The Role of Reward System as Performance Control System: Empirical Evidence from Strategic Business Unit in Indonesia

Kartika, Endo Wijaya and Ellitan, Lena (2022) The Role of Reward System as Performance Control System: Empirical Evidence from Strategic Business Unit in Indonesia. [UNSPECIFIED]

	PDF Download (280Kb)
	PDF Download (3720Kb)

Abstract

The current global uncertainty in the business environment has delivered negative impact on the Indonesian economy, resulting in problems that arise for large-scale corporate companies that have many Strategic Business Units (SBU) under them. This condition presents a challenge for corporate companies where one of the main roles is to regulate all SBU to be able to produce optimal performance through the established Management Control System (MCS). One of the MCS that need to be studied more deeply academically is reward system that is expected to be able to improve SBU performance through Organizational Learning Culture (OLC) and innovation capability. This study aims to empirically prove the development of a more comprehensive model to improve the SBU performance, especially in SBU context for corporate companies in Indonesia. This is a causal quantitative with total samples is 72 respondents. The results prove that reward system has a significant positive effect on SBU performance, innovation capability, and OLC. OLC has a significant positive effect on innovation capability, but has no significant positive effect on SBU performance. The innovation capability has a significant positive effect on SBU performance. Meanwhile, innovation capability is proven to be a mediating variable for the effect of reward system on SBU performance, and the influence of OLC on SBU performance. OLC is proven to be a mediating variable of the effect of reward system on innovation capability, but it is not proven to be a mediating variable of the effect of reward system on SBU performance.

Actions (login required)