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The Importance of Compensating Strategic Network Board Members for Network Performance: A Contingency Approach
Author(s) -
Thorgren Sara,
Wincent Joakim,
Anokhin Sergey
Publication year - 2010
Publication title -
british journal of management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.407
H-Index - 108
eISSN - 1467-8551
pISSN - 1045-3172
DOI - 10.1111/j.1467-8551.2009.00674.x
Subject(s) - contingency , agency (philosophy) , business , stewardship (theology) , compensation (psychology) , government (linguistics) , accounting , panel data , on board , contingency plan , industrial organization , marketing , management , economics , psychology , engineering , law , political science , sociology , social science , philosophy , linguistics , politics , psychoanalysis , econometrics , aerospace engineering
Firms in government‐supported strategic networks tend to rely on professional network board members for support and assistance. As such, two significant issues arise: should board members be compensated and under which circumstances is compensation more – or less – effective for network performance. Based on yearly panel data from 53 government‐supported strategic networks of small‐ and medium‐sized enterprises over a five‐year period, this study examines the effects of compensating network board members. Advocating for a contingency approach, we combine the agency and stewardship literatures to posit that the effects of compensation are moderated by contingency factors that stimulate either an agency or stewardship relationship between the network board and the networking firms. Our findings indicate that significant funding, network firms represented on the network board, and top‐down network formation stimulate board members to become agents rather than stewards. This therefore explains the higher effect of board member compensation under such conditions.