How does interactive use of budgets affect creativity?

The purpose of this paper is to examine the relationship between the interactive use of budgets, role clarity and individual creativity.

Survey data was collected from mid-level managers in publicly listed Indonesian companies. The data was analysed using partial least squares.

The findings indicate that while there is no direct association between an interactive use of budgets and individual creativity, an interactive use of budgets can affect individual creativity via role clarity.

This study is one of only a few studies that provide empirical evidence on the relationships between individual creativity, role clarity and the interactive use of budgets. While previous studies have been undertaken in Western countries such as the USA and the UK, this study focuses on an emerging economy – Indonesia in which firms have been trying to improve individual creativity.