Blockchain and network governance: learning from applications in the supply chain sector

Figures & data

Table 1. Network governance of blockchain applications.

	Centralised	NAO-approach	Decentralised
Lead organisation	Yes	Broker	No
Description	A lead organisation owns and controls the application. Governance is centralised (Provan and Kenis 2008)	NAO (either for-profit or non-for-profit organisation) is tasked with the governance of the network. It is distinct from members (Chen, Pereira, and Patel 2021; Provan and Kenis 2008)	Governance is fully decentralised. Example in blockchain-space: Decentralised Autonomous Organisations (DAO) (Lumineau, Wang, and Schilke 2021; Ziolkowski, Miscione, and Schwabe 2020)
Blockchain example	Other technologies may be better suited (Furlonger and Uzureau 2019)	GSBN (The Maritime Executive 2020)	Bitcoin (Nakamoto 2008)
Strengths	Efficient decision-making, stability (Provan and Kenis 2008)	Scalability of network size, inclusiveness (Provan and Kenis 2008)	Inclusiveness, internal legitimacy (Provan and Kenis 2008)
Weaknesses	Members are dependent on lead organisation	Resource-intensiveness	Inefficient decision-making, inefficient member engagement

Table 2. Overview of informants per case.

Study case	Informant role	Affiliated with organisation	Interview duration^a
Appl-1	Executive	NAO	0:57
	Executive	NAO	0:58
	Advisor	NAO	0:49
	Project manager	Technology provider	0:37
Appl-2	Executive	NAO	0:55
	Product manager	Member firm	0:59
	R&D manager	Member firm	0:28
	Senior reporter	Specialist publication	0:52
Appl-3	Executive	NAO	1:04
	Business development manager	Technology partner	0:53
Appl-4	Analyst	NAO	1:04
	Executive	NAO	0:33
	Executive	NAO	0:27
Appl-5	Product manager	NAO	1:12
	Technology specialist	NAO	0:54
	Executive	Member firm	0:56
	Engineer	University	0:51
	Senior editor	Specialist publication	0:53
Pre-study	Managing consultant	Management consultancy	0:51
Pre-study	Professor	University	0:43
Pre-study	Product Manager	Logistics company	1:01
Pre-study	Managing consultant	Blockchain consultancy	0:40
Pre-study	Executive	Blockchain start-up	0:53

^aThe interview duration is measured in hours:minutes.

Table 3. Coding strategy.

Code	Case	Example quote
Decentralisation	Appl-1	So the Walmart, the FoodTrust one is an easy one because you design a blockchain network and you tell your suppliers to connect and […] your work is done. But it is not a collaboration. What we are doing is through collaborations. So I need to convince everybody to work together in this infrastructure. [Executive]
Decentralisation	Appl-2	No there is a difference. Those members who have a board seat have the biggest say. […] Those organisations who are shareholders but do not have a board seat, obviously, have lesser say. And then those who are licensees only, they are licensees only. [Executive]
Decentralisation	Appl-4	And then, obviously, […] it is a shared solution […]. It is not a siloed solution; blockchain is never one. [Analyst]
Decentralisation	Appl-5	I mean, you have got a network of different participants - blockchain does not make any sense if you make just blockchain for yourself - so it is a decentralised system. [Engineer at University]
Transformation	Appl-1	And of course, of course, I imagine - now it is a cosy club of nine or something. But when we have an audience of 100 in specific areas, we have to rearrange this stuff. [Executive]
Transformation	Appl-2	[It was] set up as a standalone entity in 2018. Now, this is something that we are seeing a lot with a lot of the other consortia, you know: they start out just being a consortium and then, because they need to have that kind of governance structure and the ability to take decisions by CEO and not by committee, they are setting up a standalone legal entity. [Senior reporter at specialist publication]
Transformation	Appl-3	So, at the beginning, when we founded the association a year ago, we were the sole master on board. And little by little, and that started with the first general assembly of the association, we started letting go some of power to the [member firms]. [Executive]
Transformation	Appl-5	[T]o my understanding […] they gave the other carriers both […] power over governance and also some sort of revenue, ability to drive revenue as well. So it wasn’t just [shareholder 1] setting the rules and [shareholder 1] purely monetising this and other companies sort of having to be involved. […] And then once [the other carriers] were involved, it naturally was seen as less of a purely [shareholder 1]-driven initiative. [Senior editor at specialist publication]

Table 4. Overview of cases.

Name	Application	Members	Ownership	Blockchain type
Appl-1	Track and trace in finished vehicle logistics	<10: logistics providers  and bank	<10 logistics providers	Permissioned
Appl-2	Trade finance	10–20: banks and  technology provider	>10 banks	Permissioned
Appl-3	Digital identity for luxury goods	>20: luxury brands and  technology provider	Member firms hold tokens and no financial stakes	Permissionless
Appl-4	Supplier information management	>20: firms from  various industries	Blockchain consultancy and technology provider	Permissioned
Appl-5	Global shipping platform	>100: logistics companies,  service providers,  terminals, customs  authorities	Logistics company and technology provider	Permissioned

Table 5. Organisational structure of cases.

Name	Management team	Board	General assembly	Working groups
Appl-1	Team of industry experts. Responsible for operations and coordination between members	Board and general assembly are the same. Executives of member firms and Appl-1 management team. Responsible for strategic decisions and product roadmap		Established working groups with experts from member firms
Appl-2	Team of industry experts. Responsible for operations and coordination between members	Executives from large shareholders and Appl-2 management team. Responsible for strategic decisions	Representatives from all member firms. Informal extension to board	Established working groups with experts from member firms
Appl-3	Team of founding individuals. Responsible for application development and operations	Reserved seats for big industry players; additional members elected by assembly. Currently, little responsibilities	Representatives from all member firms and technology partners. Input on application development; elects board members	Established working groups with experts from member firms
Appl-4	Dedicated team from major shareholding blockchain consultancy. Responsible for operations, business development, and coordination between members	Executives from 10 ‘industry leaders’ from different industries. Responsible for strategic decisions	Representatives from all member firms. Coordinates working groups	Established working groups with experts from member firms
Appl-5	Large dedicated organisation associated with the two major shareholders. Responsible for operations, business development, and coordination between members	Two bodies to be instituted: One is an association encompassing major competitors in one value chain echelon. The other is a board with representatives from a cross-section of member firms	–	Working groups not established

Table 6. Observed shifts in the degrees of centralisation.

Direction 1: towards centralisation
Appl-1	Initially, group of firms sharing control. Since, creation of an NAO and formalised governance	[N]ow it’s a cosy club of nine or something. But when we have an audience of 100 in specific areas, we have to rearrange this stuff. […] Then you have members and members; basically people just participating in the network transacting and doing nothing, but just using it. [Executive, Appl-1]
Appl-2	Initially, group of firms sharing control. Since, strengthening of the management team and decrease of the involvement of member firms	How this has evolved is that the [Appl-2] organisation […] has taken a more firm grip […]. I really welcome that I don’t need to have a say in all questions. […] So, the [Appl-2] organisation as of today is much more effective and efficient compared to just one or two years ago. [Product manager at member firm, Appl-2]
Direction 2: towards decentralisation
Appl-3	Initially, centralised governance by a group of entrepreneur founders. In a step-by-step process, the founders relinquish their decision-making monopoly to the member firms	[A]t the beginning, when we founded the association a year ago, we were the sole master on board. And little by little – and that started with the first general assembly of the association – we started letting go some of power to the [member firms]. [Executive, Appl-3]
Appl-5	Initially, powerful NAO to push for fast network growth, which it accomplished. In order to get competitors of the main owner on board, there has been a recent move towards decentralising control somewhat	For the [firms], we have a consortium, […]. It’s kind of a bigger group of all different big [firms] within this industry. […] I think we have all top seven worldwide [firms] which will be onboarded within this group, within this association. [Product manager, Appl-5]

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