Firms means of motivating it to perform

Firms have embarked on strategies that help catch up with the stiff competition in the market.

As a result, they partner with other firms to form strategic networks that constitute many members. This arrangement enables them attain strategic renewal through sharing resources, participation in joint technological activities and drawing similar marketing strategies. It is evident that this helps in strengthening the firm’s competitiveness; as a result, most governments and business related regulatory agencies support its implementation especially for small businesses. Another reason why many governments’ support this concept is because it assists firms to build independent entities that will help them address their deficiencies. Most importantly, to ensure the networks accomplish their goals, it is essential to establish a network board that will foresee their operations.

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This board might come in handy in situations where companies that have formed a network are experiencing problems related to insufficient resources (Thorgren, Wincent and Anokhin 131). The network board consists of firm’s representatives, experts in the industry or representatives of different related public agencies. Most importantly, the main responsibility of the network board is to augment network authenticity. Additionally, it heartens, harmonizes and offers support for joint activities among the networked firms. Basing on the roles played by this network board, it is essential that they are compensated so as to motivate them.

It is obvious that the administrative structure that governs the operations of this board is different from the normal organization structure. This is because the board foresees the operations of more than one firm and each of them has its own administrative structure. Thus, the process of compensating the network board is far different from that of an organization’s board. As evident, this board acts as agents that link different organizations. Research has incorporated agency theory with stewardship theory to suggest that unforeseen events shape the affiliation linking networking firms and network board members in a way that can add weight to the effects of board compensation on network performance (Thorgren et al.



In this article, the author portrays the importance of the small businesses coming together and establishing an empire that will sustain them presently and in the future. In order for these businesses to succeed, they must form a board to foresee their operations. Additionally, this board must be compensated as a means of motivating it to perform its duties well. It is noteworthy that the author’s qualification is certain as he brings out the most important facts concerning the avenue that leads to small businesses prosperity. Establishment of a strategic network by firms as presented by the author seems to be a practicable fact.

However, the administrative structure that links these companies in a way to facilitate the compensation of this board does not seem to be practicable. It is obvious that the board members are derived from the industry. Thus, each stakeholder must compensate its representatives as part of its contribution towards the sustainability of the board.

It is essential for the firms concerned to come up with well constructed strategies, which will ensure the costs incurred during compensation process are shared equally. Basing on this fact, it is an appropriate for firms to produce equal number of representatives on the board to ensure equivalent contribution towards their compensation. In as much as the article portrays the importance of compensating the network board members, it does not give the criteria to be employed when administering the compensation.

It is a fact that the compensation strategy is a critical issue that needs to be addressed in detail. Some experts reveal that issues arising from the compensation strategy might result to controversies, hence collapse of the strategic networks. In the establishment of these networks, it is essential for its proposers to put in mind the fact that it requires a lot of consultation to link the companies. In the board, it is essential to constitute experts with experience on joint company ventures. This acts as a mitigation measure incase there occurs future disagreements.


It is noted that, this information is important in business as it depicts ways in which different companies can combine their resources to come up with a solid venture able to outdo its competitors. The information on compensation of the network board is necessary to companies that are already in strategic network as it enlightens them on ways of strengthening their links. Most importantly, this information is essential to the management as it reveals a rough idea of what to expect when they involve their institutions in strategic networks.

Additionally, this information is vital to institutions already in involved in strategic network but having problems to do with the compensation and constitution of the network board.


As evident, stiff competition in the market leads to employment of new strategies to enable firms catch up with the market leaders. Thus, there are companies that opt for the strategic network so as to combine their resources; as a result, it boosts their market share. In any organization, employee motivation is considered essential because it ensures more productivity. Thus, for the strategic network board to be motivated it should receive compensation from the network partners.

It is appropriate for each company to have a representative on the board so that their interests are well represented. Furthermore, a company will be well represented if the individual has got formal links with the company and understands what goes on in the company. The board’s success is determined by the mode of treatment and concern it receives from the stakeholder. Thus, its compensation is an important element that will boost their working morale. As evident, the compensation process must be well structured so as to ensure there are no obstacles towards the implementation of the strategic network. Hence, the parties involved must seek the advice and guidance of experts before executing this strategy.

Work cited

Thorgren, Sara.

Wincent, Joakim. & Anokhin, Sergey. The Importance of Compensating Strategic Network Board Members for Network Performance: A Contingency Approach. British Journal of Management, 2010, 21: 131–151. Print.


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