The effects of the intensity of use of the levers of control on contextual and supply chain ambidexterity and firm performance

Abstract This study investigates how the intensity of use of the levers of control (LoC) facilitates contextual ambidexterity (alignment and adaptability) and supply chain ambidexterity (exploitation and exploration) in Australian manufacturing supply chains. Survey data from 113 manufacturing firms are analyzed using partial least squares-structural equation modeling (PLS-SEM) and fuzzy-set qualitative comparative analysis (fsQCA). The results indicate that the intensity of use of the LoC helps to create both contextual ambidexterity and supply chain ambidexterity, which, in turn, lead to superior firm performance. The relationship between the intensity of use of the LoC and firm performance is mediated by contextual ambidexterity and supply chain ambidexterity. While contextual ambidexterity and supply chain ambidexterity are the main drivers of superior firm performance, there are different combinations of emphasis on the intensity of use of the LoC. We provide theoretical insights into and practical implications for the use of management control systems to create contextual and supply chain ambidexterity and improve firm performance.