Investigating the influence of organizational factors on blockchain adoption. An innovation theory perspective

Pages1457-1491
Published date12 August 2019
Date12 August 2019
DOIhttps://doi.org/10.1108/IMDS-08-2018-0365
AuthorTrevor Clohessy,Thomas Acton
Subject MatterInformation & knowledge management,Information systems,Data management systems,Knowledge management,Knowledge sharing,Management science & operations,Supply chain management,Supply chain information systems,Logistics,Quality management/systems
Investigating the influence of
organizational factors on
blockchain adoption
An innovation theory perspective
Trevor Clohessy
Department of Enterprise and Technology,
Galway-Mayo Institute of Technology, Galway, Ireland, and
Thomas Acton
School of Business and Economics,
National University of Ireland Galway, Galway, Ireland
Abstract
Purpose Blockchain possesses the potential to disrupt and reshape a plethora of industries in the next
decade. However, bloc kchain adoption rates i n technology develope d countries, such as Ire land, are
relatively low. Motiv ated by blockchains potential to transform sociotechnical systems, the lack of
systematic inquiry per taining to blockchain studies from an inform ation system perspective, the authors
propose the following r esearch question: How do organizationa l factors influence blockchain adoptio n in
organizations based in a developed country?Sp ecifically, the pu rpose of this paper is to elucidate the
impact of organizatio nal factors on the adoption of blo ckchain and the adoption of blo ckchain in companies
based in Ireland.
Design/methodology/approach A comprehensive literature review was conducted, and the methods of
qualitative content analysis were used to identify the most important technologyorganizationenvironment
(TOE) blockchain adoption factors. Organizational factors are often viewed as the most significant
determinants of IT innovation adoption in organizations. Consequently, using a multiple-case study of 20
companies based in Ireland, the authors investigate how the top three organizational factors identified from
the blockchain literature affected these companies decision to adopt or not adopt blockchain.
Findings The literature review on blockchain adoption identified specific technological, organizational and
environmental factors. Furthermore, the case study findings identified three patterns: top management
support and organizational readiness are enablers for blockchain adoption, and large companies are more
likely to adopt blockchain than small to medium-sized enterprises (SMEs). The authors explain these patterns
by examining the nature of blockchain and the characteristics of Ireland as a developed country. Practical and
scientific contributions are also presented.
Research limitations/implications This study makes several imp ortant scientific contributio ns. First,
the findings revealed t hat top management support and org anizational readiness are sig nificant enablers of
blockchain adoption. Ireland is recognized as a te chnology developed c ountry; however, the fin dings in
relation to top manageme nt support contradict e xisting IT adoption lit erature pertaining to d eveloped
countries. Second, pr evious IT innovation ado ption literature sugg ests that organizati ons size has a
positive influence o n a companys IT innovation adoption process. This study demonstrates that large
organizations are more likely to not only adopt blockchai n but are also more likely to conduct increased
levels of blockchain r esearch and developme nt activities. Final ly, and most signific antly, the authors
identified several pa tterns, which relate specifically to Ire land as a developed country that influenc ed the
findings. These findin gs could hold particu lar relevance to govern ments and organizat ions of other
developed countries i n terms of accelerating blockchain adopt ion.
Practical implications The findings about the low level of blockchain awareness and the lack of
information pertaining to viable business use cases indicate that the Irish government could play a more
significant role in promoting the benefits of blockchain technologies. Further, the findings could also
encourage IT providers to formulate enhanced strategies aimed at disseminating information pertaining to
blockchain technologies. Second, the positive influence of top management support and organizational
readiness, particularly about core competencies, on blockchain adoption suggests that equipping managers
with the requisite knowledge and skills will be crucial in adopting these IT innovations. Finally, organizations
who adopted blockchain used cloud-based blockchain platformsand tools to overcome the constraints of their
initial low levels of organizational readiness.
Industrial Management & Data
Systems
Vol. 119 No. 7, 2019
pp. 1457-1491
© Emerald PublishingLimited
0263-5577
DOI 10.1108/IMDS-08-2018-0365
Received 28 August 2018
Revised 8 April 2019
Accepted 23 May 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0263-5577.htm
1457
The influence
of
organizational
factors
Originality/value This is one of the first studies to identify specific TOE blockchain adoption factors.
Further,the authors examinehow the three most identifiedorganizationaladoption factorsimpact organizations
decisions to adopt blockchain. Finally, the authors discuss how the resulting three patterns identified by
examining the nature of blockchainand the characteristics of Ireland as a technologydeveloped country.
Keywords IT adoption, Blockchain, IT Innovation,
TechnologicalEnvironmentalOrganizational (TOE) Framework
Paper type Research paper
1. Introduction
Blockchain enables you to do something that you have not done before. Therefore, the fundamental
question for your business prior to adoption should be: what problem are you trying to solve which
can only be solved by blockchain? (A16)
The emergenceof blockchain as a trend in the informationtechnology (IT) sector has attracted
considerable attention from practitioners, academics, researchers and national development
authorities. Bl ockchain, as it i s used today, is a tamper-resistant database of transactions
consistent across a large number of nodes and is cryptographically secured against
retrospective manipulations, and it uses a consensus mechanism to keep the database
consistent whenever new transactions need to be validated(Beck, 2018). Blockchain was
introduced in October 2008 as part of a proposal for bitcoin by Satoshi Nakamato, a virtual
currency system, that eschewed a central authority for issuing currency, transferring
ownership, andconfirming transactions(Lansitiand Lakhani, 2017). Bitcoin is viewed as the
first application of blockchain technology. Blockchain is not a disruptive technology; it is a
foundational technology, which possesses the capacity to create new foundations for our
economic and social systems( Lansitiand Lakhani, 2017). Modern applicationsof blockchain
range from low noveltyand complexity initiatives (e.g.bitcoin payments) to high novelty and
complex initiatives (e.g. self-executing contracts). There are also nuanced mature blockchain
supply chain tracking initiatives. For instance, in the diamond industry off-the-shelf
blockchain technologies can be acquired to tracegems along the supply chain from origin to
the customer. Furthermore, blockchain is being used in the music industry where databases
containing information pertaining to music rights ownership are being stored in public
ledgers. Future transformational applications will encompasslarge-scale public identification
systems (e.g. passport control) and machine learning-based decision making (e.g. money
laundering).Large global financial institutionssuch as NasDaq, Bank of America, JP Morgan,
the New York Stock Exchange, Fidelity Investments are currently conducting private
blockchain research and development initiatives. These initiatives encompass the trialing of
digital currencies (e.g. interbank transfers), and the replacement of manual and paper-based
transactions (e.g. foreign exchanges). Blockchain technology can provide its adopters with
strategic and operational advantages which include enhanced security, cost savings,
immutability, faster transactions, transparency and pseudonymity (Lansiti and Lakhani,
2017; Tapscott and Tapscott, 2016).
Several reports have predicted that these advantages may be especially promising for
developed countries (Espinel, 2015; Cuomo et al., 2016; Pisa and Juden, 2017). For the
purposes of this study, a developed country represents a sovereign state categorized as
having a highly developed economy and advanced IT infrastructure relative to other less
industrialized countries. In 2018 the global blockchain technology market is predicted to
reach $548m in size and is forecast to grow to $2.3bn dollars by 2021 (Mehta and Striapunia,
2017). However, although the global blockchain adoption rate is increasing gradually, as
reported by IT analysts such as McKinsey (2017) and Accenture (Treat et al., 2017) and
multinational technology company IBM (Bear et al., 2016), in developed countries such as
1458
IMDS
119,7
Ireland, the UK and the USA, the adoption rates appear to be rather low. Reasons which are
used to explain the low rate of adoption of blockchain in Ireland are, among others,
organizational and technology readiness (Beck, Becker, Lindman and Rossi, 2017) and lack
of blockchain awareness (Fitzpatrick et al., 2017). For example, a study conducted by PWC
of 1,300 Irish business leaders reports that 14 percent of Irish survey respondents claimed
that they are either very or extremely familiar with blockchain, compared to 24 percent
globally. Further, the survey highlights how 45 percent of Irish business leaders say
blockchain is not part of their strategic plans and 23 percent of respondents are either in the
early stages of evaluating the technology or experimenting with it compared to 30 percent
globally (Fitzpatrick et al., 2017).
To investigate the low rate of adoption of blockchain in Ireland, we operationalized
innovation theory, which has been extensively used to examine technology innovation
adoption in organizational studies (Rogers, 1995; Yu and Hang, 2010; Van de Weerd et al.,
2016). IT innovation can be defined as the application of a new IT by an organization,
individual or unit (Swanson, 2004). According to Wang (2009), one question that is central to
research on IT innovation is Why do some information technologies come to be applied
widely among organizations, while others do not?Information systems (IS) researchers
have studied IT as organizational innovations and have identified various, organizational,
technological and environmental factors which contribute to an organizations decision to
adopt or not adopt an IT innovation. A framework that is often used to investigate the
intention of an organization to adopt an IT innovation is the technologyorganization
environment (TOE) framework (Tornatzky and Fleischer, 1990).
The adoption of a IT innovation can result in significant transformation to an
organizations internal and external operations (Wang, 2009; Kaganer et al., 2010).
Consequently, organizations should thread carefully when deciding to adopt such
innovations. As a result, a large body of research has focused on specific organizational
factors that impact companys decisions concerning IT innovation adoption (Wang, 2009).
Organizational factors that are considered significant determinants of IT innovation
adoption include organizational readiness, top management support, innovativeness,
organizational size, culture, prior IT experience and business model readiness (Damanpour,
1991; Law and Ngai, 2007; Jang, 2010; Yang et al., 2015).
Blockchain is frequently referred to as one of the primary IT innovations that possesses
the potential to disrupt and reshape a plethora of industries (e.g. insurance, financial, legal,
sharing economy etc.) in the next decade (Tapscott and Tapscott, 2016; Puschmann and Alt,
2016). Motivated by blockchains potential to transform sociotechnical systems, the lack of
systematic inquiry pertaining to blockchain studies from an IS perspective and the theories
presented earlier, we propose the following research question:
RQ1. How do organizational factors influence blockchain adoption in organizations
based in a developed country?
Specifically, this study elucidates the impact of organizational factors on the adoption of
blockchain and the adoption of blockchain in companies based in Ireland.
The paper proceeds as follows. The next section discusses the determinants of
blockchain adoption. The research method is presented next, followed by the data analysis
and results. Next, we discuss our research findings. The study concludes with discussion of
contributions of the study from the research and practice perspectives.
2. Blockchain adoption
2.1 Blockchain definition and characteristics
IT innovations are now part of the popular business lexicon. Given the significant impact of
IT innovations on organizations, IT innovation adoption has regularly been put under the
1459
The influence
of
organizational
factors

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT