacy, locus of control, and the theory of planned behavior 1. J Appl Soc Psychol 32(4):665–683. https://doi.org/10.1111/j.1559-1816.2002.tb00236.x

Ajzen I (1991) The theory of planned behavior. Organ Behav Hum Decis Process 50(2):179–211. https://doi.org/10.1016/0749-5978(91)90020-T

Altman I, Taylor DA (1973) Social penetration: the development of interpersonal relationships. Holt, Rinehart & Winston

Anaya-Sánchez R, Aguilar-Illescas R, Molinillo S, Martínez-López FJ (2020) Trust and loyalty in online brand communities. Span J Mark ESIC 24(2):177–191. https://doi.org/10.1108/SJME-01-2020-0004

Astuti BA, Hariyawan A (2021) Perspectives of social capital and self-determination on e-WOM at millennial generation in Yogyakarta. Integr J Bus Econ 5(1):399475. https://doi.org/10.33019/ijbe.v5i1.338

Bao Z, Wang D (2021) Examining consumer participation on brand microblogs in China: perspectives from elaboration likelihood model, commitment–trust theory and social presence. J Res Interact Mark 15(1):10–29. https://doi.org/10.1108/JRIM-02-2019-0027

Barta S, Belanche D, Fernández A, Flavián M (2023) Influencer marketing on TikTok: the effectiveness of humor and followers’ hedonic experience. J Retail Consum Serv 70:103149. https://doi.org/10.1016/j.jretconser.2022.103149

Bond BJ (2016) Following your “friend”: social media and the strength of adolescents’ parasocial relationships with media personae. Cyberpsych Behav Soc Netw 19(11):656–660. https://doi.org/10.1089/cyber.2016.0355

Breves P, Amrehn J, Heidenreich A, Liebers N, Schramm H (2021) Blind trust? The importance and interplay of parasocial relationships and advertising disclosures in explaining influencers’ persuasive effects on their followers. Int J Advert 40(7):1209–1229. https://doi.org/10.1080/02650487.2021.1881237

Brodie RJ, Ilic A, Juric B, Hollebeek L (2013) Consumer engagement in a virtual brand community: an exploratory analysis. J Bus Res 66(1):105–114. https://doi.org/10.1016/j.jbusres.2011.07.029

Buzeta C, De Pelsmacker P, Dens N (2020) Motivations to use different social media types and their impact on consumers’ online brand-related activities (COBRAs). J Interact Mark 52(1):79–98. https://doi.org/10.1016/j.intmar.2020.04.0

Chen KJ, Lin JS, Shan Y (2021) Influencer marketing in China: The roles of parasocial identification, consumer engagement, and inferences of manipulative intent. J Consum Behav 20(6):1436–1448. https://doi.org/10.1002/cb.1945

Chetioui Y, Benlafqih H, Lebdaoui H (2020) How fashion influencers contribute to consumers’ purchase intention. J Fash Mark Manag 24(3):361–380. https://doi.org/10.1108/JFMM-08-2019-0157

Cheung ML, Pires GD, Rosenberger III PJ, De Oliveira MJ (2021) Driving COBRAs: the power of social media marketing. Mark Intell Plan 39(3):361–376. https://doi.org/10.1108/MIP-11-2019-0583

Cheung MY, Luo C, Sia CL, Chen H (2009) Credibility of electronic word-of-mouth: Informational and normative determinants of on-line consumer recommendations. Int J Electron Comm 13(4):9–38. https://doi.org/10.2753/JEC1086-4415130402

Chung S, Cho H (2017) Fostering parasocial relationships with celebrities on social media: Implications for celebrity endorsement. Psychol Mark 34(4):481–495. https://doi.org/10.1002/mar.21001

Chu SC, Choi SM (2011) Electronic word-of-mouth in social networking sites: a cross-cultural study of the United States and China. J Glob Mark 24(3):263–281. https://doi.org/10.1080/08911762.2011.592461

Chu SC, Kim Y (2011) Determinants of consumer engagement in electronic word-of-mouth (eWOM) in social networking sites. Int J Advert 30(1):47–75. https://doi.org/10.2501/IJA-30-1-047-075

Chu TH, Sun M, Crystal Jiang L (2023) Self-disclosure in social media and psychologicalwell-being: a meta-analysis. J Soc Pers Relat 40(2):576–599. https://doi.org/10.1177/02654075221119429

Cropanzano R, Mitchell MS (2005) Social exchange theory: an interdisciplinary review. J Manag 31(6):874–900. https://doi.org/10.1177/0149206305279602

Della Vigna S, Gentzkow M (2010) Persuasion: empirical evidence. Annu Rev Econ 2(1):643–669. https://doi.org/10.1146/annurev.economics.102308.124309

Dijkstra TK, Henseler J (2015) Consistent and asymptotically normal PLS estimators for linear structural equations. Comput Stat Data 81:10–23. https://doi.org/10.1016/j.csda.2014.07.008

Article   MathSciNet   Google Scholar  

Djafarova E, Rushworth C (2017) Exploring the credibility of online celebrities’ Instagram profiles in influencing the purchase decisions of young female users. Comput Hum Behav 68:1–7. https://doi.org/10.1016/j.chb.2016.11.009

D Horton D, Richard Wohl R (1956) Mass communication and para-social interaction: Observations on intimacy at a distance. Psychiatry 19(3):215–229. https://doi.org/10.1080/00332747.1956.11023049

Ducoffe RH (1995) How consumers assess the value of advertising. J Curr Issues Res Adver 17(1):1–18. https://doi.org/10.1080/10641734.1995.10505022

Fornell C, Larcker DF (1981) Structural equation models with unobservable variables and measurement error: Algebra and statistics. J Mark Res 18(3):382–388. https://doi.org/10.1177/002224378101800313

Gefen D, Straub DW, Rigdon EE (2011) An update and extension to SEM guidelines for administrative and social science research. Mis Quart 35(2):iii–xiv. https://doi.org/10.2307/23044042

Geng S, Yang P, Gao Y, Tan Y, Yang C (2021) The effects of ad social and personal relevance on consumer ad engagement on social media: the moderating role of platform trust. Comput Hum Behav 122:106834. https://doi.org/10.1016/j.chb.2021.106834

Giles DC (2002) Parasocial interaction: a review of the literature and a model for future research. Media Psychol 4(3):279–305. https://doi.org/10.1207/S1532785XMEP0403_04

Gräve JF, Bartsch F (2022) # Instafame: exploring the endorsement effectiveness of influencers compared to celebrities. Int J Advert 41(4):591–622. https://doi.org/10.1080/02650487.2021.1987041

Gupta R, Ranjan S, Gupta A (2021) Consumer’s perceived trust and subjective norms as antecedents of mobile wallets adoption and continuance intention: a technology acceptance approach. Recent Adv Technol Accept Models Theor 211–224. https://doi.org/10.1007/978-3-030-64987-6_13

Habibi MR, Laroche M, Richard MO (2014) The roles of brand community and community engagement in building brand trust on social media. Comput Hum Behav 37:152–161. https://doi.org/10.1016/j.chb.2014.04.016

Hagger MS, Chatzisarantis NL (2009) Integrating the theory of planned behaviour and self‐determination theory in health behaviour: a meta‐analysis. Brit J Health Psych 14(2):275–302. https://doi.org/10.1348/135910708X373959

Haida A, Rahim HL (2015) Social media advertising value: A Study on consumer’s perception. Int Acad Res J Bus Technol 1(1):1–8. https://www.researchgate.net/publication/280325676_Social_Media_Advertising_Value_A_Study_on_Consumer%27s_Perception

Google Scholar  

Hair JF (2009) Multivariate data analysis. Prentice Hall, Upper Saddle River

Hair JF, Ringle CM, Gudergan SP, Fischer A, Nitzl C, Menictas C (2019) Partial least squares structural equation modeling-based discrete choice modeling: an illustration in modeling retailer choice. Bus Res 12(1):115–142. https://doi.org/10.1007/s40685-018-0072-4

Hair JF, Sarstedt M, Ringle CM, Mena JA (2012) An assessment of the use of partial least squares structural equation modeling in marketing research. Acad Mark Sci 40:414–433. https://doi.org/10.1007/s11747-011-0261-6

Heirman W, Walrave M, Ponnet K (2013) Predicting adolescents’ disclosure of personal information in exchange for commercial incentives: An application of an extended theory of planned behavior. Cyberpsych Behav Soc Netw16(2):81–87. https://doi.org/10.1089/cyber.2012.0041

Hewei T, Youngsook L (2022) Factors affecting continuous purchase intention of fashion products on social E-commerce: SOR model and the mediating effect. Entertain Comput 41:100474. https://doi.org/10.1016/j.entcom.2021.100474

Hovland CI, Janis IL, Kelley HH (1953) Communication and persuasion. Yale University Press

Hsieh JK, Li YJ (2020) Will you ever trust the review website again? The importance of source credibility. Int J Electron Commerce 24(2):255–275. https://doi.org/10.1080/10864415.2020.1715528

Huang YC (2023) Integrated concepts of the UTAUT and TPB in virtual reality behavioral intention. J Retail Consum Serv 70:103127. https://doi.org/10.1016/j.jretconser.2022.103127

Hudders L, Lou C (2023) The rosy world of influencer marketing? Its bright and dark sides, and future research recommendations. Int J Advert 42(1):151–161. https://doi.org/10.1080/02650487.2022.2137318

Itani OS, Kalra A, Riley J (2022) Complementary effects of CRM and social media on customer co-creation and sales performance in B2B firms: The role of salesperson self-determination needs. Inf Manag 59(3):103621. https://doi.org/10.1016/j.im.2022.103621

Jang W, Kim J, Kim S, Chun JW (2021) The role of engagement in travel influencer marketing: the perspectives of dual process theory and the source credibility model. Curr Issues Tour 24(17):2416–2420. https://doi.org/10.1080/13683500.2020.1845126

Jin SV, Ryu E, Muqaddam A (2021) I trust what she’s# endorsing on Instagram: moderating effects of parasocial interaction and social presence in fashion influencer marketing. J Fash Mark Manag 25(4):665–681. https://doi.org/10.1108/JFMM-04-2020-0059

Kamboj S, Sharma M (2023) Social media adoption behaviour: consumer innovativeness and participation intention. Int J Consum Stud 47(2):523–544. https://doi.org/10.1111/ijcs.12848

Kaushik AK, Rahman Z (2014) Perspectives and dimensions of consumer innovativeness: a literature review and future agenda. J Int Consum Mark 26(3):239–263. https://doi.org/10.1080/08961530.2014.893150

Kelley JB, Alden DL (2016) Online brand community: through the eyes of self-determination theory. Internet Res 26(4):790–808. https://doi.org/10.1108/IntR-01-2015-0017

K Kim DY, Kim HY (2021) Trust me, trust me not: A nuanced view of influencer marketing on social media. J Bus Res 134:223–232. https://doi.org/10.1016/j.jbusres.2021.05.024

Koay KY, Ong DLT, Khoo KL, Yeoh HJ (2020) Perceived social media marketing activities and consumer-based brand equity: Testing a moderated mediation model. Asia Pac J Mark Logist 33(1):53–72. https://doi.org/10.1108/APJML-07-2019-0453

Kumar S, Panda BS (2020) Identifying influential nodes in Social Networks: Neighborhood Coreness based voting approach. Phys A: Stat Mech Appl 553:124215. https://doi.org/10.1016/j.physa.2020.124215

Lee D, Hosanagar K, Nair HS (2018) Advertising content and consumer engagement on social media: evidence from Facebook. Manag Sci 64(11):5105–5131. https://doi.org/10.1287/mnsc.2017.2902

Lee DH, Im S, Taylor CR (2008) Voluntary self‐disclosure of information on the Internet: a multimethod study of the motivations and consequences of disclosing information on blogs. Psychol Mark 25(7):692–710. https://doi.org/10.1002/mar.20232

Lee J, Rajtmajer S, Srivatsavaya E, Wilson S (2023) Online self-disclosure, social support, and user engagement during the COVID-19 pandemic. ACM Trans Soc Comput 6(3-4):1–31. https://doi.org/10.1145/3617654

Lee Y, Lee J, Hwang Y (2015) Relating motivation to information and communication technology acceptance: self-determination theory perspective. Comput Hum Behav 51:418–428. https://doi.org/10.1016/j.chb.2015.05.021

Leite FP, Baptista PDP (2022) The effects of social media influencers’ self-disclosure on behavioral intentions: The role of source credibility, parasocial relationships, and brand trust. J Mark Theory Pr 30(3):295–311. https://doi.org/10.1080/10696679.2021.1935275

Leite FP, Pontes N, de Paula Baptista P (2022) Oops, I’ve overshared! When social media influencers’ self-disclosure damage perceptions of source credibility. Comput Hum Behav 133:107274. https://doi.org/10.1016/j.chb.2022.107274

León SP, Abad MJ, Rosas JM (2009) Giving contexts informative value makes information context-specific. Exp Psychol. https://doi.org/10.1027/1618-3169/a000006

Lou C, Tan SS, Chen X (2019) Investigating consumer engagement with influencer-vs. brand-promoted ads: The roles of source and disclosure. J Interact Advert 19(3):169–186. https://doi.org/10.1080/15252019.2019.1667928

Lou C, Yuan S (2019) Influencer marketing: how message value and credibility affect consumer trust of branded content on social media. J Interact Advert 19(1):58–73. https://doi.org/10.1080/15252019.2018.1533501

Luo M, Hancock JT (2020) Self-disclosure and social media: motivations, mechanisms and psychological well-being. Curr Opin Psychol 31:110–115. https://doi.org/10.1016/j.copsyc.2019.08.019

Article   PubMed   Google Scholar  

Mahmood S, Khwaja MG, Jusoh A (2019) Electronic word of mouth on social media websites: role of social capital theory, self-determination theory, and altruism. Int J Space-Based Situat Comput 9(2):74–89. https://doi.org/10.1504/IJSSC.2019.104217

Majerczak P, Strzelecki A (2022) Trust, media credibility, social ties, and the intention to share towards information verification in an age of fake news. Behav Sci 12(2):51. https://doi.org/10.3390/bs12020051

Article   PubMed   PubMed Central   Google Scholar  

McAllister DJ (1995) Affect-and cognition-based trust as foundations for interpersonal cooperation in organizations. Acad Manag J 38(1):24–59. https://doi.org/10.5465/256727

Mehrabian A, Russell JA (1974). An approach to environmental psychology. The MIT Press

Minton EA (2015) In advertising we trust: Religiosity’s influence on marketplace and relational trust. J Advert 44(4):403–414. https://doi.org/10.1080/00913367.2015.1033572

Moorman C, Deshpande R, Zaltman G (1993) Factors affecting trust in market research relationships. J Mark 57(1):81–101. https://doi.org/10.1177/002224299305700106

Muntinga DG, Moorman M, Smit EG (2011) Introducing COBRAs: Exploring motivations for brand-related social media use. Int J Advert 30(1):13–46. https://doi.org/10.2501/IJA-30-1-013-046

Nadeem W, Tan TM, Tajvidi M, Hajli N (2021) How do experiences enhance brand relationship performance and value co-creation in social commerce? The role of consumer engagement and self brand-connection. Technol Forecast Soc 171:120952. https://doi.org/10.1016/j.techfore.2021.120952

Oestreicher-Singer G, Zalmanson L (2013) Content or community? A digital business strategy for content providers in the social age. MIS Quart 37(2):591–616. https://www.jstor.org/stable/43825924

Okazaki S (2009) Social influence model and electronic word of mouth: PC versus mobile internet. Int J Advert 28(3):439–472. https://doi.org/10.2501/S0265048709200692

Piehler R, Schade M, Kleine-Kalmer B, Burmann C (2019) Consumers’ online brand-related activities (COBRAs) on SNS brand pages: an investigation of consuming, contributing and creating behaviours of SNS brand page followers. Eur J Mark 53(9):1833–1853. https://doi.org/10.1108/EJM-10-2017-0722

Podsakoff PM, MacKenzie SB, Lee JY, Podsakoff NP (2003) Common method biases in behavioral research: a critical review of the literature and recommended remedies. J Appl Psychol 88(5):879. https://doi.org/10.1037/0021-9010.88.5.879

Pop RA, Săplăcan Z, Dabija DC, Alt MA (2022) The impact of social media influencers on travel decisions: The role of trust in consumer decision journey. Curr Issues Tour 25(5):823–843. https://doi.org/10.1080/13683500.2021.1895729

Pradhan B, Kishore K, Gokhale N (2023) Social media influencers and consumer engagement: a review and future research agenda. Int J Consum Stud 47(6):2106–2130. https://doi.org/10.1111/ijcs.12901

Qiu A, Chen M (2018) 基于UTAUT修正模型的微信朋友圈广告接受意愿分析 [Analysis of WeChat moments advertising acceptance intention based on a modified UTAUT model]. Stat Decis 34(12):99–102. https://doi.org/10.13546/j.cnki.tjyjc.2018.12.024

Qiu L, Kumar S (2017) Understanding voluntary knowledge provision and content contribution through a social-media-based prediction market: a field experiment. Inf Syst Res 28(3):529–546. https://doi.org/10.1287/isre.2016.0679

Racherla P, Mandviwalla M, Connolly DJ (2012) Factors affecting consumers’ trust in online product reviews. J Consum Behav 11(2):94–104. https://doi.org/10.1002/cb.385

Ranjbarian B, Gharibpoor M, Lari A (2012) Attitude toward SMS advertising and derived behavioral intension, an empirical study using TPB (SEM method). J Am Sci 8(7):297–307. https://www.ceeol.com/search/article-detail?id=466212

Robertshaw GS, Marr NE (2006) The implications of incomplete and spurious personal information disclosures for direct marketing practice. J Database Mark Custom Strategy Manag. 13:186–197. https://doi.org/10.1057/palgrave.dbm.3240296

Roh T, Seok J, Kim Y (2022) Unveiling ways to reach organic purchase: Green perceived value, perceived knowledge, attitude, subjective norm, and trust. J Retail Consum Serv 67:102988. https://doi.org/10.1016/j.jretconser.2022.102988

Schivinski B, Christodoulides G, Dabrowski D (2016) Measuring consumers’ engagement with brand-related social-media content: Development and validation of a scale that identifies levels of social-media engagement with brands. J Advert Res 56(1):64–80. https://doi.org/10.2501/JAR-2016-004

Schouten AP, Janssen L, Verspaget M (2021) Celebrity vs. Influencer endorsements in advertising: the role of identification, credibility, and product-endorser fit. Leveraged marketing communications, Routledge. pp. 208–231

Schramm H, Hartmann T (2008) The PSI-Process Scales. A new measure to assess the intensity and breadth of parasocial processes. Communications. https://doi.org/10.1515/COMM.2008.025

Shan Y, Chen KJ, Lin JS (2020) When social media influencers endorse brands: the effects of self-influencer congruence, parasocial identification, and perceived endorser motive. Int J Advert 39(5):590–610. https://doi.org/10.1080/02650487.2019.1678322

Shi Y (2018) The impact of consumer innovativeness on the intention of clicking on SNS advertising. Mod Econ 9(2):278–285. https://doi.org/10.4236/me.2018.92018

Article   CAS   Google Scholar  

Simon F, Tossan V (2018) Does brand-consumer social sharing matter? A relational framework of customer engagement to brand-hosted social media. J Bus Res 85:175–184. https://doi.org/10.1016/j.jbusres.2017.12.050

Steinhoff L, Arli D, Weaven S, Kozlenkova IV (2019) Online relationship marketing. J Acad Mark Sci 47:369–393. https://doi.org/10.1007/s11747-018-0621-6

Stutzman F, Capra R, Thompson J (2011) Factors mediating disclosure in social network sites. Comput Hum Behav 27(1):590–598. https://doi.org/10.1016/j.chb.2010.10.017

Sun T, Youn S, Wu G, Kuntaraporn M (2006) Online word-of-mouth (or mouse): An exploration of its antecedents and consequences. J Comput-Mediat Comm 11(4):1104–1127. https://doi.org/10.1111/j.1083-6101.2006.00310.x

Sweet KS, LeBlanc JK, Stough LM, Sweany NW (2020) Community building and knowledge sharing by individuals with disabilities using social media. J Comput Assist Lear 36(1):1–11. https://doi.org/10.1111/jcal.12377

Tak P, Gupta M (2021) Examining travel mobile app attributes and its impact on consumer engagement: An application of SOR framework. J Internet Commer 20(3):293–318. https://doi.org/10.1080/15332861.2021.1891517

Towner E, Grint J, Levy T, Blakemore SJ, Tomova L (2022) Revealing the self in a digital world: a systematic review of adolescent online and offline self-disclosure. Curr Opin Psychol 45:101309. https://doi.org/10.1016/j.copsyc.2022.101309

Vander Schee BA, Peltier J, Dahl AJ (2020) Antecedent consumer factors, consequential branding outcomes and measures of online consumer engagement: current research and future directions. J Res Interact Mark 14(2):239–268. https://doi.org/10.1108/JRIM-01-2020-0010

Van-Tien Dao W, Nhat Hanh Le A, Ming-Sung Cheng J, Chao Chen D (2014) Social media advertising value: The case of transitional economies in Southeast Asia. Int J Advert 33(2):271–294. https://doi.org/10.2501/IJA-33-2-271-294

Viswanathan V, Hollebeek LD, Malthouse EC, Maslowska E, Jung Kim S, Xie W (2017) The dynamics of consumer engagement with mobile technologies. Serv Sci 9(1):36–49. https://doi.org/10.1287/serv.2016.0161

Voss KE, Spangenberg ER, Grohmann B (2003) Measuring the hedonic and utilitarian dimensions of consumer attitude. J Mark Res 40(3):310–320. https://doi.org/10.1509/jmkr.40.3.310.19238

Vrontis D, Makrides A, Christofi M, Thrassou A (2021) Social media influencer marketing: A systematic review, integrative framework and future research agenda. Int J Consum Stud 45(4):617–644. https://doi.org/10.1111/ijcs.12647

Wang T, Yeh RKJ, Chen C, Tsydypov Z (2016) What drives electronic word-of-mouth on social networking sites? Perspectives of social capital and self-determination. Telemat Inf 33(4):1034–1047. https://doi.org/10.1016/j.tele.2016.03.005

Watson JB (1917) An Attempted formulation of the scope of behavior psychology. Psychol Rev 24(5):329. https://doi.org/10.1037/h0073044

Wehmeyer ML (1999) A functional model of self-determination: Describing development and implementing instruction. Focus Autism Dev Dis 14(1):53–61. https://www.imdetermined.org/wp-content/uploads/2018/06/SD5_A-Functional-Model-of.pdf

Wei X, Chen H, Ramirez A, Jeon Y, Sun Y (2022) Influencers as endorsers and followers as consumers: exploring the role of parasocial relationship, congruence, and followers’ identifications on consumer–brand engagement. J Interact Advert 22(3):269–288. https://doi.org/10.1080/15252019.2022.2116963

Wirth J, Maier C, Laumer S (2019) Subjective norm and the privacy calculus: explaining self-disclosure on social networking sites. Paper presented at the 27th European Conference on Information Systems (ECIS). Stockholm & Uppsala, Sweden, 8–14, June 2019 https://aisel.aisnet.org/ecis2019_rp

Xiao L, Li X, Zhang Y (2023) Exploring the factors influencing consumer engagement behavior regarding short-form video advertising: a big data perspective. J Retail Consum Serv 70:103170. https://doi.org/10.1016/j.jretconser.2022.103170

Yang J, Peng MYP, Wong S, Chong W (2021) How E-learning environmental stimuli influence determinates of learning engagement in the context of COVID-19? SOR model perspective. Front Psychol 12:584976. https://doi.org/10.3389/fpsyg.2021.584976

Yang K, Jolly LD (2009) The effects of consumer perceived value and subjective norm on mobile data service adoption between American and Korean consumers. J Retail Consum Serv 16(6):502–508. https://doi.org/10.1016/j.jretconser.2009.08.005

Yang S, Zhou S, Cheng X (2019) Why do college students continue to use mobile learning? Learning involvement and self‐determination theory. Brit J Educ Technol 50(2):626–637. https://doi.org/10.1111/bjet.12634

Yusuf AS, Busalim AH (2018) Influence of e-WOM engagement on consumer purchase intention in social commerce. J Serv Mark 32(4):493–504. https://doi.org/10.1108/JSM-01-2017-0031

Zhang G, Yue X, Ye Y, Peng MYP (2021) Understanding the impact of the psychological cognitive process on student learning satisfaction: combination of the social cognitive career theory and SOR model. Front Psychol 12:712323. https://doi.org/10.3389/fpsyg.2021.712323

Zhang J, Liu J, Zhong W (2019) 广告精准度与广告效果:基于隐私关注的现场实验 [Ad targeting accuracy and advertising effectiveness: a field experiment based on privacy concerns]. Manag Sci 32(06):123–132

CAS   Google Scholar  

Download references

Acknowledgements

The authors thank all the participants of this study. The participants were all informed about the purpose and content of the study and voluntarily agreed to participate. The participants were able to stop participating at any time without penalty. Funding for this study was provided by Minjiang University Research Start-up Funds (No. 324-32404314).

Author information

Authors and affiliations.

School of Journalism and Communication, Minjiang University, Fuzhou, China

School of Journalism and Communication, Shanghai University, Shanghai, China

Qiuting Duan

You can also search for this author in PubMed   Google Scholar

Contributions

Conceptualization: CG; methodology: CG and QD; software: CG and QD; validation: CG; formal analysis: CG and QD; investigation: CG and QD; resources: CG; data curation: CG and QD; writing—original draft preparation: CG; writing—review and editing: CG; visualization: CG; project administration: CG. All authors have read and agreed to the published version of the manuscript.

Corresponding author

Correspondence to Chenyu Gu .

Ethics declarations

Competing interests.

The authors declare no competing interests.

Ethical approval

The questionnaire and methodology for this study were approved by the School of Journalism and Communication, Minjiang University, Committee on Ethical Research (No. MJUCER20230621). The procedures used in this study adhere to the tenets of the Declaration of Helsinki.

Informed consent

Informed consent was obtained from all participants and/or their legal guardians.

Additional information

Publisher’s note Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Supplementary information

Rights and permissions.

Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/ .

Reprints and permissions

About this article

Cite this article.

Gu, C., Duan, Q. Exploring the dynamics of consumer engagement in social media influencer marketing: from the self-determination theory perspective. Humanit Soc Sci Commun 11 , 587 (2024). https://doi.org/10.1057/s41599-024-03127-w

Download citation

Received : 17 December 2023

Accepted : 23 April 2024

Published : 08 May 2024

DOI : https://doi.org/10.1057/s41599-024-03127-w

Share this article

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

Quick links

• Explore articles by subject
• Guide to authors
• Editorial policies

Click through the PLOS taxonomy to find articles in your field.

For more information about PLOS Subject Areas, click here .

Loading metrics

Open Access

Peer-reviewed

Research Article

Research on the mechanism of consumer participation in value co-creation by innovative enterprises: An evolutionary game analysis framework

Roles Writing – original draft

* E-mail: [email protected]

Affiliation International School, Malaysia University Business School of Mahsa, Selangor, Malaysia

• Published: May 15, 2024
• https://doi.org/10.1371/journal.pone.0297475
• Reader Comments

The profound changes brought about by informatization and digitalization have given rise to the user-centered innovation concept, and value co-creation by enterprises has become an inevitable trend. It has become a pressing issue for scholars to analyze the mechanism of consumer participation in the value co-creation of innovative enterprises. In this paper, by establishing an evolutionary game model between consumers and innovative enterprises, we analyze in depth the mechanism of consumer participation in the value co-creation of innovative enterprises. The results show that the initial cooperation probability between consumers and innovative enterprises directly affects their strategic choices; the establishment of reward mechanisms makes consumers more inclined to choose active participation in value co-creation strategies; as the probability of non-cooperation between the two parties being reported increases, the probability of consumers and innovative enterprises choosing cooperation also increases. Studying the mechanism of consumer participation in the value co-creation of innovative enterprises has essential theoretical and practical significance for enterprises to achieve value creation, enhance competitiveness, and promote innovation. This study not only enriches and develops relevant theories but also provides guidance and support for the practice of enterprises, promoting sustainable development and successful co-creation.

Citation: Liu Y (2024) Research on the mechanism of consumer participation in value co-creation by innovative enterprises: An evolutionary game analysis framework. PLoS ONE 19(5): e0297475. https://doi.org/10.1371/journal.pone.0297475

Editor: Minyu Feng, Southwest University, CHINA

Received: October 31, 2023; Accepted: January 6, 2024; Published: May 15, 2024

This is an open access article, free of all copyright, and may be freely reproduced, distributed, transmitted, modified, built upon, or otherwise used by anyone for any lawful purpose. The work is made available under the Creative Commons CC0 public domain dedication.

Data Availability: All relevant data are within the manuscript and its Supporting information files.

Funding: The author(s) received no specific funding for this work.

Competing interests: The authors have declared that no competing interests exist.

1. Introduction

Under the background of globalization, digitalization, and social transformation, the business environment faced by enterprises has become increasingly complex and dynamic. On one hand, the development of information and digital technology has imposed stricter requirements on the development of enterprises. Traditional business models and modes can no longer meet the needs of the times. On the other hand, stakeholders’ influence and power over enterprises, including consumers, employees, shareholders, government, social organizations, suppliers, and others, have been enhanced. Among stakeholders, consumers hold a pivotal position. With increased power and decision-making autonomy in purchasing, consumers are no longer passive participants but have become vital forces actively involved in and influencing enterprise decisions.

Currently, value co-creation can be broadly categorized into two main theories. One is the experiential value co-creation theory based on consumer experience, which suggests that through interactions with consumers, enterprises can create personalized experiences [ 1 ]. The other is the service-dominant logic of value co-creation, which argues that value is co-created through the collaboration and interaction of multiple stakeholders, including employees, consumers, and enterprises. Stakeholders contribute their knowledge and skills to the value-creation process of enterprises, thus achieving value-creation [ 2 , 3 ]. Both of these theories indicate the vital role consumers play in transitioning from a product-dominant logic to a consumer experience logic and a service-dominant logic. The relationship between consumers and enterprises is a co-creative one aimed at achieving value co-creation, stimulating product and service innovation, and ultimately gaining competitive advantage [ 4 , 5 ]. Therefore, enterprises must actively collaborate with stakeholders, especially consumers, to engage in value co-creation and jointly tackle the challenges and opportunities brought about by societal changes.

Consumers are critical actors in the value-creation ecosystem. Consumers contribute significantly through effective interactions as co-creators of value for enterprises [ 1 , 6 ]. The rise of internet services and social media has provided a favorable platform and channel for consumer participation in value creation for enterprises [ 7 , 8 ]. Consumers can co-create value with enterprises through online and offline channels [ 9 , 10 ]. Enterprises can improve their products and services online by considering consumer reviews and feedback [ 11 ]. In offline channels, enterprises provide opportunities for consumers to experience their products and services. This experiential engagement positively influences consumer participation in value co-creation and enhances brand loyalty and satisfaction [ 12 , 13 ]. Furthermore, enhancing enterprises’ brand value also contributes to consumer participation in value co-creation [ 14 ]. It is important to note that whether in online or offline channels, paying attention to differentiated consumer demands is essential for value co-creation by enterprises [ 15 ].

In value co-creation with consumers, enterprises must focus on guiding consumer psychology. Understanding consumer needs from dimensions such as psychological ownership, self-identity, and spatial requirements can enhance consumer brand loyalty and ultimately improve the competitiveness of enterprises through value co-creation [ 16 ].

However, it is undeniable that many factors still hinder consumer participation in value co-creation with enterprises. On the one hand, the asymmetry and inapplicability of resources and information between consumers and enterprises lead to a lower willingness of consumers to participate in value co-creation [ 17 , 18 ]. On the other hand, the lack of consumer expertise results in lower contribution capabilities in the value co-creation process [ 19 ]. Additionally, consumer consumption inertia, perceived complexity, perceived risk, and perceived justice can also become critical barriers that hinder consumer participation in value co-creation [ 20 ].

Evolutionary game theory mainly studies the dynamic process of subject evolution over time, which is different from traditional game theory’s complete rationality and static analysis. Based on bounded rationality, evolutionary game theory is a dynamic game theory. Due to its ability to help understand and explain the evolution and change of individual and group behavior, as well as the interaction and results of inter-group games, evolutionary game theory has been widely applied in fields such as biology, economics, management, and social behavior.

For instance, evolutionary game theory is used in biology to predict social behavior and other characteristics that influence individual interaction patterns and to analyze the social dominance hierarchy of group-living animals by combining evolutionary game theory with behavioral mechanisms [ 21 ].

In economics, scholars have utilized a combination of epidemiological models and behavioral dynamics concepts from evolutionary game theory to analyze the gradual weakening of compliance with economic shutdowns over time and the development of shield immunity during the COVID-19 pandemic [ 22 ]. Additionally, researchers have employed evolutionary game theory models to analyze the issue of data openness in the digital economy, focusing on critical actors such as data providers, users, and regulatory agencies [ 23 ].

In management, scholars have used evolutionary game theory to study reputation management in the Internet of Vehicles (IoV) [ 24 ]. Evolutionary game models have also been employed to analyze group decision-making in signed social networks, specifically examining the dynamics between selfish and collectivist agents [ 25 ].

In the field of social behavior, scholars have utilized reputation mechanisms and Markov process-based individual game transitions to describe changes in individual psychology [ 26 ]. Evolutionary multigame models combined with dynamic complex networks have been employed to analyze and predict group decision-making behavior in interactive environments [ 27 ]. Furthermore, the application of evolutionary game theory has been explored in constructing centralized exclusionary institutions as global exclusion models and analyzing their potential impacts on the replicator dynamics of public goods games [ 28 ]. Additionally, numerous reviews have highlighted the wide-ranging applications of evolutionary game theory in both natural and social sciences [ 29 ].

Although the literature above analyzes consumer participation in value co-creation with enterprises, some limitations remain. Firstly, current research mainly relies on qualitative and case analysis methods to analyze the process of consumer participation in value co-creation with enterprises. Secondly, the above studies should have considered the issue of consumer strategic choices in the analysis of consumer participation in value co-creation with enterprises. Thirdly, current research has yet to analyze the path changes in consumer participation in value co-creation with enterprises. In comparison to existing literature on value co-creation in innovative enterprises, this study makes several contributions in the following aspects:

• Currently, scholars mainly rely on case studies and qualitative descriptions to research value co-creation in innovative enterprises, with few scholars conducting in-depth analyses using empirical methods or mathematical models. This study takes consumers and innovative enterprises as the game participants. It conducts a comprehensive mathematical analysis of consumer participation in value co-creation with innovative enterprises by establishing an evolutionary game model.
• In analyzing the process of consumer participation in value co-creation with innovative enterprises, this study considers the issue of consumer strategic choices, which breaks the existing research paradigm of value co-creation in innovative enterprises. It expands the research boundaries and enriches the research content of value co-creation in innovative enterprises.
• After using the evolutionary game model to analyze the process of consumer participation in value co-creation with innovative enterprises, this study further simulates and analyzes the evolutionary path of consumer participation in value co-creation with innovative enterprises using Matlab. It also investigates the impact of parameter changes on value co-creation in innovative enterprises.

The remaining structure of this article is arranged as follows: Part 2 analyzes the underlying mechanisms of consumer participation in value co-creation with innovative enterprises. Part 3 proposes research hypotheses for consumer participation in value co-creation with innovative enterprises. Part 4 establishes an evolutionary game model with consumers and innovative enterprises as the primary entities. Part 5 uses Matlab to simulate the evolutionary path of consumer participation in value co-creation with innovative enterprises. Part 6 presents the conclusions and discussions of this study.

2. Analysis of mechanisms

With the rapid development of information technology, represented by digital technology, innovative enterprises must continuously update their technology and business models to adapt to technological advancements. Engaging in value co-creation enables enterprises to leverage new technologies better and provide more advanced products and services to meet consumer needs. Consumer participation in value co-creation with innovative enterprises benefits both parties. On one hand, it enhances consumer trust and loyalty towards the enterprise. On the other hand, it provides the enterprise with diverse, innovative ideas and creativity. Consumers can contribute novel insights and perspectives, challenging the existing mindset of the enterprise and driving innovation and improvement in products and services. Consumer participation also helps enterprises better identify product quality issues and provides directions and opinions for improvement. Fig 1 depicts the logic and mechanisms of consumer participation in value co-creation with innovative enterprises.

• PPT PowerPoint slide
• PNG larger image
• TIFF original image

https://doi.org/10.1371/journal.pone.0297475.g001

From Fig 1 , it can be observed that when consumers participate in the value co-creation process with innovative enterprises, they go through the following specific stages. The first stage is feedback on consumer needs. Through consumer communication and feedback, innovative enterprises can better understand market demands, make timely adjustments to their products or services, and enhance their competitiveness. The second stage is consumer involvement in innovation. As participants in the innovation process, consumers can provide new ideas and insights, fostering innovation and development within the enterprise. Innovative enterprises attract consumer participation through innovation and social activities, collaborating to create value. The third stage is consumer word-of-mouth promotion. As loyal users of the enterprise, consumers can promote the products and services to others through word-of-mouth, helping expand the market. The innovative enterprise earns consumer trust and support by delivering high-quality products and services, thus driving its growth.

Behind the mechanisms of consumer participation in value co-creation with innovative enterprises, the enterprise must establish an open, transparent, and interactive cultural atmosphere that encourages consumer involvement in innovation and value co-creation. The enterprise must also establish corresponding participation platforms and tools that enable consumers to interact and engage efficiently. By collaborating with consumers, the enterprise can better meet market demands, increase the success rate of innovation, and enhance market competitiveness.

3. Model Hypothesis

The involvement of consumers in co-creating value with innovative enterprises has been a topic of significant academic interest. As one of the most important stakeholders in this process, consumers are critical in co-creating value with innovative enterprises. In order to further analyze the underlying mechanisms of consumer participation in value co-creation with innovative enterprises, as well as the strategic choices made by both parties, this paper proposes the following hypotheses.

• Hypothesis 1: In the value co-creation process of innovative enterprises, this study assumes the presence of only two game entities. On the one hand, there is the innovative enterprise, which serves as the primary carrier of value co-creation and acts as a central force in the value co-creation process. On the other hand, there are the consumers, who are the primary participants in value co-creation with the innovative enterprise and play a crucial role in enterprise value co-creation.
• Hypothesis 2: Although innovative enterprises ( E ) and consumers ( C ) are essential participants in value co-creation, both parties are characterized by bounded rationality. Due to differences in cognitive abilities, information acquisition, time constraints, and experience, innovative enterprises ( E ) and consumers ( C ) cannot make optimal decisions based on unlimited information and analysis. Instead, they have to make decisions based on limited time and information. Moreover, the decision-making process of both parties is also influenced by factors such as emotions, biases, habits, and risk aversion when making choices within limited information. Therefore, innovative enterprises ( E ) and consumers ( C ) seek to maximize their interests in the game process. They also adjust their strategies based on changes in their benefits and the strategies of the other party in order to achieve maximum self-interest.
• Hypothesis 3: To simplify the subsequent analysis, this study assumes that the innovative enterprise ( E ) has only two strategies in the game process. One strategy is active value co-creation, while the other is passive. Therefore, the strategy space of the innovative enterprise ( E ) can be represented as = (active value co-creation, passive value co-creation). Simultaneously, it is assumed that the consumers () have only two strategies. One strategy is active participation in value co-creation, while the other is passive participation. The strategy space of the consumers ( C ) can be represented as = (active participation in value co-creation, passive participation in value co-creation). Additionally, it is assumed that the innovative enterprise ( E ) has a probability of choosing the active value co-creation strategy as x and a probability of choosing the passive value co-creation strategy as 1 − x . Furthermore, it is assumed that the consumers ( C ) have a probability of choosing active participation in the value co-creation strategy as y and a probability of choosing passive participation in the value co-creation strategy as 1 − y . Both x and y are probabilistic variables and x , y ∈ [0,1]. Additionally, both variables are functions of time t .
• Hypothesis 4: When the innovative enterprise chooses the active value co-creation strategy, it invests significant human, material, and financial resources—for example, research and development costs. Innovative enterprises need to invest resources in research and development to create new products or enhance the value of existing products. This may involve costs such as human resources for research and development teams, equipment, and technology inputs. Communication and coordination costs. When engaging in value co-creation with consumers, innovative entrepreneurs need to engage in more communication and coordination efforts. This may include communicating with consumers, gathering feedback, addressing questions, coordinating needs and expectations, etc. These communication and coordination efforts require time, workforce, and resource investments. Let us assume the cost of these activities as c E 1 . Similarly, when the innovative enterprise chooses the passive value co-creation strategy, it incurs certain costs. For instance, if the innovative enterprise fails to listen to consumers’ feedback and address their issues, it may negatively impact the enterprise’s reputation. This may result in customer attrition due to product and service problems. Let us assume the cost of this scenario as c E 2 . Innovative enterprises obtain additional benefits when they successfully engage in value co-creation. For instance, consumer loyalty increases. Innovative entrepreneurs can establish deeper relationships and enhance consumer loyalty through proactive interactions and consumer participation—product and service improvements. Innovative entrepreneurs better understand consumer needs and preferences by involving consumers in the innovation and improvement of products and services. The feedback and suggestions consumers provide during the co-creation process can help identify shortcomings in products and services and drive corresponding improvements. Let us assume the value of these additional benefits is denoted as R E 1 .
• Hypothesis 5: When consumers choose active participation in a value co-creation strategy, they incur certain costs. For example, time costs. Consumers actively participating in value co-creation strategies may require more time to engage in activities, provide feedback and suggestions, communicate and collaborate with the firm, etc. These time costs may consume consumers’ leisure time or working hours—energy costs. Participating in value co-creation strategies requires consumers to invest more energy in thinking and providing valuable opinions, participating in discussions and feedback, and so on. This may require them to gain a deeper understanding of the product and the market, research and analyze relevant issues, and engage in continuous learning and reflection. Let us assume the cost of these activities as c C .

Moreover, when consumers actively participate in value co-creation strategies, they are rewarded with economic incentives. By providing valuable feedback, suggestions, and opinions, consumers actively contribute to improving products and services. In recognition of their participation, firms may provide economic incentives to these contributors, such as coupons, discounts, or gift cards. Let us assume the value of these incentives is denoted as ω .

Consumers may face certain losses when they passively participate in value co-creation strategies. For instance, consumers may need more personalized customized products or services. If consumers opt for passive participation, they may not be able to enjoy tailored products or services, instead having to settle for generic offerings that may only partially meet their needs. Consumers may also miss opportunities for interaction and engagement with innovative firms. By choosing passive participation, they may forego these opportunities for interaction and engagement, thereby missing the chance to contribute their creativity and insights. Additionally, consumers may miss out on opportunities for interaction and sharing with other consumers. In value co-creation, consumers can interact and communicate with each other through sharing experiences, recommending products, and more. This interaction and sharing can help consumers gain more information and knowledge, enabling them to make more informed decisions. By opting for passive participation, consumers may miss out on these opportunities for interaction and sharing, potentially needing more information and knowledge to make fully informed decisions. Let us assume the value of these losses is denoted as f .

The probability of both parties being detected as non-cooperative and reported is represented as η . Reporting non-cooperative behavior can prompt both parties in a game to reassess their actions and strengthen adherence to cooperative norms. Reporting can serve as a warning and deterrent, making participants realize the adverse consequences of non-cooperative behavior, guiding them to comply with cooperative rules, and ultimately achieving value co-creation. However, the success of reporting depends on several factors, such as the rigor of regulatory agencies, the number of reporters, and the effectiveness of the reporting system. Therefore, let us denote the probability of successful reporting as η .

• Hypothesis 6: Even if consumers and innovative enterprises choose not to participate in the value co-creation game, both parties still receive fundamental benefits. Let us assume that the fundamental benefit for the innovative enterprise is denoted as R E , and the consumer’s fundamental benefit is denoted as R C .

Table 1 shows the variable parameters and their meanings for consumers and innovative enterprises, with detailed content in Table 1 .

https://doi.org/10.1371/journal.pone.0297475.t001

The payoff matrix for the evolutionary game between consumers and innovative enterprises can be presented based on the above assumptions. For detailed information, please refer to Table 2 .

https://doi.org/10.1371/journal.pone.0297475.t002

4. Analysis of the co-creation of value between innovative enterprises and consumers

4.1 model establishment and solution.

Based on the principle of Malthusian dynamic equations and formulas ( 1 )–( 6 ), the replicator dynamic equations for consumers and innovative enterprises can be derived. The specific formulas are shown as ( 7 ) and ( 8 ).

A two-dimensional dynamical system can be constructed based on the replicator dynamic equations for consumers and innovative enterprises. By solving Eqs ( 7 ) and ( 8 ), the equilibrium points of the two-dimensional dynamical system can be obtained. After solving the replicator dynamic equations, the equilibrium point obtained is denoted as E 1 (0,0), E 2 (1,0), E 3 (0,1), E 4 (1,1), E 5 ( x *, y *).

4.2 Stability analysis

Based on Eq (9) and the replicator dynamics equations of consumers and innovative firms, the Jacobian matrix of the game system can be calculated as shown in Eq (10) .

To facilitate further analysis, it is necessary to calculate the determinant(det J e ) and trace( trJ e ) of the aforementioned Jacobian matrix. The specific expressions are given by Eqs ( 11 ) and ( 12 ).

In order to calculate the eigenvalues of the Jacobian matrix, it is necessary to substitute the equilibrium points obtained from solving the replicator dynamic equations into the Jacobian matrix. The specific details are described in Table 3 .

https://doi.org/10.1371/journal.pone.0297475.t003

Due to the complexity and difficulty in determining the eigenvalues of equilibrium point E 5 ( x *, y *) from its formula, this article only analyzes equilibrium points E 1 − E 4 . It determines the stability of the equilibrium point based on the signs of the determinant (det J e ) and trace ( trJ e ). Since it is difficult to determine the sign of the eigenvalues, it is necessary to analyze different cases. The specific analysis is shown below.

Scenario 1: When (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 > 0 and (1 − η ) R E + ηc E 2 − c E 1 > 0, the sign of the eigenvalues can be determined. Based on the sign of the eigenvalues, the sign of the determinant (det J e ) and trace ( trJ e ) can be determined, and the stability of the equilibrium point can be obtained. Please refer to Table 4 for specific details.

Scenario 2: When (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 > 0 and (1 − η ) R E + ηc E 2 − c E 1 < 0, the sign of the eigenvalues can be determined, and based on the sign of the eigenvalues, the sign of the determinant (det J e ) and trace ( trJ e ) can be determined, which allows for the determination of the stability of the equilibrium point. Please refer to Table 4 for specific details.

Scenario 3: When (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 < 0 and (1 − η ) R E + ηc E 2 − c E 1 > 0, the sign of the eigenvalues can be determined, and based on the sign of the eigenvalues, the sign of the determinant (det J e ) and trace ( trJ e ) can be determined, which allows for the determination of the stability of the equilibrium point. Please refer to Table 4 for specific details.

Scenario 4: When (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 < 0 and (1 − η ) R E + ηc E 2 − c E 1 < 0, the sign of the eigenvalues can be determined, and based on the sign of the eigenvalues, the sign of the determinant (det J e ) and trace ( trJ e ) can be determined, which allows for the determination of the stability of the equilibrium point. Please refer to Table 4 for specific details.

https://doi.org/10.1371/journal.pone.0297475.t004

Table 4 shows that in scenario 1, When (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 > 0 and (1 − η ) R E + ηc E 2 − c E 1 > 0, the game system converges to E 4 (1,1). In this case, consumers are more inclined to choose active participation in the value co-creation strategy. At the same time, the innovative enterprise is also more inclined to choose the active value co-creation strategy. In scenario 2, the game system converges to E 3 (0,1) when (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 > 0 and (1 − η ) R E + ηc E 2 − c E 1 < 0. Consumers are inclined to choose active participation in the value co-creation strategy, while the innovative enterprise chooses the passive value co-creation strategy. In scenario 3, When (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 < 0 and (1 − η ) R E + ηc E 2 − c E 1 > 0, the game system converges to E 4 (1,1). In this case, consumers are more inclined to choose active participation in a value co-creation strategy. The innovative enterprise is also more inclined to choose the active value co-creation strategy. In scenario 4, the game system converges to E 3 (0,1) when (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 < 0 and (1 − η ) R E + ηc E 2 − c E 1 < 0. In this case, consumers are inclined to choose active participation in the value co-creation strategy, while the innovative enterprise is inclined to choose the passive value co-creation strategy. Please refer to Table 4 for more details.

In addition, it is necessary to explain why the equilibrium points do not converge to E 1 (0,0) and E 2 (1,0). Converting equilibrium points to a specific value requires fulfilling certain conditions: det J e > 0 and trJ e < 0. Based on the previous assumptions and the eigenvalues of the Jacobian matrix in Table 3 , it is impossible to determine the signs of (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 and (1 − η ) R E + ηc E 2 − c E 1 in the eigenvalues. Therefore, discussing the positive or negative nature of these two eigenvalues in different scenarios is necessary. In all four scenarios mentioned above, regardless of the signs of (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 and (1 − η ) R E + ηc E 2 − c E 1 , it is observed that neither E 1 (0,0) nor E 2 (1,0) satisfies the conditions det J e > 0 and trJ e < 0. Therefore, the equilibrium points will not converge to E 1 (0,0) and E 2 (1,0). The eigenvalues X and Y corresponding to point E 5 ( x *, y *) are purely imaginary roots. According to the literature lemma and theorem[ 30 , 31 ], it is known that point E 5 ( x *, y *) is a stable equilibrium point but not asymptotically stable. The system’s trajectory will form a closed-loop motion around E 5 ( x *, y *). Therefore, the equilibrium points of the system will not converge to E 5 ( x *, y *).

5. Evolutionary simulation study

Section 4 uses an evolutionary game model to analyze the intrinsic mechanism of consumer participation in value co-creation with innovative enterprises. In this section, numerical simulation analysis of the above results is conducted using Matlab, and the effects of various parameter changes on the evolution path of both sides of the game are further analyzed. The specific analysis is shown below.

5.1 Simulation analysis of game results

(1) When (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 > 0 and (1 − η ) R E + ηc E 2 − c E 1 > 0 hold, the parameters are set as indicated in the second row of Table 5 . When (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 > 0 and (1 − η ) R E + ηc E 2 − c E 1 < 0 hold, the parameters are set as indicated in the third row of Table 5 . When (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 < 0 and (1 − η ) R E + ηc E 2 − c E 1 > 0 hold, the parameters are set as indicated in the fourth row of Table 5 . When (1 − 2 η ) R E + (1 − η ) R E 1 + 2 ηc E 2 − c E 1 < 0 and (1 − η ) R E + ηc E 2 − c E 1 < 0 hold, the parameters are set as indicated in the fifth row of Table 5 . For specific details, please refer to Table 5 .

https://doi.org/10.1371/journal.pone.0297475.t005

Under the parameter settings for Scenario 1, the game system will converge to point E 4 (1,1). At this point, consumers are more likely to choose a proactive value co-creation strategy, and innovation-oriented enterprises are also more likely to choose to engage in value co-creation proactively. See Fig 2 for more details. Under the parameter settings for Scenario 2, the game system will converge to point E 3 (0,1). At this point, consumers tend to choose a proactive value co-creation strategy, while innovation-oriented enterprises tend to choose a passive value co-creation strategy. See Fig 3 for more details. Under the parameter settings for Scenario 3, the game system will converge to point E 4 (1,1). At this point, consumers are more likely to choose a proactive value co-creation strategy, and innovation-oriented enterprises are also more likely to choose to engage in value co-creation proactively. See Fig 4 for more details. Under the parameter settings for Scenario 4, the game system will converge to point E 3 (0,1). At this point, consumers tend to choose a proactive value co-creation strategy. In contrast, innovation-oriented enterprises tend to choose a passive value co-creation strategy. See Fig 5 for more details.

https://doi.org/10.1371/journal.pone.0297475.g002

https://doi.org/10.1371/journal.pone.0297475.g003

https://doi.org/10.1371/journal.pone.0297475.g004

https://doi.org/10.1371/journal.pone.0297475.g005

5.2 Simulation analysis of parameter variation

Numerical simulation analysis was performed using Matlab to analyze further the impact of parameter variations on the evolutionary paths of both players in the game. Please refer to the following sections for detailed information.

• (1) Variation in Initial Cooperation Probability

The initial cooperation probability of innovative enterprises influences their willingness to cooperate. Fig 6 illustrates the change in cooperation willingness with an increase in the initial cooperation probability of innovative enterprises while keeping other conditions constant. From Fig 6 , it can be observed that, under unchanged conditions, as innovative enterprises’ initial cooperation probability increases, the convergence speed to the equilibrium point also accelerates. Detailed information can be found in Fig 6 . Similarly, an increase in the initial cooperation probability of consumers also affects their willingness to cooperate. From Fig 7 , it can be seen that, under unchanged conditions, as consumers’ initial cooperation probability increases, the convergence speed to the equilibrium point also accelerates. Detailed information can be found in Fig 7 .

https://doi.org/10.1371/journal.pone.0297475.g006

https://doi.org/10.1371/journal.pone.0297475.g007

Why does an increase in the initial cooperation probability of innovative enterprises and consumers accelerate their convergence to equilibrium? The main reasons are as follows: On one hand, an increase in the initial cooperation probability of innovative enterprises and consumers can enhance the trust and closeness between consumers and enterprises, making it easier for consumers to accept the cooperation proposals and strategies of enterprises, thereby facilitating cooperation and accelerating the pace of coordination. On the other hand, it can also reduce the uncertainty for both parties involved in the cooperation, thereby decreasing the risks and obstacles associated with uncertainty and enabling both parties to adapt to cooperation more quickly, thus speeding up the convergence towards the equilibrium point. Therefore, an increase in the initial cooperation probability of innovative enterprises facilitates their convergence to the equilibrium point.

• (2) Variation in loss and Reward Parameters

Fig 8 depicts the evolutionary path when consumer losses increase while keeping other conditions constant. From Fig 8 , it can be observed that as consumer losses increase, the probability of choosing to participate actively in value co-creation also increases. Specifically, when consumer losses are six units, the probability of consumers participating actively in value co-creation is relatively low. However, as consumer losses increase, i.e., when consumer losses are 60 and 100 units, the probability of consumers actively participating in value co-creation increases. For consumers, bearing certain losses may stimulate their desire to participate actively in value co-creation. When consumers perceive that they may face losses, they will pay more attention to and value the outcomes and development of value co-creation. In order to avoid losses, they will actively participate and contribute their thoughts and opinions. Secondly, the perceived losses ignite a sense of responsibility and mission in consumers, motivating them to participate actively in value co-creation. This sense of responsibility and mission can drive consumers to participate and contribute more actively towards achieving common goals and maximizing benefits. Detailed information can be found in Fig 8 .

https://doi.org/10.1371/journal.pone.0297475.g008

Fig 9 describes the evolutionary path when increasing consumer rewards while keeping other conditions constant. Fig 9 shows that the higher the rewards for consumers, the higher the probability of actively participating in value co-creation. Precisely, when rewards for consumers are five units, consumers’ probability of actively participating in value co-creation is relatively low. However, as rewards for consumers increase, i.e., when rewards are 50 and 100 units, the probability of consumers actively participating in value co-creation increases. The possible reasons are: Firstly, rewards can stimulate consumer interest and motivation. When consumers are rewarded more for value co-creation, they become more motivated to participate actively and willing to invest significant effort and time. Secondly, rewards can enhance the effectiveness and value of consumer participation. When consumers participate in value co-creation, they can contribute by sharing their experiences, ideas, and perspectives to drive and refine the project. Detailed information can be found in Fig 9 .

https://doi.org/10.1371/journal.pone.0297475.g009

• (3) Probability of Being Reported Changes

Fig 10 depicts the scenario where innovative enterprises choosing a non-cooperative strategy are reported. Fig 10 shows that the higher the probability of innovative enterprises being reported for choosing a non-cooperative strategy, the higher the probability of them choosing to cooperate. Specifically, when the probability of innovative enterprises being reported is 0.3, the probability of them actively engaging in value co-creation is relatively low. However, as the probability of innovative enterprises being reported increases, i.e., when the probability is 0.6 and 0.9, the probability of them actively engaging in value co-creation also increases. Detailed information can be found in Fig 10 .

https://doi.org/10.1371/journal.pone.0297475.g010

Fig 11 depicts the scenario where consumers choosing a non-cooperative strategy are reported. Fig 11 shows that the higher the probability of consumers being reported for choosing a non-cooperative strategy, the higher the probability of them choosing to cooperate. Specifically, when the probability of consumers being reported is 0.3, the probability of them choosing to cooperate is relatively low. However, as the probability of consumers being reported increases, i.e., when the probability is 0.6 and 0.9, the probability of them choosing to cooperate also increases. Detailed information can be found in Fig 11 .

https://doi.org/10.1371/journal.pone.0297475.g011

6. Conclusion and discussion

Consumers play a significant role in value co-creation with innovative enterprises. A thorough analysis of the mechanisms behind consumer participation in value co-creation with innovative enterprises has essential theoretical and practical implications. Theoretically, studying the mechanisms of consumer participation in value co-creation helps deepen our understanding of consumer needs and values and uncover the influence and impact of consumers on value co-creation within enterprises. This contributes to enriching and expanding consumer value theory, offering essential guidance for enterprise value creation and innovation. Researching the mechanisms of consumer participation in value co-creation with innovative enterprises aligns with the core principles of open innovation theory. It helps reveal the roles and value of consumers in the innovation process, deepening our understanding and application of open innovation theory. By conducting in-depth research on the processes, methods, and effects of consumer participation in innovation, a practical foundation and empirical support can be provided for participatory innovation theories.

From a practical perspective, studying the mechanisms of consumer participation in value co-creation with innovative enterprises can enable businesses to be more market-oriented and better meet consumer demands. Through interaction and collaboration with consumers, enterprises can gain a more accurate understanding of market dynamics and enhance the competitiveness of their products and services. This, in turn, helps to stimulate innovation and entrepreneurial vitality. As innovation’s leading actors and beneficiaries, consumers can provide valuable ideas and feedback, driving better innovation and entrepreneurial practices within enterprises. This can facilitate continuous improvement and optimization of products and services. Through consumer participation and feedback, enterprises can promptly identify and address issues, enhance product and service quality, and improve user experience and satisfaction. The mechanisms of consumer participation in value co-creation with innovative enterprises can also enhance enterprises’ brand image and reputation. Through interaction and collaboration with consumers, enterprises can establish a strong brand image, make improvements and adjustments based on consumer needs and opinions, and enhance brand value and competitiveness.

This study focuses on the game between consumers and innovative enterprises. It provides an in-depth analysis of the underlying mechanisms of consumer participation in value co-creation with innovative enterprises by constructing an evolutionary game model. The following important conclusions are drawn based on the game analysis and systematic simulation analysis. Firstly, the initial cooperation probability between consumers and innovative enterprises directly affects the strategic choices of both parties. Specifically, as the initial cooperation probability between consumers and innovative enterprises increases, both parties choose cooperative strategies. Consumers are more inclined to actively participate in value co-creation strategies, while innovative enterprises are more inclined to engage in value co-creation strategies proactively. Secondly, establishing reward mechanisms makes consumers more inclined to choose to actively participate in value co-creation strategies.

Moreover, as the intensity of rewards increases, the probability of consumers choosing to actively participate in value co-creation strategies also increases. Thirdly, as the probability of both parties being reported for non-cooperation increases, the probability of consumers and innovative enterprises choosing cooperation also increases. In comparison to consumers, the impact of reporting on innovative enterprises is more significant.

Based on the above conclusions, this paper proposes the following strategies and recommendations:

• Establish a trust relationship and enhance willingness to cooperate. To begin with, a consumer participation platform should be established. On the one hand, enterprises can create dedicated platforms for consumer communication, encouraging consumer involvement in decision-making and innovation activities through online surveys, discussion forums, and idea solicitation, among other methods. On the other hand, enterprises can establish platforms for knowledge and experience sharing, allowing consumers to share and exchange their innovative ideas and experiences. This will help build a learning and innovation community, promoting mutual learning and inspiration among consumers. Secondly, continuously cultivate consumer participation awareness and establish feedback mechanisms. Through relevant promotion and educational activities, enterprises can continuously cultivate consumer awareness and capabilities for innovation. For instance, consumer innovation training courses and relevant innovation tools and methods can be offered to encourage consumers to participate actively in innovation activities. Moreover, enterprises should establish effective feedback mechanisms to collect consumer feedback and opinions promptly. This can be achieved through customer service hotlines, social media interactions, product evaluations, and other means. Valuing and actively responding to consumer feedback will help enterprises improve their products and services, enhancing their competitiveness and customer satisfaction.
• Establish reward and incentive mechanisms and actively engage in cooperation. Establishing reward and incentive mechanisms to encourage consumer participation in value co-creation with innovative enterprises is essential. For example, consumer innovation awards can be established to provide recognition and rewards to consumers who contribute significantly, stimulating more consumer involvement in innovation activities. Additionally, enterprises can collaborate with consumers on research and development projects, involving them in product design and feature development activities. Through collaborative R&D with consumers, enterprises can better understand consumer needs and enhance the market adaptability and competitiveness of their products.
• Establish a reasonable reporting mechanism to urge consumers to co-create value with innovative enterprises. Firstly, strengthen monitoring and inspection of non-cooperative behavior, such as increasing the frequency and coverage of regulatory inspections to increase the likelihood of detecting non-cooperative behavior. Secondly, establish reward and punishment mechanisms. For example, rewarding individuals who discover and report non-cooperative behavior while simultaneously imposing penalties on reported non-cooperative behavior to increase the likelihood of being reported. An anonymous reporting mechanism can also be established to allow individuals unwilling to report formally to report anonymously, thereby increasing the likelihood of reporting non-cooperative behavior.

This paper focuses on the game between consumers and innovative enterprises. It establishes a bi-directional evolutionary game model to analyze the mechanisms of consumer participation in value co-creation with innovative enterprises. However, there are some limitations in exploring consumer participation in value co-creation with innovative enterprises. Firstly, the role of government in value co-creation with innovative enterprises is not considered. The government plays a crucial role in value co-creation with innovative enterprises by providing policy support, tax incentives, and other forms of assistance. Secondly, repeated games need to be considered when discussing consumer participation in value co-creation with innovative enterprises. Consumer participation in value co-creation with innovative enterprises is a progressive and repetitive game process. Therefore, in future research, the government could be included in the game model, and the issue of repeated games should be considered in analyzing the game process.

Supporting information

S1 file. auxiliary data files..

https://doi.org/10.1371/journal.pone.0297475.s001

• View Article
• Google Scholar
• 21. Mcnamara JM, Leimar O. Game Theory in Biology: concepts and frontiers concepts and frontiers: Game Theory in Biology: concepts and frontiers concepts and frontiers; 2020.
• PubMed/NCBI

Connecting value creation for society with work engagement: the relevance of an organization’s public value as an extension of the job characteristics model

• Open access
• Published: 16 May 2024

Cite this article

You have full access to this open access article

• Timo Meynhardt   ORCID: orcid.org/0000-0002-2762-7538 1 , 2 ,
• Carolin Hermann 2 &
• Jessica Bardeli 1  

Since the seminal work by Hackman and Oldham ( 1975 ) there has been a growing body of literature demonstrating how work characteristics can positively both organizations and their employees. While the very nature of the task or job at hand is well explored, insufficient attention has been given to the social and cultural context in which the work is done (Spreitzer & Cameron, 2012 ). Based on Meynhardt’s public value approach ( 2009 , 2015 ), we investigate whether organizational public value acts as an additional work characteristic in the Job Characteristics Model (JCM), thus extending the model. Specifically, we theorize that organizational public value is an additional unique resource for employees and social context work characteristic in the JCM that is positively related to employees work engagement. Additionally, our study analyzes that the positive relationship between the work characteristics, including organizational public value, and work engagement is mediated by self-efficacy. Moreover, we analyze whether employees working in industries with a public focus integrated into their core business will experience higher levels of public value in their jobs than employees in other industries. To test our hypotheses, we conducted a representative online survey in different public and non-public organizations in Switzerland ( N  = 949). Overall, the results support our hypotheses and contribute to close the gap by taking social context factors into the JCM and to reveal processes between the macro-level (organizational public value, work characteristics) and micro-level (employees work experience). Further theoretical and practical implications as well as future research avenues are discussed in the paper.

Avoid common mistakes on your manuscript.

Introduction

What makes individuals, workgroups and organizations flourish at work is an important topic that has attracted increasing interest from researchers. To find out more about how positive states at work emerge, positive organizational scholarship researchers have called for further research that addresses the interrelationships among individuals and the broader organization as well as the social and cultural context of work (Dutton & Glynn, 2008 ; Spreitzer & Cameron, 2012 ). Moreover, this relationship receives more public attention due to issues such as ecological, demographical or geopolitical grand challenges (Brammer et al., 2019 ). Due to the rising number of global events, business needs to step up on societal issues. Because public and non-public organizations contribute to societal cohesion (Meynhardt, 2015 ), societal legitimization of organizational activities remains a critical point. Thus, scholars and practitioners are focusing on the relationship between organizations, society and individuals, pursuing concepts such as public value (Meynhardt, 2009 , 2015 ). The public value approach of Meynhardt ( 2009 , 2015 ) describes the individual perception of an organization’s contribution to the common good, so that the evaluation can be positive or negative, depending on the shared collective need fulfilment. Already Bryson et al. ( 2021 ) emphasized, “[t]o create public value and advance the common good is […] what the grand challenges of our time require” (p. 180). In particular, current data highlights that existing crisis and challenges have a negative impact on employees work outcomes (Newman et al., 2022 ; Liu et al., 2021 ). Therefore, organizations are being called upon to find ways to counteract this (Gabriel & Aguinis, 2022 ; Pearson & Mitroff, 2019 ). One pathway begins with the recognition that the social context in which organizations are embedded, has an impact on the organizational and individual level and should be considered in the work design. However, current work design models neglect the social impact of organizations for employees and society and the effect on positive work outcomes, such as work engagement (Bailey et al., 2017 ). Established models, such as the job characteristics model (JCM) (Hackman & Oldham, 1975 ), addresses questions of how tasks need to be designed to positively influence employee-related outcomes through related work characteristics, but the broader social and organizational context has barely been taken into account, so there is a need to expand the JCM. Previous studies have mainly focused on the relationship of work characteristics such as skill variety or task identity on positive work outcomes (Milovanska-Farrington, 2023 ; Rai & Maheshwari, 2020 ; Saks, 2006 ). Consequently, we need more research into the relevance of work characteristics, not only in terms of the task itself (Parker et al., 2001 ), but rather in terms of the social context of the organization and the associated impact on employees’ work outcomes. In this regard, our main aim of the study is to include public value as an organizational social context factor and additional unique work characteristic into the JCM to investigate the relationship with positive work-related outcomes, especially on employees work engagement. In order to close the gap between the macro-level (organizational public value, work characteristics) and micro-level (employees work experience), it is important to understand the underlying processes. While organizations are stronger called upon to reflect their purpose and role in society, at the same time, employees search for purpose and meaning in work (Jasinenko & Steuber, 2023 ; Wrzesniewski & Dutton, 2001 ). Experiencing work meaningfulness is one of the most important factor related to organizational outcomes such as employee well-being or work engagement (e.g., Albrecht et al., 2021 ; Chen et al., 2011 ; Lysova et al., 2019 ; Panda et al., 2022 ). Thus, understanding alternative sources of meaning and motivation at work, which are associated with human thriving and contribution to the greater good, is central for work researchers. Following the meaningfulness of work that arises from the underlying mechanisms of the JCM and public value theory, we further include self-efficacy beliefs as mediator of this connection. Thus, our study connects to the work of Grant ( 2008 ), who found that when employees see the significance of their work by improving the welfare of others, it positively influences their job performance. By extending these findings to the organizational level instead of the task level, we assume that when employees recognize their organization contributes to the greater good, it enables them to perceive their work as more meaningful and strengthens also their self-efficacy, which should be positively related to their work engagement. So far, the purposeful strategic focus on creating public value has already been linked to increased organizational performance at the macro-level (Gartenberg et al., 2019 ), but the outcomes of perceived public value creation at the intra-individual micro-level have not yet been sufficiently researched (Hartley et al., 2017 ). We also seek to examine whether there is a difference in the perception of the public value of public and non-public organizations. Ritz et al. ( 2023 ) have already pointed out to closing this research gap by encouraging future research to examine the extent to which perceptions of public value depend on sector affiliation and other organizational characteristics. For the purpose of our study, we applied a cross-sectional design with study data from different industries in public and non-public organizations in Switzerland.

With this paper, we contribute three-fold: First, we supplement the JCM with Meynhardt’s public value approach ( 2009 , 2015 ), which considers the contribution to the common good as social contextual factor at the macro-level and investigate the relationship with micro-level experience of employee work engagement. In this context the organizational, societal and individual levels are considered in our study. Second, our study serves as a further addition to the field of research on public value (Grubert et al., 2022 ; Meynhardt & Jasinenko, 2020 ; Ritz et al., 2023 ) that has also supported to bridge the gap between micro- and macro-level processes. Third, our study shows practitioners what positive consequences organizational public value has on employees beside other work characteristics, so that measures to create public value within the organization should be established.

Theoretical background and hypotheses development

• Job characteristics model

Work design research can be described as “the study, creation, and modification of the composition, content, structure, and environment within which jobs and roles are enacted” (Morgeson & Humphrey, 2008 , p. 47). In the following, we employ the term work design rather than job design because this term better reflects the fact that important aspects of work include characteristics of the environment in which work takes place in addition to the content and organization of tasks (Morgeson & Humphrey, 2006 ). The JCM proposes five core dimensions of work – skill variety, task identity, task significance, autonomy and feedback from the job (Hackman & Oldham, 1975 ). These characteristics produce three “critical psychological states”, namely experienced meaningfulness of work, experienced responsibility for the outcomes of work, and knowledge of the results of work activities (Hackman & Oldham, 1975 ). These psychological states are considered to be responsible for positive personal and work outcomes such as internal motivation, work satisfaction, or performance (Hackman & Oldham, 1975 ). Working in jobs with high task significance leads employees to feel that their job is meaningful (Hackman & Oldham, 1975 ). However, by focusing on the task level, task significance signals the employee that their own endeavors provide opportunities to contribute to others’ welfare (Grant, 2008 ). Task significance does not refer to contributing to others’ welfare at an organizational level, which is considered in our study. Some studies support the importance of social characteristics in work design (e.g., Humphrey et al., 2007 ; Morgeson & Humphrey, 2006 ). Results of the analysis showed that social characteristics explained a large amount of unique variance concerning different employee outcomes like organizational commitment (40%), job satisfaction (17%) and subjective performance (9%) apart from motivational characteristics (Humphrey et al., 2007 ). However, just a few researchers have addressed social and contextual factors of work. Morgeson and Humphrey ( 2006 ), for example, developed an extended model of work design that considers social characteristics (e.g., social support and feedback from superiors and employees) and contextual characteristics (e.g., ergonomics and work conditions). Grant ( 2007 ) took another important step toward a broader social perspective on work design, developing a conceptual framework to explain relational aspects of work design. He proposed that a relational architecture of jobs can enhance employees’ prosocial motivation and performance (Grant, 2007 ). Although these approaches extend the view on work design models toward emphasizing social and contextual factors of work, they do not consider the broad view of how organizations are embedded in society and how the current grand challenges affect the organizational and employee level in this context. Therefore, we address the question of the relevance of an organization’s public value as an addition in the JCM for employees work engagement.

• Public value

Organizations are “organs of society. They do not exist for their own sake, but to fulfill a specific social purpose and satisfy a specific need of society, community, or individual” (Drucker, 2011 , p. 36). Since organizations work in and for society, they have an important role in shaping societal values that are collectively shared (Meynhardt, 2009 , 2015 ). Organizations behave responsibly when corporate actions are aligned with society’s values and needs and are legitimized by society (Meynhardt, 2009 , 2015 ). One needs to look at its micro foundation to understand better the consequences of socially responsible firm behavior for employees. In this context, the construct of organizational public value is used to identify the value contribution of an organization to society. Based on Meynhardt’s approach ( 2009 , 2015 ), the theory includes a psychologically-based explanation for the relationship between individual experiences and the evaluation of business activities to improve the greater good. Public value refers to the interrelatedness between the individual and society and links individual basic needs to societal value creation of organizations. According to Meynhardt’s approach, “value for the public is a result of evaluations about how basic needs of individuals, groups and the society as a whole are influenced in relationships involving the public” (Meynhardt, 2009 , p. 212). Thereby, emotional-motivational processes like needs, emotions, or attitudes that initiate evaluations build the basis of evaluation (Meynhardt, 2009 ). Further, psychological needs build the basis of public value because every evaluation is grounded in psychological needs, which serve as reference points for evaluations (Meynhardt, 2009 , 2015 ). This evaluation of organizational activities is calibrated according to these basic psychological needs, which have their foundation in Epstein’s cognitive-experiential self-theory (Epstein, 2003 ): the need for orientation and control, which reflects a utilitarian-instrumental dimension; the need for positive self-evaluation, which reflects a moral-ethical dimension; the need for positive relationships, which reflects a political-social dimension; and the need for gaining pleasure and avoiding pain, which reflects a hedonistic-aesthetical dimension (Meynhardt, 2009 ). Hence, organizations can contribute to the fulfillment of basic needs and, in this way, can create public value but can also destroy public value if basic needs are not satisfied (Meynhardt, 2009 , 2015 ). Public value integrates different equally important value dimensions and thus takes a more holistic view on value creation. We grounded our study on the public value approach by Meynhardt ( 2009 , 2015 ). Especially, value creation for society can be seen as a resource for the individual (Meynhardt, 2009 ), because the satisfaction of needs is a condition for personal development (Epstein, 2003 ). It responds to the needs of individuals to find meaning and purpose in life. Previous research findings has shown a positive relationship between organizational public value and motivational work outcomes at the organizational and employee level (Grubert et al., 2022 ; Ritz et al., 2023 ). Accordingly, the current research results lead to the assumption that organizational public value is an important social context work characteristic at the organizational level that is positively related to work engagement at the individual level. In this regard, Meynhardt’s public value approach ( 2009 , 2015 ) provides an organizational perspective and allows us to integrate processes between the macro- and micro-level.

The relationship between work characteristics, including organizational public value, and work engagement

Our model aims to create understanding about the relationship between work characteristics, including the employee perception of an organizational public value, and employee work engagement and their underlying mechanism. In the recent years, the work engagement concept and research field gained interest. The authors Schaufeli et al. ( 2002 ) describe the experience of engagement among employees as a positive work-related state of mind with character traits of vigour, dedication and absorption. A majority of work engagement research focuses on the impact at the individual factors instead of situational and contextual factors (Bailey et al., 2017 ). Thus, previous research has been undertaken by work design research, which has shown that good working conditions and workplace lead to higher levels of work engagement (Dinh, 2020 ; Rasool et al., 2021 ; Jurek & Besta, 2021 ; Truss et al., 2013 ). In the context of the JCM, a meta-analyze pointed out that task-related work characteristics (task variety and autonomy) are positively linked to engagement at work (Crawford et al., 2010 ). Further research has indicated that work characteristics are positively related to work engagement (e.g., Hakanen et al., 2008 ; Rai & Maheshwari, 2020 ; Saks, 2006 ). But the field has broadened through additional research examining not only work-specific characteristics (Chen et al., 2011 ) as in the JCM, but also contextual characteristics related to work engagement (Bailey et al., 2017 ; Christian et al., 2011 ; Humphrey et al., 2007 ). However, so far, there is no research that take social context characteristics as the public value into consideration. In this sense, this study attempts to identify the positive relationship of the organizational and societal level on work engagement on the individual level in order to bridge the gap, which was already postulated by Bailey et al. ( 2017 ). This is becoming increasingly important due to the current challenges organizations are confronted with (Brammer et al., 2019 ). We extended the JCM by the inclusion of the employee perception of organizational public value, which leads to our argument that an organization’s contribution to society is a source of meaningfulness for employees and an important additional work characteristic in the JCM, which has not been researched before according to our knowledge. Many employees are searching for more than mere financial compensation and want to find work that offers the possibility to achieve something meaningful. Hence, work design models should integrate alternative manifestations of work meaningfulness that are not limited to the characteristics of certain tasks (Chaudhary, 2022 ; Glavas, 2012 ). One source of meaningfulness for the employee should be represented by the organization’s contribution to the common good in the sense of public value. In this study the term meaningfulness is defined as the perception of the importance of goals and activities they perform in the organizations in relation to employees own self and life (Barrick et al., 2013 ). In order to provide employees with meaningfulness, organizations have a responsibility to balance the needs of the organization with the needs of the employees (Cartwright & Holmes, 2006 ). Organizations that contribute to the common good can satisfy the basic needs of employees, as described in Meynhardt’s public value theory ( 2009 , 2015 ), which leads to employees valuing their work as more meaningful, rewarding and worthwhile for themselves and others (Aguinis & Glavas, 2019 ; May et al., 2004 ). Accordingly, work meaning arises when employees understand what they are doing and why their work is significant (Wrzesniewski et al., 2003 ). In this view, work meaning is socially constructed and dynamic over time. Individual characteristics like personal values and preferences, along with the social context – the interaction with others – contribute appreciably to work meaning (Wrzesniewski et al., 2003 ). Work meaning at the individual task level focuses on the content of the work itself, whereas work meaning at the organizational level focuses on the interaction between organizational members and the values and goals of the organization (Pratt & Ashfort, 2003 ). Since meaningfulness depends on employees’ identities and individual sense-making, it cannot just be provided by the organization. However, organizations can facilitate employees’ experiences of meaningfulness in and at work (Pratt & Ashfort, 2003 ). Organizational practices that concentrate on the job itself, such as job redesign to increase skill variety or autonomy, foster the experience of meaningfulness in work. The experience of meaningfulness at work can be achieved by enriching employees’ organizational membership by promoting organizational goals, values, or beliefs or the alteration of relationships between employees (Pratt & Ashfort, 2003 ). Employees’ perception of work as meaningful has a positive impact on work outcomes (Albrecht et al., 2021 ; Allan et al., 2019 ; Frieder et al., 2018 ; Hackman & Oldham, 1975 ; Lysova et al., 2019 ; Panda et al., 2022 ), especially on work engagement (Woods & Sofat, 2013 ; Demirtas et al., 2017 ; Fairlie, 2011 ). Particularly important is the research on work engagement that has identified an indirect relationship between work characteristics and work engagement through meaningfulness (May et al., 2004 ; Rothmann & Welsh, 2013 ). Consequently, it is not surprising that meaningful work characteristics – in the sense of self-actualizing work, work that has a social impact, reflects values and realizes one’s life goals – were found to predict substantive variance of employee engagement in addition to other work characteristics (e.g., Fairlie, 2011 ). Other studies have shown that the experience of work meaningfulness has been the most powerful mediator between all motivational work characteristics and work outcomes (Humphrey et al., 2007 ). Hence, we argue that in the same way task-specific work characteristics contributes to experienced meaningfulness in work, public value should contribute to experienced meaningfulness at work. Therefore, we believe that the organization’s value creation for society offers an additional resource for the employee (Meynhardt, 2015 ) by infusing meaningfulness at work and thus should be positively related to employee work engagement. Thus, we formulate the following hypothesis:

Hypothesis 1

Employee perception of an organization’s public value accounts for additional unique variance in employee work engagement beyond the work characteristics skill variety, task identity, task significance, autonomy and feedback from the job.

The mediating role of self-efficacy in the relationship between work characteristics, including organizational public value, and work engagement

In addition to work characteristics and organizational public value as a resource for the employee work engagement, individual factors are also important to consider, because they play an important role in work design models owing to their interaction with work characteristics (Schaufeli & Taris, 2014 ). Individual factors might act as “third variables” (Schaufeli & Taris, 2014 , p. 51) in the sense that they not only influence how work characteristics are perceived, but also influence employee well-being and motivation. According to the conservation of resources theory (Hobfoll, 1989 ), individuals strive to gain, build and preserve resources as well as experience stress when resources are threatened. A key resource that relates to physical and emotional well-being, and which is important for human functioning as a personal resource, is self-efficacy (Bandura, 1994 ; Hobfoll, 1989 ; Judge et al., 2007 ). The self-efficacy theory is based on Bandura’s conception ( 1997 ) and describes individuals’ assessment of how effectively they can organize and perform the cognitive, social and behavioral skills that constitute them in dealing with future situations (Bandura, 1997 , 1983 ). The belief that one’s skills are sufficient in a situation arises from successful past experiences, vicarious learning, verbal persuasion, and physiological and psychological states (Bandura, 1997). Moreover, they are continuously adjusted and revised in the face of incoming information (Epstein, 2003 ; Judge et al., 2007 ). As a result, previous experiences with work characteristics should enhance individual self-efficacy (Deci & Ryan, 2000 ; Epstein, 2003 ). However, we also assume that the employees’ perception of the organizations contribution to the common good can increase their self-efficacy. One explanation for this assumption is based on the social identity theory (Ashfort & Mael, 1989 ; Tajfel & Turner, 1985 ). It proposes that individuals derive their identity from their membership to relevant social groups. One membership that shapes identity is organizational membership, and if organizations can meet employees’ need for meaning, it leads to positive identification (Ashfort & Mael, 1989 ). Individuals strive for a positive social identity and identify as employees with the actions and image of their organizations, especially if those organizations are perceived positively by others (Ashfort & Mael, 1989 ). From a public value perspective, this means that if employees can associate themselves with organizations that fulfill their personal needs and the needs of society, it should lead to a positive anticipated external appraisal and positive feelings, which should enhance their self-concept and accordingly their self-efficacy. More specifically, belonging to an organization that contributes greatly to the common good can facilitate employees’ identification with the organization and perceived meaning in work, thereby positively influencing employees’ self-image as well as their sense of belonging to the organization (Brieger et al., 2020 ; Jia et al., 2019 ). Consequently, based on the social identity theory and experience of meaningful work, we argue that the employee’s understanding of contributing to society through membership in an organization with public value orientation should enhance their self-efficacy. Therefore, we assume that organizational membership and perception of public value as a unique additional social context resource will constitute a work characteristic for the employee and expands the framework of the JCM, which is positively related to work engagement and mediated by self-efficacy. Our assumption is supported by numerous studies, which have found individual factors, such as self-efficacy, foster work engagement (Christian et al., 2011 ; Schaufeli & Salanova, 2007 ). In addition, studies have found the mediating influence of personal resources like self-efficacy in the relationship between work resources and engagement (Albrecht & Marty, 2020 ; Llorens et al., 2007 ; Xanthopoulou et al., 2007 ). These findings confirm Gist and Mitchell’s ( 1992 ) theoretical perspective that self-efficacy is an important personal resource which directly and indirectly influences motivation- and performance-related outcomes. Further findings revealed a mediating influence of personal resources on the relationship between work characteristics and engagement, since providing a resourceful environment enhances personal feelings to be capable of controlling the work environment and makes people stay engaged (Xanthopoulou et al., 2007 ). But there is a lack of research on social context factors that influence self-efficacy (Guan & So, 2016 ). Additionally, integrating insights from self-determination theory (Deci & Ryan, 2012 ) and social-cognitive theory (Bandura, 2001 ), researchers have begun to uncover a supplementary path from self-efficacy beliefs towards work engagement: human agency. Given these theories hold human nature to be inherently proactive and generative (Bakker & van Woerkom, 2017 ), research has increasingly focused on how need-fulfillment through e.g., the confirmation of self-efficacious beliefs can promote agentic behaviors fostering work engagement, such as an increased focus on the task and increased helpful relating at work (Spreitzer et al., 2005 ). Based on the literature and previous research findings we expect self-efficacy partially mediate the relationship between work characteristics and work engagement, because we did not include all possible mediators within this process (Xanthopoulou et al., 2007 ). In light of our study’s work-context, we therefore hypothesize:

Hypothesis 2

Self-efficacy will partially mediate the relationship between work characteristics, including the additional resource as employee perception of public value, and work engagement.

The resulting mediation model is depicted in Fig.  1 .

Main research model with self-efficacy mediating the relationship between work characteristics, including the additional resource as employee perception of organizational public value, and work engagement

The difference of organizational public value in industries

Linking to the theory of social identity and the sense of belonging to an organization, there can be different perceptions based on the organizational industry. Employees who work in organizations that contribute more to the common good can more easily identify with the organization, which in turn affects their self-efficacy and perceived meaning of work (Brieger et al., 2020 ). Moreover, research has shown differences regarding the task significance of certain occupations (Grant, 2008 ; Morgeson & Humphrey, 2006 ). Employees who worked in jobs that focused on the promotion of human life reported higher task significance owing to the increased salience of their work’s purpose, which resulted in a more affective engagement. Grant ( 2007 ) suggested that if employees see that their work positively impacts other people, their productivity increases. Furthermore, employees who know the impact of their work on society or community perceive work as more significant and meaningful (Grant, 2008 ). Furthermore, the authors Levitats and Vigoda-Gadot ( 2020 ) emphasized that employees, especially in the public sector, make not only within, but also outside the organization an engaged contribution to society in order to serve the organization’s mission. However, prior research does not investigated the different perceptions of organizational level contribution to the welfare of others and society in various industries. Referred to the organizational level, we argue that public value is more salient in organizations where the significance of serving a collective is part of its core business. Hence, we hypothesize:

Hypothesis 3

Employees working in industries with a public focus integrated into their core business will experience higher levels of public value in their work than employees in other industries.

Participants

We tested the hypotheses with data from Switzerland from 2015. Respondents were asked to evaluate the public value of their employing organizations within an online survey. Participants were 949 Swiss German-speaking citizens who were employed at the time of the survey. They were members of a large panel of an independent Swiss market research institute intervista (intervista.ch) and worked across 31 industries. Within the industries, a distinction can be made between public and non-public industries. The public industries include e.g., public administration and healthcare. The non-public industries consists e.g., of banks and insurance. Prior to the main study, a qualitative ( N  = 5) and quantitative ( N  = 100) pretest revealed that the length of the survey was adequate and the questions were comprehensible. Respondents’ age ranged between 19 and over 70 years, of whom 46.6% of the respondents were female and 34.2% had a college degree or higher. In addition, 40.0% held a leadership position and 67.1% worked full-time. Overall, this distribution of socio-economic characteristics corresponds to that of the Swiss population, indicating a comparatively representative sample. After completing the socio-demographic data, participants were asked to complete the survey, which included instruments that test our three hypotheses.

Preliminary analysis

Since we used the short version of the public value scale and abbreviated the self-efficacy scale, we tested construct validity by conducting a confirmatory factor analysis (CFA) using maximum likelihood estimates following Hinkin ( 1998 ) and Harman’s one-factor test for endogeneity (Podsakoff & Organ, 1986 ). These procedures found that common source bias was not an issue, as a common factor would only extract 30.53% of the variance on average, which is far below the recommended threshold. If the first factor had accounted for the majority of variance among all measures, the presence of a substantial amount of common method bias would have been likely (Podsakoff et al., 2003 ). Following advice by Hinkin ( 1998 ), we statistically tested the validity of the variables public value and self-efficacy by conducting an individual confirmatory factor analyses (CFA). To further test a good fit, we performed a test for convergent validity and composite reliability for the variables public value and self-efficacy. We used the following five indices for the results of the CFA: chi-square/df ratio (χ 2 / df), Tucker-Lewis Index (TLI), Comparative Fit Index (CFI), Root-Mean-Square-Error of Approximation (RMSEA) and Standardized Root-Mean-Square-Residual (SRMR). All items load significantly ( p  < .01) on the specified factor. Factor loadings are generally high (≥ 0.71). Maximum likelihood-based estimation results indicate the model fit for public value (χ 2 (2) = 146.96; p  < .001; CFI = 0.93; TLI = 0.79; RMSEA = 0.27; SRMR = 0.055) and self-efficacy (χ 2 (3) = 403.8; p  < .001; CFI = 1.0; TLI = 1.0). For the variable public value the SRMR value is below the value of 0.08 and likewise the CFI and TLI show good values for the model fit of the variables public value and self-efficacy, even the RMSEA value does not match the value under 0.05 for the variable public value (Brown, 2015 ). Moreover, the average variances extracted (AVE) of 0.73 and 0.59 indicate that convergent validity was not an issue for the variables public value and self-efficacy. The composite reliability (CR) for public value is 0.91 and for self-efficacy 0.81. Hence, we are confident in our short measure since the fit indices indicate overall good construct to data fit and suggesting that the short scales are indeed appropriate.

Work characteristics

For the assessment of the work characteristics, the Job Diagnostic Survey (JDS) of Hackman and Oldham ( 1975 ) was used in the German translation (Schmidt & Kleinbeck, 1999). The five core dimensions of the work environment were each assessed with three items: skill variety (α = 0.77) with items like “The job is quite simple and repetitive,” task identity (α = 0.73) with items like “The job provides me the chance to completely finish the pieces of work I begin”, task significance (α = 0.71) with items like “The job is one where a lot of other people can be affected by how well the work gets done”, autonomy (α = 0.75) with items like “The job gives me considerable opportunity for independence and freedom in how I do the work” and feedback from the job (α = 0.75) with items like “After I finish a job, I know whether I performed well”. Participants responded on a seven-point Likert scale ranging from 1 (completely incorrect) to 7 (completely correct).

Each employee evaluated the public value of their employing organization using the short version of the public value scale (Meynhardt & Jasinenko, 2020 ) with four items. Respondents indicated the degree to which their employing organization (1) “behaves decently” (moral-ethical dimension), (2) “contributes to the quality of life in society” (hedonistic-aesthetical dimension), (3) “contributes to social cohesion in society” (political-social dimension) and (4) “does good work in its core business” (utilitarian-instrumental dimension). The respondents gave their assessment for each item on a six-point Likert scale ranging from 1 (disagree) to 6 (agree). The measure for public value showed good reliability (α = 0.87).

Self-efficacy

We assessed self-efficacy with three items of the 10-item German General Self-Efficacy Scale (Schwarzer & Jerusalem, 1999 ). We selected three items to reduce respondent burden and chose items that had shown the highest discriminatory power across three measurement points: “When I am confronted with a problem, I can usually find several solutions”, “I can solve most problems if I invest the necessary effort” and “I can usually handle whatever comes my way”. These were answered on a four-point Likert scale, ranging from 1 (strongly disagree) to 4 (strongly agree). Cronbach’s α was 0.66.

• Work engagement

We assessed work engagement with the German version of the nine-item Utrecht Work Engagement Scale (Schaufeli & Bakker, 2004 ) with three items for each of the three aspects of work engagement: vigor, dedication and absorption. Example items included “At my work, I feel bursting with energy” (which represents the aspect of vigor), ”My job inspires me” (which represents the aspect of dedication) and “I feel happy when I am working intensely” (which represents the aspect of absorption). Answers were given on a seven-point Likert scale, anchored at 1 (never) and 7 (always). Cronbach’s α was 0.95.

Control variables

Based on previous studies, we considered several control variables. We controlled for age as a continuous variable; gender (male = 1, female = 2); income (six groups, ranging from a gross monthly income of less than CHF 3,000 to more than CHF 12,000); education (nine groups, ranging from no school-leaving certificate to high tertiary education); current profession (five groups, ranging from apprentice to independent entrepreneur). We also controlled for employee health based on the sick days and the organization’s industry by considering 31 industries.

Analysis and results

Descriptives.

Means, standard deviations and correlations between the variables are displayed in Table  1 . The results show for work engagement ( M  = 4.67, SD = 1.12) and public value ( M  = 4.87, SD = 0.95) positive values. The work characteristics, skill variety ( M  = 5.48, SD = 1.12), task identity ( M  = 5.54, SD = 1.18), task significance ( M  = 5.58, SD = 1.08), autonomy ( M  = 5.56, SD = 1.10) and feedback from the job ( M  = 5.59, SD = 1.02), show above-average means. The potential mediator self-efficacy also shows a higher average value ( M  = 3.12, SD = 0.45). Consistent with other research, we found significant positive correlations between work characteristics and work engagement (see Table  1 ).

Hierarchical regression

To test H1, that public value acts as an additional resource beyond skill variety, task identity, task significance, autonomy and feedback from the job in regard to employee work engagement, we conducted hierarchical regression analyses. Table  2 presents the results of the analyses. Model 1 investigated the relationship between the control variables and work engagement, Model 2 analyzed the relationship between skill variety, task identity, task significance, autonomy, feedback from the job and work engagement. Model 3 examined the relationship between public value and work engagement. The control variables age, gender, education, gross monthly income, industry, current profession and sick days accounted for 9.6% of the total variance in work engagement. The work characteristics entered in Model 2 explained an additional 31.0% of the variance. Public value, entered in Model 3, accounted for an additional 3.7% of unique variance in the overall model. The change in R 2 between the second and third model that resulted from the addition of the public value variable was significant ( p  < .001). The regression weights indicate that public value and skill variety were the most important variables in the overall model. Thus, we could confirm H1.

Mediation analysis

For testing the mediating effect of self-efficacy in the relationship between work characteristics, including the additional resource as public value, and work engagement, we conducted a structural equation modeling (SEM) using IBM SPSS Amos 26. We defined all five work characteristics and public value as the independent variable, self-efficacy as the mediator, and work engagement as the dependent variable. The indirect effect (ab) is described through the path X → M path ( a ), M → Y path (b). First, we performed a CFA to test the measurement model. The CFA results indicate that each item load significantly ( p  < .001) on the specific factor. Factor loadings are high (≥ 0.61). The model fit indices also suggest that the measurement model was a good fit to the data (χ 2 (406) = 1152.67; p  < .001; CFI = 0.95; TLI = 0.94; RMSEA = 0.04; SRMR = 0.03). Second, we conducted a structural test for our mediation research model and specified a just-identified structural equation model ( df  = 0) with good values of CFI = 1.0 and GFI = 1.0. The path coefficients are also significant. Third, we conducted the mediation model test. Table  3 presents the results of the analysis. The results with a 95% bias-corrected bootstrap confidence interval indicate a significant mediation model (standardized indirect effects) (see Fig.  2 ): ab skill variety ß = 0.021; 95%-CI = [0.007; 0.039], ab task significance ß = 0.013; 95%-CI = [0.001; 0.029], ab feedback from the job ß = 0.028; 95%-CI = [0.014; 0.046] and ab public value ß = 0.014; 95%-CI = [0.001; 0.030]. Only the indirect effects of the work characteristics ab task identity ß = -0.001; 95%-CI = [-0.016; 0.013] and ab autonomy ß = 0.009; 95%-CI = [-0.006; 0.024] are not significant. The direct effects of all five work characteristics and public value on work engagement also remain significant c skill variety ß = 0.249; 95%-CI = [0.186; 0.314]; c task identity ß = 0.101; 95%-CI = [0.040; 0.161], c task significance ß = 0.139; 95%-CI = [0.081; 0.197], c autonomy ß = 0.074; 95%-CI = [0.007; 0.145], c feedback from the job ß = 0.137; 95%-CI = [0.078; 0.192] and c public value ß = 0.198; 95%-CI = [0.138; 0.255]. The results showed the partially mediating effect of self-efficacy on the relationship between work characteristics, including the additional resource as public value, and work engagement. Thus, H2 could be confirmed.

Visualization of the tested mediation model including completely standardized indirect effects and direct effects. Note : * p  < .05, ** p  < .01, *** p  < .001

Industry differences in regard to employee public value perception

We created two broad categories to test H3, including only industries for which we had responses from more than 20 respondents. Therefore, out of 31 industries, 18 industries were considered (Table  4 ). The category of “non-public focus industries” comprised 12 industries. The category of “public focus industries” was composed of six industries.

T -test results revealed significant differences between both categories, with public focus industries ( M  = 5.16, SD = 0.83, n  = 392) show higher public value ratings than non-public focus industries ( M  = 4.67, SD = 0.98, n  = 420), t (811) = 7.56, p  < .001. The effect size indicated a Cohen’s d  = 0.53, revealing a medium to large effect. Therefore, H3 could be confirmed.

Robustness analysis

For the robustness of our results of H3, we analyzed the public value score of public and non-public industries from a second dataset in Switzerland. The data were collected via an online-survey in 2019. Participants were 7430 Swiss German-speaking citizens which were employed at the time of the survey. They were members of a large-scale representative online-survey of an independent Swiss market research institute intervista (intervista.ch) and worked across 27 industries. Within the industries, also a distinction between public and non-public industries can be made. Participants age ranged between 18 and over 70 years. Moreover, 47,3% of the respondents were female, 38,7% had a college degree or higher. In addition, 38,8% held a leadership position and 58,8% worked full-time. Overall, the distribution of socio-economic characteristics of the sample corresponds to that of the Swiss population, which is an indication of a comparatively representative sample. After collecting the demographic data, the participants were asked to complete the survey.

To support the results of H3, we calculated an independent samples t -test, which also revealed significant differences between the two categories. Industries with public interest ( M  = 5.21, SD = 0.84, n  = 2833) show higher public value ratings than industries without public interest ( M  = 4.78, SD = 1.00, n  = 4597), t (7428) = 18.88, p  < .001. The data indicated a medium effect with Cohen’s d  = 0.61. Thus, the additional test also analyzes whether the public value of organizations with a public focus receives higher ratings than those with a less public focus. Consequently, the additional consideration of the data from 2019 underpins the results of H3.

Finding meaning and purpose in work is highly relevant for employees (Hackman & Oldham, 1975 ; Jasinenko & Steuber, 2023 ; Wrzesniewski et al., 2003 ), especially in time of grand challenges increasing pressure on organizations. While previous studies have focused on the positive effects of work characteristics in terms of employees’ work behavior and meaningful work (e.g., Milovanska-Farrington, 2023 , Rai & Maheshwari, 2020 ; Saks, 2006 ), the social context factors as additional work characteristics have remained largely unexplored. Hence, we theoretically argued and empirically tested, whether the perceived public value contribution of an organization is an additional unique work characteristic and resource for the employee in the JCM, which is positively related to employee work engagement. This study contributes to the theoretical foundation of JCM by supporting previous findings on the positive relationship between work characteristics and positive work outcomes, such as work engagement. But by integrating the public value theory (Meynhardt, 2009 , 2015 ) into the JCM, we broaden the perspective of existing work design models by going beyond the previous work characteristics and taking the social context into account and using the conceptualization of organizational value creation for the common good. Accordingly, we also support previous studies on public value and positive organizational and individual outcomes (Grubert et al., 2022 ; Ritz et al., 2023 ). However, it is the first study to our knowledge, to propose an extension of JCM with social contextual factors underlying intra-individual processes and to investigate in this context the relationship between organizational public value and positive work outcomes. Thus, we tried to contribute to bridge the gap to understand the value creation processes at the micro- and macro-level by investigating the potential benefits of public value, which positively affects changes at the organizational and individual level. Our study contributes novel empirical evidence to the role public value plays for employees’ work engagement using a Swiss citizen sample and real organizations from public and non-public industries.

As hypothesized, our research reveals three key findings: First, to extend the JCM by adding social contextual factors is important. The results are consistent with our first hypothesis about the positive relationship of work characteristics, including the employees’ perceptions of their organization’s public value, and work engagement. Specifically, hierarchical regression analysis demonstrated the positive relationship between public value and work engagement beyond the work characteristics skill variety, task identity, task significance, autonomy and feedback from the job. We found this result despite our conservative approach to testing H1, because we entered all other work characteristics in the first step of the regression so that all shared variance between the motivational work characteristics and public value was associated with the other five work characteristics. Furthermore, the regression coefficients revealed that public value was the second most important variable beside skill variety that was linked to work engagement. Second, to explain the phenomena behind the relationship, individual factors are important. The results also support our second hypothesis that self-efficacy partially mediates the relationship between work characteristics, including the additional resource as public value, and work engagement. The results also showed that public value is one of the three strongest effect sizes on work engagement via self-efficacy and also in the direct effect on work engagement. Third, the perception of public value differs from sectoral factors. The reported findings also correspond to our third hypothesis that employees who worked in industries with a strong public focus had a higher perception of the public value of their organizations than employees who worked in industries without such a focus. To strengthen these result, we considered another dataset from 2019, which confirmed this as well.

Based on these findings and building on extant research, our results provide evidence that it is necessary that work design theory looks at different sources of work meaningfulness (Glavas, 2012 ). Apart from other work characteristics that focus more on the task level, the social context factor public value is important for employee engagement and should be seen as an additional work characteristic within the JCM. Although we applied a conservative testing of our hypotheses, we found evidence for a significant and unique contribution of public value. Thus, for a more comprehensive view on work design models and the impact of work design on employee well-being, researchers should take into account the value creation of an organization within a community or society. We assumed that if employees are capable to see a significant societal value contribution of their employing organization, their self-efficacy beliefs are activated by their membership in the organization. As a result, they feel more capable of contributing to something larger in their environment. These positive feelings are likely to promote the experience of confidence and meaningfulness so that employees engage more strongly with their work (Xanthopoulou et al., 2007 ). Accordingly, highlighting the positive relationship between public value-oriented organizational behavior and a flourishing a healthy workplace, our findings provide new insights for research on positive organizational scholarship and an extension of the JCM. In addition, our analysis showed regardless of sectoral affiliation in our first hypothesis, there was a positive association with employees’ work engagement. This is based on the assumption that all organizations have a social function and are relevant to society (Meynhardt, 2015 ). Despite the lower perception of public value in non-public organizations, they can also benefit from the advantages of public value. However, our third hypothesis revealed differences in the perception of public value with regard to sectoral affiliation. As already assumed, one possible explanation for the difference in public value perception between public and non-public industries could come from social identity theory, which assumes that individuals strive for a positive social identity and self-image (Ashforth & Mael, 1989) which in turn affects their meaning of work (Brieger et al., 2020 ). Therefore, employees find identification with the job role that has high task significance. In this context, Grant ( 2008 ) showed that task significance is associated with a greater awareness of its social influence and value. Thus, we assumed that the perception of public value of a public organization is higher among its employees, because their profession has a direct influence on them and the social identity of their work role is more in focus. For employees in non-public organizations, where the social contribution of the organization to the common good is not directly tangible in the work environment and in the work characteristics, there is a lower perception of public value. A further possible explanation could be that employees in public organizations show an increased public service motivation, which concerns the motivation of individuals to contribute to society as a whole by providing public services and serving the public interest (Ritz et al., 2020 ; Weißmüller et al. 2022 ). This leads to a greater tendency to seek employment in the public sector (Asseburg & Homberg, 2020 ; Ritz et al., 2023 ; Vandenabeele, 2008 ). Existing studies showed that public service motivation is an important facet of value congruence between public employees and public employers (Bright, 2008 ; Teo et al., 2016 ). Thus, by measuring the common good contribution of an organization as the fulfillment of four basic needs, following Meynhardt’s ( 2009 , 2015 ) conceptualization of public value, the needs of employees can be satisfied and increase the perception of the public value of the organization.

Theoretical implications

There are at least four reasons why the results of our study are considered theoretically important. First, our study highlights the positive relationship between work characteristics, including the additional resource public value, and work engagement. Previous studies have examined the relationship between work characteristics and positive work outcomes like work engagement or motivation. However, the social context factors in this interaction has not been sufficiently investigated. Some studies consider social support, feedback from others or interdependence as social work characteristics as well as ergonomics, physical demands or work conditions as contextual work characteristics (Morgeson & Humphrey, 2006 ), but they do not consider the social perspective and the embedding of organizations into society. Therefore, our study complements the JCM with the valuable unique social context work characteristic of public value, which acts as a resource for employees, and is a further antecedence for the occurrence of work engagement. Second, the present study examined a mediation model to understand the relationship between the work characteristics, including public value, and work engagement via self-efficacy. Although past research has investigated that self-efficacy plays a key role in determining meaningfulness of work and employees’ well-being (Christian et al., 2011 ; Schaufeli & Salanova, 2007 ), empirical investigations of this important variable have been incomplete. Our results confirmed the mediation model and made an important contribution to science by including individual factors in explaining the processes on the micro- and macro-level in the context of work design models. Third, we were able to make an additional contribution to science by shed light on the perception of public value in public and non-public organizations. However, most of the existing related literature focuses on public organizations for e.g., public administration, but there is a need to shift the attention also to non-public organizations in this context. As studies have already shown all sectors can contribute to the common good (Grubert et al., 2022 ). Even if our study showed that the contribution to the common good of public organizations is perceived higher than of non-public organizations, it does not rule out that all organizations are relevant for society (Drucker, 2011 ) as they all confront with the current grand challenges. Finally, our study made an important contribution to the public value research stream by attempting to bridge the gap between macro-level (organizational public value, work characteristics) and micro-level (employees work experience) processes. This complements previous public value studies like those from Brieger et al. ( 2020 ), Grubert et al. ( 2022 ) and Ritz et al. ( 2023 ).

Managerial implications

Our findings offer important insights for management practice and, in particular, for practical implications in the areas of human resources and leadership. They provide evidence of the importance of an organization’s public value in addition to the other work characteristics for an engaged and healthy workforce. Organizations can enrich employees’ membership in the organization and thereby foster meaningfulness at work, for example by promoting values and goals of the organization (Pratt & Ashfort, 2003 ). Therefore, management strategies and measures should be aimed at increasing employees’ experience of meaningfulness at all these levels. Public value should be seen as one source of enhanced meaningfulness at work at the organizational level. Making the purpose of tasks transparent and the organization as a whole and pointing to the connection of the core business with its contribution to society is essential for employees to experience meaningfulness at the organizational level. As our results demonstrate, the experience of doing something good for society by being a member of an organization with a high public value is likely to increase employee engagement. It has been shown that especially this combination of high work engagement and workplace well-being is highly relevant for key organizational outcomes (Leitão et al., 2019 ). Results revealed, for example, that engaged employees were not only more likely to report higher well-being levels and better performance at the task and organizational level, they also reported a better adaptability in situations of change. In times of crisis and grand challenges, this change became particularly visible as employees were confronted with high work demands. Companies and managers in particular are responsible for ensuring that employee engagement does not suffer as a result. Moreover, respecting society’s needs and expectations in business models, services and products should therefore be integral to management decisions. In this process, a dialogue with society and an intensive reflection among organizational members on whether business activities are aligned with societal needs is necessary to create public value. But also a transparent and regular communication with the organization’s employees in order to identify their needs and perceived public value of the organization in which they work is an important measurement. In addition, communicating the public value contribution outside the organization and integrating it into internal and external projects can also be useful. Our results indicate that taking such steps in stressing values and goals beyond financial aspects and providing employees with opportunities to see the greater purpose of their work should lead to increased work engagement.

Limitations and avenues for future research

There are limitations to the present research despite our results. One important limitation is that our study is based on cross-sectional data, so that no causal interpretation of the results can be made. Moreover, the data were self-reported and collected at the same time in a cross-sectional research design, common method and common source bias might be present (Podsakoff et al., 2003 ). For this reason, we used several methods and appropriate survey designs in advance to minimize the potential of common method bias, tested subsequently whether it had been a threat and followed established recommendations (Jakobsen & Jensen, 2015 ; Podsakoff et al., 2003 ). First, to avoid common method bias at the comprehensive stage and to reduce social desirability bias, we assured anonymity of all responses to our study participants. Second, we made sure that all items were formulated precisely by conducting a qualitative and quantitative pretest. Third, our online questionnaire included different response formats and scale endpoints for our items, which should decrease method biases caused by anchoring effects (Podsakoff et al., 2003 ). Also the survey used questionnaires that had been tested in previous studies. Fourth, the items were part of a large-scale questionnaire, so participants had limited knowledge of the purpose of the study and thus would not have guided their responses appropriately for consistency. Fifth, our study included several objective control variables, such as age, gender, income, education, current profession, the industry of the organization as well as employee health days, which allowed us to control for differences in response bias between groups. Sixth, we used Harman’s single-factor test (Harman, 1976 ) to assess retrospectively the presence of common method bias. Nonetheless, that common method bias could threaten the validity of our results because the predictor and criterion variables were from the same source (Podsakoff et al., 2003 ). However, considering all methods, we concluded that bias from common methods did not pose a significant threat to our data for the analysis. We created sufficient variance with the different organizations from the public and non-public industries and used a sample of a relatively large number of 949 individual respondents drawn from the general population of Swiss citizens. Also, the latent factor tests for construct validity did not reveal any such issues. Moreover, methodological research by Siemsen et al. ( 2010 ) indicated that regression estimates of interaction effects would be attenuated rather than artificially increased by common method bias, further supporting the robustness of our results. Additional limitations are that other factors might have influenced the perception of public value, for example, employees’ attitudes toward supervisors. Since the company name of the employing organization was kept anonymous and our analysis relied solely on self-reported data, we are not able to compare public value ratings across team or organizational levels or to compare the evaluations of the employees with other sources, such as assessments of the respective supervisor or coworkers. Finally, we provided a solid theoretical rationale for our assumption that an organization’s public value is positively related to employee work engagement in addition to the work characteristics of the JCM, other pathways are still possible. For example, more engaged workers could be more likely to evaluate the public value of their employing organization more highly than less engaged employees.

However, our study points out further avenues for future research. The study design did not allow for detecting causality between the relationship of public value and employee well-being. Thus, we hope researchers will address this issue and examine this relationship for example in long-term studies and with an experimental design. Further, individual differences could shape the perception of public value and its relevance might be higher for certain individuals. Research has shown for example that individuals with higher prosocial values were more concerned about the impact of their work on other people, and the experience of task significance strongly affected their performance (Grant, 2008 ). Additionally, not only individual values could interfere with the perception of public value, but the orientation toward work could also be important. Work orientations can be relevant to a better understanding how employees derive meaning from their work (Wrzesniewski & Dutton, 2001 ). Individuals who see their job as a calling, as socially valuable and purposeful, could be more strongly affected by public value. Researchers should address the influence of individual differences in values and work orientations concerning the perception of public value and its relationship with well-being.

We have analyzed the relevance of an organization’s public value for employee outcomes across various industries and demonstrated a positive relationship between work characteristics, including public value, and employee work engagement. Additionally, our findings have shown that the positive relationship was partially mediated by self-efficacy. This study is an example how to reintegrate society into work design research and can be seen as a renaissance of considering societal factors in employees’ workplace experience. Organizations should acknowledge public value as a source of meaning and additional resource for employees to create a more engaged and healthy workforce, especially in times of grand challenges organizations are confronted with. More specifically, organizational public value contributes positively to the employee’s identification with the organization and promotes the meaning of work, which leads to a stronger sense of self-efficacy and work engagement. In other words, organizational public value serves as a resource for the individual at work. The evidence from our study should encourage researchers to take another perspective on work design and reintegrate the societal dimension of organizational activities. The extension of the job characteristics model towards social context may allow to better understand the social nature of work with all its cultural, political and moral dimensions.

Data availability

The datasets generated during and/or analysed during the current study are available from the corresponding author on reasonable request.

Aguinis, H., & Glavas, A. (2019). On corporate social responsibility, sensemaking, and the search for meaningfulness through work. Journal of Management , 45 (3), 1057–1086. https://doi.org/10.1177/0149206317691575 .

Article   Google Scholar  

Albrecht, S. L., & Marty, A. (2020). Personality, self-efficacy and job resources and their associations with employee engagement, affective commitment and turnover intentions. The International Journal of Human Resource Management , 31 , 657–681. https://doi.org/10.1080/09585192.2017.1362660 .

Albrecht, S. L., Green, C. R., & Marty, A. (2021). Meaningful work, job resources, and employee engagement. Sustainability , 13 (7), 4045. https://doi.org/10.3390/su13074045 .

Allan, B. A., Batz-Barbarich, C., Sterling, H. M., & Tay, L. (2019). Outcomes of meaningful work: A meta-analysis. Journal of Management Studies , 56 (3), 500–528. https://doi.org/10.1111/joms.12406 .

Ashfort, B. E., & Mael, F. (1989). Social identity theory and the organization. The Academy of Management Review , 14 (1), 20–39. https://doi.org/10.2307/258189 .

Asseburg, J., & Homberg, F. (2020). Public service motivation or sector rewards? Two studies on the determinants of sector attraction. Review of Public Personnel Administration , 40 (1), 82–111. https://doi.org/10.1177/0734371X18778334 .

Bailey, C., Madden, A., Alfes, K., & Fletcher, L. (2017). The meaning, antecedents and outcomes of employee engagement: A narrative synthesis. International Journal of Management Reviews , 19 , 31–53. https://doi.org/10.1111/ijmr.12077 .

Bakker, A. B., & Van Woerkom, M. (2017). Flow at work: A self-determination perspective. Occupational Health Science, 1 , 47–65.

Bandura, A. (1983). Self-efficacy determinants of anticipated fears and calamities. Journal of personality and social psychology, 45 (2), 464–469. https://doi.org/10.1037/0022-3514.45.2.464

Bandura, A. (1994). Self-efficacy. In V. S. Ramachandran (Ed.), Encyclopedia of human behavior (pp. 71–81). Academic.

Bandura, A. (1997). Self-Efficacy: The Exercise of Control . Freeman

Bandura, A. (2001). Social Cognitive Theory: An Agentic Perspective. Annual Review of Psychology, 52 (1), 1–26.

Barrick, M. R., Mount, M. K., & Li, N. (2013). The theory of purposeful work behavior: The role of personality, higher-order goals, and job characteristics. Academy of Management Review , 38 (1), 132–153. https://doi.org/10.5465/amr.10.0479 .

Brammer, S., Branicki, L., Linnenluecke, M., & Smith, T. (2019). Grand challenges in management research: Attributes, achievements, and advancement. Australian Journal of Management , 44 (4), 517–533. https://doi.org/10.1177/0312896219871337 .

Brieger, S. A., Anderer, S., Fröhlich, A., Bäro, A., & Meynhardt, T. (2020). Too much of a good thing? On the relationship between CSR and employee work addiction. Journal of Business Ethics , 166 (2), 311–329. https://doi.org/10.1007/s10551-019-04141-8 .

Bright, L. (2008). Does public service motivation really make a difference on the job satisfaction and turnover intentions of public employees? The American Review of Public Administration , 38 (2), 149–166. https://doi.org/10.1177/0275074008317248 .

Brown, T. A. (2015). Confirmatory factor analysis for applied research. Methodology in the social sciences (2nd ed.). Guilford Press.

Bryson, J. M., Barberg, B., Crosby, B. C., & Patton, M. Q. (2021). Leading Social Transformations: Creating Public Value and Advancing the Common Good. Journal of Change Management, 21 (2), 180–202.

Cartwright, S., & Holmes, N. (2006). The meaning of work: The challenge of regaining employee engagement and reducing cynicism. Human Resource Management Review , 16 , 199–208. https://doi.org/10.1016/j.hrmr.2006.03.012 .

Chaudhary, R. (2022). Deconstructing work meaningfulness: Sources and mechanisms. Current Psychology, 41 (9), 6093–6106. https://doi.org/10.1007/s12144-020-01103-6

Chen, Z. J., Zhang, X., & Vogel, D. (2011). Exploring the underlying processes between conflict and knowledge sharing: A work–engagement perspective. Journal of Applied Social Psychology , 41 (5), 1005–1033. https://doi.org/10.1111/j.1559-1816.2011.00745.x .

Christian, M. S., Garza, A. S., & Slaughter, J. E. (2011). Work Engagement: A quantitative review and test of its relations with Task and Contextual Performance. Personnel Psychology , 64 , 89–136. https://doi.org/10.1111/j.1744-6570.2010.01203.x .

Crawford, E. R., Lepine, J. A., & Rich, B. L. (2010). Linking job demands and resources to employee engagement and burnout: A theoretical extension and meta-analytic test. Journal of Applied Psychology , 95 (5), 834–848. https://doi.org/10.1037/a0019364 .

Article   PubMed   Google Scholar  

Deci, E. L., & Ryan, R. M. (2000). The “what” and “why” of goal pursuits: Human needs and the self-determination of behavior. Psychological inquiry, 11 (4), 227–268. https://doi.org/10.1207/S15327965PLI1104_01

Deci, E. L., & Ryan, R. M. (2012). Self-determination theory. In P. A. M. Van Lange, A. W. Kruglanski, & E. T. Higgins (Eds.), Handbook of theories of social psychology (pp. 416–436). Sage Publications Ltd. https://doi.org/10.4135/9781446249215.n21

Demirtas, O., Hannah, S. T., Gok, K., Arslan, A., & Capar, N. (2017). The moderated influence of ethical leadership, via meaningful work, on followers’ engagement, organizational identification, and envy. Journal of Business Ethics , 145 , 183–199. https://doi.org/10.1007/s10551-015-2907-7 .

Dinh, L. (2020). Determinants of employee engagement mediated by work-life balance and work stress. Management Science Letters , 10 (4), 923–928. https://doi.org/10.5267/j.msl.2019.10.003 .

Drucker, P. F. (2011). Management: An abridged and revised version of management: Tasks, responsibilities, practices . Routledge.

Dutton, J., & Glynn, M. A. (2008). Positive Organizational Scholarship. In C. L. Cooper & J. Barling (Eds.), The SAGE handbook of organizational behavior. Vol. 1: Micro approaches (pp. 693–712). SAGE.

Epstein, S. (2003). Cognitive-experiential self-theory of personality. In I. B. Weiner, D. K. Freedheim, J. A. Schinka, & W. F. Velicer (Eds.), Handbook of psychology (pp. 159–184). Wiley.

Fairlie, P. (2011). Meaningful work, Employee Engagement, and other Key Employee outcomes: Implications for human Resource Development. Advances in Developing Human Resources , 13 (4), 508–525. https://doi.org/10.1177/1523422311431679 .

Frieder, R. E., Wang, G., & Oh, I. S. (2018). Linking job-relevant personality traits, transformational leadership, and job performance via perceived meaningfulness at work: A moderated mediation model. Journal of Applied Psychology , 103 (3), 324–333. https://doi.org/10.1037/apl0000274 .

Gabriel, K. P., & Aguinis, H. (2022). How to prevent and combat employee burnout and create healthier workplaces during crises and beyond. Business Horizons , 65 (2), 183–192. https://doi.org/10.1016/j.bushor.2021.02.037 .

Gartenberg, C., Prat, A., & Serafeim, G. (2019). Corporate purpose and financial performance . Organization Science , 30 (1), 1–18. https://doi.org/10.1287/orsc.2018.1230 .

Gist, M. E., & Mitchell, T. R. (1992). Self-efficacy: A theoretical analysis of its determinants and malleability. Academy of Management review, 17 (2), 183–211. https://doi.org/10.2307/258770

Glavas, A. (2012). Employee engagement and sustainability: A model for implementing meaningfulness at and in work. The Journal of Corporate Citizenship , 46 , 13–29. https://doi.org/10.9774/GLEAF.4700.2012.su.00003 .

Grant, A. M. (2007). Relational Job Design and the motivation to make a Prosocial difference. Academy of Management Review , 32 (2), 393–417. https://doi.org/10.5465/AMR.2007.24351328 .

Grant, A. M. (2008). The significance of task significance: Job performance effects, relational mechanisms, and boundary conditions. The Journal of Applied Psychology , 93 (1), 108–124. https://doi.org/10.1037/0021-9010.93.1.108 .

Grubert, T., Steuber, J., & Meynhardt, T. (2022). Engagement at a higher level: The effects of public value on employee engagement, the organization, and society. Current Psychology , 1–19. https://doi.org/10.1007/s12144-022-03076-0 .

Guan, M., & So, J. (2016). Influence of social identity on self-efficacy beliefs through perceived social support: A social identity theory perspective. Communication Studies , 67 (5), 588–604. https://doi.org/10.1080/10510974.2016.1239645 .

Hackman, R. J., & Oldham, G. R. (1975). Development of the Job Diagnostic Survey. Journal of Applied Psychology , 60 (2), 159–170. https://doi.org/10.1037/h0076546 .

Hakanen, J. J., Schaufeli, W. B., & Ahola, K. (2008). The job demands-resources model: A three-year cross-lagged study of burnout, depression, commitment, and work engagement. Work and Stress , 22 (3), 224–241. https://doi.org/10.1080/02678370802379432 .

Harman, H. H. (1976). Modern factor analysis (3rd ed.). The University of Chicago.

Hartley, J., Alford, J., Knies, E., & Douglas, S. (2017). Towards an empirical Research Agenda for Public Value Theory. Public Management Review , 19 (5), 670–685. https://doi.org/10.1080/14719037.2016.1192166 .

Hinkin, T. R. (1998). A brief tutorial on the development of measures for use in survey questionnaires. Organizational Research Methods , 1 (1), 104–121. https://doi.org/10.1177/109442819800100106 .

Hobfoll, S. E. (1989). Conservation of resources: A new attempt at conceptualizing stress. American Psychologist , 44 (3), 513–524. https://doi.org/10.1037/0003-066X.44.3.513 .

Humphrey, S. E., Nahrgang, J. D., & Morgeson, F. P. (2007). Integrating motivational, social, and contextual work design features: A meta-analytic summary and theoretical extension of the work design literature. Journal of Applied Psychology , 92 (5), 1332–1356. https://doi.org/10.1037/0021-9010.92.5.1332 .

Jakobsen, M., & Jensen, R. (2015). Common method bias in public management studies. International Public Management Journal , 18 (1), 3–30. https://doi.org/10.1080/10967494.2014.997906 .

Jasinenko, A., & Steuber, J. (2023). Perceived organizational purpose: Systematic literature review, construct definition, measurement and potential employee outcomes. Journal of Management Studies , 60 (6), 1415–1447. https://doi.org/10.1111/joms.12852 .

Jia, Y., Yan, J., Liu, T., & Huang, J. (2019). How does Internal and External CSR affect employees’ work Engagement? International Journal of Environmental Research and Public Health , 16 (14), 2476. https://doi.org/10.3390/ijerph16142476 .

Article   PubMed   PubMed Central   Google Scholar  

Judge, T. A., Jackson, C. L., Shaw, J. C., Scott, B. A., & Rich, B. L. (2007). Self-efficacy and work-related performance: The integral role of individual differences. Journal of Applied Psychology , 92 (1), 107–127. https://doi.org/10.1037/0021-9010.92.1.107 .

Jurek, P., & Besta, T. (2021). Employees’ self-expansion as a mediator between perceived work conditions and work engagement and productive behaviors. Current Psychology , 40 , 3048–3057. https://doi.org/10.1007/s12144-019-00241-w .

Leitão, J., Pereira, D., & Gonçalves, Â. (2019). Quality of work life and organizational performance: Workers’ feelings of contributing, or not, to the organization’s productivity. International Journal of Environmental Research and Public Health , 16 (20), 3803. https://doi.org/10.3390/ijerph16203803 .

Levitats, Z., & Vigoda-Gadot, E. (2020). Emotionally engaged civil servants: Toward a multilevel theory and multisource analysis in public administration. Review of Public Personnel Administration , 40 (3), 426–446. https://doi.org/10.1177/0734371X18820 .

Liu, D., Chen, Y., & Li, N. (2021). Tackling the negative impact of COVID-19 on work engagement and taking charge: A multi-study investigation of frontline health workers. Journal of Applied Psychology , 106 (2), 185–198. https://doi.org/10.1037/apl0000866 .

Llorens, S., Schaufeli, W., Bakker, A., & Salanova, M. (2007). Does a positive gain spiral of resources, efficacy beliefs and engagement exist?. Computers in human behavior, 23 (1), 825–841. https://doi.org/10.1016/j.chb.2004.11.012

Lysova, E. I., Allan, B. A., Dik, B. J., Duffy, R. D., & Steger, M. F. (2019). Fostering meaningful work in organizations: A multi-level review and integration. Journal of Vocational Behavior , 110 , 374–389. https://doi.org/10.1016/J.JVB.2018.07.004 .

May, D. R., Gilson, R. L., & Harter, L. M. (2004). The psychological conditions of meaningfulness , safety and availability and the engagement of the human spirit at work. Journal of Occupational and Organizational Psychology , 77 (1), 11–37. https://doi.org/10.1348/096317904322915892 .

Meynhardt, T. (2009). Public value inside: What is public value creation? International Journal of Public Administration , 32 (3–4), 192–219. https://doi.org/10.1080/01900690902732632 .

Meynhardt, T. (2015). Public value: Turning a conceptual framework into a scorecard. In J. M. Bryson, B. C. Crosby, & L. Bloomberg (Eds.), Public Value and Public Administration (pp. 147–169). Georgetown University Press.

Meynhardt, T., & Jasinenko, A. (2020). Measuring public value: Scale development and construct validation. International Public Management Journal , 24 (2), 222–249. https://doi.org/10.1080/10967494.2020.1829763 .

Milovanska-Farrington, S. (2023). Gender differences in the association between job characteristics, and work satisfaction and retention. American Journal of Business , 38 (2), 62–88. https://doi.org/10.1108/AJB-07-2022-0115 .

Morgeson, F. P., & Humphrey, S. E. (2006). The Work Design Questionnaire (WDQ): Developing and validating a comprehensive measure for assessing job design and the nature of work. The Journal of Applied Psychology , 91 (6), 1321–1339. https://doi.org/10.1037/0021-9010.91.6.1321 .

Morgeson, F. P., & Humphrey, S. E. (2008). Job and Team Design: Toward a More Integrative Conceptualization of Work Design. In J. J. Martocchio (Eds.), Research in personnel and human resources management. (vol. 27 , pp. 39–91). Emerald.

Newman, A., Eva, N., Bindl, U. K., & Stoverink, A. C. (2022). Organizational and vocational behavior in times of crisis: A review of empirical work undertaken during the COVID-19 pandemic and introduction to the special issue. Applied Psychology , 71 (3), 743–764. https://doi.org/10.1111/apps.12409 .

Panda, A., Sinha, S., & Jain, N. K. (2022). Job meaningfulness, employee engagement, supervisory support and job performance: A moderated-mediation analysis. International Journal of Productivity and Performance Management , 71 (6), 2316–2336. https://doi.org/10.1108/IJPPM-08-2020-0434 .

Parker, S. K., Wall, T. D., & Cordery, J. L. (2001). Future work design research and practice: Towards an elaborated model of work design. Journal of Occupational and Organizational Psychology , 74 , 413–440. https://doi.org/10.1348/096317901167460 .

Pearson, C. M., & Mitroff, I. I. (2019). From crisis prone to crisis prepared: A framework for crisis management. In Risk management (pp. 185–196). Routledge. https://doi.org/10.5465/AME.1993.9409142058 .

Podsakoff, P. M., & Organ, D. W. (1986). Self-reports in organizational research: Problems and prospects. Journal of Management , 12 (4), 531–544. https://doi.org/10.1177/014920638601200408 .

Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. The Journal of Applied Psychology , 88 (5), 879–903. https://doi.org/10.1037/0021-9010.88.5.879 .

Pratt, M. G., & Ashfort, B. E. (2003). Fostering meaningfulness in Working and at work. In K. Cameron, J. E. Dutton, & R. E. Quinn (Eds.), Positive organizational scholarship. Foundations of a New Discipline (pp. 309–327). Berrett-Koehler.

Rai, A., & Maheshwari, S. (2020). Exploring the mediating role of work engagement between the linkages of job characteristics with organizational engagement and job satisfaction. Management Research Review , 44 (1), 133–157. https://doi.org/10.1108/MRR-10-2019-0442 .

Rasool, S. F., Wang, M., Tang, M., Saeed, A., & Iqbal, J. (2021). How toxic workplace environment effects the employee engagement: The mediating role of organizational support and employee wellbeing. International Journal of Environmental Research and Public Health , 18 (5), 2294. https://doi.org/10.3390%2Fijerph18052294.

Ritz, A., Schott, C., Nitzl, C., & Alfes, K. (2020). Public service motivation and prosocial motivation: Two sides of the same coin? Public Management Review , 22 (7), 974–998. https://doi.org/10.1080/14719037.2020.1740305 .

Ritz, A., Weißmüller, K. S., & Meynhardt, T. (2023). Public value at Cross Points: A comparative study on Employer attractiveness of Public, Private, and Nonprofit organizations. Review of Public Personnel Administration , 2 (4), 1–29. https://doi.org/10.1177/0734371X221098153 .

Rothmann, S., & Welsh, C. (2013). Employee engagement: The role of psychological conditions. Management Dynamics: Journal of the Southern African Institute for Management Scientists , 22 (1), 14–25.

Google Scholar  

Saks, A. M. (2006). Antecendents and consequences of work engagement. Journal of Managerial Psychology , 600–619. https://doi.org/10.1108/02683940610690169 .

Schaufeli, W. B., & Bakker, A. B. (2004). UWES: Utrecht work engagement scale . Preliminary manual.

Schaufeli, W. B., & Salanova, M. (2007). Efficacy or inefficacy, that’s the question: Burnout and work engagement, and their relationships with efficacy beliefs. Anxiety Stress and Coping , 20 (2), 177–196. https://doi.org/10.1080/10615800701217878 .

Schaufeli, W. B., & Taris, T. W. (2014). A critical review of the job demands-resources model: Implications for improving work and health. In G. F. Bauer, & O. Hämmig (Eds.), Bridging occupational, organizational and public health: A transdisciplinary approach (pp. 43–68). Springer Science + Business Media. https://doi.org/10.1007/978-94-007-5640-3_4 .

Schaufeli, W. B., Salanova, M., González-Romá, V., & Bakker, A. B. (2002). The measurement of engagement and burnout: A two sample confirmatory factor analytic approach. Journal of Happiness Studies , 3 (1), 71–92. https://doi.org/10.1023/A:1015630930326 .

Schwarzer, R., & Jerusalem, M. (1999). Skalen Zur Erfassung Von Lehrer- Und Schülermerkmalen. Dokumentation Der Psychometrischen Verfahren Im Rahmen Der Wissenschaftlichen Begleitung Des Modellversuchs Selbstwirksame Schulen . Freie Universität Berlin.

Siemsen, E., Roth, A., & Oliveira, P. (2010). Common method bias in regression models with linear, quadratic, and interaction effects. Organizational Research Methods , 13 (3), 456–476. https://doi.org/10.1177/1094428109351241 .

Spreitzer, G., & Cameron, K. (2012). A path Forward. In K. S. Cameron, & G. M. Spreitzer (Eds.), Oxford library of psychology. The Oxford handbook of positive organizational scholarship (pp. 1034–1048). Oxford University Press.

Spreitzer, G., Sutcliffe, K., Dutton, J., Sonenshein, S., & Grant, A. M. (2005). A socially embedded model of thriving at work. Organization Science , 16 (5), 537–549. https://doi.org/10.1287/orsc.1050.0153 .

Tajfel, H., & Turner, C. J. (1985). The social identity theory of intergroup behavior. In S. Worchel, & W. G. Austin (Eds.), Psychology of intergroup relations (pp. 7–24). Nelson-Hall.

Teo, S. T., Pick, D., Xerri, M., & Newton, C. (2016). Person–organization fit and public service motivation in the context of change. Public Management Review , 18 (5), 740–762. https://doi.org/10.1080/14719037.2015.1045016 .

Truss, C., Shantz, A., Soane, E., Alfes, K., & Delbridge, R. (2013). Employee engagement, organisational performance and individual well-being: exploring the evidence, developing the theory. The international journal of human resource management, 24 (14), 2657–2669. https://doi.org/10.1080/09585192.2013.798921

Vandenabeele, W. (2008). Government calling: Public service motivation as an element in selecting government as an employer of choice. Public Administration , 86 (4), 1089–1105. https://doi.org/10.1111/j.1467-9299.2008.00728.x .

Weißmüller, K. S., De Waele, L., & van Witteloostuijn, A. (2022). Public service motivation and prosocial rule-breaking: An international vignettes study in Belgium, Germany, and the Netherlands. Review of Public Personnel Administration , 42 (2), 258–286. https://doi.org/10.1177/0734371X20973441 .

Woods, S. A., & Sofat, J. A. (2013). Personality and engagement at work: The mediating role of psychological meaningfulness. Journal of Applied Social Psychology , 43 (11), 2203–2210. https://doi.org/10.1111/jasp.12171 .

Wrzesniewski, A., & Dutton, J. (2001). Crafting a job: Revisioning employees as active crafters of their work. Academy of Management Review , 26 (2), 179–201. https://doi.org/10.2307/259118 .

Wrzesniewski, A., Dutton, J. E., & Debebe, G. (2003). Interpersonal sensemaking and the meaning of work. Research in Organizational Behavior , 25 , 93–135. https://doi.org/10.1016/S0191-3085(03)25003-6 .

Xanthopoulou, D., Bakker, A. B., Demerouti, E., & Schaufeli, W. B. (2007). The role of personal resources in the job demands-resources model. International Journal of Stress Management , 14 (2), 121–141. https://doi.org/10.1037/1072-5245.14.2.121 .

Download references

Open Access funding enabled and organized by Projekt DEAL.

Author information

Authors and affiliations.

Dr. Arend Oetker Chair of Business Psychology and Leadership, HHL Leipzig Graduate School of Management, Saxony, Germany

Timo Meynhardt & Jessica Bardeli

Center for Leadership and Values in Society, University of St.Gallen, St.Gallen, Switzerland

Timo Meynhardt & Carolin Hermann

You can also search for this author in PubMed   Google Scholar

Contributions

All authors contributed to the study conception and design. All authors commented on previous versions of the manuscript. All authors read and approved the final manuscript.

Corresponding author

Correspondence to Timo Meynhardt .

Ethics declarations

Compliance with ethical standards.

All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and also with ESOMAR code of conduct. ( https://www.esomar.org/uploads/public/knowledge-and-standards/codes-and-guidelines/ICCES_OMAR_Code_English_.pdf ). Our research is not a medical study conducted with the participation of patients; therefore, the 1964 Helsinki declaration and its later amendments are not applicable here.

Informed consent

This was a fully anonymous online study and the participants were informed about it and agreed to participate by clicking on the link in the invitation e-mail. We did not collect any other forms of informed consent.

Conflict of interest

On behalf of all authors, the corresponding author states that there is no further conflict of interest.

Additional information

Publisher’s note.

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/ .

Reprints and permissions

About this article

Meynhardt, T., Hermann, C. & Bardeli, J. Connecting value creation for society with work engagement: the relevance of an organization’s public value as an extension of the job characteristics model. Curr Psychol (2024). https://doi.org/10.1007/s12144-024-05922-9

Download citation

Accepted : 21 March 2024

Published : 16 May 2024

DOI : https://doi.org/10.1007/s12144-024-05922-9

Share this article

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Common good
• Meaningfulness
• Find a journal
• Publish with us
• Track your research