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
Date Written: May 26, 2019
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
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