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The effects of performance measurement system uses on organizational ambidexterity and firm performance
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Mura, Matteo, Micheli, Pietro and Longo, Mariolina (2021) The effects of performance measurement system uses on organizational ambidexterity and firm performance. International Journal of Operations and Production Management, 41 (13). pp. 127-151. doi:10.1108/IJOPM-02-2021-0101
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Official URL: https://doi.org/10.1108/IJOPM-02-2021-0101
Abstract
Purpose
This study aims to investigate how dynamic tensions between performance measurement system (PMS) uses enable organizations to achieve both exploitation and exploration and enhance firm performance.
Design/methodology/approach
The authors collected survey data on 153 Italian companies. Scales for each construct were validated through an exploratory factor analysis. Data on firm performance were cross-validated by using lagged accounting data. The authors tested our hypotheses using hierarchical ordinary least squares regressions, together with bootstrapping procedures for the test on mediation.
Findings
A diagnostic use of PMS has a positive association with both exploitation – e.g. reductions in total costs and lead times – and exploration, e.g. introduction of new products and extension of product ranges. The dynamic tension created by a joint diagnostic and interactive use has the strongest association with organizational ambidexterity, measured as the multiplicative interaction between exploration and exploitation.
Practical implications
If an organization or business unit is mainly pursuing exploitative goals, a mainly diagnostic use of PMS would be most suitable. If goals are both exploitative and explorative, a mix of diagnostic and interactive uses would be most effective.
Originality/value
This research helps reconcile conflicting views in the literature. The diagnostic use of PMS, far from acting as a “negative force,” appears to be necessary to guide opportunity search and to establish an appropriate scope for exploration-related activities. The authors’ focus on the uses of PMSs shows that ambidexterity is achieved through managerial capability, rather than just through the introduction of systems and structures.
| Item Type: | Journal Article | ||||||||
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| Divisions: | Faculty of Social Sciences > Warwick Business School | ||||||||
| Journal or Publication Title: | International Journal of Operations and Production Management | ||||||||
| Publisher: | Emerald Group Publishing Ltd. | ||||||||
| ISSN: | 0144-3577 | ||||||||
| Official Date: | 2021 | ||||||||
| Dates: |
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| Volume: | 41 | ||||||||
| Number: | 13 | ||||||||
| Page Range: | pp. 127-151 | ||||||||
| DOI: | 10.1108/IJOPM-02-2021-0101 | ||||||||
| Status: | Peer Reviewed | ||||||||
| Publication Status: | Published | ||||||||
| Publisher Statement: | Mura, M., Micheli, P. and Longo, M. (2021), "The effects of performance measurement system uses on organizational ambidexterity and firm performance", International Journal of Operations & Production Management, Vol. 41 No. 13, pp. 127-151. https://doi.org/10.1108/IJOPM-02-2021-0101 | ||||||||
| Access rights to Published version: | Open Access | ||||||||
| Related URLs: |
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