ABSTRACT:
The Special Section on Strategic Integration of Blockchain Technology into Organizations that opens this issue of Journal of Management Information Systems (JMIS) shows both the emerging strategic importance of the blockchain in the competitive posture of business firms and the contribution that the information systems (IS) research methods can make to the understanding and development of the field. Few information technologies rise up the stack from the levels of technology to the level of strategic, mission-critical, application. The blockchain is becoming one of them. Guest-edited by Rajiv Kohli and Ting-Peng Liang, the Special Section encompasses four papers that apply different methodologies to four different aspects of blockchain adoption and its impacts.
Blockchain is an unalterable append-only ledger of transaction records with properties that ensure an agreement on its contents by multiple distributed actors without central control. This definition encompasses the most salient attributes of the technology without actually indicating its power and the multiplicity of its facets. Introduced as the vehicle for Bitcoin in 2008 in a pseudonymous open-access paper published on the Web, blockchain and the cryptocurrency it serves to implement represent a highly impressive integration and deployment of the intellectual products of multiple research streams of computer science [4]. In particular, cryptographic means are used to ensure that the linked chain of blocks of transaction records cannot be altered, thus providing the integrity to the ledger and engendering trust in it. Peer-to-peer networks serve as the means of distributing the blockchain to the participants. In the case of cryptocurrencies and similar tokens, the transactions are simply transfers of ownership.
Blockchains ensure trust. The strategic potentialities of blockchain emerge from the variety of key properties it may be implemented to possess. Permissionless blockchains with public access are replicated across the servers of independent actors and provide a simile of trust among them, with all actors being potential transaction validators. Permissioned blockchains serve a restricted set of actors, with a further restricted (if desired) set of validators and with the consequent ability to cut drastically the amount of computing (and electric) power needed to add to the preexisting trust.
A highly promising capability that can be realized in a blockchain is the implementation of smart contracts. Such blockchains combine the transaction data with the software code that can transform the data over the extended life of the contract. The code represents the application. This is a transformational capability for various markets. As another, and complementary use, non-fungible tokens implemented with blockchain technology can serve as the proof of ownership of digital items, be they a meme, a video, or digital art, and make them into marketable assets that can, with smart contracts, render royalties to their creators over time under the intellectual property laws. This application area is transforming, for example, the art marketplace [6].
New business models founded on blockchain are emerging apace. Blockchain-as-a-service cloud offerings lower the entry barriers for the startups as for the existing organizations [5]. Lowering the transaction costs can have significant effects in many fields of the economy, such as startup financing [1].
By enabling the integrity and the desired level of transparency of transactions, blockchain can serve societal objectives of proper governance at all levels, constraining opportunistic behavior, rent seeking, and economic crime. Real-estate property rights secured by blockchain as the land registry would markedly improve citizens’ rights in a number of countries. Higher levels of trust in a society have been associated with its superior economic performance and human flourishing [3]. Two of the papers in the Special Section point to this weighty opportunity.
A recent review of competitively important blockchain applications shows a burgeoning interest [2]. They include such various systems going well beyond cryptocurrencies as digitizing supply chain information by the Danish shipping and logistics company A.P. Mollers-Maersk with TradeLens (whose developer is a co-author of one of the papers in the Special Section); the blockchain platform AntChain enabling over 50 large-scale blockchain applications, including smart contracts, for Ant Group of China and its partners and clients; tracking the ESG attributes of suppliers by Australian mining company BHP; markedly speeding up through direct settlement the trades enabled by Credit Suisse; and making aviation-quality documents directly accessible to its customers by Honeywell of the United States.
Our discipline is methodologically well equipped to study the capabilities furnished by various principal forms of blockchain to organizations and to investigate their impacts at the operational, tactical, and strategic levels. The cost and complexity of blockchain-based systems are perceived as significant barriers to its implementation by governmental and business organizations. Additionally, the inefficiency associated with the replication of public blockchains over the servers of the participating parties and with some of the consensus protocols is a significant barrier. Cost-benefit analyses of various structural alternatives and the design exemplars we can provide will serve well in the adoption of this technology. The trade-offs between security and performance for various federations in permissioned blockchains should be an important focus for the formal economic research and for design science in our field. The organizational impacts on all the levels of analysis are certain to be investigated.
The introduction of the guest editors of the Special Section offers a framework for the research and introduces us to the contents. The papers the guest editors included in the issue have been selected for publication after a rigorous editorial process that eliminated 61 out of 65 submitted works and, thus, they represent the best collective foot forward in our field. It is important to combine these new works with the study we published last year to see some of the key spectra of potentialities of blockchain in the inter-organizational collaboration and other domains [8].
The first article of the general section is an excellent complement to the Special Section. Aleksi Aaltonen, Cristina Alaimo, and Jannis Kallinikos analyze the process of commoditization of data into tradeable tokens. In a constructivist work, the researchers study the process that aggregates and turns data into commodities, that is recontextualizable and tradable objects. The authors distill the commoditization process from the organizational practices they analyze in their empirics in an intensive case study they conducted. The approach taken in the paper is partly inspired by the insights published in this journal by Tuomi [7]. The marketable data tokens can be made, perhaps with blockchain’s smart contracts, to conform to the rules of privacy and ownership.
Recommender systems do not only help buyers to match their needs more closely and rapidly. They may also help the sellers to personalize their offering and cross-sell via follow-up recommendations. Does the cross-selling affect prices and if so, how? Abhijeet Ghoshal, Vijay S. Mookerjee, and Sumit Sarkar address this research question through formal economic modeling. The authors offer a monopoly model and a duopoly, with one of the firms deploying a higher-caliber recommender. In a monopoly, the seller may charge a higher price under cross-selling, particularly with an improved recommender, and yet both the seller firm and the customer benefit from the personalization. Under duopoly, a nuanced interdependence among the prices, profits, market sizes, and consumer surpluses emerge.
Most of the native digital content is free online. Yet we are beginning to question the effects and the aptness of that in some categories of applications. Explorations of paid content are increasingly appearing on the Web and in the academic literature. Monetization and valuation of digital assets are of the moment and of the future. They also tie in to the issues of blockchain and data commodities. Here, Hua (Jonathan) Ye, Xueping Yang, Xinwei Wang, and Theophanis C. Stratopoulos explore the drivers of revenue from a paid Q&A platform, whose users prepay a fee to view an answer. As an answer is an experience product whose value cannot be assessed without consumption, the potential viewers need to rely on signals to predict quality, and the researchers employ signaling theory in their study. Several kinds of signals are available, notably including the price and the endorsements (or their absence) on social media. By crawling Weibo Q&A, the authors arrive on the answers to their hypothesized relationships between the various signals and the realized sales. This is another important contribution to our understanding of the opportunities for digitalization in the present issue of the Journal.
With the impressive progress of e-commerce, we are witnessing the growth in omni-channel selling. In particular, the complementary advantages of online and offline selling are being harnessed by combining these two channels. Although experience has been garnered in the promotion for each of these channels individually, the integrated promotion presents a challenge. The entire point of the distribution over multiple channels is to exploit their synergy and spillovers between them. In the next paper, Seung Yoon Lee, Yoonseock Son, and Wonseok Oh study the effectiveness of integrated online-offline promotion. The authors ground themselves in construal level theory that links an individual’s evaluation of an object, such as a product, to the perceived, psychological distance from it. The hypothesized relationships, tested via a randomized field experiment, allow the researchers to reach granular results and to offer pragmatic advice to marketers.
Several trends in societal development, individual behavior, technology availability, combined with the impetus from the pandemic, have led to the proliferation of mHealth. Defined as the practice of medicine and public health with the support of mobile devices, the practice relies to a significant degree on the active participation of individuals in the management of their health and thus calls for a behavioral change. The current practice of mHealth has been based on several behavioral change techniques that the authors of the next paper assert do not have a synergistic effect. Kai Spohrer, Monica Fallon, Hartmut Hoehle, and Armin Heinzl conduct and report on a randomized field experiment the participants of which use prototype mHealth apps designed on differing theoretical premises and their combinations. The authors show negative interaction effects of combining certain theoretical bases in app designs and suggest the way forward based on their conclusions.
With the growth of complexity of platform-based ecosystems, owing to the growing number, proliferation of sources, and increasing interconnectedness of components, failures are quite common. In a failure, the offending component needs to be identified and dealt with. This may be the core platform itself or one of the apps running on it. In their research presented here, Brian Dunn, Matthew L. Jensen, and Ryan Ralston address both of these issues. They examine how the users assign the responsibility to a specific component after the failure and how the providers of the component considered culpable manage the implications of the failure. The authors’ theory-based empirics lead them to recommend, from the point of view of responsibility attribution, a tighter integration of the ecosystem components, among other conclusions of this study.
The scholarly community of the IS discipline mourns the passing of Ting-Peng Liang, Guest Editor of the Special Section opening this issue of JMIS. A prominent scholar, quietly inspiring leader, successful entrepreneur, thoughtful and modest individual, gracious meeting host, T.P. was a significant presence in our lives. Over several decades, he has done much for the global development of IS scholarship as an organizer, mentor, and author of generative works. His research interests and contributions ranged widely, including decision support, knowledge management, strategic deployment of information technologies, data analytics, and intelligent systems. The subjects of the recent special sections Dr. Liang has guest-edited for JMIS, neuroIS and strategic deployment of blockchains, are a testimony to his constant self-renewal as a researcher. It is difficult for me to believe that the contribution you find here is a coda to the scholarly life of Ting-Peng Liang, but a worthy coda it is.
We are welcoming to our Editorial Board Professors Sulin Ba (University of Connecticut), Oliver Hinz (Goethe University Frankfurt), Jannis Kallinikos (LUISS University, Rome, and London School of Economics and Political Science), and Christine Legner (HEC Lausanne). We are thanking for their contribution the outgoing members of the Board, Indranil Bardhan and Michael J. Ginzberg.