Reconciling Resource Integration and Value Propositions -- The Dynamics of Value Co-creation

The progress of service-dominant logic and service science, and their expanding theoretical basis, has created ambiguities in relation to understanding the micro-foundations of value co-creation. Based on a conceptual analysis of resource integration and value proposing as the foundational practices of value co-creation, this article portrays value propositions as the co-created forms of shared resources and understanding, which constitutes service systems. This view is inherently socially constructed and perceives value propositions as institutionalized, taken-for-granted social structures that influence local instances of resource integration within and between service systems. Because of the idiosyncratic local contexts for resource integration, however, value propositions do not completely govern resource integration. Instead, they are reproduced and transformed through the local interactions they influence. This mutually constituting nature between value propositions and resource integration affects our understanding of stability and change, creating novel avenues for studying innovation on the basis of service science.