The co‐production approach to service: a theoretical background

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.