The Triangle: Roles of the Go-Between

Abstract

Social capital is seen here as part of the overall resource base of a firm. One part of social capital is positional advantage in a network. It is established on the basis of relational competence. Third parties can help in the development of social capital by offering their relational competence, in playing one or more of six roles: the roles of the go-between. Transaction cost economics recognizes that in an inter-firm relation the inclusion of a third party can economize on the setting up and operation of a governance mechanism (‘trilateral governance’). The third party acts as a go-between in monitoring and controlling compliance to agreements, thus eliminating the need of intricate and costly forms of ‘bilateral governance.’ A second role of the go-between is to serve as a repository of hostages. A third role is to help in the judgement of the value that partners have for each other, i.e. to solve the ‘revelation problem.’ A fourth is to serve as a filter against spill-over. A fifth is to mediate in the building of trust. A sixth is to act as a boundary spanner: to offer a link between an established network and outside sources of innovation, while maintaining the integrity of the network. These roles are especially important in relations that are aimed at innovation. By performing these roles, the third party also increases the flexibility of networks of firms. In sum, third parties may form an important part of the social capital that supports networks of firms. The analysis opens opportunities, or new perspectives for fulfilment of their roles, to governmental agencies, such as innovation transfer agencies, municipalities or provinces, and market agencies, such as banks, and suggests that a new market is opening up for professional go-betweens.