The effects of performance measurement system uses on organizational ambidexterity and firm performance

Purpose This study aims to investigate how dynamic tensions between performance measurement system (PMS) uses enable organizations achieve both exploitation and exploration 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 cross-validated by using lagged accounting data. tested our hypotheses hierarchical ordinary least squares regressions, together with bootstrapping procedures the test mediation. Findings A diagnostic use of PMS has a positive association – e.g. reductions in total costs lead times exploration, introduction new products extension product ranges. tension created joint interactive strongest organizational ambidexterity, measured as multiplicative interaction exploitation. Practical implications If organization or business unit is mainly pursuing exploitative goals, would be most suitable. goals are explorative, mix effective. Originality/value research helps reconcile conflicting views literature. PMS, far from acting “negative force,” appears necessary guide opportunity search establish appropriate scope exploration-related activities. authors’ focus PMSs shows that ambidexterity achieved managerial capability, rather than just systems structures.