Organizational Ambidexterity: How Balanced Scorecard (BSC) and Activity-Based Costing (ABC) Enable Exploration–Exploitation Synergy and Sustainable Performance

Ahmed Abdullah Saad Al-Dhubaibi ()
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Ahmed Abdullah Saad Al-Dhubaibi: Department of Accounting, College of Business Administration, Prince Sattam Bin Abdulaziz University, Al-Kharj 46451, Saudi Arabia

JRFM, 2025, vol. 18, issue 9, 1-25

Abstract: This study investigates how management accounting systems (MASs), specifically the balanced scorecard (BSC) and activity-based costing (ABC), foster organizational ambidexterity (OA) and, in turn, enhance firm performance. Drawing on the resource-based view, theory of constraints, and the ambidexterity literature, this research explores whether BSC and ABC act as enablers of the exploration–exploitation balance necessary for long-term competitiveness. A quantitative survey design was employed, targeting large- and medium-sized organizations in Saudi Arabia. Data from 186 valid responses were analyzed using structural equation modeling (SEM) to test the proposed relationships. The results provide robust empirical evidence that both BSC and ABC significantly contribute to OA. While BSC indirectly enhances organizational performance through OA, ABC exerts a direct positive effect on performance. Furthermore, higher levels of OA were found to significantly improve business outcomes, confirming its role as a critical mediator of strategic and operational success. The study makes three key contributions: First, it validates the role of MASs in building ambidextrous capabilities that enable firms to balance efficiency with innovation. Second, it demonstrates the complementary effects of BSC and ABC in driving superior organizational performance. Third, it highlights the strategic value of MASs in aligning organizational practices with sustainable development goals, thereby reconciling short-term profitability with long-term growth.

Keywords: organizational ambidexterity (OA); management accounting systems (MASs); balanced scorecard (BSC); activity-based costing (ABC); firm performance (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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