A Blockchain-based inter-organizational relationships: Social and innovation implications

Contemporary businesses increasingly adopt algorithmic technologies to facilitate inter-organisational coordination. One example of this trend is a blockchain-based smart contracting, also known as smart contracting, which autonomously executes actions when encoded conditions are satisfied. While an emerging body of literature provides some evidence of positive associations between smart contracting and operational performance reflected in the reduction of transaction costs and improvement of transaction efficiency, research has yet to explore how these novel, technology-based governance mechanisms can affect relational resources, mainly social capital, often required to produce innovation performance. Therefore, by adopting the social capital lens, this study investigated the social and performance implications of smart contracting. Adopting a mixed-methods strategy, data collection included collecting insights from field experts, using the Delphi method, followed by semi-structured interviews with executives of firms that either use this technology or facilitate its implementation. The findings revealed that smart contracting directly affects the formation and structure of inter-organisational social capital, which can subsequently contribute to innovation performance. We also developed an evidence-based model that critically integrates factors influencing the relationship between social capital and innovation performance. Interestingly, system trust, as trust in technology, is found to be the key contextual factor, driving most aspects of inter-organisational collaborations. The study advances our understanding of how inter-organisational relationships can evolve in the smart contracting settings.