Effects of co-creation on organizational performance of small and medium manufacturers

Abstract

Co-creation, the joint effort of diverse stakeholders of an organization to enhance the value creation process, is a key in developing shared goals. However, the recent trend of an increasing number and size of mammoth buyers has put the smaller manufacturing suppliers in subordinate roles and relegated their goal to survival. This study, by examining the effect of co-creation on the performance of small and medium manufacturers (SMMs) that supply parts or components to large corporate buyers, found that co-creation does have a significant positive impact on organizational performance through their enhanced strategic advantage. Thus, co-creation is not only important to just large organizations, but even more so to SMMs, as it elevates them from a win-lose relationship to a collaborative partnership with their large buyers. This study makes both theoretical and practical contributions as it is one of the first empirical studies that analyzed the impact of co-creation on SMMs' performance.