The co-production approach to service: a theoretical background

Abstract

The paper develops a theoretical background on the co-production approach as an extension of operations management principles, in which co-production function assumes well-defined functional form with the input presence of both firm and customers. The co-production approach not only views a customer as a co-producer, but also conducts strategic trade-offs between a firm and customers in service systems. Moreover, the value and the process of value co-creation are also explored under the co-production approach. The experimental study with a hypothetical service system indicates that the co-production function is feasible under economic and institutional considerations, and the co-production approach generalizes both the firm approach and the customer approach. Furthermore, the co-production approach creates many rich opportunities for future research on service operations management.