Individual Creativity and Organizational Innovation: Can We Reconcile Creativity with Management Control Systems?

China Management Accounting Review, Vol.8, No.2, 2019

17 Pages Posted: 21 Jun 2019 Last revised: 2 Aug 2019

See all articles by In Gyun Baek

In Gyun Baek

University of Wisconsin - Madison - Department of Accounting and Information Systems

Ella Mae Matsumura

University of Wisconsin-Madison - Department of Accounting and Information Systems

Date Written: May 26, 2019

Abstract

Organizations often rely on management control systems to stimulate individual creativity and organizational innovation. However, organizations face a serious problem using formal controls to stimulate creativity because extrinsic motivation (motivation induced by external rewards, such as monetary incentives) can sometimes crowd out intrinsic motivation (motivation linked to intrinsic satisfaction in performing a task) to be creative. Still, formal control systems are necessary to coordinate individuals’ creative activities with others, especially when many individuals work interdependently on complex and large projects. We shed light on this management control dilemma by reviewing early and recent studies and examine empirical evidence. We call for further research on how management control systems can stimulate creativity in a manner consistent with organizations’ best interests.

Keywords: Creativity, Management Control Systems

JEL Classification: M41

Suggested Citation

Baek, In Gyun and Matsumura, Ella Mae, Individual Creativity and Organizational Innovation: Can We Reconcile Creativity with Management Control Systems? (May 26, 2019). China Management Accounting Review, Vol.8, No.2, 2019, Available at SSRN: https://ssrn.com/abstract=3404705

In Gyun Baek (Contact Author)

University of Wisconsin - Madison - Department of Accounting and Information Systems ( email )

975 University Avenue
Madison, WI 53706
United States

Ella Mae Matsumura

University of Wisconsin-Madison - Department of Accounting and Information Systems ( email )

School of Business
975 University Avenue
Madison, WI 53706
United States
608-262-9731 (Phone)
608-265-6040 (Fax)

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