A new study helps international businesses weigh the benefits and risks of implementing blockchain technology

Blockchain technology has become one of the most powerful developments in recent years, but there has not been a clear understanding of the possible business models for its use by multinational corporations (MNCs ). A new study published in Global Strategy Journal provides a better understanding of the advantages and disadvantages of blockchain by focusing on three specific technological applications in this field: financial transactions, collaboration and data analysis.

The study, “Perspectives on three tradeoffs of blockchain technology for MNC global strategy,” was written by Tuuli Hakkarainen of the University of Liverpool, Anatoli Colicev of the University of Liverpool, and Torben Pedersen of the Business School of Copenhagen. The researchers’ interest in this topic stems from their association with the MNC industry and government projects. The role of blockchain has been addressed by academic research in other areas, such as finance and operations management, but has received very little attention in international business and policy.

The team chose to focus on blockchain technology in financial transactions, collaboration, and data analytics because they found these three areas to be the most promising, feasible, and less researched technologies for MNCs. Within these three areas, their research explored cryptocurrencies, smart contracts, and blockchain data.

“It was clear from the beginning that the role of cryptocurrencies as part of payment options and smart contracts to facilitate cooperation with remote partners was at the heart of firms doing business across borders,” Hakkarainen he says. “We also wanted to discuss the details of blockchain especially for its untapped potential. For example, we believe that global firms may be willing to invest in obtaining real-time to find different consumer tastes and behaviors across countries to be competitive in those markets.”

To build their understanding of business within these three blockchain technology applications, researchers conducted in-depth research across countries and industries to determine whether cryptocurrencies, smart contracts, or analytics of data were implemented in companies. They combined industry and company reports, third-party resources, case studies, press releases, and social media interviews in addition to other publicly available sources.

The results are a thorough understanding of technology-related interactions to help companies measure their use. The group found that the advantages of cryptocurrencies include lower transaction fees, better security, and higher speed, but they require expensive equipment and are stigmatized by negative headlines. Smart contracts can facilitate agreements between parties, however, they lack the flexibility that global firms need when dealing with suppliers and partners. New blockchain data can be linked to marketing dashboards, but this could also threaten consumer privacy.

“We believe that blockchain is here to stay and can change many aspects for companies and their customers,” Colicev says. “There are many examples where we can see concrete evidence of how blockchain is already helping companies, not to mention the huge potential to help manage various problems when operating in other countries.”

The authors caution that as with any new technology, firms would do well to mitigate potential risks by evaluating the use of blockchain in other areas of operations in the same country or experimenting with smart contracts and certain partners. Because the council continues its general role in global MNCs, there is no reason to “change” the entire business model at once.