A process model of governance adaptation and performance outcomes in e-commerce permissioned blockchain networks

Abstract

E-commerce-permissioned Blockchain networks are enablers of new governance mechanisms, leveraging Blockchain technology to enable parties in e-commerce supply chains to collaborate on and coordinate transactions. Despite the widespread interest in forming these business networks, there is little understanding of how joining these networks affects the established contractual and relational governance mechanisms among supply chain partners. Consequently, this study adopts an input-process-outcome (IPO) process model to examine the effects of Blockchain-enabled governance mechanisms on traditional governance (contractual and relational) in e-commerce permissioned Blockchain networks and performance outcomes. We employ a quantitative research design and collect data from e-commerce permissioned Blockchain consortium members worldwide, analysing data from 361 individual respondents using CFA and SEM. The findings show that as the Blockchain platform's transaction-level and administrative-level capabilities increase, so do the changes in contractual and relational governance mechanisms employed by supply chain actors. Furthermore, changes in relational governance have a significant positive correlation with performance outcomes. However, changes in contractual governance negatively impact performance outcomes. Managers in e-commerce permissioned Blockchain networks can enhance performance by prioritising relational governance, adopting flexible contracts, streamlining administrative processes, and proactively managing risks, thus maximising the potential benefits of Blockchain technology.