Cultural Control, Creativity, Social Capital and Organizational Performance: Empirical Study of Small to Medium Sized Enterprises (SME) in Indonesia

By Ismail, Tubagus | International Journal of Entrepreneurship, Annual 2015 | Go to article overview

Cultural Control, Creativity, Social Capital and Organizational Performance: Empirical Study of Small to Medium Sized Enterprises (SME) in Indonesia


Ismail, Tubagus, International Journal of Entrepreneurship


INTRODUCTION

In control system literature, the concept and operation of cultural control are still ambiguous. Prior studies on cultural control were still overlapped with other forms of control, such as informal control (Cravens, et al., 2004), clan control (Ouchi, 1980; Govindarajan & Fisher, 1990), group control (Abernethy & Brownell, 1997), professional control (Abernethy & Stoelwinder, 1995; Orlikowsky, 1991), personal control (Wiersma, 2009), ideological control (Collier, 2005; Ditillo, 2004) and social control (Merchant, 1985; Rockness & Shields, 1988). Merchant & Van der Stede (2007) stated that cultural control was not limited by element of formal and informal system domains which are made in written and unwritten form (such as, management philosophy, ideology and values).

In this paper, cultural control follows the recent literature. Cultural control is a part of written and unwritten values and organizational rule which shapes organizational control and employee behavior. This definition does not only cover the informal control but it also adds formal control (Malagueno & Bisbe, 2010). Basically, cultural control is a part of management control system (MCS). It is in line with the definition of MCS which says that MCS is a tool designed to help the manager in decision making process by using formal and informal control (Chenhall, 2003), to reach the desired organizational purpose, including organizational performance (Bhimani et al., 2008).

Studies about cultural control and performance still suffer from some problems. Previous research found that formal control and informal control which became the part of cultural control would directly facilitate the performance (Kallunki et al, 2010; Chapman and Kihn, 2009), yet other research found that cultural control would firstly facilitate organizational capability (Malagueno and Bisbe, 2010), and the capability would then improve organizational performance (Henri, 2006). Meanwhile, Batac & Carassus (2009) found that cultural control would halt the organizational capability. Prior studies ignored the cultural-based industry as an object of the study, although the control form used in the study was entirely based on culture. Almost all studies on cultural control and capability are performed in developed countries, and rarely performed in developing countries.

This paper investigates the relationship between cultural control and performance in batik industry, based in Indonesian culture as developing country. Cultural factors, adoption and control in developing countries will be different from the ones used in developed countries (Joshi, 2001). The study on the use of control in developing countries potentially results in a new vision. The purpose of this study is also to fill the research gap in previous literature by testing direct and indirect relationships between cultural control and performance with creativity and social capital as intervening variables. Meutia (2012) found that creativity and social capital were two core competencies in Indonesian culture-based batik industry. Results from current studies show creativity and social capital are part of capability and variables that mediate the relationships between cultural control and performance.

The remainder of the paper is organized as follows. Section two will describe Indonesian culture-based batik industry. Section three will explain hypotheses in this study. Section four will present research methods, section five will present the result from this study meanwhile section six elaborates the concluding remarks.

BATIK INDUSTRY IN INDONESIA

Batik industry in Indonesia develops rapidly after this traditional cloth was acknowledged by UNESCO in 2009 as a cultural heritage from Indonesia. The development of batik industry has reached 300 percent for the last 3.5 years, with the revenue reaches 100 billion rupiahs per year. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Cultural Control, Creativity, Social Capital and Organizational Performance: Empirical Study of Small to Medium Sized Enterprises (SME) in Indonesia
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.