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Co-creation and co-destruction
A practice-theory based study of interactive value formation
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Drawing on an empirical study of public transport, this paper studies interactive value formation
at the provider-customer interface, from a practice-theory perspective. In contrast to the bulk of
previous research, it argues that interactive value formation is not only associated with value co-
creation but also with value co-destruction. In addition, the paper also identifies five interaction
value practices – informing, greeting, delivering, charging, and helping—and theorizes how
interactive value formation takes place as well as how value is inter-subjectively assessed by
actors at the provider-customer interface. Furthermore, the paper also distinguishes between four
types of interactive value formation praxis corresponding with four subject positions which
practitioners step into when engaging in interactive value formation.
Keywords: Practice theory, Marketing, Value, Co-creation, Co-destruction, Interactive value
formation, Praxis, Subject positions.
Understanding how value is formed has been a key research endeavour in marketing. Previous
research distinguishes between two major types of value formation. The first is non-interactive
value formation which holds that value is produced by providers and consumed by customers—
value is conceptualized as exchanged (Alderson, 1957; Bagozzi, 1975; Hunt, 1976). The second
is interactive value formation which stipulates that value is co-created during the interaction
between the provider and the customer (Prahalad and Ramaswamy, 2004; Ramírez, 1999; Vargo
and Lusch, 2004)1.
In this paper, our aim is to outline a framework that explains how interactive value formation
takes place in practice. We argue that such a framework is lacking. Key reasons for this can be
found in two research limitations in previous research. The first concerns the lack of knowledge
of how interactive value formation actually takes place in practice. A major part of previous
research is conceptual and abstract. Empirical research has not been geared towards studying the
micro practice of interactive value formation. This makes previous research poor in terms of
theoretically explaining and practically guiding interactive value formation. The second
limitation concerns the abundance of positive, as well as the relative lack of negative, accounts of
interactive value formation in the literature (Bonsu and Darmody, 2008; Cova and Dalli, 2009,
Zwick et al., 2008). We argue that this resonates poorly with experiences that we have all had as
consumers, and with frontline employees’ experiences when serving their customers. Interactive
value formation is clearly not only linked to positive outcomes and connotations. Accordingly,
both the upside and the downside need to be explained and accounted for using an interactive
value formation framework.
In order to overcome these two limitations, we draw on a detailed empirical study of interactions
between the frontline employees of a Swedish public transport organization and their customers.
Theoretically, the study is based on practice theory, which helps us to illuminate and analyze the
micro practice of interactive value formation. In particular, we draw on practice theory as
elaborated on in previous marketing research, which has begun to address the above-noted
limitations (Schau et al., 2009; Skålén, 2009; 2010; Warde, 2005).
The empirical study and our theoretical orientation enable the outlining of a framework that
explains interactive value formation in practice. More specifically, the paper employs the notion
of value co-destruction (cf. Plé and Chumpitaz Cáceres, 2010)2, capturing the downside of
interactive value formation. In addition, the paper also identifies five interaction value
practices—informing, greeting, delivering charging, and helping. It suggests that value co-
creation and co-destruction are two key dimensions of these interaction value practices. It also
argues that these five practices are made up of specific elements of practices. Drawing on Schau
et al. (2009), these elements are discussed in terms of procedures, understandings, and
engagements that make it possible to theorize how interactive value formation takes place and
how value is inter-subjectively assessed by agents. More specifically, the paper suggests that
interactive value formation derives from providers and customers drawing on congruent (in the
case of value co-creation) and incongruent (in the case of value co-destruction) elements of
practices. It argues, furthermore, that the relationship between interaction value practices,
elements of practices, and dimensions of interaction value practices is associated with four types
of praxis—characteristic patterns of interaction between providers and customers: reinforcing
value co-creation; recovery value co-formation; reductive value co-formation; and reinforcing
value co-destruction. Associated with each of these is one subject position or role—value co-
creator, value co-recoverer, value co-reducer, and value co-destroyer—which the practitioners (or
human actors involved in the interaction) need to step into in order to be able to perform
In this section, we review mainstream research into interactive value formation, discuss the
limitations of this research, and outline a framework based on practice theory that is drawn on to
address these limitations.
Interactive value formation research
Above, we distinguished between two major types of value formation: interactive and non-
interactive. These two types correspond with the two major views of conceptualizing value in
marketing theory. The first of these is the exchange view of value. This view is associated with
non-interactive value formation and has dominated conceptualizations of value in marketing
research (Bagozzi, 1975; Hunt, 1976; Alderson, 1957). According to this view, value; is
embedded in the products or services that focal organizations produce; is added during the
production process, which is separated from the customer; and equals the price that the customer
pays for products and services—value is objectively measured in terms of money. In the
vocabulary of Miller (2008: 1124), the exchange view represents a bottom-line approach to value,
meaning that the price of a product or service is the ‘single form of value to which all economic
life should be reduced’.
The exchange view of value has been challenged by another view which we will refer to as the
interaction view.3 This view is associated with interactive value formation and stipulates that
value is co-created during the interaction between the provider and the customer (Prahalad and
Ramaswamy, 2004; Ramírez, 1999; Vargo and Lusch, 2004). In contrast to conceptualizing value
as embedded in the product, this view holds that providers co-create services and products in
collaboration with their customers. This implies that value, rather than being added during a
separated and non-interactive production and consumption process, is co-created, realized, and
assessed in the social context of the simultaneous production and consumption process. Rather
than being objectively measured in monetary terms, value is subjectively assessed from the
customers’ or the providers’ points of view. The conceptualization of value underlying interactive
value formation and the corresponding interaction view of value resonate with Holbrook’s (2006)
definition of value. Holbrook takes the stance that value resides in actions and interactions and
that it is collectively produced but subjectively experienced. More precisely, Holbrook (2006:
212) refers to value as an ‘interactive relativistic preference experience’. This definition implies
that value; is a function of the interaction between subjects, or a subject, and an object; is
contextual and personal; is a function of attitudes, affections, satisfaction, or behaviourally-based
judgments; and resides in a consumption experience. This perspective thus holds that value can
never be reduced to monetary evaluation, rather it is a function of an individual’s articulated set
This paper contributes to research on interaction value and focuses on interactive value
formation. It is informed by service marketing research wherein the idea that value in service
settings is co-created during the interaction between providers and customers has been key ever
since the formation of the research stream in the late 1970s/early 1980s (Grönroos, 1982;
Shostack, 1977). By articulating the notion of ‘interactive marketing’ (Grönroos, 1982;
Gummesson, 1987), service marketing scholars have claimed that marketing is not only realized
through the traditional 4P marketing mix oriented efforts coordinated by the marketing
department, but also during interactions between providers and customers.
In marketing, the understanding of co-creation as initially specified in service marketing has
recently been elaborated on in work on the service-centred view conducted by Lusch and Vargo
(2006; Lusch et al., 2007; Vargo and Lusch, 2004; 2008, see also Etgar, 2008; Jaworski and
Kohli, 2006; Kalaignanam and Varadarajan, 2006). Work on the boundary between marketing
and strategic management has also contributed to this elaboration (Prahalad and Ramaswamy,
2004; Normann and Ramírez, 1993; Ramírez, 1999). The service-centred view is articulated
using the distinction between ‘operand resources’, that is ‘resources on which an operation or act
is performed’, e.g. ‘land, animal life, plant life, minerals and other natural resources’, and
‘operant resources’, which are most prominently the ‘skills and knowledge’ that are ‘employed to
act on operand resources (and other operant resources)’ (Vargo and Lusch, 2004:2). It argues that
operant resources are key to value co-creation and critiques the exchange view of value for
emphasizing operand resources as central to the value formation process. According to the
service-centred view, the knowledge and skills located within the organization—e.g. the
competence of the employees, shared cultures, information systems, and market information—
and in the environment—e.g. customer skills, national cultures, and institutional frameworks—
drive value formation. The implication is that value formation is seen as interactively co-created
by operant resources acting on operand resources or by operant resources in collaboration, and
that value is conceptualized as realized in use: it is only when the knowledge and skills, or the
operant resources, are active or activated that value co-creation takes place. Prahalad and
Ramaswamy (2004: X and 16) define the co-creation of value thus: ‘The consumer and the firm
are intimately involved in jointly creating value that is unique to the individual consumer…The
interaction between consumers and firms becomes the new locus of co-creation of value’.
Issues linked to interactive value formation are also found in another research stream associated
with service marketing—service encounter research—which deals with the outcome of the
contact between provider and customer. This research stream has been preoccupied with
accounting for how customers evaluate service encounters (Meuter et al., 2000; Surprenant and
Solomon, 1987). In the language of Oliver (2006), service encounter research has been
“unidirectional”, implying that the co-creation of value between providers and customers has not
been studied systematically. However, recent conceptualization emphasizes that service
encounters are co-creation entities whereby the services rendered by the firm are matched by the
services that consumers provide to the firm. Oliver (2006) explores conceptually (but not
empirically) the dynamics underlying this symbiosis in terms of mutual satisfaction and
bidirectionality, the latter referring to the assessment and fulfilment of the other party’s needs.
According to this view, both provider and customer are obliged to exceed the other’s expectations
of them, i.e. the verbal and nonverbal communication of clear mutual expectations regarding
appropriate requests. Value, in this sense, is interactional, a reciprocal action, even if the power
balance between the parties is more or less asymmetric.
Limitations of the interaction view of value formation
The aim of this paper is to outline a framework that explains how interactive value formation
takes place in practice. In relation to this aim, we have identified two limitations in previous
interaction value research. The first limitation concerns the fact that the interactive value
formation frameworks put forward are not based on systematic empirical research. Rather, they
are conceptual (e.g. Vargo and Lusch, 2004) or draw on anecdotal data (e.g. Prahalad and
Ramaswamy, 2004). In the service encounter research, sound empirical studies do exist, e.g.
Price and Arnoulds’ (1999) study of commercial friendship, suggesting that provider-customer
interactions offer opportunities for sociability, as well as the suggestion of Chandon et al. (1997)
that there is a dyadic perspective on the dimensions of service encounters. However, these studies
do not explain, or offer, a framework suggesting how interactive value formation takes place in
practice. The result is that previous research does not capture the marketing practices
underpinning interaction value. The outcome of this is the lack of a framework capable of
explaining interactive value formation. Initiating such an articulation requires that the point of
departure be taken in a systematic (qualitative) empirical study of the practice of provider–
The second research limitation that we identify in the research into interaction value concerns the
fact that what can be referred to as the downside of value formation is not accounted for. The
literature on interaction value is linked to fairly positive connotations—the key notion of co-
creation as such is a clear example of this. Prahalad and Ramaswamy (2004) occasionally warn
that interactions with providers may sometimes be perceived negatively by customers. When
referring to one particular case, for instance, they infer that ‘not everyone enjoys such an
interactive co-creation process…Nor are all co-creation experiences positive’ (Prahalad and
Ramaswamy, 2004: 21). Yet, the main impression we get from the literature is that engaging in
interactive value formation processes is conceived as unproblematic for the parties involved.
Along with critical studies of value co-creation (Bonsu and Darmody, 2008; Cova and Dalli,
2009, Zwick et al., 2008), we argue that this is an unrealistic conception. However, unlike these
critical studies, the present paper aims to outline a framework that explains how interactive value
formation takes place.
Thus, interactive value formation is clearly not only linked to positive outcomes and
connotations. A framework that explains how interactive value formation takes place in practice
needs to be informed by accounts of both the up-side and the down-side of the practice of
interactive value formation. In line with Plé and Chumpitaz Cáceres (2010), we see reasons to
suggest a distinction between the co-creation of value and the co-destruction of value during
interactive value formation. While co-creation refers to the process whereby providers and
customers collaboratively create value, co-destruction refers to the collaborative destruction, or
diminishment, of value by providers and customers. Thus, the co-destruction of value, like the
co-creation of value, is likely to be an integral part of the interaction between providers and
sellers when the latter consumes the service. The paper specifies the notion of co-destruction of
value and uses it as a basis for outlining the framework depicting how interactive value formation
takes place in practice. However, unlike previous research into value co-destruction (Plé and
Chumpitaz Cáceres, 2010), this paper draws on a systematic empirical study and builds on
marketing research informed by practice theory, which we turn to next.
When studying interaction between providers and customers, from the perspective of practice
theory, the point of departure is the observable interactional practice itself (Holt, 1995; Schau et
al., 2009; Warde 2005). There is a particular focus on practices: the key concept of practice
theory (Duguid, 2005; Reckwitz, 2002). Practice theory holds that action is only possible and
understandable in relation to common and shared practices and that social order is constituted by
practices (Bourdieu, 1977; Foucault, 1977; Giddens, 1984). Practice theories thus conceive of
organizations as constituted by the shared practices which actors draw on to act and interpret
other actors’ actions (Orlikowski, 2007; Schatski, 2006).
Jarzabkowski and Spee (2009: 70), in an overview of practice-theory informed strategy research,
define strategy practices as shared ‘social, symbolic and material tools through which strategy
work is done’. According to Chia (2004: 32), practices are ‘background coping skills’ which
actors unconsciously draw on in order to manoeuvre in everyday life. Warde (2005) argues that
practices comprise a temporally unfolding and spatially dispersed nexus of behaviours that
include practical activities, performances, and representations or talk. Practices are, thus,
combinations of mental frames, artefacts, technology, discourse, values, and symbols
(Orlikowski, 2007; Schatski, 2006). A particular combination of these different building blocks
constitutes practices which, for example, can be ‘routinized ways in which bodies are moved,
objects are handled, subjects are treated, things are described and the world is understood’
(Reckwitz, 2002: 250). Following practice theory, we thus conceive of practices as background
coping skills that simultaneously limit and enable interactions between provider and customer.
A key research endeavour in this study will be to identify which practices providers and
customers draw on in order to co-create and co-destruct value when interacting with each other.
We will refer to these practices as interaction value practices. In this regard, the present paper
will elaborate on Schau et al. (2009) who, in their practise-theory informed study of value
creation in web-based communities, identified 12 practices. The rich palette of practices
identified by Schau et al. (2009) is, however, based on data concerning interactions between
consumers on web forums. Thus, the context under study is particular and does not include the
interactions between providers and customers—a key relationship when understanding
interaction value—in focus in the present paper. In addition, the link with the destructive side of
interaction value is weak in the work of Schau et al. (2009).
The present paper will also build on Schau et al. (2009) when it comes to conceptualizing
practices. Drawing on previous practice theory research (Duguid, 2005; Schatzki, 1996; Warde,
2005), Schau et al. (2009) argue that practices have a common anatomy consisting of the
following parts: ‘(1) procedures—explicit rules, principles, precepts, and instructions, called
“discursive knowledge”; (2) understandings—knowledge of what to say and do, skills and
projects, or know-how; and (3) engagements—ends and purposes that are emotionally charged
insofar as people are committed to them’. We will refer to these parts as elements of practices,
which will help us to articulate an understanding of how interaction value is inter-subjectively
assessed by actors.
Praxis and practitioners
According to practice theory, practices structure praxis, i.e. the stream of activity in which
different types of action are accomplished. A change in the practices, or a reconfiguration of the
elements of practices governing and structuring a situation, implies a change of praxis
(Jarzabkowski and Spee, 2009; Reckwitz, 2002; Whittington, 2006). Recently, marketing
research has developed rich descriptions of marketing practices and the link between these and
actions (Schau et al., 2009; Skålén, 2009; 2010). However, conceptualizations of which types of
praxis that are associated with interactive value formation and the practices that foster this type of
value formation are lacking. Consequently, the paper aims to contribute knowledge in this area.
In addition, practices and configurations of elements of practices form practitioners; the human
actors involved in a certain practice. From a practice-theory perspective, practitioners (human
actors) are conceived of as unique combinations of practices. Identity/subjectivity is not, thus,
conceptualized as a function of the stable constellations of attributes, beliefs, values, motives, and
experience residing in the individual, but as subject positions embedded in the ‘background
knowledge’—the practices—governing and structuring a particular practice in which the
individual is involved. As Skålén (2009; 2010) has suggested, a change in the marketing practices
structuring a practice thus implies that the subjectivity of the practitioners will change in
corresponding ways. However, just how interaction value practices and elements of practices
form practitioners has not been studied systematically.
Since interactive value formation is an empirically under-explored area of research, we decided
to adopt an exploratory single-case study design (Eisenhardt, 1989; Yin, 1984; Miles and
Huberman, 1994) in order to address the research limitations reported above. Our study of the
Swedish public transport organization Göteborgs Spårvägar (Gothenburg Tramways) (GS)
focuses on interactions between bus/tram drivers and travellers on the GS system, whereby
interactive value formation, according to previous research, is said to take place.
Our main data collection technique was conducting interviews. In total, we interviewed 55
people. Of the informants, 38 were men and 17 were women, reflecting the uneven gender
distribution within the organization. Each interview lasted between 45 minutes and two and a half
hours. All the interviews were conducted face-to-face at the organization’s premises, e.g. in an
office, conference room, or similar.
An initial round of interviews was conducted in May and June 2008. During this phase, we
interviewed a group of 5 customer representatives, a group of 4 drivers, a group of 5 strategic
managers, and 2 groups (consisting of 3 and 4 people) of frontline managers. These initial group
interviews were rather unstructured and were aimed at getting an overview of the organization
and identifying the locus of the value formation processes. We returned to the organization in
February and again in September 2009 for the second and third rounds of the individual
interviews—26 with drivers and 8 with staff working approximately half-time as instructors and
part-time as regular drivers4. The themes that emerged during the second round were probed
during the third round, by asking informants to re-narrate specific driver-customer interactions—
both positive and negative. The present article draws mostly on the 34 interviews conducted
during the second and third rounds.
This selection of informants reflects our choice of bringing an employee perspective into the
investigation of interactive value formation at the expense of the customer perspective. The
argument for approaching interaction value practices from the employee side is that it gives us
rich data from individuals with extensive experience of these practices. Our assumption is that
these informants, even though they are somewhat coloured by their perspective, also have the
capacity to reflect the customer side of things in their narratives. Especially since we asked the
informants questions encouraging them to share narratives regarding interactions between them,
as providers, and their customers, we argue that interviewing was an appropriate technique for
mapping the interaction value practices drawn on by the actors in this particular context
(Czarniawska, 1998). A criterion for selection was experiences of customer interaction on a daily
basis—in our case drivers and instructors. Within that group, we tried to find a range of
individuals that mirrored different working experience and working sites. The reason for
interviewing instructors and managers was that these influence the practice of interactive value
formation within the organization by means of different management activities, e.g. coaching and
monitoring of service interactions in the field. Using this procedure, we can confirm contextual
conditions in the organization and we were able to identify the understanding of existing
In addition to interviews we also made some twenty or thirty complementary observations of
interactions between providers and customers. These observations were made during a few days
of intensive field work (at the time of the second and third rounds of interviews) on board
different buses and trams, all over the local transport system that GS operates. The observations
supported and further elucidated the impressions gained during the interviews. Besides these
observations, we also used video recordings of 20 driver-customer interactions to further confirm
our categories and to study in more detail the inter-subjective mechanisms of value formation
(Echeverri, 1999; 2002; 2006).
We transcribed and coded the interviews as quickly as possible after conducting them, Nvivo 7
being used as the data analysis software. The data analysis was inspired by Layder (2005),
shifting between data and theoretical concepts. Accordingly, when empirical themes and codes
capable of informing gaps in previous research were detected, subsequent data collection focused
on developing—or probing—these themes and also structured itself around them. More to the
point, a theoretical sensitivity to interactive value formation guided the ongoing joint collection
and analysis of data conducted during the different phases. The iterative reflections upon the
empirical material finally contributed to the conceptualizations made in the paper. Specifically,
the concept of practice in practice-theory and the constant comparison of interview-narratives
made us sensitive to observable interactions central to service encounters in public transport.
Moreover, drawing on previous research (Schau et al., 2009), the conceptualizations of the
anatomy of practices—as procedures, understandings and engagements—were used as selective
coding categories and each constituent was identified in all narratives. Empirical codes, which are
in vivo codes or simple descriptive phrases, were generated in relation to these three constructs
and the two main dimensions of practices—co-creation and co-destruction. Building on these
empirical codes, we identified five interaction value practices—informing; greeting; delivering;
charging and helping—which could repeatedly be observed in the empirical material. Similarly,
the sensitizing concept of praxis was used to empirically identify streams of activities,
specifically in relation to interactive value formation. Early on, we received indications that these
streams were dynamic and varied, in relation to the process and the outcome of the activity
stream as a whole. The concept helped us to define central patterns of interactions and to see the
links to the two main dimensions of practices—co-creation and co-destruction. Based on these
patterns, we defined subject positions, also a key concept in our practice-theoretical framework.
By iterating between the data and the conceptualization of practice-theory, we realized that we
could contribute to previous research by outlining an empirically-based and practice-theory-
informed framework of interaction value taking co-creation as well as co-destruction of value
into account. All subsequent data analysis and collection was carried out with this in mind.
This section reports on the five interaction value practices—informing; greeting; delivering;
charging and helping—that we have identified in our data. Illustrated by quotations, this section
describes each of these in relation to the procedures, understandings, and engagements
constituting the elements of each practice. In relation to each quotation, we show how
configurations of these elements cause either value co-creation—i.e. when the elements are
congruent—or value co-destruction—i.e. when the elements are incongruent.
Informing is the first interaction value practice that we identify in our data. Informing implies
that employees and customers share information regarding issues related to the service – in our
case, timetables, prices, traffic jams, etc. Our data analysis suggests that informing is a common
denominator in most provider-customer interactions.
The following narrative is an example of co-creation concerning a bus-driver informing an
irritated passenger about the nature of timetables.
“I always say to those who complain [about delays] …that [being delayed by] 2-3 minutes doesn’t
matter (understandings). – Ok, you’re 2 minutes late [says a customer] in an irritated voice
…(engagements). – Did you read the timetable, underneath? Those times are approximate
(procedures). – Right, ok [says the customer] (understandings / engagements). I always talk to them in
cases like these.”
As an effect of informing about procedures, which the bus-driver does to the passenger, their
understandings, which are initially at odds with one another, coalesce. In addition, the initially
negative emotional engagement of the passenger is reduced. Congruence is established between
the elements of the practice. Regarding the co-creative dimension of this practice of informing,
both actors negotiate on how to interpret the meaning of the information at hand, referring to
implicit codes of conduct and to workflow experience—accepting and giving responses in line
with accepted cultural norms.
Many employees witness co-destruction that occurs due to ignorance on the part of the passenger
when it comes to how the public transport system works—the procedures of the system. One
common problem, which all drivers experience, arises when crossing lanes of traffic. In order to
do this, they need to stop the traffic by pushing a button which turns the traffic lights red. When
this happens, they themselves get a green light– they get “the signal”, as they call it. However,
when they push the button, the doors need to be closed. If they open the doors again, they will
need to start the process all over again, which might take up to a minute—an eternity in the life of
a bus or tram driver. This means that buses and trams sometimes have to stand at the platform
without letting customers board. To the ignorant customer, who does not know about the
procedure surrounding “the signal”, this seems like very bad service and can thus cause negative
“I was standing at Liseberg [a popular amusement park in Gothenburg where GS operates] …this was
when we sold tickets. There are always loads of people at Liseberg …I was selling tickets, and more
tickets, and then more tickets and then I got to Berseligatan [a subsequent stop] ...I shut the doors and
locked them. I switched the signal (procedures). And then a girl came running, and did she run. I had a
dad and his twin sons sitting up front, they weren’t from round here. He was explaining to the boys
about trams and all that. And then this girl comes running. I thought, if she makes it, I’ll open the door
and she can board the tram. But before she made it, I got a green light (procedures) and I was really
late. So I pulled away and then I heard him [the dad with his kids]. He was talking and talking and he
was so angry (engagements). So at the next stop, I got out of my cab and asked him what the problem
was (understanding). – That was the worst thing I ever saw. That was the worst he said!
(engagements) So then I had to explain to him that I was 10 minutes late (understandings). But that
wasn’t something that grabbed his attention. He didn’t want to hear that. That was the worst thing he’d
ever seen. And she really struggled and you just pulled away [he said] (engagements). But they don’t
want you to explain why. I’m no idiot …Sometimes it really, really feels like crap, excuse me
As the narrative exemplifies, drivers and customers sometimes operate with incongruent
comprehensions of the procedures and understandings that should be drawn on in the practice of
informing. This leads to diverging engagements and to the co-destruction of value. More
generally, our findings suggest that the co-destructive dimension of this practice is displayed
when interactants disagree with each other, obstruct responses, misinterpret or keep information
to themselves, displaying disappointment about poor performance.
The second practice that we identify is greeting, which refers to how employees and customers
approach each other. In our case, this usually takes place when the passenger boards the vehicle
and employs both verbal (e.g. ‘hi’) and non-verbal communication (e.g. a nod). Greeting is a way
of mutually addressing an inherent and occasional relationship between provider and customer.
It is not surprising that greeting fosters the co-creation of value. When people greet each other,
this is usually done in a friendly way. The following quote involves a bus driver and an
imaginary customer, describing how greeting drives the co-creation of value.
“If I swivel my seat toward you (procedure) and smile when you board my bus (understandings), then
you feel that I see you as a person, as an individual (engagement). Then you will have been welcomed
aboard my bus. There’s someone who sees you and says good morning to you. So, I want you to board
my bus …[in keeping with] all of your upbringing and all that (understandings).”
The procedure of “swivelling the seat” is in line with instructions the company has implemented
in order to regulate how customers should be greeted. The quote illustrates that drivers and
passengers need to agree on the understandings, procedures, and engagements that are drawn on
in the practice of greeting in order for the co-creation of value to take place. Our findings suggest
that the co-creative potential of this practice is realized when mutual greeting behaviour is in line
with organizational instructions and cultural norms. Skills of demeanour, recognizing the
presence of the other as an individual, are crucial.
At first glance, it might seem more surprising that greeting also informs the co-destruction of
value. However, if providers and buyers have different expectations regarding which elements of
practices should characterize a particular greeting event, our data supports the fact that co-
destruction is likely to take place.
“I was a bit …behind schedule (procedure). So I pulled in to the bus stop and opened the doors to let
people on and off. Everyone boarded apart from one man, he went forward and stood to one side and
let people on in front of him. So I said: – Are you travelling? – Yes. – Well get on then, we’re in a
hurry (understandings). – No, I’ll get on up there, you have to move all the way up there, right the way
up is where you’re supposed to stop (procedure) and that’s where I get on. – But I haven’t got time for
that (understandings), we’re behind schedule (procedure), we’ll be too late for people to make their
bus connections …(understandings). – I’ll get on up there and you have to drive up to that point
(procedure). I just shut the door and drove away. He chased after me with his …briefcase and waved
As the narrative shows, divergent understandings and more or less conflicting procedures relate
to dissimilar engagements between the actors. Accordingly, when the provider and the customer
do not agree on which elements of practices should be drawn on in order to conduct a particular
greeting, this can be truly co-destructive. The co-destructive potential of the practice of greeting
is salient when interactants accuse each other emotionally, or neglect the situation of the other—
acting in a selfish way.
The third practice that we identify in our data is delivery of the core service—the actual
transportation of people from A to B. This may involve extensive interaction, especially in
situations involving service breakdowns. Even if the term “delivering” might seem associated
with the provider side, it should be conceived as an interactive concept—i.e. both providers and
customers are involved in realizing delivery.
Intuitively, one might believe that co-creation takes place when customers get what they pay for,
while co-destruction happens when the service breaks down. Even though this is supported by
our data, it might also be the other way round—i.e. that failure to deliver the core service might
drive co-creation. Our data suggests that the way the actors handle the breakdown is just as
important as the breakdown itself as regards experiencing value formation.
“Sometimes, there are traffic jams – things come to a standstill …We’re not allowed to open the doors
everywhere (procedures). But you can get round the rules a bit to make things easier for the traveller.
If …the front door is at the stop [you can tell them to] get off that way …You can be a metre away
from the stop. Then you can’t really open the door but you do anyway (understandings). The
passengers often express their gratitude (engagements).”
The quote shows that customers and drivers sometimes agree on the fact that procedures should
be broken. If the driver and the customer act accordingly, understandings and engagements might
level out, fostering value co-creation. This finding somewhat contradicts the commonly held
idea, in service research, that it is important to deliver according to the stipulated procedures and
standards of the organization. In order for value co-creation to happen, a certain level of
flexibility has to be allowed for. Indeed, the co-creative dimension of the practice of delivering
appears when employees remain flexible towards organizational instructions, and when
customers voluntarily simplify the work of the employees, adapting to the flow of service
production. Co-creation happens when the interactants mutually agree on what procedures to
invoke in order to carry out a particular action (expressing gratitude or being flexible about
problems that occur).
On the other hand, when drivers comply with procedures or apply them too strictly, this might be
a source of the co-destruction of value. The following narrative, from a tram driver who
interpreted the formal rules rather strictly during one stage of her career, provides an example of
“One thing has etched itself very deeply into my memory and that was when I did something which
wasn’t good (understandings). I was driving a no. 5 into town. I was on time and not a second late.
There was an old dear, I’m sure she had pains in her legs and found it difficult to get around. I catch
sight of her; she’s about 20 metres away, no more. And she wants to travel, she waves to me, a really
sweet old dear, but I was sulking and thought: “no, you have to be at the stop or you don’t get to ride
on my tram” (procedures). I shut the doors and moved off. I didn’t think much more about it as that’s
the way I worked back then. And then a girl came up to me and asked, did you see that lady? I replied
yes (understandings) and then she said – bloody hell, that was a nasty thing to do. And I knew she was
right. It was a bad thing to do (engagements). Maybe it would’ve cost me three seconds …It was nice
that she came up to me and told me off. That’s what I deserved.”
The quote suggests that the customers and the drivers sometimes hold incongruent opinions about
how to balance procedures and engagements. In this case, the driver interprets the procedures
rather strictly at the expense of a key purpose of the service, while the customer argues for more
flexibility. Ultimately, the quote suggests that incongruence between providers’ and customers’
conceptions of which elements of practices should be applied during interaction causes the co-
destruction of value. This finding challenges both the customer-centric view, that is central to
much marketing research, and the provider-centric view of quality standards in service
production. Value formation is rather a matter of inter-subjective congruence.
Charging is the fourth central practice involving co-creation and co-destruction that we find in
our data. By the time we did our data collection, a change in charging procedures had taken
place. GS drivers had stopped handling money and had thus also stopped selling tickets. GS had
implemented different types of self-service ticketing technologies—ticket machines, smart cards,
SMS ticketing, etc. However, these changes did not entail a decrease in the interaction between
the drivers and the customers regarding payment. The reason for this is that the different self-
service payment possibilities caused the customers to ask the drivers a lot of questions. The
change also caused frustration and the need for assistance. Accordingly, charging still involves
the interactive procedure of paying, checking, and issuing tickets, in which both customers and
drivers are involved.
The interaction surrounding charging provided an opportunity for interaction which could end in
both the co-creation and co-destruction of value. In the former case, the drivers and the customers
solve the problem through collaboration.
“There was a lady who wanted to buy a ticket. And I just …– listen; I haven’t sold tickets since last
summer (procedures). – Ok, I’m just visiting [the lady said]. But then I explained that she could buy
one from the ticket machine, which we have on board the trams, or by text message (understandings)
…It made her really happy (engagements).”
This quote from a tram driver suggests that the customer had misunderstood the procedures of the
practice of charging the customer. Collaboratively, the driver and the customer worked towards
levelling out their understandings with regard to charging, resulting in positive engagements and
congruent elements in the practice of charging. Co-creation is realized when the procedure of
charging is explained, understood and accepted. Practical knowledge of charging methods and
how to deal with equipment is shared, and used, preferably also along with markers of mutual
However, not being able to buy a ticket might also trigger the co-destruction potential that lies
dormant in the charging practice. This can be explained by the actors operating with incongruent
elements of practices. The following quote from a tram driver provides a good example of this.
“I say [to the customers]: – I don’t sell tickets anymore, we don’t do that (procedures)...And then they
get angry and say: – It’s bad that you can’t do that (engagements). Then I say: – You’ll have to use the
ticket machine [which is on board the tram] (procedures). Then they say: – Do you accept notes
(procedures)? – when I’ve just said ticket machine. That makes me frustrated, none of them listen
(engagements). Then they say: – Can I get some change then? – But we don’t handle cash anymore.
Then they say: – But what am I going to do (understandings)? Then a lot of them get irritated
(engagements) even though you’ve just given them two or three different alternative ways of paying
for their journeys (understandings). Then there’s someone else who doesn’t get it, who didn’t hear
what was said. He got all angry and slammed the door and all that (engagements). Some people get
angry over nothing at times.”
The quote clearly illustrates incongruent understandings and procedures between a driver and a
customer. Obviously, the actors are not adjusted to each other and do not agree on how to
practice charging. Complicated payment methods, bad instructions, and limited understanding in
tandem with a stressful environment cause problems. None of the actors pay attention to the
required knowledge and skills. States of irritation and frustration (on both sides) are displayed
and neglected. Incongruent elements of practices which inform providers’ and customers’
conceptions of how the ticketing system should work are linked to co-destruction.
The fifth interaction value practice that we identify is helping. By helping, we mean the help that
the staff provide the customers with (e.g. helping an elderly person to board), the help the
customers give each other (e.g. one customer helping another to board), and the help the
customers give the staff (e.g. picking up litter off the floor). This practice is frequently reported
in the data and is clearly linked to interactive value formation.
The most common example of helping in our data is when a driver helps an elderly person, a
disabled person, or a parent with a pram to board a bus. It is not surprising that this type of help is
often associated with the co-creation of value. The following quote illustrates how this co-
creation takes place.
“Sometimes [you have to] help people with stuff to board the tram (understandings) ...It’s the older
trams and especially ...the elderly with walking frames. They find it difficult to get aboard. Then, you
have to help them (procedures) …Most of the time, they’re very grateful (engagements).”
The quote illustrates that the actors mutually contribute, agree on the procedures, and share
understandings of what is needed and what should be done. Employees display a willingness to
be of help to customers in their handling of resources during their consumption process. This has
its equivalent in the customers who collaborate with the employees by paying attention to
instructions and supporting the actions of the employees in different situations. Put differently,
customer and provider draw on congruent elements associated with the practice of helping. When
this is the case, co-creation will take place.
Counter-intuitively, helping can also lead to the co-destruction of value in the provider-customer
interface. The following quote from one of the tram drivers illustrates this.
“Today, there are drivers who feel that ...‘well, it’s not really my job to lift a pram’ (understandings)
…we’re there to drive …it can take 1½-2 minutes [to get a walking frame on board] …Then …there
might be prams wanting to travel but there won’t be any space for them on my tram – maybe they’ll
have to take the one behind (understandings). Then you have to get on the PA and tell them that
(procedures). Then they don’t hear what you’re saying and then it’s “why can’t I get on?”
(understandings). Then there will be some fuss (engagements), and that will take up a minute or two as
The reason to that helping leads to co-destruction is that the provider’s and the customers’
presupposed procedures of helping do not level out; the skills and actions of helping do not
connect properly with the others’ needs and procedural understanding, e.g. making a fuss or
losing one’s temper when assisting. It is not just a question of the absence of help, rather the way
it is conducted. Understandings and engagements associated with the practice of helping, which
the employee and customer draw on, are incongruent and cause the co-destruction of value.
An overview of the final data analysis is provided in Table 1. It is made up of our two main
constructs for theorizing interactive value formation—the co-creation and co-destruction of
value. We label these dimensions of practices as they cut across the five interaction value
practices that we identified in the data (previously described). Each practice is given a general
description which emphasizes its interactive, mutual character. Further, drawing on previous
research (Schau et al., 2009), the five practices are divided into three elements of practices:
procedures, understandings, and engagements relevant to both the co-creation and the co-
destruction of value. Also included in Table 1 are definitions of these elements and substantive
descriptions of the elements of each practice.
Please insert Table 1 about here
In this section, we discuss the ways in which the present paper contributes to the discussion about
value formation in marketing theory. We specify the implications of our findings in relation to
the practice-theory informed framework that we articulated in the literature review section. We
outline a framework that explains how interactive value formation takes place in practice.
Co-creation and co-destruction of value
Our study supports the fundamental notion, in previous research, that value in service settings is
collaboratively realized during interaction between providers and customers (Prahalad and
Ramaswamy, 2004; Ramírez, 1999; Vargo and Lusch, 2004). Thus, our findings are, to a certain
extent, in line with the argument that is fundamental to the service-centred view which holds that
operant resources—knowledge and skills—are the most important resources for the co-creation
of value during interactions between providers and customers (Lusch et al., 2007; Vargo and
Lusch, 2004; 2008). However, our study also problematizes previous research by suggesting that
the interactive value formation process taking place between providers and customers is not only
a creative process but also a destructive one: value is both co-created and co-destroyed at the
provider–customer interface. Accordingly, our study suggests that the interaction between
providers and customers can be understood, or approached, against the backdrop of the notions of
value co-creation and value co-destruction and, thus, that operant resources not only co-create but
also co-destroy value. Thus, while previous researchers of interactive value formation have
argued that co-destruction only takes place in exchange-based settings (Ramírez, 1999), that the
downside of co-creation is a minor phenomenon (Prahalad and Ramaswamy, 2004) or that issues
pertaining to co-destruction have been neglected (Vargo and Lusch, 2004), we, in line with Plé
and Chumpitaz Cáceres (2010), argue that the co-destruction of value is a significant feature of
the interaction between provider and customer.
However, our notion of co-destruction is different from the notion of value destruction associated
with the exchange view of value formation (Bagozzi, 1975; Hunt, 1976; Alderson, 1957). This
view holds that value is added during the production process, which does not involve the
customer to any great extent. Value destruction is conceptualized as the diminishment of value,
which takes place when the customer uses the product—e.g. that the value of a car in monetary
terms decreases when it is used, reported as ‘written down’ in bookkeeping terms (Ramírez,
1999). The interaction view of value formation (Prahalad and Ramaswamy, 2004; Ramírez,
1999; Vargo and Lusch, 2004), on the other hand, holds that value is realized collaboratively
during the interaction between customer and seller and that value co-creation is the only
possibility during this interaction. However, our study also shows that value can be
collaboratively co-destroyed during the provider-customer interaction. Thus, while the exchange
view separates the creation and destruction of value in time and space, our paper indicates that no
such separation can be made in the case of interaction value.
Interaction value practices
In addition to introducing the notion that interactive value formation involves both co-creation
and co-destruction, we have also identified five interaction value practices: informing, greeting,
delivering, charging, and helping. In this respect, our study elaborates on Schau et al. (2009) who
identified 12 value creation practices. Empirically, Schau et al. (2009) focused on brand
communities: groups of consumers interacting on web forums with respect to a particular product
or brand. Our contribution in relation to Schau et al. (2009) is that we have focused on practices
that order face-to-face interactions between providers and customers. We see this as a key locus
for understanding interactive value formation, in particular co-creation and co-destruction in
business relationships, not denying the fact that interactions taking place outside the customer-
provider interface are also important. However, we also acknowledge that these are key value
formation practices in a service encounter context that we have focused on, but not necessarily in
other contexts (e.g. e-commerce or business-to-business sales).
Interactive value formation
As should be clear from the findings, we suggest that all five of the interaction value practices
that we identified may foster both the co-creation and the co-destruction of value—i.e. these two
dimensions are inherent in all five practices. More specifically, our findings indicate that what we
refer to as the elements of practices—which are the procedures, understandings, and engagements
constituting them—enable both the co-creation and the co-destruction of value. What stands out
is the fact that when the elements of practices are congruent—i.e. when providers and customers
are in consensus as to which procedures, understandings, and engagements should inform a
specific interaction—value co-creation will be the outcome. Consequently, when the elements of
practices are incongruent—i.e. when providers and customers do not agree on which procedures,
understandings, and engagements should inform a specific interaction—value co-destruction
ensues. Our conclusion is in line with the conceptual analysis of Plé and Chumpitaz Cáceres
(2010). Even though they conceptualize the relationship between co-creation and co-destruction,
from a service systems and a resource-based perspective, Plé and Chumpitaz Cáceres (2010: 432,
emphasis added) also maintain that: ‘...value co-creation occurs when two service systems have
congruent expectations of the way in which the available resources should be used in the course
of their interactions ...inappropriate or unexpected use of the available resources in an interaction
will result in value co-destruction for at least one of the parties’.
By elaborating on previous marketing research (Schau et al., 2009; Warde, 2005), that has drawn
on practice theory, we make a contribution to marketing research by theorizing how interactive
value formation takes place. We also contribute towards understanding how value is inter-
subjectively assessed by agents. More specifically, the paper suggests that interactive value
formation—value co-creation as well as value co-destruction—derives from providers and
customers drawing on congruent (in the case of value co-creation) and incongruent (in the case of
value co-destruction) elements of practices. This implies that we are proposing an alternative
position on value formation which goes beyond both the exchange-based view and the interaction
view reviewed above; the former treats value objectively by measuring it in terms of money
(Bagozzi, 1975; Hunt, 1976; Alderson, 1957) while the latter only treats value subjectively and
assesses it relatively from the customer’s point of view (Holbrook, 2006; Prahalad and
Ramaswamy, 2004; Ramírez, 1999; Vargo and Lusch, 2004). Elaborating on Oliver (2006), we
extend the understanding of value as a bidirectional construct that takes the assessment of both
provider and customer into account. More to the point, our practice theory informed framework
suggests that value can be understood in terms of ‘matches’ (congruence) or ‘mismatches’
(incongruence) between socially-available methods—i.e. the possible configuration of practices
and elements of practices—that providers and customers draw on in order to act and to interpret
other actors’ actions. We might think of this standpoint as being positioned between an
objectivistic and a subjectivistic position (integrating objectivistic elements of social structures
with subjectivistic elements of individuals’ experiences).
Praxis and Practitioners
In this section, we offer a more precise understanding of interactive value formation. We suggest
that the five practices we have identified and the two dimensions of practices associated with
them—which are the outcome of congruent or incongruent elements of practices—shape the
praxis (stream of activity) of the practitioners (human actors) involved in provider-customer
interactions. We make a distinction between four types of praxis. We also argue that, in order for
practitioners (both driver and customer in our case) to be able to carry out these different kinds of
praxis, they need to step into specific subject positions and play certain roles. Accordingly, we
make a distinction between four different subject positions and roles—one for each type of
praxis. For an overview of the relationships between the different constructs, see Figure 1.
Please insert Figure 1 about here.
As Figure 1 illustrates, we suggest four different cases. First, we have the case where the
interaction between providers and customers is dominated totally by value co-creation. In
accordance with the discussion in the previous section regarding value formation, the first case
means that providers and customers operate with congruent understandings about which elements
of practices should be applied to a particular situation. In this situation, the interaction value
steadily increases. A typical situation might be a driver giving a customer directions regarding
what bus or tram to change to, followed by the customer thanking that driver by praising his or
her driving skills. We call the type of praxis characterizing a situation like this “reinforcing value
co-creation”. In order to carry out this type of praxis, the practitioners (both employee and
customer) need to assume act the subject position of “value co-creator”.
Second, we have the case where the interaction between employees and customers is totally
dominated by value co-destruction. During such interactions, providers and customers have
incongruent conceptions regarding what procedures, understandings and engagements should
apply, entailing that the interaction value steadily decreases. This type of interaction can be
illustrated by situations where drivers are subjected to threats or harassments and defend
themselves by shouting back at customers. This type of praxis, which is dominated entirely by
the dimension of value co-destruction, we refer to as “reinforcing value co-destruction”. In this
case, actors take on a subject position which can be referred to as “value co-destroyer”.
However, we have also identified mixed cases, i.e. types of interactions informed by both
dimensions of practices—both value co-creation and value co-destruction. We distinguish
between these on the basis of differences in how they are initiated and ended. Therefore, the third
case is initiated when providers and customers initially draw on incongruent procedures,
understandings, and engagements causing value co-destruction but, during the process of
interaction, the elements of practices drawn on by providers and customers become congruent,
entailing that the interaction ends in value co-creation. This could be illustrated by a customer
crossly complaining about a bus being late, followed by the driver explaining that the times given
in the timetable are only approximate (as in the co-creation quote under Informing in the
Findings section). We call the type of praxis specific to a typical interaction like this “recovery
value co-formation”, due to the recovery-like nature of the interactive value formation shifting
away from the co-destruction towards the co-creation of value. In a situation like this, where the
practitioners collaboratively contribute towards the recovery of value, we argue that they take on
the subject position of “value co-recoverer”.
It is also quite possible for this interaction to unfold the other way round. Consequently, the
fourth case is initiated when providers and customers draw on congruent procedures,
understandings, and engagements. Accordingly, the interaction is initially associated with value
co-creation. However, during the process of interaction, the elements of practices drawn on
become incongruent, entailing that the interaction ends in value co-destruction. This could be
illustrated by a driver welcoming a passenger aboard a bus, followed by the customer moaning
about the bus being late with the driver then following up by barking back at the customer. We
call the type of praxis specific to a typical interaction like this “reductive value co-formation”,
due to the reductive nature of the interaction value shifting away from the co-creation towards the
co-destruction of value. In a situation like this, where the practitioners collaboratively contribute
to the reduction of value, we argue that they take on the subject position of “value co-reducer”.
CONCLUSIONS AND CONTRIBUTIONS
The discussion concerning value formation has been at the heart of the marketing research
agenda for several decades (Bagozzi, 1975; Hunt, 1976; Alderson, 1957). With the interaction
view of value formation, this discussion has been re-invigorated (Prahalad and Ramaswamy,
2004; Ramírez, 1999; Vargo and Lusch, 2004). Our paper and its practice-theoretical framing
have contributed to this general discussion vis-à-vis value formation. It has contributed in
particular to the research into interactive value formation. First, by emphasizing the notion of
value co-destruction, it has brought much needed nuance and critique to the overtly positive
research into interaction value. It has shown, based on empirical research, that value is not just
something that is co-created at the customer-provider interface, but also something that is co-
destroyed. Accordingly, we need to stop seeing value creation as the only possible outcome
during interactions between provider and customer. Value destruction is equally important.
Second, this paper has pinpointed five interaction value practices: informing, welcoming,
charging, delivering, and helping. These provide a baseline for understanding and theorizing
interactive value formation—especially in service encounter contexts (face-to-face). Third, and
building on the first and second contributions, the paper has contributed towards generating a
framework explaining how interactive value formation takes place and how value is inter-
subjectively assessed by agents. More to the point, the paper suggests that interactive value
formation—value co-creation as well as value co-destruction—derives from providers and
customers drawing on congruent (in the case of value co-creation) and incongruent (in the case of
value co-destruction) elements of practices. In relation to the exchange view, conceptualizing
value objectively, and in relation to the interaction view, conceptualizing value subjectively, the
paper articulates an inter-subjective middle position. Fourth, as an integral part of the presented
value formation framework, the paper makes a contribution vis-à-vis knowledge of how
interaction value practices, elements of practices, and dimensions of interaction value practices
order praxis, suggesting a distinction between four different types of praxis and what types of
subject position human actors or practitioners need to step into in order to perform the particular
kinds of praxis (see Figure 1 for a summary).
Our paper suffers from several limitations which need to be addressed in future research. First, it
is mostly based on service provider and interview data. Co-creation and co-destruction have been
reported as interpreted and narrated by frontline employees. Future research needs to more
closely observe interactions between providers and customers. Second, we have studied
interactive value formation in the context of service encounters. Future research needs to study
whether or not our conclusions are generalizable to other contexts, e.g. long-lasting relationships
in business-to-business contexts or in e-commerce contexts. Third, our paper draws on a
qualitative single case study of an organization operating in a particular context. Future research
needs to have a broader scope. This does not imply that future research should rely solely on
quantitative data, because micro practices might be hard to detect from a distance. Case studies of
other types of organizations, operating in other fields, need to be conducted. Fourth, our paper
has started to inquire into the relationship between co-creation and co-destruction. This topic
needs corroboration in future studies.
1 In order to avoid normative terminology, and inspired by the conceptualization offered in two recently-completed
doctoral theses (Korkman 2006; Ots 2010), we use the notion of value formation rather than, for instance, the co-
creation of value. Non-interactive value formation and interactive value formation are notions coined by us.
2 This paper, which to our knowledge is the first to discuss value co-destruction, was published during the final
editing phase of the present paper.
3 Since we question the one-sided focus on the co-creation of value in previous research, we use the more neutral and
open notion of the interaction view when referring to this research. The notion has been coined by us.
4 Treated as drivers in the present case.
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Figure 1: Relationship between practices, elements of practices, dimensions of practices,
praxis, and subject positions
Reinforcing value co-creation
Recovery value co-formation
Reductive value co-formation
Reinforcing value co-destruction