The Effect of Levers of Control and Leadership Style on Creativity

Abstract

Introduction: This research aims to investigate how leadership assists the levers of control (LOC) to influence employees’ creativity. Background problem: Managing a company is challenging due to the numerous issues faced, including those relating to the employees’ creati­vity. Prior studies showed different results concerning how company controls constrained or enhanced the employees’ creativity. Previous studies explained that incentives can influence the employees’ creativity, but only temporarily. However, organizations require creativity continuously in order to sustain themselves. In response to this issue, it is essential to investigate other determinants that encourage employees’ creativity, and how the process is relevant to each organization’s core values. This study examines this through companies control systems and leadership aspects. Novelty: Our study attempts to complement previous studies and answer Spekle’s (2017) call. This study offers transformational leadership to strengthen employees’ creativity, aligned through the LOC. Research Methods: The data were collected via an online survey. The questionnaires were sent to startup companies’ employees who had worked in the creative divisions of those companies for a minimum of six months. There were 109 responses that we processed. This study used SEM-PLS to analyze the data. Finding/ Result: The LOC positively influenced employee creativity. The more leaders behaved as transformational leader, it strengthened LOC to influence employees’ creativity. Conclusion: This study shows that the dimensions used to establish the LOC should be integrated, to align the employees’ creative ideas for new methods of working. Furthermore, this study supports the prior research into the self-determination theory and answers Spekle et al (2017), that leadership is required to influence the employees. Particularly, companies should appoint appropriate leaders to encourage their employees’ creativity. Transformational leaders should be considered to be an option.

Performance Improvement of Blud Puskesmas Employees Based on the Reliance on Multiple Performance Measure Through Levers of Control

“…Metrics for financial and non-financial performance measurement systems have been tested with a combination of levers of control as practiced by Ghozali and Sulityani (2016). These findings can influence psychological empowerment (Marginson et al, 2014) to improve organizational performance and increase the creativity of subordinates (Adi and Sukmawati, 2020), and improve the performance of subordinates in the subordinate work-related attitudes dimension. This is because levers of control can provide an essential framework for the consequences of performance measures (Franco-Santos et al, 2012;Marginson et al, 2014).…”

“…This study uses levers of control proposed by Simons (1994). Levers of control refers to a management control system consisting of four control systems, namely; belief system, boundary system, diagnostic control system, and interactive control system (Ghozali and Sulityani, 2016;Speklé et al, 2017;Bandiyono and Augustine, 2019;Adi and Sukmawati, 2020;de Haan-Hoek et al, 2020). In simple terms, Bandiyono and Augustine (2019) describe the four systems as follows.…”

“…The combination of performance measurement with the levers of control is expected to avoid a decline in company performance caused by a decrease in the performance of superiors and subordinates (Su and Baird, 2018;Adi and Sukmawati, 2020). Interactive control systems are a beneficial force in organizations and complement diagnostic control systems, and both systems provide an essential framework for understanding the effects of performance measures (Franco-Santos et al, 2012).…”

“…The combination of financial and nonfinancial performance measurements with levers of control has been carried out by Afrizal et al (2020) and Hernando (2020) which shows the diversity of results in the combination towards subordinate workrelated attitudes. The variety of findings is indicated because of the merging of two dimensions in one mediation Therefore, in this study only one dimension in one mediation, namely levers of control (Adi and Sukmawati, 2020).…”

“…Previous research findings proved that financial and non-financial performance measurement systems can be combined with levers of control to increase the performance of superiors and subordinates in a company (Marginson et al, 2014;Afrizal et al, 2020;Hernando, 2020). The combination of performance measurement with levers of control is expected to avoid a decline in company performance caused by a decrease in the performance of both superiors and subordinates (Su and Baird, 2018;Adi and Sukmawati, 2020).…”