Embracing the paradox of inter-organisational value co-creation - value capture: A Literature Review towards Paradox Resolution

This study reviews literature on paradoxical tensions between value co-creation and capture in inter-organisational relationships (IORs). The purpose of this review is to make a re-evaluation of the literature by engaging a paradox theory lens (Smith and Lewis 2011), thereby identifying factors that render tensions salient and factors that lead to virtuous or vicious cycles. Our review of 143 articles reveals factors that make tensions salient; these relate to plurality (e.g. coopetition), scarcity (e.g. lack of experience with IORs), change (e.g. changes in collaboration scope) or combinations thereof (e.g. IORs in weak appropriability regimes). Results also uncover factors that resolve paradoxical tensions of value co-creation and capture, thus spurring virtuous cycles (e.g. carefully mixing trust and contracts), as well as factors which promote vicious cycles due to the emphasis on either value co-creation or capture (e.g. myopia of learning). Our review also uncovers a new category of factors that may stimulate either virtuous or vicious cycles, depending on the extent to which they are enforced. This finding expands the value co-creation-capture paradox resolution, and brings to light new dynamics in the paradox framework of dynamic equilibrium. We thus contribute by: 1) re-assessing existing literature and applying paradox theory to the well-known hazard of value co-creation and capture; 2) highlighting factors that amplify paradoxical tensions related to this hazard; and 3) outlining factors that solve the paradox by embracing its contradictory poles and factors that hinder paradox resolution by emphasizing either value co-creation or appropriation.