In order to grow and survive, a firm must create value with consumers in ways that both fit in with consumer demands and stand out from competitors. Focusing on and understanding consumer and firm assessments of value and creation of value has become a central scope in the contemporary strategic management and marketing literature for understanding and explaining firm survival and success. Consequently, the overall aim of this thesis is to provide a conceptually and empirically grounded understanding of consumers’ and managers’ value assessments and behavior in value creation.

This thesis draws on a consumer experience perspective and theories on social construction, organizational identity, self-congruence, and the theory of attractive quality, and combines multiple qualitative and quantitative studies. The findings in this thesis shed light on the interplay between consumers, firms, and contextual structures in value creation. Contextual structural, cultural, and political forces are shown to affect and be affected by the shared and individual cognitions of value creation that firms and consumers use in their assessment and creation value.

The results of the study enhance the understanding of how firms can adopt various strategic schemas or organizing logics to optimize different types of use value creation when choosing between opposing and contradictive demands in their value creation. Furthermore, the thesis provides a deeper understanding of the hierarchical nature of consumer judgments of value that can be used to enhance the effectiveness of firm prioritizations and as a foundation for future value-creating strategies.

Purpose – The purpose of this thesis is to explore the capability of Swedish regional public transport authorities (RPTAs) to organize public transport so that it stimulates the intended value creation process needed to increase users’ positive experience.

Design/methodology/approach – This thesis utilizes an interpretative research approach. Two empirical studies, resulting in two papers have been used in this thesis. Study I consists of a quantitative Kano questionnaire with 930 respondents. Study II comprises a qualitative study with 11 semi-structured interviews. Both studies have been equally necessary to the results of this thesis.

Findings – Public transport is one of the few public services with a mandate to attract users, and therefore, this thesis suggests that Swedish public transport organizations must understand how various services in multiple dimensions affect users’ preferences for public transport. With this understanding, public transport organizations can effectively and efficiently allocate resources and increase the appeal of future public transport. Such a focus demands a deep organizational knowledge and understanding of customer needs and detailed awareness of how the achievement of various requirements affects customers. This thesis shows that organizational structures are based on political comprises rather then the needs to solve coordination challenges and facilitate customers’ value creation. It is further argued that the organizational structures and personal or impersonal information processing mechanisms in Swedish public transport influence the search for information and subsequent organizational learning influencing the RPTAs’ capabilities to include and understand public transport users’ needs. This thesis offers insight into how public organizations, such as Swedish public transport authorities, can make decisions in structural design to learn from customer perceptions and adapt organizational policy accordingly.  In addition, I argue that RPTAs must employ both exploitative and exploratory learning to improve their capabilities and increase their efficiency and effectiveness. This thesis also provides a model to describe these relationships.

Originality/value – Unlike previous studies, this thesis shows how organizational structures are decided based on political compromises rather than the need for coordination. This thesis offers insight into how public organizations, such as Swedish public transport authorities, can make decisions in structural design to learn from customer perceptions and adapt organizational policy accordingly.

Public transport is one of the few public services with a mandate to attract users, and therefore, this thesis suggests that Swedish public transport organizations must understand how various services in multiple dimensions affect users’ preferences for public transport. With this understanding, public transport organizations can effectively and efficiently allocate resources and increase the appeal of future public transport. Such an approach requires not only a deep organizational knowledge of customer needs, but also a detailed knowledge of how the achievement of the various demands affects users and their value creation. This thesis further shows that organizational structures are based on political comprises rather then the needs to solve coordination challenges and facilitate customers’ value creation. It is here argued that the organizational structures and personal or impersonal information processing mechanisms in Swedish public transport influence the search for information and subsequent organizational learning influencing the RPTAs’ capabilities to include and understand public transport users’ needs. This thesis offers insight into how public organizations, such as Swedish public transport authorities, can make decisions in structural design to learn from customer perceptions and adapt organizational policy accordingly.

Putting the capability to satisfy citizens’ needs at the heart of public organizations, public value has been argued to be the ultimate goal of public sector programs and policies. However, the contemporary public sector’s complex and multilevel structures has led to limited information processing between the various levels within organizations. Such vertical fragmentation has created issues in vertical coordination, hampering the efficiency and effectiveness of the regional public sector. Addressing these issues, the aim of this thesis is twofold. First, this thesis aims to describe and explain public organizations’ coordination challenges. Second, this thesis aims to elaborate on the implications of this explanation to create a deeper understanding of how these challenges affect public organizations’ ability to perform public service that adds to public value. In order to reach the aim, quantitative and qualitative methods have been used. The empirical base consists of two questionnaire studies (930 public transport users in the first and 921 in the second), as well as a comprehensive interview and documentation study with 11 respondents representing 11 Regional Public Transport Authorities and their respective policy documents. In this thesis, I argue that vertical specialization has brought conditions where each level interprets the regulations and policy documents based on their own individual preconditions such as individual ideologies and self-interests, as well as attitudes and relationships between different divisions. As such, these preconditions influence the outcome of rules and regulations that were created with the purpose of reforming the public sector. Further, the thesis outlines how the same individual precondition may act as a structural filter on the flow of information about citizens’ needs, influencing the distribution of information upstream in the organization. If we neglect these conditions and focus only on the rules and regulations, we risk missing aspects that influence the organization and its coordination outcome and, in turn, the citizen. 

For long, private-sector managerial techniques of organizational resources have been applied to the public sector, with the assumption that the application of these techniques will improve the efficiency of public service. The use of these techniques has resulted in a “patchwork quilt” of various public and private actors acting on several territorial levels. Such structure has resulted in vertical specialization where tasks and responsibility are divided with narrow field of competencies creating a fragmented organization that is dependent on information processing and coordination.

This thesis elaborates on the coordination challenges brought by the devolution of functions and specialization in the vertical organization. It was found that despite the efforts to meet the recognized efficiency problems, public sector has created organizations that are dependent on information processing and coordination in order to function effectively, but with a structure and norms that struggles with such activities. The leviathan of the public sector is no longer constituted by a sovereign state but by the effect of the lack of communication between the various levels of a fragmented and complex public organization. Despite its normative flavor, this thesis elaborates on why it appears that the core solution of vertical coordination might be increased focus on interaction between individuals.