Based on research by Renita Murimi, PhD, CISSP, Greg Bell, PhD, Abdul A. Rasheed, PhD, and Sri Beldona, PhD
Blockchain is a decentralized database that enables real-time verification and communication of information. Among its advantages, blockchain can enable firms to achieve higher levels of disintermediation where suppliers can transact directly with customers, along with efficient tracking of assets and assuring the integrity of data. Due to the consensus-based validation, blockchain eliminates the need for a trusted third party. Blockchain can help firms overcome gaps in trust and increase transparency in supply chains. Blockchain technology is also important to young firms raising capital, and how growing organizations are utilizing blockchains to engage in rapid internationalization.
Key Points
- Today a growing number of multinationals are actively leveraging blockchain technology across a wide range of industries, including the financial sector, healthcare, and logistics for a variety of reasons such as compliance and data protection.
- As blockchain technologies transform international business practices, they have the potential to change the nature of interactions among firms worldwide.
- Trust is produced in blockchain transactions through their basic characteristics such as decentralization of decision making, distributed processing, reliability, peer-to peer transmission, immutability of data, automaticity, low transaction fees, transparency, irreversibility, and speed.
- Blockchain’s importance to international business is rooted in its ability to mitigate issues of trust between organizations.
Why This Matters
The widespread adoption of blockchains holds the promise of transforming our business landscape in multiple ways. First, it helps in ushering in a truly borderless world because digital platforms are not bound by national borders. Second, it fundamentally transforms the production of trust. Trust has always been a function of the frequency of interaction among transacting parties as well as the passage of time. There was also considerable variation in trust levels across cultures. Blockchains have suddenly transformed the process of trust-building into an instantaneous, relatively costless, and technology-mediated activity. Third, blockchains are not homogenous—their functions are applicable to several areas of business. A firm’s choice of a specific blockchain is based on its specific circumstances and needs.
Want to know more?
Related Links:
- What is blockchain for business?
- How Blockchain and AI are set to transform small businesses in 2024
- An Entrepreneur's Guide on the Blockchain Technology and It's Uses
Based upon the following peer-reviewed manuscript: Murimi, R., Bell, G., Rasheed, A. A., & Beldona, S. (2023). Blockchains: A Review and Research Agenda for International Business. Research in International Business and Finance, 102018.
