Value Co-Creation in the Organizations of the Future

The organizations of the future (OOTF) are conceptualized as a networked ecosystem of autonomous, modular, value cells. These value cells collaborate dynamically, inter-or intra-organizationally to co-create value in line with, or in anticipation of, the emerging or latent market needs. This paper seeks to answer the question: How do OOTF co-create value collaboratively for the participating partners? We conduct an exploratory literature review of diverse disciplines including IT, management, and service sciences to uncover and crystallize the underlying principles and mechanisms for OOTF value co-creation. The preliminary literature-review findings are summarized below. Value-creation activity in the OOTF is "organized around information" focused on customer value. The underlying IT is conceptualized as a social object that has "an action potential" known as affordance. Affordances enact the requisite value-creation organizational capabilities and other social capacities within and outside the boundary of the focal firm. Through IT, in line with strategy, the firm is enmeshed with its external environments in a value constellation or industry architecture of stakeholders comprising market ties with its customers and competitors; referential ties with other institutions; affective ties with its partners; and hierarchical ties with the regulators. These stakeholder ties would be organized in either loosely (flexibility strategy) or tightly (efficiency strategy) coupled forms. Each strategy calls for varied leadership and governance models for value co-creation between stakeholders, which involves mutual alignment of stakeholder value propositions and leveraging and integration of one another's capabilities and resources. Inter-organizational systems data and process standards and joint production governance will facilitate value co-creation across the ecosystem. OOTF leadership is socially constructed where actors interact in a dynamic and fluid leading-following adaptive process interchanging leader-follower identities and relationships contingent on the value creation contexts. OOTF may possess open or closed boundaries and/or memberships, defined by its innovation strategy and associated organizational capabilities. The former is superior in value creation when the product-customer mapping complexity is medium to low; the latter when complexity is high. The focal firm's information-intensive social structure will tend to exhibit "small-world system" dynamic characteristics. Its value creation potential is determined by its network reach (extent of tie to distant, different, and diverse partners), richness (value of network resources available) and receptivity (capacity to leverage network resources across inter-organizational boundaries), individually and interactively. The value creation process is closely linked with the firm's capability development process through orchestration of diverse resources across the ecosystem. It must simultaneously balance the conflicting "global-vs-local" demands in terms of markets, and regulative, social and cultural mechanisms to create sustained value. This capacity is linked to its strategies, structure and dynamic capabilities - especially the leaders' ability to manage paradox - the tension between efficiency and flexibility. In sum, value creation in dynamic environments requires the OOTF firm to possess the capacity to structure its resource portfolio, bundle the resources to create capabilities and leveraging/reconfiguring the capabilities to (efficiently) exploit market opportunities and (flexibly) explore innovations for latent market demands.