How performance measurement systems enable or hinder organizational ambidexterity

Abstract

Purpose This study aims to examine how different uses of performance measurement systems (PMS) enable or hinder organizational ambidexterity (OA), intended as the simultaneous pursuit of exploitation and exploration. Design/methodology/approach Following a qualitative research design, we gathered data through semi-structured interviews, observations and reviews of documents at four departments of an automotive firm. Findings We contribute to operations management research and practice by demonstrating how PMS, which are typically associated with exploitation, can also foster exploration and enable organizations to become ambidextrous. Specifically, we show how PMS can be structured and used in more agile ways and, in relation to innovation, we identify which PM practices should be introduced and with what effects and those that should be avoided. We also contribute to organization theory by highlighting how a single management tool can promote the achievement of both exploration and exploitation. Practical implications In investigating PMS uses and their effects, we identify several positive practices. For example, we show how managers can use PMS more effectively and how targets could be deployed to stimulate creativity and innovation. We also emphasize the need for managers to opt more often for team incentives rather than individual ones to encourage the collaboration needed for OA. Originality/value We provide in-depth insight into how PM tools affect an organization’s ability to pursue exploitation and exploration, thus contributing to research in operations, innovation and organization theory.

Cite this work

No public copy is stored for this record, so only the metadata is cited.

Stored only when both papers are in the corpus — 14 citations exist upstream.

Papers that cite the same references — the relational fallback while embeddings are still backfilling.