The Effects of Performance Measurement Uses on Organizational Ambidexterity and Company Performance

This study looks at how performance measurement can be used to drive simultaneously exploitative and explorative behaviors, and impact company performance. In doing so, this research considers performance measurement as an important, but neglected antecedent of organizational ambidexterity, and adds to existing evidence on the impact of organizational ambidexterity on firm financial and non-financial performance. The study draws on two main bodies of literature: organizational ambidexterity, and performance measurement and management. The results of our survey of 153 Italian companies suggest that: (1) organizational ambidexterity positively impacts company performance; (2) integrating diagnostic and interactive uses of measurement systems positively affects organizational performance; and (3) this relationship is mediated by a company’s ability to innovate its products or services, while exploiting existing assets and resources. Taken together, these findings suggest that organizational ambidexterity positively mediates the relationship between performance measurement uses and company performance.