Modes of customer co-production for international service offerings

Abstract

Purpose – Much has been written about the manifestations and managerial implications of customer co-production in service offerings. However, there have been relatively few references to issues of co-production in international service environments. Co-production is very relevant in international environments because of the requirements for interaction between producers and consumers, which interaction spans international borders and national cultures. The purpose of this paper is to apply an established theory of co-production, the Unified Service Theory (UST), to the international service context. This provides the authors with structured models for conceptualizing the co-productive nature of international service offerings and assessing-related managerial implications. Design/methodology/approach – The UST provides a model of co-productive service delivery. Extending that model, the authors develop a taxonomy of international service based on the “four modes of service supply” provided in the General Agreement on Trade and Services instituted by the World Trade Organization (WTO). Then, using data from the WTO and World Bank, the authors propose and test six hypotheses for predicting service exporting focus corresponding to the co-production taxonomy. Findings – Based on the analysis of empirical data, the authors find more service exporting focus in small, growing, high-wage economies that have a significant service base and focus in merchandise exporting. The strength of these effects differs for different modes of service supply. Research limitations/implications – The authors also discuss cultural issues of international service, but the empirical analysis of culture effects is thus far inconclusive. Also, the analysis is limited to modeling and studying dyadic relationships, i.e., service providers in one country involved in an interchange with customers in another country. A natural extension would be to consider triads and more complex networks of co-productive service offerings. Practical implications – This research shows how managerial implication of the UST can be extended to international service contexts. The authors review managerial implications pertaining to meeting variable demand, describing service characteristics, and pricing. Originality/value – Co-production research is well-established in service management literature. This paper extends that research to international contexts by describing the WTO taxonomy in terms of the UST. This allows the authors to apply various insights of co-production to international service offerings.

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