How firms translate intended ambidexterity into innovation outcomes: The role of performance measurement systems

This paper examines the extent to which design and use attributes of performance measurement systems (PMSs) influence the conversion of intended competence ambidexterity into the achievement of ambidextrous innovation outcomes. Drawing on paradox and organisational conflict literature, this study emphasises the role of cognitive conflict in shaping the relationships between PMSs and ambidexterity. Using cross-sectional survey data from a sample of 90 Irish firms, the paper investigates whether a) balance in the design of performance measures and b) the degree to which performance measures are used for debate and discussion among the top management team (TMT) impact on the generation of cognitive conflict in order to simultaneously achieve incremental and radical innovation outcomes. Findings reveal that cognitive conflict significantly drives the achievement of ambidextrous innovation outcomes. Furthermore, the results of this study indicate that intentions to develop competence ambidexterity do not generate cognitive conflict by themselves. Rather it is through the combined presence of balance in the design of a PMS and the use of performance measures for debate and discussion among the TMT that cognitive conflict is activated. Overall, the paper emphasises the relevance of the role of PMSs as conflict generators in order for ambidextrous firms to be able to realise their strategies.

This seminar is one of a series of seminars in the Whitaker Ideas Forum seminar series.  Professor Sweeney will be representing the Performance Management Research Cluster.