Content area
Full text
1. Introduction
As a value proposition is the distinctive offering of a company to its customers (Kaplan and Norton, 2004), it is central to competitive advantage and strategy. Value propositions - both technical and relational - have been at the centre of the recent and on-going debate on the restructuring of credit unions in Ireland. In this paper, we define the technical value proposition as that which puts a primary focus on the physical products and services. A relational value proposition is that which puts a primary focus on the relationship between the member and the credit union and where the physical products and services are secondary.
The predominant restructuring debate suggests that the technical value proposition of credit unions needs to be improved. Proponents of the current restructuring model argue that an improved technical value proposition will be in the members' interests. There are a number of assumptions here, mainly that the member preference is for a technical value proposition and that the relational value proposition will somehow look after itself. This unquestioned assumption that member value is captured by technical dimensions alone seems to be widely held by credit union leaders, regulators, media and so on. Nonetheless, some have argued (Røkholt, 1999; Cutcher, 2008; Hammond-Ketilson and Brown, 2011; Jones and Ellison, 2011; Byrne et al. , 2012) that the type of restructuring model proposed, which is primarily based on mergers and centralisation, has the potential to weaken the relational value proposition[1]. Byrne et al. (2012) assert that credit union members may place a higher value on relational value. They make this assertion on the basis of a survey involving over 1,300 credit union members, where they found that 88 per cent of members would opt for a local credit union model with fewer services over a larger centralised credit union with a wide range of services. However, Byrne et al. (2012) do not directly measure the relational or technical preferences of members and hence only surmise that this might be the underlying process. This paper examines if it is indeed the case that members value the relational more than the technical.
The inspiration for this paper arose out of frustration with the current praxis in Ireland and disappointment with the credit union restructuring...