Facilitating interorganizational trust in strategic alliances by leveraging blockchain-based systems: Case studies of two eastern banks

Abstract

Strategic alliances require mutual trust and collaboration between organizations. To increase alliance performance, organizations in a strategic alliance are more likely to interpret each other’s equivocal behaviors in a positive way to sustain the stability of the relationship. Different from traditional mechanisms to build interorganizational trust, blockchain facilitates trust among alliance partners via its technology advantages, for example, public ledger and distributed consensus. The decentralized and distributed nature of a blockchain-based system assures that no single organization can add information to the chain without an approval from the alliance, nor can it make unilateral changes in the system. Drawing from the Affordance Theory, we propose an exploratory research design to understand the structure of a blockchain-based system, as well as how this blockchain-based system influences interorganizational trust in a strategic alliance and how blockchain-enabled interorganizational trust influences alliance performance. The case studies of two eastern banks indicate that the technical features of blockchain can help reduce equivocal behaviors and improve interorganizational trust. We discuss the findings and conclude the paper with implications.