Managing the politics of value propositions

Abstract

This article contributes to the ongoing discussion, revived by the service-dominant logic thesis, on value propositions in service organizations. Against a backdrop of understanding value as a pluralistic social construct that takes place across different institutionalized practices of valuation or regimes of value, we argue that value propositions transcend the immediate localness of both value in exchange and value in use. Correspondingly, we claim that service practitioners may draw advantages from engaging with a politics of value that addresses multiple regimes of value, whether commensurable or not. A case study of waste management services in Sweden serves as an illustration of such a politics that combines practical, economic, political, and environmental aspects of value propositions.

Keywords

Politics of value regimes of value service-dominant logic value proposition waste management

Introduction

Vargo and Lusch’s (2004) thesis that marketing should abandon a goods-dominant logic for a service-dominant logic (SDL) has fueled an intense discussion about the nature of marketing. The SDL thesis has also revived the long discussion among service scholars about the nature of value in services (e.g., Delaunay and Gadrey, 1992; Gallarza et al., 2011; Gummesson, 1995; Levitt, 2004; Normann and Ramírez, 1993; Williams, 2012). By doing so, it has brought into focus anew the assertion that service firms can only make value propositions (Ballantyne et al., 2011; Frow and Payne, 2011; Grönroos, 2008, 2011; Hilton et al., 2012; Kowalkowski, 2011; Kowalkowski et al., 2012; Michel et al., 2008; Vargo, 2011a; Vargo and Lusch, 2008). This assertion actualizes the relevance of inquiring about what it means to make value propositions.

The notion of value proposition (for a history, see Ballantyne et al., 2011) comes from the conventional view in service management research that services are coproduced by service providers and customers (e.g., Grönroos, 2012; McColl-Kennedy et al., 2012; Normann and Ramírez, 1993; Payne et al., 2008). Service companies do not endow what they sell with intrinsic value, as industrial companies have traditionally imagined about their products. Instead, service companies are value facilitators: They make value propositions to users that may or may not be realized (Grönroos and Ravald, 2011). The value that stems from their value creation processes (Gummerus, 2013) is only potential as it can only become real if accepted by users (Grönroos, 2011; Hilton et al., 2012). On this account, the notion of value proposition corroborates that value is “phenomenological and experiential in nature” (Vargo and Lusch, 2008: 2), can only be appreciated and realized by the customer (Gallarza et al., 2011; Holbrook, 1999, 2006), and should be defined in use rather than in exchange (Vargo, 2011b; Vargo and Lusch, 2004, 2008).

Our claim is that value propositions are not limited to the here and now of the immediate exchange and experience of service interactions. We build on the understanding that value propositions are reciprocal communicative practices (Ballantyne et al., 2011) that take place in interactive networks (Ford and Mouzas, 2013; Fyrberg and Jüriado, 2009). The stakeholders in these networks participate in different ways in the service delivery and experience (Frow and Payne, 2011), and they exchange value propositions (Flint and Mentzer, 2006; Kowalkowski et al., 2012). Value propositions are therefore not univocal. They address the needs of different evaluators (Kowalkowski, 2011), and it is a challenge for the party making value offerings to align (Frow and Payne, 2011) the different views of the parties present. Value propositions are also endowed with a time dimension (Heinonen et al., 2010) in that they involve sensemaking processes that are not limited to the immediate interactions between providers and customers; rather they depend on how these and other stakeholders make sense of future or past service interactions.

Further, our claim builds on the fact that just like contexts frame service provision (Chandler and Vargo, 2011), value propositions are embedded in social settings that condition what is considered good or bad, attractive or repulsive, or legitimate or not. Drawing on economic sociology (Beckert and Aspers, 2011; Beckert and Zafirovski, 2010; Smith, 1990; Stark, 2009) and economic anthropology (Carrier, 2005; Wilk and Cliggett, 2007), and more specifically Appadurai (1986), we claim that organizations make not only one (Hultman and Ek, 2011) but several value propositions that address different institutionalized activities, processes, or practices of valuation (Muniesa, 2011), in other words regimes of value. For example, the municipally owned waste management company that serves as the illustrative case in our study concurrently makes various value propositions: a practical value proposition to households to collect waste; a political value proposition to provide the region with a novel competitive advantage; an environmental value proposition to secure a viable environment for future generations; and an economic value proposition to its municipal owners to generate enough returns to finance its own development. Each of these value propositions is evaluated by stakeholders according to idiosyncratic rules and criteria, and they are hardly commensurable and comparable. Yet, as our case study shows, the value propositions made to certain stakeholders can be used to strengthen the value propositions made to other stakeholders. While stakeholders may make use of idiosyncratic regimes of value, they do understand service propositions made to other stakeholders who hold other regimes of value.

This finding brings us to our final claim that managers in service companies can engage innovatively with the pluralism of their value propositions. Drawing on Appadurai’s (1986) notion of a politics of value, we suggest that service providers can embark on a politics of value propositions that strategically exploits rather than regrets or even denies that their value propositions are so diverse that they resist being integrated into one value proposition. Our case study illustrates that such a view is particularly relevant for companies involved in the economic, social, and environmental dimensions of sustainability.

All in all, our purpose is to redirect the theoretical discussions on value propositions in services away from seeking to establish the nature of these propositions to investigating why, how, and for whom service companies make a variety of value propositions. Given this purpose, we align ourselves with service management scholars who focus on how sociocultural variables affect value cocreation and the “valuing activities of subjects” (Domegan et al., 2012: 208). Value emerges from substantial interactions (Ford and Mouzas, 2013) between people, for example, to cope with problems. It is “constituted by marketers and consumers in their activities and discourses via an enacted process, a social construction that takes place prior to, during and after the actual exchange and use(s) take place” (Peñaloza and Venkatesh, 2006: 303). Value also has a collective and intersubjective dimension and should be understood as value in social context (Edvardsson et al., 2011). Value creation does not take place in a vacuum; it involves not only the firm and customer dyad but also others in the customer’s service network (McColl-Kennedy et al., 2012). This is why externalities are a crucial component of the SDL (Williams, 2012), and the SDL should pay more attention to the social conditions and cultural meanings essential for value creation (Peñaloza and Mish, 2011). Central to our claims is the need for service researchers to unfold the practice of value cocreation (Helkkula et al., 2012; Kowalkowski et al., 2012).

The article is structured as follows. First, we introduce some key tenets of the economic sociology and anthropology of value. Second, we describe our methodology: waste management in Sweden and our waste management case company. Third, we analyze how the company calls on different regimes of value for its value propositions. Finally, we discuss this calling on different regimes of value in terms of a politics of value propositions and conclude with a call for a pluralistic understanding of value propositions.

Theory: A sociology and anthropology of value

Economic sociology (e.g., Beckert and Zafirovski, 2010) and economic anthropology (e.g., Carrier, 2005; Wilk and Cliggett, 2007) both have a long tradition of describing the social nature of value. Emile Durkheim ([1893] 1991), Marcel Mauss ([1902] 2000), and Max Weber (Weber and Whimster [1921-1922] 2008) tend to be seen as pioneers in this field, while lately scholars have turned to Gabriel Tarde (1902) to underscore the subjective and intersubjective character of economic quantification (e.g., Arvidsson, 2011b; Latour and Lépinay, 2009). Recent developments have demonstrated the ambiguities and uncertainties concerning what is defined as being valuable as well as the coexistence of different valuation principles (Stark, 2009).

Refuting absolute value

A common claim among these disciplines is that there is no such thing as absolute value. Value is embedded in the cultural characteristics of societies. Definitions of value are contingent in the sense of being conditioned but not mechanistically determined (Herrnstein Smith, 1988) and on the symbolic systems that in any given context define what is important, meaningful, desirable, or worthwhile (Graeber, 2005). For example, auctions, far from functioning as abstractly as economic theories assume, determine value according to idiosyncratic characteristics of specific places and specific points in time, location and history, and tradition and desire (Smith, 1990). Similarly, in standard markets (e.g., commodities) value is centered on the characteristics of what is exchanged so that valuation is quite independent of who the actors are; but in a status market (e.g., fashion or art), value is centered on the relative status of the actors present (Aspers, 2009). The vast economy of singularities (Karpik, 2010) that is composed of the multiple markets where people exchange things and services that are unique, specific, peculiar, or simply deeply embedded in culture illustrates daily the situated character of value determinations. The economy of singularities also shows that it is not fully possible to distinguish between use value and exchange value, as Marx suggests (see, e.g. Davis, 2006), since what the buyer is prepared to pay for a value proposition is an integrated part of the experience derived from this proposition, something already noted by Veblen ([1899] 2001) in his theory of conspicuous consumption.

Value is an outcome of situated judgments (Frow, 2007). What people in a given society consider as being of value cannot be reduced to a matter of individual preferences a priori. Individual preferences are not only conditioned by families and private and public organizations but also less tangible influences such as political affairs, the arts, social practices, technological developments, and the natural environment. For example, the rise of intangibles such as brands or symbols has brought with it a new valuation logic that is more than before dependent on collective ethical affinity (Arvidsson, 2009) and shared affective investments (Arvidsson, 2011b).

Value derives from how people conceive of the cosmology of their world (Alexander, 2005). More specifically, value derives from how people conceive of worth and of ends in order to give meaning to their choices and to give direction to their actions (Corvellec and Risberg, 2007). From asserting the value of Nature affected by an oil spill, to how connoisseurs agree on the value of wine, through the worlds of scientific publications, subprime mortgages, or stock exchanges, value derives from the preferences of market actors. These preferences are systematically conditioned by the political dynamics of institutional contexts and embedded in the social psychology of desire and meaning (Beckert and Aspers, 2011). Not least, value in the technical sense as a measure of worth depends on values in the ethical sense of normative views of the good (Arvidsson, 2011a).

Value circulates

Social anthropology also shows that as soon as value emerges, it starts to circulate as a construct, undergoing transformations along time and distance that encompass not only the economy but also society and the environment as a whole (Mauss, [1902] 2000).

Valuation practices are variable in terms of space. Since there is a spatiality of exchange and of use, there is also a spatiality of value. The same secondhand item will be assigned different values depending on whether it is offered at garage boot sale, charity shop, or vintage boutique (Gregson and Crewe, 2003). The practice of arbitrage is a case in point that prices—the clearest economic proxy to value—need an encompassing social and technical support to be set across nearly perfect markets (Beunza et al., 2006), a dimension not taken into account by the Black and Scholes model (Black and Scholes, 1973), arguably the dominant understanding of arbitrage in economic theory. And the efforts made in high-frequency trading at leveling off differences in the time that it takes to pass orders between computers that are immediately near the data centers of stock exchange companies and computers that are a few kilometers away (Patterson, 2012; Yagiz, 2012) show that even when economic information travels at the speed of electrons, differences in distance mean differences in profit-making opportunities.

Valuation practices are also variable over time. Stevengraphs, small British mechanically woven silk pictures from the late 1800s and early 1900s, are a case in point of the transient nature of economic value (Thompson, 1979). Very popular for a while after their launch at the 1879 York Exhibition, they saw their economic value coming close to zero in the following decades, only to experience a revival as Victorian curiosa in the late 1960s that has lasted until today, their economic value having been secured by a reappraisal of their aesthetic and historical value. At the other end of the time scale, the transience of value is corroborated, again, by high-frequency trading where value creation or destruction is a matter of less than nanoseconds.

Regimes of value

A reason why value is not absolute is that value is determined, at the same time and across time, through different regimes of value (Appadurai, 1986). Regimes of value are institutionalized ways of assessing and communicating value. They are expressions of established understandings of what matters as opposed to what does not matter. As Frow explains, a regime of value is

a semiotic institution generating evaluative regularities under certain conditions of use, and in which particular empirical audiences or communities may be more or less fully imbricated. (1995: 144)

Regimes of value are coherent and socially situated ways to establish value (Appadurai, 1986). They are evaluative frameworks and practices that are embedded in specific social contexts, rely on specific modes of calculation, and are borne by specific sets of institutions. And as evaluative frameworks, regimes of values impose themselves on both sides of the traditional divide in service management theory between the offering side of the service provider and the beneficiary side of the service customer.

The concept of regime of value expresses a fundamental thesis:

that no object, no text, no cultural practice has an intrinsic or necessary meaning or value or function; and that meaning, value and function are always the effect of specific (and changing, changeable) social relations and mechanisms of signification. (Frow, 1995: 145)

Different regimes of value define value differently. One regime can attribute value to something that another regime considers having no or negative value. For example, a political regime might attach a particular value to democracy and consider that universal access to a public service is of key significance, whereas an economic regime attaches more importance to providing users with good value for the money, and an environmental regime gives priority to the service’s environmental impact. Each evaluative framework is an expression of assumptions, preferences, choices, modes of calculations, arbitrages, and, more generally, orders of worth (Boltanski and Thévenot, 2006) that condition what this framework points to as being of value.

The concept of regimes of value has one of its grounds in the observation that “not all parties share the same interests in any specific regime of value” (Appadurai, 1986: 90, italics in the original). Stakeholders adopt different ways to measure how well the company is serving their interests. Not that the concept of regimes of value is simply restating the argument that value is something subjective, in the sense of being personal, preferential, experimental, and situational (Holbrook, 1999). Instead, the notion of regimes of value underscores that different institutions, calculative modes, or traditions lead stakeholders with different regimes of value to define value in different ways. The notion of regime of value expresses that value is determined locally, in different contexts, and by social groups that have different vantage points and employ different criteria (Frow, 1995).

Politics of value

As Stark (2009) shows, the logic for evaluating worth in organizations is not always clear; multiple and changing criteria create ambivalent and uncertain orders of worth for the actors. The coexistence of regimes of value, the transformation of regimes of value over time so that some grow in importance while others become obsolete, and the additional fact that regimes of value are not necessarily homogeneous and can be crossed by conflicts and controversies create a challenge for value proposers. It is difficult for them to know in advance according to which metrics the value of their action will be measured.

Moreover, ways to assess value cannot necessarily be measured with the same standard because they are not necessarily commensurable. Commensuration, expressing characteristics normally expressed in different units according to a common metric (Espeland and Mitchell, 1998), has its limits. There are not necessarily clear ways to compare and rank value propositions according to different regimes of value. For example, there is no obvious scale of equivalence or ordering principles between the political value of democracy, the economic value of efficacy, and the environmental value of precaution: Organizations that aim to offer services that address these three regimes of value address incommensurate evaluative regimes (Frow, 1993). Different regimes of value can even be incompatible and mutually exclusive. For example, education services offered on a purely commercial basis would transform the value of diplomas so greatly that they would lose their original value of being a sign of individual merit and competence (Sandel, 2012). This is why movements across incommensurable value spaces are clearly critical (Frow, 1995).

This combined instability and incommensurability of a regime of values is not necessarily a curse for organizations, though. It makes it possible for them to organize their value propositions according to what Appadurai (1986) calls a politics of value.

The notion of politics of value considers that “to value” as verb is primary to “value” as a noun (Dewey, 1939). It displaces the focus from the notion of value per se to the pragmatics of valuation (Muniesa, 2011). Value results from an action of valuation, and this action is ultimately political in the sense that it involves “relations, assumptions and contests pertaining to power” (Appadurai, 1986: 57). Value emerges from “relationships amongst people” (Harvie and Milburn, 2010) who are different and therefore of unequal social status (Zafirovski, 2000) and who act within the specific social order of, for example, markets (Fourcade, 2007).

Further, valuation activities are political in the sense that they produce representations that link knowledge practices to decision-making practices (Verran, 2011). Valuation ultimately rests on collective arbitrages between socially conditioned individual variables such as beliefs, desires, convictions, preferences, priorities, ambitions, and the like. Lacking technical or objective ways to aggregate these variables, and thus ways of combining the different regimes of value through which these variable find an expression, organizational members need to learn how to engage with the kind of things that characterize politics: negotiations, compromises, and trade-offs, but also programs, moral choices, and public votes. More than value propositions, organizations make valuation propositions, to reuse Dewey’s (1939) locution (see also Muniesa, 2011), that is, propositions about how organizational activities should be valued.

Case study: A Swedish municipal waste management company

Method

We will apply these insights about value propositions, regimes of value, and the politics of value to a case study of waste management services in Sweden. This will allow us to provide a concrete understanding of a politics of value propositions that takes place across practical, political, legal, environmental, economic, and social regimes of value. Waste management is a service-providing infrastructure. As such, its value propositions are critical for a functioning society.

The case study concerns a municipally owned waste management company, NSR (Nordvästra Skånes Renhållnings AB, in translation Northwest Scania Recycling Ltd; see below for a presentation). The study is part of a 4-year research project on the organization of critical infrastructural services (see acknowledgments). The fieldwork for this particular case study has, as suggested by Star (1999) in investigations of infrastructure, followed a multimethod, ethnographic design. It has combined qualitative interviews, discussions between researchers and practitioners, practitioner meetings where researchers have been observers, workshops where research results have been communicated to practitioners, and the study of company documents, including service marketing and accounting material. Data collection took place between 2009 and 2013. Thus, the argument presented here is the result of an extensive case study, well suited to analyze policy-driven processes that undergo transformations and change on a continual basis (McCann and Ward, 2012; Peck and Theodore, 2012), as is the case with waste governance.

For the purposes of this case study, we have used 5 semi-structured interviews with company management of the 18 interviews that we have conducted within the research project. These interviews lasted between 60 and 100 min, were recorded, fully transcribed, and manually coded. This coding has served to capture how company management expresses their value propositions in relation to their own services, waste management, and waste research. We also attended six meetings where representatives presented the activities and value propositions of the case company. These observations were documented by taking notes, and this material was coded according to the same themes as the interviews.

Furthermore, we have conducted document analyses of the NSR 2010 and 2012 owners’ directive, annual reports for the past 10 years, communication brochures, and the NSR Web site. The material was manually coded. This coding served to capture how proposition are communicated to internal and external stakeholders by the company in the context of its service offerings.

This specific fieldwork has been backed up by extensive fieldwork within the Swedish waste management community and has enabled us to contextualize the data specifically collected for this study. It includes attending four 1-day trade conferences organized by a national trade journal and one 2-day yearly assembly of Swedish Waste Management (Avfall Sverige), the association of municipally owned sanitation and waste management companies. This fieldwork has given us access to a wide range of presentations about innovative waste management services, as well as numerous talks with waste managers and politicians. We have toured the facilities of three waste management companies. We have also interviewed the head of Swedish Waste Management (Avfall Sverige), administrative officials at the Swedish Environmental Protection Agency (Naturvårdverket), and consultants involved in waste management.

Finally, the data and results specific to this study have been continuously validated through contacts between researchers and representatives of waste management companies. Previous versions of the argument have been formally presented for managers and members of the board at two waste management companies, one of which is the case company in this analysis. These presentations have prompted important feedback and discussions. Likewise, from the start of the research project we have had an informal dialogue with the chief executive officer of the case company about value creation in waste management. These contacts have shown that representatives of waste management companies consider the presented argument, inclusive of the notion of “regime of value”, as relevant to their operational and strategic work with value propositions.

Waste management in Sweden

About two-thirds of the waste generated in Sweden as measured by weight is produced and processed by the mining industry, mostly through landfills. A privately run system of extended producer responsibilities (EPR) answers for the collection and processing services for specific waste streams such as packaging, end-of-life vehicles, electrical and electronic equipment, and batteries. Municipalities have the responsibility for the collection and processing of household waste that is not encompassed by the EPR system. The collection and processing of industrial and hazardous waste from industries are deregulated, market-based activities (Avfall Sverige, 2012).

Municipalities can handle their responsibility for household waste in three different ways: through municipal departments, municipally owned waste management companies that they own either solely or together with other municipalities, or public procurements. Municipalities tend to proceed in different ways for the different stages of waste management: first the collection services and then the treatment of waste. Three municipalities out of four have chosen public procurement to organize the collection of waste from households, including transfer and transport. But nearly all municipalities answer for the treatment of waste (e.g., storage, segregation, incineration, composting, production of biogas, material recovery and recycling, and disposal at landfills) through municipally owned waste management companies (Avfall Sverige, 2012).

Municipally owned companies thus hold a key position on the treatment stage of waste management in Sweden. This is largely due to a legal statute that endows them with a monopoly on household waste within the jurisdiction of their municipal owner(s), but also allows them to tender bids made by municipalities that cannot handle their waste themselves and need to procure waste services. Swedish municipally owned companies can even compete with private waste management companies for contracts to handle waste from commercial and industrial customers, and they can import waste from foreign countries, for example, to secure their delivery of energy to district heating systems.

Waste management at NSR

NSR is a solid waste management company co-owned by six municipalities in the region of Northwest Scania in Southern Sweden, and as such it answers for waste collection and waste treatment services in the region. NSR is an advanced waste management company. It is one of the major biogas producers in Sweden, a producer of biofertilizers, and, more generally, a company with unique competence in biological treatment, waste characterization, recycling, and landfill research (NSR, 2013).

From the perspective of the municipalities that own NSR, the company makes it possible to fulfill their legal responsibility, as decreed in the Swedish environmental code (SFS, 1998: 808, Chapter 15), to ensure that household waste generated in the municipality is recycled or removed. More precisely, the municipal owners’ directive (Helsingborg Stad—Kommunfullmäktige, 2012) states that NSR should develop a waste management that preserves the environment, serves the regional business community, and offers services to the community (waste reduction, recycling, reuse, and environmentally reliable treatment). It mandates that NSR should create the conditions for the development and creation of waste management and recycling methods that strengthen growth and increase resource efficiency in the region. It also mandates that NSR should follow the European model of waste hierarchy according to which the best waste policy is minimization, followed by reuse, recycling as material, recycling as energy, and in the worst case, landfilling. Among other things, NSR is to provide the region with waste management services that limit the diffusion of hazardous substances, is cost-efficient, and is flexible enough to meet the new demands that will come in the future. In sum, NSR is a service provider expected by its owners to deliver a complex mix of value propositions to a great number of stakeholders.

In a service delivery sense, NSR offers a series of waste collection propositions to households. The company has developed a multifraction neighborhood collection system that provides households with the possibility to separate and recycle food, packaging, and newspapers at the sidewalk or in a garbage room. This is an “extra service” (NSR, 2011a) compared with the need to go to an off-site recycling center or recycling depot. In some municipalities, NSR offers the service of collecting batteries and smaller electronic goods from households up to six times per year (NSR, n.a.). NSR also offers multifamily properties the service of cleaning waste containers on-site for a fee (NSR, 2011d). The company states that “by developing our customer service and improving collection and sorting operations we can increase efficiency in waste treatment and recycling” (NSR, 2007: 2).

Similarly, NSR offers tailored services to companies. Larger companies or companies with environmental ambitions are offered “a comprehensive waste management contract, with personal contact, proximity to services, and an overview of the waste management situation” (our translation, NSR, 2011b). The service consists of an in-depth analysis of the customer’s internal waste producing processes, custom waste prevention, separation and collection solutions, and informational material. Smaller companies are offered “effective management of waste streams with custom waste collection and proximity to efficient service” (our translation, NSR, 2011c). The service consists of an analysis of the type of waste produced, waste prevention advice, custom waste separation, and collection solutions and informational material. Moreover, NSR offers to act as a consultant to businesses throughout the region for hazardous waste, “offering the services of its chemists and safety advisers in the classification and handling of all categories of hazardous waste, with the exception of radioactive waste” (our translation, NSR, 2007: 11).

Analysis: Addressing multiple regimes of value

Multidimensional value propositions at NSR

NSR’s activities illustrate that waste management companies make more than one kind of value proposition. This trait of waste management services is noted in the waste literature. Effective waste management systems are known for creating social, economic, political, technological, and environmental value (Zaman and Lehmann, 2011). Correspondingly, their activities open the way for discussions about their impact on the environment, business economies, local economies, aesthetics, infrastructure robustness, pedagogic ability, health, and social cohesion (Söderberg and Kain, 2006).

First, NSR makes value propositions to a broad range of stakeholders. The company offers households and industries the value of getting rid of their waste on-site, that is, to remove something that is considered to have no or negative value. At the same time, NSR offers municipalities the value of fulfilling their public service mission of collecting, transporting, and treating waste within their jurisdictions. It offers the region the attractive argument to provide cost-effective waste management solutions to local businesses, and, more generally, it offers to develop Sweden’s ecological modernization. NSR also makes a consequential value proposition to the environment. The company recycles 95% of the waste that it collects (NSR, 2013), if waste incinerated for energy recovery is included. The safe management of hazardous waste prevents environmental hazards; the recovery of plastic, metal, paper, cardboard, and other materials replaces the use of virgin resources; the production of biogas and the recovery of methane from landfill replace significant amounts of fossil fuels; and the production of biofertilizer gives back to the Earth large amounts of nutrients that agriculture has extracted from it.

Second, NSR makes several different but intertwined types of value propositions. Public health concerns are always close at hand in waste management (Ross, 2011), and one may consider that the first service offering of an efficient waste management system is to safeguard the population from poisoning and epidemics. NSR’s recycling activities offer a considerable amount of environmental value as we have just described. In addition, businesses and households are offered obvious practical value from NSR’s removal of what they do not want to keep and wish to be rid of. Moreover, as Swedish Waste Management (Avfall Sverige [Swedish Waste Management], 2011) claims, efficient waste management companies generate innovation, new companies, and economic growth. Thus, owner municipalities are also offered the symbolic and therefore political value to assume their legal responsibilities for waste with economic and environmental efficiency. And NSR may even be offering moral value: By providing waste producers with the possibilities to recycle their waste in an environmentally responsible way, the company offers industries a greening of their activities (Fuchs and Mazmanian, 1998) and customers with a possibility of easing a potentially guilty conscience for overconsumption (Åkesson, 2005).

Third, NSR’s value propositions unfold across various temporal and physical scales. Waste collection is a service that answers to the here and now of production and consumption. In this respect, its value is localized and immediate. But even if waste collection is the most visible part of NSR’s activities for a large majority of waste producers, it is only a small part of the company’s activities. A large share of these activities consists of waste processing and marketing activities (Corvellec et al., 2012), and these have a considerable reach across temporal and physical distances. Managing waste means moving things along (Gregson et al., 2007). Waste is something eminently mobile. The geography of waste (Moore, 2012) is as varied (Jewitt, 2011) as it is global (Crang et al., 2013; Scheinberg et al., 2010), and it should be understood all the way down to the end of life of waste (Gregson et al., 2010).

As shown by the short dialogue below, the export of recycled material to foreign countries inscribes NSR’s value propositions within the global flows of economic production and exchanges and the political economy of waste (O’Brien, 1999).

Interviewer:

But as the European Union waste policy is implemented, will waste become more mobile [across national borders]?

Respondent:

Yes. And I don’t think that is strange because we speak of free mobility for goods and services /…/ and we [Sweden] have a need for heat and electricity. Lands like Italy, Spain, France—they have not developed this kind of heating system because there is no need in the southern countries. But instead they have a big problem with waste. So you can see an export of waste up here where we need the heat. (Head of marketing, NSR, our translation)

Likewise, waste is a permanent reminder of the durability of the material world (Edensor, 2005). NSR has developed techniques to take care of the leachates and methane (a gas with strong global warming potential) that its decommissioned landfills still emit, well ahead of the National Waste Plan’s (Naturvårdverket, 2012) recommendation to municipalities and waste management companies to actively address the risks of old landfills to public health and the environment. The creation, or destruction, of value by waste management companies is both transnational and transgenerational.

A balanced scorecard (NSR and A2 A/S, 2010) that the management of NSR uses to communicate with the company’s board of directors illustrates an awareness among NSR managers that the company offers different kinds of value to different stakeholders over various temporal and physical scales. NSR’s various value propositions are depicted through a comprehensive array of performance indicators, listed not only under headings such as market, environment, or finance but also transportation, biogas, landfill, installations and recycling centers, and research and development. Some of these indicators are traditional industrial ones such as tonnage, turnover, or financial ratios; while others are more innovative indicators of impact such as the number of satisfied customers and their degree of satisfaction, the percentage of transportation powered by renewable energy, the volume and quality of leachates, the number of scientific publications in which NSR participated, or the percentage of recycled materials generated. Using a multidimensional tool for performance measurement is a way for NSR’s management to underscore for its owners the pluralism of the company’s value propositions.

What is crucial is that these various value propositions are not necessarily in harmony with each other. Different environmental value propositions might enter in conflict:

Respondent:

But one thing has increased tremendously in all this you have seen today, and that is transportation.

Interviewer:

It is an incredible amount of movement [of waste].

Respondent:

/…/ If you take in 500,000 tons of waste and put it in a single heap there [points], well, then you have no transportation. But the heap grows. It’s a long way to heaven. But the heap remains. [Recounts an imaginary dialogue]: “But what have you done? We have said that we should not have this large heap! We are supposed to put this there, and that there, and this there, and that there!” And we wash and sort, and sort and bundle, and sort and crush. And it is cars hither and thither all the time. And it is outbound transports all the time. And the material we send out goes to another industry where they sort again. And send it out again to the next industry. So we have something we call waste tourism. (Production manager, NSR, our translation)

The respondent makes it clear how moving waste around is necessary to sustain economic and environmental value propositions, but the mobility of waste simultaneously entails a destruction of economic and environmental value that goes against the efficacy of these propositions. By so doing, our respondent points to the inadequacy of unidimensional or essentializing understandings of a waste company’s value propositions. As Stark (2009: 27) points out, “It is the friction at the interacting overlap of multiple performance criteria that generates productive recombinations by sustaining a pragmatic organizational reflexivity.” The case of waste management illustrates that value propositions are dynamic and context-based, and to render the richness of the company’s value propositions, one needs to address the contextual dynamics of these propositions.

Addressing coexisting regimes of value

NSR’s multiple value propositions demonstrate the insufficiency of grounding an understanding of value propositions in services in a value-in-exchange view or value-in-use view of value. Concerning a value-in-exchange view of value, the NSR case shows that measures of economic exchange such as waste handling fees or the company’s sales of energy and recycled products provide only a partial expression of the value propositions of waste management companies. Because these companies offer a service with a decisive role for public health (Ross, 2011) and sustainability (Scheinberg et al., 2010), there is more to their value propositions than what can be expressed by their commercial transactions on the markets for waste, energy, or recycled products. The value creation of waste management companies cannot be reduced to their share of the gross national product.

Neither is it sufficient to adopt an experience-based value-in-use view, claiming, as Vargo and Lusch do, that “[v]alue is perceived and determined by the customer on the basis of value in use” (2004: 7). NSR’s value propositions involve a greater number of stakeholders than the households and industries that see their waste disappear out of sight. A focus on the actors directly involved in the collection and treatment of waste is insufficient since most individuals and companies who consume waste services are nonspecialists who are ignorant of what should happen and what actually happens with their waste, how it is processed, and how it reenters the economy. The experiential view of waste management services by the customers of municipal waste companies covers only a limited part of waste management systems as a whole. A value-in-use view of value that is grounded in the limited tempospatial experience customers have of the service is therefore too narrow to express the multisidedness of waste management value propositions.

There is a need to transcend the immediate here and now localness of service interactions to take into account service offerings of different kinds that involve stakeholders removed in time and physical distance. Starting from a Nordic service school view of value “as created throughout the relationship by the customer, partly in interaction, between the customer and the supplier or service provider” (Grönroos, 2000: 24) has clear limitations. The case of waste management companies illustrates that value propositions are better understood as part of a constellation of relationships (Harvie and Milburn, 2010) among stakeholders (Frow and Payne, 2011)—service providers, service users, and others (Normann and Ramírez, 1993; Patrício et al., 2011)—who exchange value propositions (Flint and Mentzer, 2006; Kowalkowski et al., 2012), under the gaze of various evaluators (Kowalkowski, 2011) who produce diverging judgments. To take fully into account Vargo’s (2008) claim that value, and thus value propositions, should be understood in context, one needs to adopt a context-sensitive view of value propositions and take into account that value has a collective and intersubjective dimension (Edvardsson et al., 2011) and that the understanding that actors have of value cocreation is framed by micro-, meso-, and macro contexts (Chandler and Vargo, 2011) and cultural meanings (Peñaloza and Mish, 2011).

Appadurai’s (1986) notion of regime of value addresses these concerns. A regime of value refers to intersubjective and institutionalized standards of evaluation that are specific to a community, a perspective, a time, or a place. Simply put, different stakeholders, at different points in time or space, and with different foci or priorities, will mobilize different criteria, scales, referents, and procedures to assert the value of any given value proposition. Regimes of value can succeed each other, complement one another, or compete.

Gille (2010) shows how regimes of value can succeed one another. She illustrates how Hungary has gone through three different value regimes for waste: A metallic regime (1948–1974) where waste was hailed as free material to be mobilized for the fulfillment of the economic development plan; an efficiency regime (1975–1984) that viewed waste as a cost of production to be reduced in order to increase efficiency; and a chemical regime (1985–present) where waste is seen as a useless and even harmful material category.

Of relevance to our argument is that regimes of value coexist. This coexistence in turn rests upon the coexistence of different social agreements on what constitute relevant measures of worth (Boltanski and Thévenot, 2006). A legal regime of value depends on how well value propositions comply with the legislation, for example, on public health or public procurement. The key measure in a political regime of value is the votes by electors. In an economic regime of value it is the creation of wealth, for example, measured in employment, whereas in a management regime of value it is often profit. An environmental regime of value stresses the control of hazardous substances, climate change mitigations, or material efficiency. A given regime of value can accommodate different and competing measures of worth, which is yet another source of diversity.

This coexistence of different regimes of value explains why the same activity can be understood as different value propositions. For example, the offer to collect 12 waste fractions (e.g., paper, cardboard, glass, metal packaging, plastic, and yard waste) at the curbside represents a practical value proposition to residents since such a system implies that they no longer need to bring their common recyclables to recycling centers. At the same time, in a complementary mode, this service represents an environmental value proposition made to residents, politicians, and future generations since, as our respondents have noted, offering to recycle packages at people’s doorstep significantly increases the rate of material recovery.

Regimes of value can also be in conflict with each other. The value propositions made by incineration will be valued differently if approached in economic or in environmental policy terms. Incineration can stand as an attractive waste treatment solution in term of profitability, especially if the incinerating company can deliver heat in addition to electricity. It is valued as much less attractive in the environmental policy terms of the European waste hierarchy model (2008/98/EC) according to which incineration, even with energy recovery, is valued higher than landfill but considered inferior to recycling, reuse, and waste prevention, in an increasing order of priority. Views about the value propositions made by incineration depend on the regime of value that one adopts: Whereas any reduction of waste volume is a success for the waste hierarchy model, it becomes a problem for waste management systems contractually bound to deliver certain quantities of electricity to the power grid and heat to district heating systems (Corvellec et al., 2013).

Regimes of value underscore that evaluation modes are socially determined and therefore changing, coexisting, competing, or collaborating. Regimes of value can concur, such as when better environmental value is represented as resulting in better economic value (Hultman and Corvellec, 2012). Regimes of value can come in conflict, such as when the economic rationale of transporting waste offsets much of the environmental benefits of recycling. Or regimes of value can be relatively autonomous. A public health regime of value is only indirectly concerned with the economic value of the materials that waste management companies recycle. Each mode of coexistence orders the different ways to appreciate value in specific and changing constellations. What is considered as “of value” is contingent (Herrnstein Smith, 1988) on who is asked, when, where, how, and why. This contingency is not a matter of subjectivity. Regimes of value refer to stabilized (although changing) and institutionalized (although by different institutions) social modes of evaluation. And by underscoring the social contingency of value, it makes clear that instead of addressing the nature of a value proposition per se, the social conditions of valuation made to this proposition need to be addressed.

As exemplified by NSR’s balanced scorecard (NSR and A2 A/S, 2010), the core of our argument is that waste management companies make value propositions to stakeholders—for example, households, industries, and the region—who have different interests in mind and belong to different regimes when they engage with and recognize the value of the company’s services. The company addresses different regimes of value at the same time, and this brings us to our next point: The need to develop a politics of value propositions that matches and possibly exploits the fact that the company addresses disparate regimes at the same time.

Discussion: The politics of value propositions

The need for managers to engage with a politics of value (Appadurai, 1986) derives from the fact that managers who make value propositions are facing a variety of valuation practices (Muniesa, 2011) that belong to a variety of orders of worth (Boltanski and Thévenot, 2006). They cannot predict the outcomes of these valuation processes simply or with certainty. Faced with multiple, changeable, and incommensurable regimes of value, managers need to engage in intricate framing and negotiation processes.

Making value propositions is a political activity in the sense that it involves comparing incommensurable variables or arbitrating between equally important, but possibly conflicting, goals. Different value regimes allow different evaluative frameworks to coexist, and these frameworks can be used in many ways to conceive of the value (Frow, 2007) that a service offers. Households and companies producing waste have frameworks of their own to assess the value propositions of waste management companies, the Swedish Chemicals Agency that supervises toxic waste have other frameworks, municipal owners of waste management companies yet others, and so on. These frameworks change and evolve over time (Thompson, 1979). For an organization to enact a politics of value propositions is not simply to acknowledge and imagine a series of subjective points of view upheld by stakeholders who occupy diverse roles or positions; it is instead to fully acknowledge that all these views about their value propositions coexist, side by side, and must eventually be taken into account since one never knows in advance which stakeholders are going to vote and how they are going to vote.

Making value propositions is a political activity also in the sense that the value that is offered has consequences for the wider society. Value propositions reflect trade-offs and priorities that are not purely technical. They are products and producers of a social order (Aspers, 2008; Fourcade, 2007) in the sense that they express institutionalized preferences, opinions, affects, and judgments based on ethical options, vested interests, political goals, and ideological options (Alexander, 2005; Arvidsson, 2011b; Beckert and Aspers, 2011). Value propositions are epistemic practices (Verran, 2011) that point to what is to be considered as being of worth (Graeber, 2005). They are enabling, but they also define controlling limits on what stakeholders can decide.

Value propositions by waste management companies stand as an example of political constructions that are contingent (Herrnstein Smith, 1988) on variables such as the state of scientific knowledge, the opinionated interests of the parties involved, institutionalized organizational practices, societal trends, and individual judgments (Frow, 2007). These constructions are all legitimate in the eyes of those who support them. Different regimes of value produce singular (cf. Karpik, 2010) understandings of the value propositions of waste management, and singular understandings lead to different priorities of actions. Therefore, ranking the value of value propositions, or simply choosing one value proposition instead of another, is inevitably an expression of judgment derived from political choices and trade-offs.

The case of waste management services further illustrates the observation made by Appadurai (1986) that there is a constant tension between ways of framing value (see also Frow, 2007; Graeber, 2001). The company’s value propositions circulate (Mauss, [1902] 2000) among stakeholders with different status (Zafirovski, 2000) and potentially contradictory and conflicting interests and concerns. The tensions among social, economic, and environmental dimensions of sustainability are one illustration. Other examples are conflicts between local and global interests or between the immediate and remote future. And releasing such tensions involves political decisions. For this reason, value propositions always equal political actions, and service research needs to acknowledge this in order to understand the practical implications of the contextual nature of value propositions for service organizations.

Engaging with the politics of value propositions is not simply a matter of deconstructing, for analytical purposes, the valuation practices (Dewey, 1939) of stakeholders. It is a matter of recognizing the capacity of services to appeal to more than one experience, of engaging pragmatically with value propositions as a pluralistic social process, and of communicating one’s preferences and choices clearly to one’s stakeholders and society in general to create a dynamics based on being active within several regimes.

Swedish municipally owned solid waste management companies provide an illustration of this in that they have learned to combine being active on four different but related markets (Corvellec and Bramryd, 2012): A political market on which their legitimacy as an organization is determined; a material economy market that determines their access to waste as a process input; a technical market on which these companies choose what waste processing technique to use; and a commercial market where they market their products. The success of waste management companies depends on an ability to articulate the interrelationships among these markets, each with a logic of its own, so that the perception of how these companies perform according to one regime of value reinforces the perception of their performance according to other regimes. Communicating a proposition of environmental value to private or corporate customers who are primarily interested in the practical removal of waste, and alerting politicians of the systematic environmental communication to these customers, as NSR does, illustrates how a company can create a dynamic between regimes of value by taking a strategic advantage from the fact that it makes multiple value propositions that evade one-dimensional evaluative frameworks. Making a value proposition to a stakeholder that has been designed for another stakeholder, alone or in combination with other value propositions, is to open a way for innovative strategic initiatives.

The purpose of a systematic politics of value propositions is to develop a richer and fairer accountability of the social dynamics of value propositions, and beyond that, value creation. To transcend a narrow understanding of value propositions in terms of the here and now of value in exchange or in use, organizations need to acknowledge and learn to exploit the fact that they simultaneously and all the time offer different kinds of value, over different temporal and spatial scales, for different stakeholders.

Concluding remarks

Waste management companies have developed a strategic capacity to combine multiple value propositions that illustrate the relevance of a multisided valuation approach to service value propositions. These companies may be considered as special cases because waste management is a public service activity operated by municipal organizations. However, neither this public service mission nor the fact that most waste management companies in Sweden belong to the public sector are conditions of our argument that value propositions should be understood as political constructs. For-profit companies, from banks to restaurants through accounting firms or airline companies, and nonprofit service organizations—such as the Red Cross or Médecins Sans Frontières—all make multiple value propositions. Waste management is simply an illustration of how service companies make multiple value propositions and then strategically engage with the dynamics of this multiplicity, for example, by making propositions to one stakeholder originally developed for another stakeholder, thereby combining value propositions.

Our contribution to the theory on value propositions, and beyond that the theory of value cocreation and the SDL thesis, is based on Appadurai’s (1986) concepts of regimes of value and politics of value: Value propositions should be seen as a pluralistic construct that cannot be framed in a single and static manner. It is better understood as an ongoing multivocal and political construction. This brings us to a final practical suggestion.

From a practical perspective, we agree with Stark (2009) that ambiguity and uncertainty about what is valuable and the co-existence of multiple principles of evaluation provide managers with sizeable opportunities for innovative ventures when they make value propositions. The case of Swedish municipally owned waste management companies shows that service organizations have much to gain from understanding how their value propositions can combine different regimes of value, even incommensurable ones. As Appadurai (1986) aptly notices, differences between how stakeholders define value do not necessarily prevent them from communicating about value and trading the objects of value. Even incommensurable regimes of value can be connected and setting up such connections in value propositions opens unexploited innovation potentials.

Footnotes

Acknowledgments

We are most grateful to our respondents at NSR for the careful attention that they have shown us. We are also grateful to Richard Ek, Katja Lindqvist, Lars Nordgren, Sumi Dahlgaard-Park, and Patrick Zapata together with CF Helgesson and his colleagues at ValueS research group in Linköping for their comments on previous drafts. Finally, Patricia Zukowski deserves a special mention for her invaluable editorial help.

Funding

This work is part of Organizing Critical Infrastructure Services—a case study of waste research project under the Winning Services Research Program financed by Vinnova, the Swedish Governmental Agency for Innovation Systems [Grant (diarienr): 2009-01696].

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