The role of employee relationship orientation in the value co-creation – firm performance link

Purpose This paper links employees’ relationship orientation, or their sense that the organization respects their contribution, to value co-creation and overall firm performance. It also measures the effects on innovation and knowledge sharing. Design/methodology/approach A total of 301 US product and marketing managers participated in a survey. Measurement and structural models were evaluated using partial least squares structural equation modeling. Findings Main findings suggest that increased value co-creation (VCC) activity has a significant effect on employee relationship orientation. This study also finds that employee relationship orientation plays a mediating role in the relationship between VCC and firm performance. Innovation as a moderator is shown to strengthen the positive relationship between value co-creation and employee relationship orientation. Finally, this study finds that knowledge sharing as a moderator has a negative effect on the relationship between VCC and employee relationship orientation. Research limitations/implications This study was conducted exclusively in the United States, so results may not apply elsewhere. Future research should explore the antecedent relationship between VCC and employee relationship orientation. Practical implications Addressing managers’ questions about the potential benefits of VCC, this study demonstrates that its effectiveness may depend on emphasizing employee relationship orientation, which can positively affect firm performance. Originality/value This study launches a new stream of research examining the relationship between VCC and employee factors. The quantitative model shows employee relationship orientation is a critical mediator in the relationship of VCC to firm performance.