The promoting workers’ rights and fair wages (Reuters, 2017),

The main focus of consumers in the
past years, when buying a product or service, has been predominantly on costs,
aiming to purchase a product or service at the lowest possible price, until the
environmental and later the social aspect became increasingly important (Basu
et al., 2015; Johnstone & Tan, 2015). Consumers increasingly started to pay
attention to sustainability and transparency. The rising awareness of the
society led to the emerging of company scandals, such as information fraud or
human right violations, resulting in a decrease of firms’ trustworthiness. Companies
involved in such scandals are not only losing potential consumers, but also
face a credibility crisis.

 

Several food scandals, for example,
happened over the past years, such as the Europewide horse-meat scandal in
2013, where horsemeat in lasagna and other meat products has been labelled as
beef (MedicalXpress, 2017). Even though the scandal had no consequences on consumers’
health, it damaged the consumers’ trust in the food industry. The transparency
of the companies was questioned, making consumers wonder whether there is a
possibility of further suspicious ingredients. In contrast, a more recent
scandal of human right violations, which involved the retailer Hennes &
Mauritz (H), had a great effect on the company. In 2017, an exclusive supplier
of the company was involved in a violent labor protest which was directly
associated with H (Thiha, 2017). Even though, H is widely seen as
being at the forefront among large apparel companies in promoting workers’
rights and fair wages (Reuters, 2017), it damaged H&M and, likewise made
consumers question the credibility of the company and their ability to ensure a
more traceable supply chain.

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Consequently, higher levels of transparency
and sustainability of the supply chain are increasingly demanded by customers. Consumers
seek for more means to monitor the supply chain of products and for more
information regarding the production. Therefore, companies should ensure
transparency and traceability along the whole value chain, which becomes more
difficult, as the supply chains of companies also become more complex. However,
thanks to new technology, ensuring transparency and traceability of supply
chains is becoming easier. An alternative technology is blockchain, a
decentralized online ledger, which can enable businesses to simplify
transactions, thus, decreasing costs and additionally adding transparency and
traceability to the supply chain. But even though the decentralized online
ledger is promising, it is currently posing several challenges for managers as
they are still looking for the most promising area providing the most value (Rao
et al., n.d.).

 

Currently there has not been a lot of research on the
consumer perspective on blockchain. Instead, previous literature on blockchain
focused mostly on the research topics finance, credit, accounting and others
(Cao et al., 2017). This
thesis, thus, focuses on the potential advantages consumer will have from
blockchain, and if those benefits will enhance consumers’ intention to use
blockchain services. Additionally, this thesis will analyze how
consumers will perceive a company differently when the company offers
blockchain as a service, giving companies a first impression on how blockchain
services for consumers could be advantageous for firms. More specifically, if it will increase the
trustworthiness of companies who have damaged their images due to trust
issues.

 

 

Firstly, blockchain in general and
the advantages and disadvantages of it will be described and based on prior
literature and papers, propositions will be formed. Secondly, the method and
research design of the used questionnaire will be presented. Thirdly, the
results of the questionnaire and the tests for the propositions will be
analyzed and discussed. Finally, the outcomes will be concluded, recommendations
based on the research will be made and suggestions for further research will be
given, build on the limitations of this thesis. 

Blockchain technology is currently receiving a lot of
attention as it is expected to disrupt the current operations management in
industries. The ledger is not owned or controlled by a central authority and
can be viewed by all users in the network, which can be public or private
(Underwood, 2016). Thus, it provides an online platform where information can
be added, copied and checked by third parties, where a trusted provider such as
a central bank is not required anymore. New transactions are checked before it
is added by all computers connected to the network, also called nodes in the
system, and are only added after the majority or all nodes confirm it as valid
data. This procedure can be seen as a mining process. Once added it is not
possible to change the data, so it is an unalterable history of information, that
can be shared among all the nodes in the network.

While the current hype is focused around the financial
services industry, there are many possible applications including music
distribution, identity verification, title registry and supply chain (Ahmed,
2017). Especially in supply chain the possible advantages and benefits are
vast. The technology is already being used by some companies hoping to enhance
their trustworthiness. For example, the insurance company AXA is using
blockchain for a new airplane insurance called ‘Fizzy’. The technology provides
the company with an information network of, for example, flight landing times
and payment data, and facilitates a transaction when data about the delay has
been verified. Through that, they promise to compensate the customer directly when
their flights have a delay of more than two hours and guarantee to make the
transaction faster and more transparent, which should also enhance and
strengthen the trust customers have in AXA (AXA, 2017).

According to Tian (2017), the inherited
characteristics of blockchain enhance trust through transparency and
traceability within any transaction of data, goods, and financial resources. More
safety, transparency and traceability are guaranteed, as blockchain provides an
online platform where third parties add, check and copy information and can
enhance validity of the data through the mining process. The technology allows
for the development of innovative financial instruments which can potentially
simplify and lower transaction costs in processes, such as, cross-border
payments (Lindman et al., 2017), making intermediaries like bankers, lawyers or
brokers no longer necessary (Iansiti & Lakhani, 2017). Additionally, as
stated by Underwood (2016), the transaction process can be shortened, since the
middleman or third-party intervention and the need for documentation, which is often
duplicated, are avoided.

Blockchain can also mitigate unethical behavior of
companies thanks to the unchangeable history of data. Trust within the network
is achieved by the members’ consensus. These benefits are already being used by
Everledger, a global startup company providing global, digital ledgers that
track and protect valuable assets throughout their lifetime journey
(Everledger, 2017). Their goal is to reduce risk, theft and fraud for banks,
insurers and open marketplaces by creating a permanent record on the
blockchain. According to Everledger (2017), the digital ledger is used by various
stakeholders across a supply chain pipeline to form provenance and verify
authenticity.

But apart from the usefulness for businesses, the
innovative technology could be advantageous for everyone in the society.
Regulators, for example, could use the technology to monitor market activities in
real time thanks to its transparency and integrity (Underwood, 2016). Furthermore, developing countries could use the
trustworthiness of blockchain for their own benefits. According to Underwood
(2016), blockchain has the ability to store and update property titles which could
allow poor people to assert reliable title claims to their homes and use them
as collateral for borrowing. It could also empower people in developing countries with,
for example, cryptocurrency,
which is based on blockchain technology. Cryptocurrency already has the
potential to be used as mean for low-cost remittances. The cryptocurrency
Bitcoin, for instance, could enable people from undeveloped countries to
transfer money to other countries without the help of intermediaries like
Western Union. Also, through cryptocurrency, local merchants in poorer
countries, struggling to get access to international payment systems, could get
the opportunity to use a bitcoin address to sell their products in exchange for
tokens, consequently avoiding traditional e-commerce systems (Scott, 2016).

However, there are also disadvantages, and risks
involved with the usage of blockchain. An issue, which gets a lot of attention
due to the increasing digitalization, are problems around data privacy
(Underwood, 2016). Regulations are yet to be established regarding blockchain
usage, thus, to ensure safety and privacy it should be made clear how much
information is actually needed to verify a transaction and how consumers can
protect their own data.

 

Moreover, even though the ledger is said to be
trusting and safe, there exists a chance for the information to be wrong.
Systems such as Bitcoin are sensitive to speculations and misinformation
(Lindman et al., 2017). Such speculations can occur when the majority of nodes
in the network validates wrong data, resulting in distrust in the network. As
stated by Brezo and Bringas (2012), the lack of an intermediary is a strength
but also a weakness of decentralized payment and trust infrastructure, as
users’ trust on the platform can rapidly decrease. However, according to
Nakamoto (2008) the creator of Bitcoin, as long as the majority of nodes are
honest and are not cooperating to attack the network, they will generate the
longest chain and outpace attackers, who will need to change the data in every
block in the chain.

 

Therefore, the success of public networks and services
depends highly on the size of the user network (Lindman et al., 2017; Scott,
2016). If more people are in the network, the less power and influence an
individual will have over it, making it safer and more trustworthy. The value
of the network to one user is then positively affected by any other user who is
joining and enlarging the network (Lindman et al., 2017). Consequently,
consumers have to be willing to take the risks associated with blockchain to
make advantageous use out of the technology.

Looking at blockchain from a
consumer perspective, the majority of people are not familiar with the new
technology. According to a survey, taken by a UK-based bank HSBC, 59% of
consumers have never heard of blockchain and 80% of those who have heard of it
said they do not understand what it is (Zhao, 2017). However, as mentioned
before, the decentralized online ledger could also be of advantage to the
consumer end of the supply chain. It could provide safety and validity of
services and products, as AXA, for example, is doing with their new product ‘Fizzy’.
Additionally, it can add assurance in consumption of everyday things, such as
food and cosmetics.

 

Nonetheless, based on previous
research, the advantages could be of no interest for consumers, as for example,
the uncertainty and volatility of cryptocurrencies such as Bitcoin made people
doubt the usefulness of blockchain technology (Scott, 2016). As bitcoin is
currently one of the most known use cases of blockchain, the limited knowledge
of the cryptocurrency represents another perceived risk, as the Bitcoin system
has been subjected to various security breaches and hacks of private computers
(Scott et al.,2017). The restricted knowledge of blockchain, which emerges due
to the knowledge of Bitcoin, could possibly prevent future usage of blockchain
services. Therefore, it is important to expand the knowledge on blockchain and
its risks and opportunities.

First,
as mentioned before, blockchain is still new for consumers, hence, it is
important to analyze whether consumers already have sufficient knowledge and if
so, if they would like to use blockchain. According to the technology
acceptance model (TAM) by Davis (1989), the intention to use a technology
predicts the actual usage. Thus, proposition 1 is stated to analyze whether
consumers would have the intention to use blockchain services after knowing of its
risks and opportunities to predict the actual usage. It also predicts that the
knowledge of blockchain will positively influence the usage of the technology. Figure
1 illustrates the relationship between the variables

Additionally, as blockchain can possibly enhance
transparency and traceability and thereby also the trustworthiness, changes in
the perception of certain companies should be analyzed on whether the use of
blockchain would increase their image or not. Thus, giving companies an
impression on how the technology could improve their service and reputation. As
figure 1 illustrates, the offered service of companies based on blockchain can
possibly positively influence the image consumer have of the company. Thus, proposition
2 is formulated.

This research will analyze the opinions of people born
in the 1980s and early 1990s, also called generation Y. This generation is
chosen as they grew up with the use of internet and technology (Kane, 2017),
and are, thus, more accustomed to technology and possibly less reluctant to
innovative technology. Since blockchain is an innovative technology which is
still in its trial phase, this target population is chosen because they will most
likely be the first to use blockchain services regularly. A sample of 75 target
members were surveyed of which 64% were female, and 36% were male.

 

An exploratory research was
conducted through an online survey by Qualtrics. This research method was
chosen because it generates insights that will improve the understanding of
consumer attitudes and behavior that are not easily accessible through other
research methods (Ciuchita, 2016). Moreover, the method of an online survey was selected because of
several advantages. Firstly, as the internet is a virtual world connecting all
kinds of people worldwide, the questionnaire could be conveniently completed
and shared by others. Additionally, it enabled the possibility to reach
individuals in distant geographic locations such as Europe and the United
States of America. Finally, the possibility of data errors was reduced as the
responses were automatically stored in a survey database. However, due
to time constraints the use of simple or systematic random sampling was not
possible, thus, convenience sampling was used. Personal networks and social media accounts such as
Facebook, WhatsApp and Snapchat were used to collect answers and to share the
survey.

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