Trust Triads: Intermediaries and Open Innovation Performance in High-Tech Firms

Abstract

As global markets become more competitive, open innovation has become an important element of organizational strategy for companies seeking to exploit these practices to gain a competitive advantage. This is particularly true of high-tech firms requiring innovation at ever increasing speeds. However, because open innovation practices often require the exchange of sensitive information, organizations may limit their success by withholding key knowledge for fear of losing control of key competencies. Important to combating these fears is building relationships of trust. Trust has been highlighted as playing a crucial role in the collaborative process. Trust allows for the free flow of information. However, building trust is not an easy proposition with unknown potential collaborators. Recent literature has introduced the role of trust intermediaries acting as third parties to help in building a trust triad (innovator, intermediaries, third parties). This study examines the role of intermediaries in open innovation management practices, through the theoretical lens of social exchange theory, in order to determine if trust between the parties involved in open innovation can be facilitated by intermediaries to increase performance outcomes. Through a systematic review of the literature, these findings support that intermediaries build trust and facilitate open innovation performance in high-tech firms. The social network is strengthened by the intermediary role. Additionally, collaboration is facilitated by building trust through the facilitation of shared values and formal contracts. Finally, open innovation performance is facilitated through the reduction of transaction cost.

Keywords: intermediaries, open innovation, social exchange theory, trust