Blockchain-Enabled Trust in Intercompany Networks Applying the Agency Theory

Abstract

Globalization, digitalization and disruptions recently driven by the Covid19 pandemic are affecting today's supply chains and thus are challenging companies in maintaining their businesses. Resulting uncertainties lead to potential over- and undercapacities and therefore to economic inefficiencies in companies. Engaging in intercompany networks can be a way to circumvent inefficiencies by sharing resources via electronic markets. Here, negotiation mechanisms can be used to allocate the exchanged goods tailored to the needs and payment conditions of the network participants. Ensuring trust and enabling cooperation between the participants in such a virtual ecosystem is a major challenge and essential for raising its potentials. Lacks of trust within the single transaction phases impede the negotiation process and in worst case the maintaining of the network. For this reason, Distributed Ledger Technologies (DLT) and their inherent consensus-building functionalities as well as abilities to utilize smart contracts deserve closer investigation. The aim of this paper is to provide a literature review of DLT functionalities coping with behavioral uncertainties, with a closer view on the context of supply chain. The paper examines, to what extend the integration of DLT provides a beneficial contribution to solving trust problems occurring in intercompany negotiations.