Tertius Dolens : Interalter Conflict and Its Negative Impact on Broker Performance

Abstract

Prior research on the relationship between network brokerage and firms’ innovation performance has predominantly portrayed the brokering firm as a tertius gaudens, or “the benefiting third,” which gains informational and coordination advantages from its network position by bridging disconnected and relationally neutral partner firms. We extend this view by theorizing a disadvantaged brokering firm, or broker, which spans two uncooperative partners, or alters, engaged in active conflict with one another. Described as a tertius dolens, or “the suffering third,” this broker occupies a position in which interalter conflict transforms brokerage from a structural advantage into a liability by constraining knowledge exchange, increasing coordination costs, and damaging the broker’s network reputation, thereby reducing innovation performance. We further argue that these adverse effects can be partly mitigated by structural conditions that restore balance to the broker’s position, including access to conflict-free structural holes, higher network status, and multiplex relational commitments with the conflicting alters. Using longitudinal data on 2,735 publicly listed biopharmaceutical firms and their vertical alliances from 2000 to 2009, combined with U.S. patent infringement lawsuits to capture interorganizational conflict, we find strong empirical support for these arguments. Taken together, our findings refine brokerage theory by identifying conflict among a broker’s alters as a hidden source of structural disadvantage and clarifying why brokers do not always realize the innovation benefits predicted by the tertius gaudens logic. Supplemental Material: The online supplementary material is available at https://doi.org/10.1287/orsc.2024.19168 .