Management Control for Stimulating Different Types of Creativity: The Role of Budgets

36 Pages Posted: 28 Mar 2012

See all articles by Martine Cools

Martine Cools

KU Leuven - Faculty of Business and Economics (FEB)

Kristof Stouthuysen

Vlerick Business School; KU Leuven

Alexandra G. H. L. Van den Abbeele

Katholieke Universiteit Leuven (K.U.Leuven)

Multiple version iconThere are 2 versions of this paper

Date Written: March 1, 2012

Abstract

In this paper, we examine the role of budgets, as a central instrument within the management control system, in a creative context. In particular we investigate whether Simons’ (1990, 1991, 1995) claim that stimulating creativity requires an interactive use of management controls, holds when differences in the kind of creativity are taken into account. We hereby distinguish between expected creativity (for open, selfdiscovered problems) versus responsive creativity (for closed, presented problems) (Unsworth, 2001). Based on a comparative study involving four creative organizations, we find indications that creative firms being mainly characterized by expected creativity use their budgets in a more interactive way. In creative firms in which responsive creativity is most important, the budgets are used in a rather diagnostic way. This study makes an important contribution to the management control literature by acknowledging that a diagnostic use of budgets does not per se stifle creativity. Instead, it is important to understand that the specific creative context might have implications for the way in which management control instruments are used to sustain the creative process.

Keywords: expected creativity, responsive creativity, diagnostic and interactive budget use

Suggested Citation

Cools, Martine and Stouthuysen, Kristof and Van den Abbeele, Alexandra G. H. L., Management Control for Stimulating Different Types of Creativity: The Role of Budgets (March 1, 2012). Available at SSRN: https://ssrn.com/abstract=2029534 or http://dx.doi.org/10.2139/ssrn.2029534

Martine Cools (Contact Author)

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

Kristof Stouthuysen

Vlerick Business School ( email )

Vlamingenstraat
Leuven, BE-3000
Belgium

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Alexandra G. H. L. Van den Abbeele

Katholieke Universiteit Leuven (K.U.Leuven) ( email )

Department of Accountancy, Finance & Insurance
Naamsestraat 69
B-3000 Leuven, 3000
Belgium
+32 16 32 69 36 (Phone)
+32 16 32 67 32 (Fax)

HOME PAGE: http://www.econ.kuleuven.be/alexandra.vandenabbeele

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