Eller Professor Says Blockchains Will Permanently Alter Business
Recent research by Oliver Schilke, associate professor of management and organizations in the University of Arizona Eller College of Management, examines blockchains as a global revolution that will change the way business is done—and impact the way technology shapes everyday society.
While blockchains have previously been used mainly in the financial sector, they are becoming more widespread across all kinds of industries and serve as a way to govern transactions between businesses.
A blockchain is a decentralized system that allows for self-enforcement of the agreement through a secure, automatic and private capacity. Essentially, blockchains are a new approach that can both replace and complement traditional methods of collaboration, allowing for broader, cheaper and faster transactions.
As blockchains become more accessible across industries, they will also greatly impact the general public.
One such example is a recent E. Coli outbreak related to romaine lettuce in 2018. After weeks of tracing using traditional food tracking systems, it was eventually determined that the infected lettuce was grown in Yuma, Arizona. This process was both difficult and costly, and meanwhile Walmart had to entirely clear out its shelves before the infected lettuce’s origins were pinpointed. Immediately follow this incident, Walmart joined the IBM Food Trust blockchain network.
“In this case, an incident that affected 200 people and caused five deaths might have had a much less harmful result had the use of blockchains to solve major issues of quick and reliable traceability in supply chain management been in place prior,” says Schilke.
In addition to its speed, the blockchain also promises to make information more accurate, which is particularly valuable when dealing with a massive quantity of products.
Schilke conducted the research with Fabrice Lumineau and Wenqian Wang of Purdue University’s Krannert School of Management. He notes as blockchains become more widely used, companies that aren’t using them may become obsolete as they may no longer be considered a viable transaction partner. In his research, Schilke cites a recent survey among Fortune 500 executives that indicates 94 percent of them have plans to launch blockchain-based initiatives. This research is published in Organization Science.
About the University of Arizona Eller College of Management: Home to 5,800 undergraduate and 750 graduate students, the University of Arizona Eller College of Management is a comprehensive business school with a global reputation for innovative research, rigorous curriculum, a distinguished faculty, excellence in entrepreneurship and social responsibility. The College’s mission is to support and develop a community of scholar and learners whose knowledge, integrity and entrepreneurial spirit will transform business and society. For more, visit www.eller.arizona.edu.