Abstract
Purpose: While blockchain technology (BCT) is recognized for its potential, its adoption among small and medium-sized enterprises (SMEs) remains limited. Existing literature focuses on large multinational enterprises, leaving a gap in understanding the challenges and opportunities SMEs face. This study aims to explore the adoption of BCT in an Italian manufacturing SME, assessing both the operational and sustainability implications. Design/methodology/approach: This study employs an action research approach grounded in the Unified Theory of Acceptance and Use of Technology framework. Through iterative phases of research, it examines the key factors influencing blockchain adoption. Semi-structured interviews were conducted with department heads with follow-ups to validate findings. Findings: The research identifies fifteen critical challenges SMEs encounter in adopting BCT, including technological readiness, interoperability with existing systems, regulatory uncertainty and misconceptions stemming from blockchain's association with cryptocurrency. While blockchain offers potential benefits such as enhanced transparency, traceability and automation, its successful adoption requires substantial internal restructuring and stakeholder engagement. The study also highlights BCT's potential to support sustainability initiatives, such as digitalized tracking and paperless invoicing. Originality/value: This study contributes to the literature by shifting the focus from large corporations to SMEs, providing empirical insights into blockchain's real-world applications in a resource-constrained environment. This study is among the few to examine blockchain adoption in SMEs through an action research approach, enabling real-time observation and iterative validation of findings across multiple organizational departments. It underscores the importance of aligning blockchain adoption with business strategy rather than merely following technological trends. Furthermore, the study serves as a practical guide for managers, offering key considerations for evaluating the feasibility of blockchain integration and identifying trade-offs between expected benefits and implementation complexities.