The role of embeddedness for resource integration

S-D logic as a perspective for resource integration in service ecosystems

S-D logic argues that individual actors interact with each other and with various resources to improve their own circumstances (or well-being) and, in doing so, to improve the circumstances of others through mutual service provision (Vargo and Lusch, 2008). Service, enabled through the interaction with and integration of resources such as knowledge and skills, is the fundamental basis for competition (Lusch et al., 2006). Firms accordingly strive to facilitate and enhance resource integration processes to enable better service and valued experiences (Karpen et al., 2012).

Recent advancements in S-D logic maintain that resource integration processes unfold in the context of service systems (e.g., Akaka et al., 2012; Kleinaltenkamp et al., 2012; Wieland et al., 2012). The latter can be seen as dynamic exchange structures consisting of interactions among people, organizations, and technology (Spohrer et al., 2007). Building on the understanding of service systems, recent S-D logic literature proposes to investigate resource integration in the context of systems of service systems, also here referred to as service ecosystems (Vargo and Akaka, 2012). Vargo and Akaka (2012: 207) draw on a definition of service ecosystems as “relatively self-contained, self-adjusting systems of resource-integrating actors connected by shared institutional logics and mutual value creation through service exchange.” Importantly, service ecosystems refer to interdependent structures of social and economic interactions for mutual service provision and build the foundational context for the remainder of this article.

The proposed service ecosystem and social structure view of value creation in S-D logic (e.g., Edvardsson et al., 2012) places connections between resource integrators in a primary position, as resource integration and service provision become possible only when individuals in a service system are connected to and engage with each other. To apply their competencies and integrate resources, individuals need access to relevant resources, which they often acquire from social relationships in their broader social structure. Currently, two perspectives prevail on the role of relationships of resource integration in service systems—one linked to Giddens’ structuration theory and one linked to network theory. These views offer a useful vantage point.

Structuration theory offers a theoretical framework for understanding the integration of human agencies with the emergence and existence of structures in social reality; an extensive tradition of research has driven the development of this theoretical stream. Two important proponents of structuration theory are Giddens (1976, 1984, 1993) and Bourdieu (1972, 1990, 1991), who have offered different theoretical lineages that form the basis of modern sociology that studies the synthesis of structure and agency effects.

In contrast, network theory is a contemporary paradigm of modern sociology with roots in schools of functionalism and structuralism. Network theory offers a systematic analytical perspective on relationships between social entities. By identifying influential patterns that unravel network dynamics, the theory facilitates the investigation of social structures. Network theory conceives relational patterns (e.g., tie strength) and propagates their impact on both agency-level and system-level outcomes. Despite its benefits in terms of understanding relational patterns and their impact, network theory has been criticized as overly simplistic and underestimating or insufficiently accounting for human or interrelational qualities (El-Sayed et al., 2012; Helbing, 2012; Smith, 2010).

In the following section, we discuss structuration and network perspectives currently informing the S-D logic literature. These two perspectives are frequently used to support S-D logic research in illustrating the significance of actors and their relational constellations for resource integration process and outcomes. However, we draw on and identify important limitations to argue for the need of an embeddedness perspective informed by SCT. The latter has the potential to offer a more holistic framework to understand and theorize about the importance of actors’ relationships. In doing so, we outline and justify the interactional and interdependent character of resource integration constellations within service ecosystems.

Resource integration through S-D logic and Giddens’ structuration

The concept of “structuration” in the sense that is specific to Giddens’ structuration theory involves thinking of objectivity and subjectivity with respect to the formation of structures (Giddens, 1984). Giddens’ view of structuration links structures and human actions causally. The main argument of his structuration perspective is that dominant human actors are responsible for recreating social structures. In the context of S-D logic, these dominant actors are viewed as “resource integrators” through which value is actualized. More precisely, Giddens’ structuration perspective focuses on dominant agencies and actors and not on their social relationships and their implications for resource integration. As the main theoretical anchor for this reasoning, structuration theory holds that societal rules and norms recursively shape cognition, causing dominant actors in the structure to behave in such a way that they reproduce social structures.

Social structures and human actions can be classified into three dimensions—signification, domination, and legitimization—which form the key proposition of this perspective (Giddens, 1984). When interacting with each other, individuals such as customers or employees draw on structural guidelines to make sense of their actions. At the same time, their actions modify the social structures that provide meaning or significance.

Linking S-D logic with structuration theory has yielded a framework to suggest that individuals draw on interpretive norms and rules to create a structure of significance (Edvardsson et al., 2012). An individual actor in a dominant position within a service system can exercise power to control resources, thereby creating a structure of domination. Likewise, individuals refer to social norms to legitimize their resource integration actions and value creation as well as their creation of a structure of legitimization. For example, if a significant number of fans in the Nutella community share their Nutella moments by posting photos of themselves enjoying Nutella, community members might think that to display their love for Nutella, they should post Nutella-related photos, thereby creating a structure of significance. Similarly, a highly active Nutella fan who continually posts and generates many followers (including “likes” and “shares”) in the Nutella community might become a central actor who exercises power to influence others, thereby creating a structure of domination. Finally, Nutella fans participating in communal events such as photo sharing or Nutella fan gatherings can legitimize their acts by referring to others who are doing the same, thus creating a structure of legitimization.

Although Giddens’ structuration perspective is useful in many ways, it falls short in explaining the role of social relationships that represent an individual’s level of social embeddedness. As an interconnected pattern of commensurate social relationships, an actor’s embeddedness shapes behaviors and actions, thus expanding or constricting the processes and outcomes of resource integration (Smith and Stevens, 2010). Despite Giddens’ valuable perspective of structuration theory, the established framework does not provide sufficient understanding of how actors assume social group memberships and social roles and positions within a structure that may influence their value cocreation efforts. Understanding the underlying structural forces, such as group memberships and the significance of enabling social roles, can offer invaluable insights into the resource integration process in service systems. Social roles impart power and authority and can create inequalities (Moody and White, 2003) in resource distribution in service ecosystems. Social roles are embedded within social structures (Granovetter, 1985) and are drawn upon as important resources in value cocreation (Akaka and Chandler, 2011).

Giddens’ proposition of domination, whereby the operation of dominant relationships relies on the compliance of subordinates, simply places limits on the feasible range of options available to individuals in a structure (Thompson, 1989). Research suggests, however, that an actor cultivates different types of dominant and weak social relationships, as each type may possess more or less potential to offer some kind of resource that the actor considers valuable. Importantly, from a resource integration standpoint, Giddens’ idea of dominant actors does not clarify the role of other or nondominant actors in recreating social structures and value cocreation. In turn, this lack of clarity limits the potential of S-D logic for understanding and explaining contingencies associated with social and economic individuals as resource integrators.

Moreover, it is unclear how an individual actor gains a dominant position in the service structure, although social network scholars have empirically demonstrated how an individual’s structure of relationships contributes to gaining dominant positions in structures (Burt, 1980; Carrington and Wasserman, 2005; Reingen and Kernan, 1986; Wasserman and Faust, 1994). There is also a lack of clarity as to how dominant actors develop themselves into knowledgeable beings as portrayed by Giddens. Individuals’ knowledge-building competencies are highly dependent on their environment (Cohen and Levinthal, 1990) that comprises other operant (e.g., social relationships) and operand (e.g., materials—mobilized by other actors) resources.

In the context of S-D logic’s structuration perspective, the explicit link between operant and operand resources with Gidden’s (1984) authoritative and allocative resources is limited. This relates, for example, to how authoritative resources as operant resources manifest control over other social actors and relationships through structures of domination in order to subject them to actions of resource exchange or usage. Allocative resources, on the other hand, involve control over tangible and more static resources such as materials (rather than humans), which we refer to as operand resources from an S-D logic perspective. In a business context, for instance, a manager has authoritative power over his/her subordinates and influences their potential resource integration at work (e.g., which resources are to be used for which tasks). Similarly, dominant customers might have an advantage over suppliers in business markets and determine resource exchanges and resource forms. In the hotel or leisure industry, quality material that has been used to build a hotel is important because customers interact with and use respective resources during their stay, using allocative power. As resource integrators with allocative power, customers thus act upon (access, mobilize, transform, etc.) other resources.

In contrast to Giddens’ structuration perspective, Bourdieu’s (1979) thinking of structuration emphasizes the importance of individuals’ positions in social groups for accessing resources in a structure. Bourdieu believes that every human actor is positioned within social groups and classes that compete with each other for resource access and usage. Bourdieu’s (1990) structuration philosophy highlights the importance of every individual being the creator of her/his own “experience” in a unique manner. The experience is guided and replicated through patterned structures that are developed during socialization. Thus, Bourdieu places great importance on closely knitted social groups that exercise power and authority to modify resources, exchange processes, and structures. Bourdieu’s structuration argument, in which all human actors are the creators of their personalized experiences and no dominant actor is single-handedly responsible for the reformation of structures, resonates conceptually with S-D logic (S-D logic premise nine: the customer is always a cocreator of value). Further, Bourdieu (1985) views the societal rules and norms that Giddens (1984) observes for guiding the actions of individuals as patterned and routinized ways of operations called practices. Practices are used to accumulate resources, create experiences, climb the social hierarchy, and gain powerful social roles and positions. In the context of S-D logic, Edvardsson et al. (2012) draw on Bourdieu’s understanding of practices to analyze activities and interactions in service systems. This linking of practices with interactions does not account for how actors, along with social relationships, precisely create, preserve, and exercise practices for value generation. Nevertheless, Bourdieu’s structuration perspective advances that of Giddens (1976) in uncovering the interplay between actors, social groups, and the effects for resource integration and structure formation. Yet this perspective still falls short in discussing actors’ embeddedness in terms of revealing relevant interactional properties and relational constellations as mediators for resource integration processes and outcomes.

Finally, Archer (1979, 1990) argued that Giddens’ (1976) structuration theory dissolves the differentiation between agencies and structures. Eliminating this differentiation makes practical social analysis difficult. Archer argues that Giddens’ amalgamation of structures and agency removes the possibilities of analyzing their historical relations, whereby Giddens neglects the impact of past relationship experiences on future relationship interpretation and behavior. “Neither structure nor agency have independent or autonomous features” (Archer, 1996: 687). Archer therefore asserts that Giddens’ structuration approach does not explain how changes in actors’ structural arrangements may change their potential to access resources, thereby constraining or increasing their freedom to act. Archer (1982) reinstates the distinction between structure and agency by developing the perspective of the “emergence of structures.” Archer’s view of structuration involves:

an image of society, not a series of acts, but as continuous flow of conduct which changes or maintains a potentially malleable social world. In turn it obviously proscribes any discontinuous conceptualization of structure and action—the intimacy of their mutual constitution defies it … Structuration itself is ever a process and never a product. (1982: 457; 1990: 75)

Within this emergence-of-structures-perspective, Archer (1979) argues for the significance of exchange processes, resource flows, and continuity across social structures by focusing on structural, relational, and cultural conditions of emergence and recreation. These conditions are specifically relevant from a resource integration perspective consistent with S-D logic and include: (1) structural-like roles; for example, social roles and social positions limit an individual’s access to resources; (2) cultural conditions as a propositional register of theories, beliefs, and values that preexist. That is, cultural conditions (e.g., norms) specify what is acceptable or unacceptable resource integration behavior; and (3) agential conditions such as individuals or groups exchanging transactions based on the ability of sensing, responding, transforming, and using resources through the focal actors’ knowledge and skills. These three conditions are viewed as drivers for new conditions of exchange and resource integration, thereby reconfiguring structures. In line with the notion of emergence, Akaka and Chandler (2011) discuss the significance of the flow of resources from an individual level to ecosystem level as important factors for the reforming of service ecosystems. While Archer’s (1979) contemplation on Giddens has been important in understanding the dynamics of resource flows across structures, it falls short in reflecting on the nature of social relationships, particularly of embeddedness as a means to exchange processes within sustainable structures.

In summary, structuration theory perspectives represent an important contribution in terms of unveiling the significance of agencies and actors for resource integration. However, limited potential exists for building a robust theoretical framework that clarifies the role of actors’ embeddedness while illustrating the essence of interdependence in resource integration processes and constellations, as proposed by S-D logic.

Resource integration through S-D logic and the network perspective

Akaka et al. (2012) employ a network-centric approach along with the S-D logic to shed light on how individuals and their relationships form networks that act as mediators for resource integration. The network approach is grounded in the premise that actors or entities are connected through patterns of social relationships in a social space (Burt, 1980). These interrelational patterns are concrete and measurable. The network approach views social relationships in terms of nodes and ties, where actors are the nodes and the relationships between actors form the ties. Actors activate their social ties to access resources from each other and achieve their goals (Knoke and Kuklinski, 1982). Applying the network perspective, Akaka et al. (2012) reflect on the embedded nature of relationships and focus on how value is driven by the individual’s ability to access, adapt, and integrate resources through routine practices within networks.

Resource access is the act of drawing available resources from the network in which an individual is situated (Akaka et al., 2012). To accelerate resource accessibility, firms may examine individual actors’ positions in the network and then attempt to influence interactions between these individuals. An important community position can be conceptualized in terms of centrality, a measure derived from social network analysis (Chandler and Wieland, 2010). Centrality is the extent to which an actor is connected to others in the network (Borgatti et al., 1998) and it significantly facilitates resource access.

Resource adaptability, on the other hand, is an act of self-customization that draws resources to match their contexts (Akaka et al., 2012). During self-customization, customers are invited to coproduce individualized offerings. Systems such as Facebook, for example, offer members various options to self-customize or adapt their profile pages to suit their values and desires. Lastly, resource integration is the act of combining the accessed (or even adapted) resources and applying them to realize value. From a theoretical point of view, this breakdown of practices related to resource integration (access, adapt, and integrate) helps differentiate value cocreation while it is occurring. Moreover, such a delineation assists in identifying practice-related strengths or weaknesses (driven by the service design and human constellation) that a firm could prioritize to improve or leverage into better mutual outcomes. For example, as embedded entities in service systems, firms may facilitate resource integration and value cocreation processes by enhancing bonding among network partners (Akaka and Chandler, 2011).

Scholars believe that a useful undertaking is to reveal how resource integration transpires in different contexts, such as through the individual or micro-level contributions to the service ecosystem or the meso- and macro-level activities. This perspective emphasizes that value as a resource integration outcome at the micro-level (between two actors) can morph into a macrolevel benefit (between all or many involved actors at the collective system level). A theoretical explanation of this phenomenon appears in the seminal work on the strength of weak ties (Granovetter, 1973, 1983), which illustrates the interdependence of actors’ resource integration at different levels and contexts. Research into word of mouth, for instance, has inspected the occurrence where connections among networked individuals contribute to the distribution of information in consumer networks (e.g., Goldenberg et al., 2001).

While network-based insights enrich S-D logic research, theoretical ambiguity persists with respect to how individual actors’ embeddedness affects resource integration efforts in a service ecosystem. At times, network theory has attracted the criticism of being overly narrow in portraying human actors as “nodes” and relationships between these nodes as “links”, neglecting relational norms and agentic properties (e.g., intentionality, motivation, self-reactiveness, and self-reflectiveness) (Bandura, 1986). In other words, network theory does not account for agent-based modeling and the various natural capacities and abilities of humans, such as that humans are able to cause their own acts and have the potential to mobilize their beliefs, interests, and emotions with a significant degree of free will, driving certain courses of action (El-Sayed et al., 2012; Helbing, 2012; Smith, 2010).

Although the S-D logic literature has initiated and implicitly highlighted the significance of embeddedness in its preliminary work (Akaka et al., 2012; Chandler and Wieland, 2010), a comprehensive and explicit discussion of embeddedness and its role in the resource integration process has not been undertaken. First, sociology scholars argue that networks and behaviors cannot be studied independently because they are formed by continuing social relationships (Castro and Roldán, 2013). The structure of social relationships in which an individual is entrenched creates and maintains contexts that lead to relational norms, such as trust and commitment, that motivate individuals to continue sharing resources. However, the current S-D logic view of networks and systems does not sufficiently address how in a partnership such norms materialize through the degrees of embeddedness among resource integrators.

Second, the value cocreation literature contains few insights into the different types of embeddedness as properties of a structure in which individuals are integrated as well as how these properties contribute to individuals’ unique opportunities and constraints in actualizing resource integration in a service system. The properties can have both descriptive and normative outcomes (Semrau and Werner, 2014) and can support the understanding of resource integration processes. The broader nature of this knowledge gap has been usefully summarized as follows:

We need to understand the various ways in which firms as collective individuals and various individuals or groups of them are embedded, and the ways in which these different embeddednesses are related to economic outcomes, both at the level of firms and their spatial environments .… Empirical studies are needed to open up the richness of “embeddedness” in comprehensive studies … to reveal the processes through which economic action and outcomes are affected by “embeddedness”. (Oinas, 1997: 30)

Primary discussions in the service literature related to embeddedness aim to understand information-seeking processes for innovation in a service system (Chandler and Wieland, 2010). Despite the discussion of how embeddedness produces community norms such as solidarity, mutuality, flexibility, role integrity, harmonization of conflicts, or power restraints (Achrol, 1997; Ivens and Blois, 2004; Kaufmann and Dante, 1992), the understanding that these norms probably influence individuals’ resource exchange efforts is missing. Furthermore, how individual actors gain access to an actual or potential spectrum of resources by means of resource practices in a network is unclear.

Moreover, the current network view does not explicitly recognize numerous resource integration practices beyond access and adaptation that may be occurring during resource integration. However, simply having access to a partner’s resources may be insufficient for resource integration to occur, as intentions to mobilize resources are vital. The intention to mobilize is an individual’s motivation for participating in resource exchange activities. While mobilization of resources has the potential to lead to reciprocity and commitment to continuous resource trade in communities, the question of how embeddedness contributes to the commitment of mobilizing resources has not been examined, although researchers have been encouraged to elaborate on the implications of mobilizing behavior between the focal customer and mobilized stakeholders (Jaakkola and Alexander, 2014).

Similarly, the practices of resource internalization and transformation may be crucial to successful resource integration. Internalization is the transition from explicit to tacit knowledge (Nonaka and Takeuchi, 1995) in a way that will assist individuals in conforming and interpreting their socialization tactics. In the context of resource integration processes, internalization informs the understanding of an individual’s ability to elicit and enact appropriate resource integration during a value cocreation behavior episode. Embeddedness facilitates this process by exposing market actors to a multitude of configurations, on which they draw to interpret actions (Coleman, 1987; Weir and Hutchings, 2005). While transformation can be described as assimilation of resources to create a new form of relevant resources for resource integration, transformation occurs through recognizing the importance of resources such as knowledge that are potentially embedded in social relationships and assimilated to develop new resources.

Lastly, the social exchange of resources calls for a shared understanding and shared interpretation of rules, values, norms (“institutions”) (Vargo and Akaka, 2012), and beliefs that individuals in a structure are expected to have. Such common understanding drives the social practices that lead to resource exchange (e.g., Edvardsson et al., 2012; Giddens, 1984). The level of shared understanding helps explain how likely individuals are to access, mobilize, internalize, adapt, transform, and apply the variety of resources available to them while considering institutional rules. However, the network view does not specifically explain this phenomenon (Akaka et al., 2012). Although the management literature provides significant insight into embeddedness as a useful construct for inter-organizational networks and outcomes (Vinhas et al., 2012), research on embeddedness in the context of S-D logic is insufficient and narrow. This insufficiency offers marketing scholars the opportunity to significantly advance the understanding of individuals’ embeddedness in service ecosystems as a source of (1) social control for resource access (Sporleder and Moss, 2002); (2) social support through strong relationships, leading to intentions to activate resources (Hallin et al., 2011; Lin, 2001); and (3) external resources (from outside the group or system) as a mechanism for innovative knowledge transfer (Ardichvili et al., 2003).

SCT and embeddedness—A theoretical perspective for resource integration

The concept of embeddedness offers an opportunity to better understand how to operationalize the mechanisms underlying the access and mobilization of resources to generate desired outcomes. Embeddedness is broadly defined as the set of social relationships between economic and noneconomic individuals (individuals as well as aggregate groups of individuals or organizations), which in turn creates distinctive patterns of constraints and incentives for economic action and behavior (e.g., Hess, 2004; Jessop, 2001; Zukin and DiMaggio, 1990). Social relationships are dynamic, and their constitution defines individuals’ contexts and dictates potential opportunities (Granovetter, 1973).

Embeddedness provides an understanding that structures do not spring up merely to fulfill an economic function but rather independently affect the functioning of economic systems through their history and continuity (Coleman, 1988). Embeddedness results from the time invested in establishing and maintaining relationships, and it is basically a rational explanation for the logic of exchange that creates, motivates, and promotes coordinated adaptation of resources to achieve value outcomes (Granovetter, 2005). According to this logic, individuals act in a way that enables them to cultivate long-term, covenantal relationships, which have both individual and collective levels of benefit (Hallin et al., 2011). Embeddedness has emerged as an ally for economic theory and sociological approaches to organization theory (Granovetter, 1995; Polanyni, 1944; Schumpeter, 1957). Accordingly, organizational and sociology scholars have adapted an SCT framework to explain the effects of embeddedness in several organizational settings (e.g., Gulati, 1998; Gulati and Gargiulo, 1999; Moran, 2005; Nahapiet and Ghoshal, 1998; Portes, 1998; Sporleder and Moss, 2002; Zukin and DiMaggio, 1990).

SCT is a neo-capital theory with roots in the structuration tradition. Essentially, social capital theorists have combined key aspects of structuration developed by Archer (1979), Bourdieu (1979) and Schutz (1967) with Marx’s (1906) classical theory of capital, resulting in “SCT” to offer an understanding of how investments in social relationships lead to or support expected outcomes. This general definition is consistent with various renditions by scholars who have contributed to the evolution of SCT. Two core dimensions of SCT concern how actors access and use resources embedded in social networks to gain value. At the relational level, the focus is on investments in developing social relationships and leveraging the embedded resources to generate value. The focal issue of the second dimension of SCT represents value at the group level and how groups maintain more or fewer group-level assets that enhance or constrain their value-generating opportunities.

Although scholars agree on the conceptual development of social capital, the debate around its analysis leads to contrasting views. For example, Bourdieu suggests the rise of dominant classes and explains the generation of value in a system as emanating from closed groups with powerful social positions and strong links to each other. Overall, Bourdieu enriches SCT by describing practices that explain how different forms of capital (human, cultural, etc.) are manifested in structures.

While Bourdieu’s contribution to the development of SCT is significant, Coleman (1988) argues that marginalizing non-powerful actors of a system fails to account for the mobility of resources from one group to another. To explain how interactions occur through the development of trust, norms, sanctions, and credibility, all individuals or system members must be included. Similarly, other scholars have highlighted the importance of loose social ties that can act as important bridges in networks, facilitating or hindering information flows, with weak ties serving as sources of new information and innovation, thereby offering a relative advantage in competing resource-driven service systems (Burt, 1992; Granovetter, 1995).

Overall, underlying SCT is the significance of how an individual’s resources in the form of in-group and out-group relationships are maintained to capture the returns for the individual who is linked to a specific action. The debate concerning close-knit or loosely knit groups has led to a contemporary perspective of SCT that better explains how individuals draw on their social contexts, personal motivations, relational norms, practices, and system rules and how these factors influence their value generation (Lin, 2001). This theoretical perspective overcomes the limitations of a network approach by providing richer insights into relational constellations and conditions. For instance, SCT offers explanations for how and why relational norms such as trust and reciprocity emerge and describes the logic behind offering social credibility, mutual recognition, and intentions of continued resource exchange between partners. Development of power, authority, and social roles accordingly determine what access individuals have to resources, how individuals develop their capacities to become enviable resources, and why individuals invest in generating collective value (public assets) without expecting rewards. We argue that Lin’s version of SCT is a more coherent, consistent, and refined conceptualization of SCT drawn from prior structuration ideas (e.g., Archer, 1995; Bourdieu, 1986; Coleman, 1988; Granovetter, 1995; Johnson, 1960; Schultz, 1967).

Lin’s (2001) SCT perspective rests on the following three assumptions that connect structure with individuals’ action: (1) resources are embedded in social structures; (2) resources can be accessed via social relationships; and (3) individuals use or mobilize these resources through purposive actions for utility maximization. Importantly, as an individual’s embeddedness drives the accessibility and mobility of resources to generate value, mobilization is a critical process of resource activation during interaction (Lin, 2001). To be precise, individuals are guided by their motivations to gain resources and the propensity to gain resources leads them to regulate their actions and thus invest in more or fewer social relationships, influencing the nature of their social relationships in the system. This motivation is driven, for example, by the need to gain instrumental outcomes (functional values) or expressive outcomes (mutual trust, empathy, intimacy, etc.).

From an SCT perspective, embeddedness accounts for comprehensive knowledge related to who knows whom and how well one knows people in a system. This knowledge is significant for SCT in explaining where and how the investment in social relationships (resources) is occurring and influencing individuals’ specific actions for articulation of specific values. This view is in line with the proposition that to understand how a relationship can be drawn upon as a resource, one should view the relationship in the context of other relationships in which it is embedded (Lusch et al., 2010). If embeddedness as a concept is important to S-D logic, as prior literature points out (e.g., Akaka et al., 2012; Wieland and Chandler, 2010), then the path to advancing its significance for S-D research is through the lens of SCT. Put simply, SCT is the only theoretical framework we are aware of that considers and leverages the concept of embeddedness into its conceptual DNA.

Embeddedness represents more than an emphasis on the relational nature of resource integration processes. It highlights how contexts influence individuals’ resource integration efforts and outcomes in marketplaces. Beyond its significance in explaining individual-level resource integration, embeddedness is important to a broader ecosystem, where various service systems connect to each other in specific relational configurations that can be instrumental or detrimental to their effective operations and sustainability. Embeddedness without SCT acts as a mere functional entity that narrates one end of the resource integration story. The SCT perspective on embeddedness offers a theoretical foundation for unraveling mechanisms of embeddedness and connecting embeddedness to a resource integration perspective associated with S-D logic. For this purpose, we first delineate the dimensions of embeddedness and subsequently link them with resource integration.

Dimensions of embeddedness

Research in disciplines other than marketing suggests the importance of distinguishing between and accounting for structural, relational, and cultural dimensions of embeddedness, as these three dimensions contribute to unique outcomes that can influence resource integration efforts (Dequech, 2003; Moran, 2005; Zukin and DiMaggio, 1990). Meanwhile, marketing researchers have concentrated on structural (Czepiel, 1974; Watts and Dodds, 2007) and relational embeddedness (e.g., Chien et al., 2012; Gemunden et al., 1997; Hakansson and Snehota, 2000; Johanson and Mattson, 1987; Kaufman et al., 2006; Snehota and Hakansson, 1995; Zafeiropoulou and Koufopoulos, 2013), largely neglecting the nature and explicit role of cultural embeddedness.

Enriching resource integration through embeddedness

In this section, we present our conceptual framework and several research propositions. Figure 1 diagrammatically represents our framework. We take a service ecosystem perspective to illustrate our argument of how the embeddedness of individuals plays a critical role for resource integration and value cocreation. The service ecosystem approach advocated by the S-D logic school of thought emphasizes the importance of understanding the mechanisms of value creation and exchange by multiple actors within and across service systems. Combining the theoretical understanding offered by the S-D logic (Vargo and Lusch, 2008, 2011) and SCT (Lin, 2001), we propose interdependencies between actors’ embeddedness and the broader service ecosystem.

OPEN IN VIEWER

Figure 1.

An integrated conceptual representation of the social capital perspective of the resource integration process.

Actors interact with each other to access and mobilize resources, attempting to solve local problems and/or achieve desired outcomes while being dependent on their embeddedness (structural, relational, and cultural). Regardless of the types of relationship actors have with their exchange partners in a service ecosystem (e.g., market relationships or hierarchical relationships, as stated by Granovetter (1985); or market-facing or nonmarket-facing relationships, as stated by Vargo and Lusch (2011)), actors integrate resources through an inevitable promise of interaction or reciprocation for the purpose of accessing and mobilizing resources. As SCT suggests, underlying these relational contracts for exchanges are actors’ motivations of preserving and expanding resources to support their well-being (Lin, 2001). This understanding resonates with the service ecosystem perspective whereby actors have some degree of agency, and it is the agency (e.g., motivation) that allows them to take action and shape the ecosystem actors and their social relationships inhabit. Actors accordingly engage in purposive actions and draw on resources from nested subsystems or overlapping systems. Every interaction or exchange between actors and their social relationships has the potential to change their degree of embeddedness in these systems and potentially eventuates in service ecosystem dynamics.

Individuals can be embedded in multiple service systems at a given time. Multiple memberships and thus cross-system embeddedness offer unique opportunities to draw resources from different service systems simultaneously, broadening the potential for resource integration. Individuals move within and between service systems by exercising service practices such as access and mobilization. The more an individual is embedded in several service systems (in other words, the wider is the service ecosystem embeddedness), the more resources this individual can potentially access and acquire. By being part of several service systems, actors potentially have a greater number of relationships to leverage distributed and dispersed resources (structural embeddedness). However, simultaneous embeddedness in various service systems can also pose challenges to maintaining relational quality (relational embeddedness) and cultural compliance (cultural embeddedness). A greater number of relationships potentially threatens the closeness of the relationships (the more friends/connections one has, the more difficult being close to everyone becomes), and having a greater number of interconnected service systems requires complying with diverse cultural contexts and conditions (the more various cultures/values the individual service systems have, the more difficult navigating through and complying with these different system demands becomes). Overall, a service ecosystem perspective enriches understanding of the role of embeddedness, as it helps to better explain actors’ resource integration potentials and limitations across service systems.

Beyond its significance for cross-system resource integration, actors’ embeddedness also shapes resource integration at different levels of interactions. S-D logic commonly discusses three context levels: micro (e.g., dyadic), meso (e.g., group/service system) and macro (e.g., market/service ecosystem) (Akaka and Vargo, 2014). During practices of accessing and mobilizing resources, actors are exposed to opportunities to maintain or modify existing and/or gain new resources at every context level. Indeed, cultural, relational, and structural embeddedness can facilitate resource integration across micro, meso, and macro service system levels. For example, structural embeddedness can enhance resource integration across the three levels because the higher the quantity of relationships that stretch these three levels, the higher the likelihood that an actor can access and mobilize specific resources (located at different levels of a service ecosystem) when required. Similarly, for actors who are culturally embedded at both micro/meso (e.g., dyadic/group culture) and macro (e.g., market culture) levels, it will be easier to access and mobilize both lower- and higher order resources, such as through friendship deeds at the micro-level (with the value-based expectation of reciprocation) or through community consumption rituals/trends, thereby accessing large knowledge or market-based symbolic resources. Moreover, cultural embeddedness supports better understanding and enactment of the institutional logics associated with different service systems and levels. An institutional logic, interpreted as governing rules, shapes actors’ resource integration (Edvardsson et al., 2014); and actors’ cultural embeddedness directly shapes their acculturation to and internalization of institutional logics. Social roles, for example, require appropriate or specific behaviors to meet the associated role expectations. Eliciting relevant behavior through cultural and institutional assumptions assists with conformity and with conservation of rules, norms, and so on to facilitate resource integration across the three levels of the service ecosystem. Embeddedness can thus enhance the cultural fit within and across institutional logics (the respective value systems), thereby securing or even rendering access to new potential resources.

Furthermore, the more an actor is relationally embedded, the easier and more sustainable resource flows across micro-, meso-, and macro-levels can become. To illustrate, closer relationships at micro-, meso-, and macro-levels can provide greater opportunity to access “power resources” (e.g., actors with decision-making power) or “power structures” (e.g., networks of actors with decision-making power) because their incumbents are likely to protect their powerful positions and potentially restrict or limit access to their resources, actors with closer relationships and thus greater relationship trust have greater opportunity to draw on such resources to influence their own and potentially other market actors and their relative opportunities for resource integration across services system levels.

The core of the framework presented in Figure 1 comprises an individual actor’s embeddedness and constitutes the structural, relational, and cultural dimensions that support resource integration practices. The service ecosystem perspective supports a view of interdependent service systems, social structures, and resource integration practices that form the foundation of interactions in the service ecosystem. By linking SCT and S-D logic, we establish that an actor’s service ecosystem embeddedness is central to the resource integration processes through which that person is able to develop value in context. Value in context is a significant element of value cocreation because it frames exchange, service, and the potentiality of resources from the unique perspective of each individual. Essentially, embeddedness facilitates the realization of value through processes of resource integration that define value experiences as desired by the actors. For example, value can rest in attaining social positions and executing social roles as these may offer opportunities to access, mobilize, transform, and apply the unique resources attached to the social positions in view of individualized value in context. Value also resides in using cultural rules, symbols, norms, and so on, which can help reserve desirable conditions for future resource integration.

Thus, the integrative embeddedness perspective differs significantly from previously discussed perspectives that view structures and networks as governors and mediators of value cocreation. Our approach suggests that an individual’s embeddedness is required to facilitate resource integration through continuity of resource flows, resource integration practices and behaviors, social roles and positions, and the overall reformation and continuation of service ecosystems. This linkage leads to the development of a set of propositions and an extensive research agenda.

Embeddedness and resource integration practices

Akaka et al. (2012) refer to resource access, adaptation, and integration as core mechanisms for resource integration. This important portfolio of “resource practices” deserves further attention. Many authors use the term “resource integration” to refer to a generic perspective that includes all types of resource-related activities or practices (e.g., Vargo and Lusch, 2008). Given this all-encompassing nature of the term resource integration, we propose to split resource integration into access, mobilization, internalization, transformation, and application of resource practices, which we define in Table 1. Beyond the extant literature, particularly resource mobilization, internalization, and transformation offer new insights and theorizing opportunity in the context of embeddedness.

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Table 1.

Key resource integration practices.

Practice	Working definition
Accessing	Allowing use of the number of resources that is determined by an individual’s personal network size in a service ecosystem.
Adapting	Self-customizing exchanged resources in a service ecosystem to generate value in context.
Mobilizing	Willingly exchanging resources with others in a service ecosystem for value in context.
Internalizing	Transitioning from explicit to tacit knowledge in a way that assists individuals in conforming and interpreting their socialization tactics.
Transforming	Assimilating resources to create new forms of relevant resources.
Applying	Deploying appropriate resources for value in context.

Resource access and mobilization

Resource access is a significant resource-integrating practice (Akaka et al., 2012), implicitly indicating a connection between resource access and actors’ embeddedness. Advancing from Akaka et al. (2012), our framework proposes an explicit link between the two concepts of resource access and embeddedness. According to SCT, resources are embedded within a structure (Lin, 2001), where they are accessed through social relationships. In the context of S-D logic, actors’ embeddedness demonstrates their relationship architecture in the form of quantity (structural embeddedness) and/or quality (relational embeddedness) in a way that allows easy acquisition of relevant resources in a service ecosystem. Further, the acquisition of resources also depends on eliciting cocreation behaviors that permit access to resources. Stimulating such behaviors calls for interpreting cultural forces (cultural embeddedness) that underlie such mechanisms. Hence we propose:

Proposition 1.1. The ability to access resources in a way that increases the potential to acquire relevant resources across service systems is constrained or facilitated by actors' embeddedness in a service ecosystem.

Although theorists have outlined the nature and need for discriminating resource access and adaptation (e.g., Akaka et al., 2012), resource mobilization deserves further exploration. SCT elaborates on resource mobilization as a product of the availability of resources and the propensity of social ties to move them. In other words, the mobilization of resources is the preparedness or willingness of individuals to help when called upon, which is indicated by the strength of the relationships and the number of resources available. Mobilization is a “process of activation” (Lin, 2001: 29). To simplify this definition, we suggest that greater and guaranteed access to resources (structural embeddedness and/or relational embeddedness) enhances the likelihood of mobilizing resources in order to climb the hierarchical structure. Structural opportunity is an advantage in mobilizing resources, yet individuals who have access to rich resources do not always choose to activate them. SCT clarifies these elements by explaining that individuals’ motivation can lead to the purposive actions they take to mobilize resources.

SCT further posits that individuals have two motives for taking purposive action. The first is to preserve their resources by gaining public recognition. Others’ recognition of an individual’s legitimacy is important in claiming resources, and such recognition occurs through actions such as showing support (relational embeddedness). The second motive is to expand their resources, which occurs only when individuals reciprocate with others via interactions. These interactions occur through routine social actions of individuals in various social positions and social roles (structural embeddedness) within a structure or service system, which leads to mutual recognition among the individuals. Individuals’ potential to mobilize resources is likely to spontaneously activate their sensing of and responding to resources and/or other actors situated within their spatial and temporal structure. The aim of preserving and expanding resources is fundamentally supported through the practice of resource mobilization. Through this practice, actors can initiate and sustain the movement and redistribution of resources and thereby minimize or maximize resource inequalities among other actors. In so doing, resource mobilization significantly shapes the emergence and performance of service systems.

Thus, mobilization comprises rational, adaptive responses that aid in increasing or preserving the pool of resources. Akaka et al. (2012) have focused on the essential practices, namely access, adapt, and integrate. We suggest adding the practice of mobilization to this portfolio, and we have demonstrated above the role of embeddedness for resource mobilization.

Proposition 1.2. The ability to mobilize resources in a way that increases the potential to initiate and/or activate resources across service systems is constrained or facilitated by actors’ embeddedness in a service ecosystem.

Resource internalization, transformation, and application

Resource internalization is described as the transition from explicit to tacit knowledge (Nonaka and Takeuchi, 1995). Accordingly, an individual’s practices merge into routinized actions the more the individual internalizes respective knowledge and exchange norms. Internalization occurs through socialization in institutions (Coleman, 1987). In the context of resource integration processes, internalization thus informs understanding of an individual’s capabilities of eliciting and enacting appropriate value cocreation behavior during a resource integration episode. Thus, to articulate value in cultural context, it is important for individuals to internalize the cultural frames that guide resource exchanges. Embeddedness facilitates this process by exposing market actors to a multitude of relational, structural, and cultural configurations on which they draw to interpret actions (Coleman, 1987; Weir and Hutchings, 2005). Hence, SCT suggests that individuals’ embeddedness plays an important role in internalizing the norms that exist in a system. Indeed, exposure through embeddedness helps actors to learn about contextual values and norms and thereby conform to these conditions.

At the same time, this internalization strengthens their absorption capacity as actors learn to appreciate the diversity in resources and applying them in value cocreation processes. Absorptive capacity is an individual’s ability to recognize the benefit of new knowledge, transform it, and apply it for value generation. In the context of S-D logic, absorptive capacity similarly suggests a resource integrator’s ability to recognize the value of knowledge resources (transformation of new knowledge) that are potentially embedded in their social relationships and can be activated for their benefits. The transformation capacity of individuals might accordingly depend on their embeddedness in order to acquire, mobilize, and absorb relevant external resources available through their network. In sum, actors’ relational, structural, and cultural embeddedness has important implications for their ability to transform knowledge resources. Recognition of the value of knowledge (resources) for transformation can be closely linked to individuals being motivated to take purposive action to preserve existing resources or expand their resource pool.

We consequently offer the following three propositions to establish the significance of embeddedness in view of internalization, transformation, and application as additional resource integration practices:

Proposition 1.4. The ability to internalize resources in a way that strengthens the potential to interpret and enact appropriate cocreation behaviors and practices across service systems is constrained or facilitated by an actors’ embeddedness in a service ecosystem.

Embeddeness and social positions: Social roles

S-D logic argues that “social roles can be both operant and operand resources” (Akaka and Chandler, 2011: 252). All market actors are accordingly capable of developing social roles and social positions as resources in service systems while also being acted upon by other actors with alternative positions. Through the execution and integration of roles as resources, customers and other stakeholders uniquely create value for themselves and for others. According to SCT, the acquisition of different social roles and social positions is predicted by individuals’ levels of structural embeddedness within service systems. For example, individuals who are more highly structurally embedded would have more connections and consequently better access to a larger volume of resources (Moody and White, 2003). Individuals who actively access and mobilize resources have a larger network of exchange partners and therefore gain higher hierarchical or network positions in the system. Individuals holding prestige positions interact with individuals in lower positions to assert their power and control over the resources.

From a resource integration perspective, increases in interaction between high-level and low-level individuals will provide access to better resources for low-level individuals and lead to subsequent value cocreation. This access in turn will facilitate a redistribution of resources to individual actors at all levels within a service ecosystem. Moreover, the strength of individuals’ location within service systems can to a degree predict the social role they play in the service system. An actor’s identity is constructed through multiple role settings, that is, a social role exists in relation to other complementary roles and a role indicates the points of contact and interaction between actors occupying different positions (Powell and Smith-Doerr, 1994). Hence, knowledge of actors’ structural embeddedness facilitates prediction of their orientation and behavior (Rao et al., 2000).

For example, SCT suggests that bridging occurs when the person is located between two otherwise isolated system members, thereby manifesting the nexus of resource exchange. The social role of being a “bridge” in a system can shape an individual’s ability to swiftly relay and spread information and sustain the resource flow in a service system. Individuals with strong positions in a service system are connected to bridging individuals and can thereby facilitate resources from both outside and inside the group. As these individuals are at a prime junction, they are valuable exchange partners who can constrain or enable the resource integration process.

It is argued, therefore, that actors in better social positions or roles are likely to have an advantage in accessing and mobilizing social ties with valuable resources. SCT further states there are two types of social position that an individual acquires in a structure, one that is inherited and called ascribed position and the other that is emergent and labeled attained position (Lin, 2001). Actors can improve their propensity for resource integration by leveraging both ascribed and attained positions in the form of better resource access and use.

In sum, structural embeddedness forms the basis of social positions and social roles that are the operand and operant resources of service ecosystems, thereby offering potential competitive advantage to a resource integrator within and/or across a service ecosystem. Hence we propose:

Proposition 2.1. The ability to gain social positions and social roles in a way that strengthens the potential to access and mobilize resources across a service ecosystem is constrained or facilitated by actors’ structural embeddedness.

Embeddedness and continuity in exchange processes: Resource flow

Continuity in exchange processes through reciprocity, redistribution, and market exchanges as described in the S-D logic is considered the essence of resource integration mechanisms at all levels of a service ecosystem. Continuous resource flows lead to more sustainable service ecosystems. However, only guaranteed access to and mobilization of resources and resource flows underlie continuity. In turn, guarantees, reciprocity, and mutuality of exchanges often have their origins in an actor’s relational embeddedness. The quality of relationships that individual actors share with their exchange partners predicts the potential of their ongoing access to resources. Higher relational embeddedness facilitates reciprocal transactions among exchange partners and therefore supports resource access and mobilization. Higher relational embeddedness also leads to a bounded solidarity that focuses on the situational circumstances and gives rise to group-oriented behavior to achieve a mutual goal (Portes and Sensenbrenner, 1993).

The relational embeddedness of individuals is reflected by the type of social ties (strong or weak) that they share with their exchange partners. As SCT suggests, both weak and strong ties can have unique outcomes for the resource exchange process. For example, a strong tie determines the closeness, intimacy, and support in a relationship (Brown et al., 2007). Strong ties are characterized by (1) a sense that the relationship is intimate and special, with a voluntary investment in the relationship and a desire for companionship with the partner; (2) an interest in frequent interactions in multiple contexts; and (3) a sense of the mutuality of the relationship (Day et al., 2013; Granovetter, 2005; Mardsen and Campbell, 1984; Moran, 2005). Thus, a strong tie between individuals can have a positive influence on the partners since they are readily available and more motivated to access and mobilize resources (Leonard-Barton, 1985).

SCT notes that individuals in close-knit groups often have a moral commitment to the group’s well-being, which leads to ready mobilization of resources. Such individuals have a vested interest in conforming to the group’s thought processes to guarantee ongoing access to the group’s resources. In addition, strong ties result in social credentials, reputation, social approval, support, and public recognition (Lin, 2001). This effect can signify and legitimize individuals’ actions and interactions in a service ecosystem. Strong ties are important in a service ecosystem for the existence or preservation of norms and trustworthiness that permit proliferation of obligations and expectations (Coleman, 1988).

On the other hand, weak ties serve an important channeling function that allows resources to travel between individuals or groups (Granovetter, 1973; Reingen, 1987,1984). Although weak ties may not be as readily influenced as strong ties for resource access and mobilization, they may nonetheless access and mobilize other resources beyond the reach of a close-knit group of individuals (Granovetter, 1973, 1995). They may act as passages in a service ecosystem and have the potential to unlock and expose close groups to external influences (Goldenberg et al., 2001), such as bringing innovative or new knowledge to the group. Owing to their channeling functions, weak ties may pave the way for the spread of resources throughout the system and can provide access to an external resource and act as conjugative partners in a service ecosystem.

Although strong ties can also serve as linkers (Burt, 1992), their tendency to be redundant sources of information is a widely accepted tenet of network theory (Ruef, 2002). Strong ties can lead to closures owing to exchanging similar resources with same set of network partners, thus precluding exposure to information from outside and limiting the potential for resource transformation (Lin, 2001). Consistent with the strength of ties thesis, speedy transmission and availability of external resources will be greater across a service system relying on weak ties rather than on strong ties. In summary, relational embeddedness can predict the potential of an individual to acquire a guaranteed resource flow at multiple exchange levels within a service ecosystem. Hence we propose:

Proposition 2.2. The ability to gain continuity in resource flows in a way that strengthens the potential to access and mobilize resources across a service ecosystem is constrained or facilitated by actors’ relational embeddedness.

Embeddedness and cultural context: Cocreation behavior

The cultural context in which exchange processes occur is perhaps the most defining influence on an actor’s interaction in a service ecosystem. Culture provides the overall framework wherein individual actors learn to organize their thoughts, emotions, and behaviors in relation to their environment. Awareness of cultural context is not innate in nature. Rather, it is learned and internalized. Drawing from cultural forces, individual actors learn how to think, which in turn conditions them how to feel and instructs them how to act, especially how to interact with other exchange partners. Culture—shared values, norms, and meaning—offers guidelines for individuals to conduct exchanges.

Embeddedness is significant with respect to economic action in the larger cultural and institutional environment (Granovetter, 1985; Krippner et al., 2004), and shared values are considered to be imperative in building buyer–seller relationships. Social capital theorists have viewed structures such as service ecosystems as those in which individuals share values and trust procedures that can be used to access and mobilize resources (Hauberer, 2011; Lin, 2001; Putnam, 2000). A strategic consensus—the shared understanding of priorities, social norms, rules, and procedures in a structure—is a central component of the cognitive dimension of social capital because it represents a system of shared visions between exchange partners. This cognitive dimension corresponds to cultural embeddedness because shared understandings can limit misinterpretation in communication between network members, thereby facilitating the efficiency of mobilizing, adapting, and applying resources (Land et al., 2012).

Cultural embeddedness facilitates an understanding of how individuals are motivated to elicit appropriate value cocreation behavior to legitimize and add meaning to their exchange processes and practices. By using the cultural cues of a service ecosystem, individual actors can access, mobilize, internalize, and transform their actions and seek out and expand resources more quickly. Thus, cultural embeddedness is important in building individuals’ resource integration potential by shaping their understanding of institutional logic and using it for operating in a service ecosystem. Hence, we propose:

Proposition 2.3. The ability to shape and interpret appropriate cocreation behavior in a way that strengthens the potential to access and mobilize resources across a service ecosystem is constrained or facilitated by actors’ cultural embeddedness.

Embeddedness and the reformation and continuation of a service ecosystem

Finally, we reflect on the role played by actors’ embeddedness in the process of the reformation and continuation of a service ecosystem using SCT. While S-D logic acknowledges that service ecosystems consist of an interconnected ecology of various service systems nested within or at least related to each other, the sociology literature suggests that structures do not spontaneously spring into action. Rather, they emerge as a result of multiple interactions among many individuals over time at multiple levels (Coleman, 1988). For the purpose of resource integration, these interactions occur not only across individual service systems but also across micro, meso, and macro system levels, as indicated earlier. SCT thus defines interactions as the reciprocation of actions (Lin, 2001). Degrees of reciprocation can be determined by the structural, relational, and cultural aspects of an actor’s embeddedness. For example, at the microlevel, structural, relational, and cultural embeddedness influences actor-to-actor service exchanges by accessing resources in order to mobilize and redistribute them and to serve other actors with whom they are interacting. Ongoing reciprocation leads to routine actions and creates social practices within the structure. Individuals favor routine social practices because they do not need to invest resources in developing a conduct for every exchange or economic transaction they perform. SCT refers to this approach as following the principle of the minimization of resources (Lin, 2001).

Embeddedness supports the emergence and routinization of resource integration practices across the micro, meso, and macro system levels. For example, routinized practices at the microlevel help give meaning to the interactions between exchange partners. That is, actors in dyadic constellations draw on routinized resource practices enabled by embeddedness to interpret interactions and their intricacies, such as required one-on-one negotiations and reciprocations. Research suggests that an interaction can be casual or complex in nature (e.g., Inglis, 2007). Identification of the nature of interaction prior to participating in an exchange, which abets with evoking the skills best suited for the purpose and goal of interaction, is important because when skills match the requirements of the tasks, outcomes are more likely to match the expectations. Embeddedness helps to recognize these attributes of an interaction. For instance, structural embeddedness frames the level of complexities and the mechanics of interacting with exchange partners through designating social positions, roles, and status in service systems, thus offering an interaction guideline during resource integration. On the other hand, relational embeddedness enhances intersubjective or social bonds by facilitating closeness with the exchange partner. Resulting empathy and intimacy in relationships promote trust, thereby assisting with navigation through the intricacies of resource exchange through human interaction. Similarly, cultural embeddedness regulates the shared norm of reciprocity between the exchange partners and hence guides routinized behaviors and practices for sustainable participation for ongoing resource integration (Johnson, 2008).

At meso-level, embeddedness underpins the emergence and routinization of resource practices, with both direct and indirect interactions occurring among multiple actors (a group of actors). When multiple actors engage in a similar ensemble of practices in ways such that they become routinely anchored and socially patterned, it supports the normalization and institutionalization of those resource practices at mesolevel and potentially replicate further at macrolevel. In particular, embeddedness contributes to synthesizing a collective line of action by bringing together multiple actors to achieve collective goals. Structural embeddedness clarifies the emergence of social positions and social roles, determining the distribution of power structures. In turn, the clarity of actors’ roles facilitates task allocation and maneuvering resource integration to achieve group goals in service systems. Consequently, embeddedness helps evade potential role conflict within the service system that can challenge resource access, mobilization, and other integrating practices. On the other hand, relational embeddedness institutes collective empathy or a sense of belonging among the actors at mesolevel. This sense of “we-ness” is likely to increase actors’ willingness to engage in multiple exchange transactions and to strive toward collective goals. The joint contributions of actors are compensated by sharing the tangible or intangible rewards of their actions. For instance, customers’ active involvement in new product development processes facilitates potentially intense information sharing with the supplier, which prompts the supplier to take risks in terms of resource investment to design effective customized products (tangible rewards).

Similarly, SCT suggests that actors participating in collective actions are rewarded with membership of the group, which may act like a certificate of credit (intangible rewards) for such actors and may support their negotiations for resource exchange outside the group. Cultural embeddedness at mesolevel helps in contriving collective goals and defining reality for actors who become involved in them. Specifically, cultural embeddedness weaves the shared norms, values, rules, and so on., widely across direct and indirect interactions, thereby streamlining exchange patterns for the achievement of communal objectives. Shared values and norms are particularly important for mesolevel indirect interactions, partly because of the need for trust in highly interdependent impersonal transactions and partly because of the wide disparity in the resources of various exchange partners (Johnson, 2008). Furthermore, cultural rituals and institutional logics can help stabilize service systems through implicit and/or explicit understanding of how resource integration practices are to be carried out (e.g., through normative expectations) at various levels, thereby establishing routine resource integration practices (Edvardsson et al., 2014). Social practices, for instance, can thus become guiding procedures for operating within social structures, constraining or enabling individuals’ value realization by laying down boundaries through, for example, behavioral standards.

Lastly, we view the macro-level context of resource integration as interrelated subsystems interacting with each other for the achievement of higher order shared goals. For example, different departments (subsystems) of a firm or different customer groups of a brand (segments) might integrate resources for the accomplishment of a shared strategic benefit of the firm and market (service ecosystem). Different groups of Lego customers, participating through various platforms and avenues such as LEGO Factory, LEGO Mosaic, LEGO Vikings, and Ldraw, integrate resources not only to achieve their own group goals but also to enhance the overall Lego brand experience and to promote the emergence and continuation of a rich Lego community and culture. The important aspects of large-scale structures are the significant proportion of indirect exchanges between interrelated subsystems. Structural embeddedness elaborates the social role of each subsystem and defines the behavioral expectation of the subsystem and macro system overall. The role of a subsystem represents accordingly a significant aspect for the functioning of a service ecosystem, as it may have direct implications on resource integration and value outcomes at macrolevel.

Relational embeddedness facilitates closeness and a feeling of responsibility between the subsystems of a service ecosystem, thereby assisting with aligning individual efforts to achieve higher order goals. Cultural embeddedness helps ensure the emergence of macrolevel interactions by institutionalizing shared values and routinized practices on a broader (e.g., market-wide) basis and offers crucial guidelines to the subsystems in view of norms, actions, and interpretations of resource integration for high-order value actualization. Thus, resource practices at all layers of the service ecosystem can create continuance while self-adjusting through the development of new resource-integrating practices and standards, which in turn influence individuals’ actions in accessing and mobilizing resources that are dependent on the level of embeddedness. A service ecosystem accordingly emerges from the ongoing exchanges of resources via reciprocation, mutuality, and redistribution. These interactions at all layers of the service ecosystem create transitivity and adjustments to the (sub)systems themselves. Social structures across micro-, meso-, and macro-levels thus continuously change as new actors join or current actors exit the service systems, triggering a change of relational constellations and social roles, while social practices evolve and dissolve. The evolving dynamics in turn can stimulate a reformation of existing service systems or potentially even the formation of new service systems and embeddedness constellations. In summary, micro-, meso-, and macrolevel dynamics emerge from the ongoing exchanges of resources between structurally, relationally, and culturally embedded market actors, via boundary-spanning resource integration practices that influence the emergence, reformation, and continuation of a service ecosystem. Hence, we propose:

Proposition 2.4. The emergence, reformation, and continuation of a service ecosystem is constrained or facilitated by actors’ embeddedness at micro-, meso-, and macro-levels of interaction.

Managerial implications

From a practical perspective, through this study, we aim to provide practitioners with a better understanding of how to interpret resource integration processes and facilitate cocreation experiences. The proposed perspective can be used to map and report patterns of customers’ relationships and to develop unique value experiences that will motivate customers to maximize value generation. For instance, knowledge about consumers’ relationship structures in a brand community will help understand what social roles individuals play in their own groups—for example, as a key brand advocate—and their potential impact on other customers among direct and indirect contacts. Depending on the level of embeddedness, an individual could be a communication controller and brand influencer, particularly if the person shares strong bonds with specific customers in the community. Such knowledge would help in deploying appropriate activities that maintain consumers’ participation in service provisions and offer better value propositions to others in the process. Understanding individuals’ embeddedness might even lead to developing new reward systems within communities to provide incentives to central individuals to promote a brand.

The notion of embeddedness might also be used as a tool for managers to recruit agents of change on behalf of the firm. Since communication is vital to successful collaboration, the firm could recruit these individuals as value cocreators. They could be operationalized to minimize cost, time, misunderstandings, and uncertainty in service-to-service exchanges in the service systems. These agents could advocate a firm’s activities to others and increase trustworthiness between firms and customer communities. A strategically aggressive firm will seek and collect possible resources that can be used to achieve objectives and competitive advantage.

An actor’s embeddedness and its significance with respect to access, mobilization, internalization, transformation, and application of resources can affect responsiveness to change in the service environment as well as the timeliness and innovativeness of decision making for individualized and collective value cocreation. Ecosystem system embeddedness can be linked to determining a customer’s value outcomes and thus may help to improve a firm’s interaction and overall service experience. Multiple system memberships can also lead to individuals acting as facilitators for resource flows from one system to another, which may result in benefits or challenges to the related service system.

Future research and limitations

Despite earlier research into embeddedness, a significant need exists to better understand how social relationships and exchanges may operate as resources for value cocreation in service environments. This study suggests that to understand the evolution of service ecosystems, future research could further explore individuals’ embeddedness. For example, whereas this article focuses on resource access, mobilization, internalization, transformation, and application based on a direct relationship with an actor’s level of embeddedness, researchers could investigate potential indirect relationships between embeddedness and identify alternative integration practices.

The value cocreation efforts of individual actors are a function of their simultaneous embeddedness within multiple dyads, triads, complex networks, and, in particular, the service ecosystem (Chandler and Vargo, 2011). Consideration of the effects of structural embeddedness, relational embeddedness, and cultural embeddedness should over time provide insights into how resource flows can be generated and sustained in service ecosystems. These resource flows depend not only on the embeddedness of individuals but also on the embeddedness of collectives such as groups or networks interacting with other groups or networks. Researchers could broaden theorizing attempts related to embeddedness in marketing by discussing cognitive, political, or technological embeddedness characteristics that might influence resource integration in specific service settings (Hogstrom and Tronvoll, 2012; Zukin and DiMaggio, 1990). Further, researchers could apply the proposed embeddedness perspective to empirically test how different dimensions of embeddedness shape various value cocreation behaviors and outcomes in diverse service settings. That is, prior research in marketing has not provided insights into the differential impacts of cultural, relational, and structural embeddedness on customer- and firm-related outcomes. For example, it is currently unclear which type of embeddedness is the strongest driver of brand intimacy (firm perspective) or value in context (customer perspective). Investigating how embeddedness can offer more refined and formalized conceptualizations and operationalizations of the social roles that an individual assumes in a service ecosystem would be important, as poorly understood roles may actually prove counterproductive to resource integration processes.

Whereas in this article we focus on the embeddedness of individual actors and several relational factors, future research might discuss actors’ personal traits such as self-efficacy, in connection with embeddedness and its impact on their resource integration efforts. Self-efficacy is a cognitive factor that is documented to have a high level of motivational effect on human action (e.g., Bandura, 1986; George 1992; Weiss and Alder, 1984). Individuals’ judgment of their self-efficacy affects their thought patterns and behavioral reactions during anticipatory and actual transactions with other entities in their environment (Bandura, 1986). Researchers could thus empirically investigate the interplay between embeddedness and self-efficacy in view of effective resource integration efforts.

Overall, this article uniquely links S-D logic research, SCT research, and the role of embeddedness to advance understanding of resource integration in service ecosystems. However, this linkage may seem to limit the usefulness of the construct to the broader marketing literature. Given the versatility of embeddedness as an invaluable concept for wider application in consumer behavior, service, and strategy research, future studies could explore and advance its relevance for understanding of its characteristics and benefits in various contexts. Another limitation is that embeddedness is an exchange logic that promotes economies of time, integrative agreements, allocative efficiency, and complex adaptation, but it has the potential to reach a threshold that may lead to the derailing of its benefits (Uzzi, 1996). Therefore, to sustain the quality and structure of dynamic service systems for continuous resource flows, understanding of the nature of potential limitations associated with embeddedness over time is important.

We conclude that resource integration and value cocreation depend on individuals’ embeddedness across service systems—specifically, the relational, structural, and cultural embeddedness that influence actors’ access, mobilization, internalization, transformation, and application of resources. This perspective helps to identify more meaningful theoretical and practical implications of the construct for resource integration. SCT offers a complementary perspective that extends the understanding of why and how alternative resource integration practices have significance for customers in cocreating value, depending on their level of embeddedness.