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Improving social sustainability and reducing supply chain risks through blockchain implementation: role of outcome and behavioural mechanisms

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The implementation of blockchain technology holds promise for improving social sustainability and minimising risks across the supply chain. A theory-driven analysis of how blockchain implementation affects social sustainability and minimises risks (outcomes) is missing in supply chain management literature. In particular, the role of technology service providers in meeting these outcomes is unknown. This research addresses these gaps by identifying the outcome-based and behavioural mechanisms needed to generate social sustainability and reduce risks through blockchain projects using agency theory as a theoretical lens. We conduct in-depth interviews with key stakeholders for four blockchain implementation projects to answer these questions. We identify that developing user-friendly applications, developing secure digital payment systems, providing support for suppliers and farmers and adapting to local conditions as the key outcome-based mechanisms. Educating and engaging with customers and building local relationships are found to be the key behavioural mechanisms needed to improve social sustainability and minimise risks using blockchain. Finally, we compare the cases and develop propositions.

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Appendix: 1st and 2nd order codes

Appendix: 1st and 2nd order codes

1st order code from the case documents

2nd order code

Types of mechanisms

A QR code which follows the coffee from farm to café

Developing user-friendly applications

Outcome-based mechanisms

An application which can be used on the vessel to identify the supplied fuel to the ship with that supplied by the refiner and marked with a unique code

Easier to post all information when dismantling an aircraft, thus providing access to repair history

Application works for every user type- collectors, branch operator, processor, client

Developed tokenised digital savings and wallet and money is deposited in the member’s account so that they can store in digital savings or redeem right away

Developing customised and secure digital payment systems

Payment to the farmer as per the agreed farmgate price and exchange rate fixed at the time of acceptance of the order

Automated quality checking process of the paper work to avoid errors

Providing technical support

Providing farmers with an integrated calculator to determine their coffee’s parchment prices

Partner with local cooperative banks, which are most accessible to the local community

Adapting to local conditions

Use the farmer’s idea for encrypting QR code on the sack

Had to focus on solar-powered phone charging and wifi before implementing blockchain solution

Local team built good relationships and generated trust

Involving locals and building local relationships

Behaviour-based mechanisms

Cooperated as train the trainer, got the community to select someone to run the Plastic Bank

Engaging with the millennial users who want same online experience while transaction in their work as their online buying in personal life

Engaging with customers

Enabling the customer to leave message for the farmer by using the app

Customer should be able to engage with the app in a whole new way

Communicating how the system works with all partners

Educating customers

Changing the perception of customers through educational programme

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Chaudhuri, A., Bhatia, M.S., Kayikci, Y. et al. Improving social sustainability and reducing supply chain risks through blockchain implementation: role of outcome and behavioural mechanisms. Ann Oper Res 327, 401–433 (2023).

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