Promoting individual creativity for inclusive economic growth in Indonesia

Abstraksi

Creativity and innovation is recognized as a potential driver of economic growth especially in developing countries (van Uden et al., 2014). However, limited budget and lack of focus in a specific timeframe results in failure of government policies to promote the improvement in creativity and innovation. In Indonesia, the lack of creativity and innovation is one of the most problematic factors which hampers its competitiveness in global market and bring down the competitiveness ranking from 37 (2015) to 41 (2016) (WEF 2016). Considering that government has a very limited budget for research and development, the private sector can contribute to the national competitiveness by developing creativity and innovation throughout the organizations. Likewise, the success of organisations in the current global market is also largely dependent on employees’ creativity. Interactive use of budgets is likely to play an important role in encouraging employees’ creativity. This study examines whether the interactive use of budgets is associated with managers’ creativity directly or indirectly through role clarity. The Partial Least Squares (PLS) technique was used to analyse the mail survey data collected from 88 middle-level managers in publicly-listed Indonesian companies. The findings of this study indicate that interactive use of budgets has a significant impact on managers’ creativity through role clarity. However, there is no evidence that interactive use of budgets has a direct association with managers’ creativity. This study contributes to the management accounting literature and sheds some light on practical implications.