How dynamic capabilities affect adoption of management innovations

Management innovation facilitates changes including technical innovation thus improving organizational performance; Chinese firms typically adopt these management innovations. Building on previous research of how and why management innovation occurs, this study measures the influence of four dynamic capabilities on four stages of the innovation process. The study surveys 264 Chinese firms and analyzes results through PLS-SEM. The findings indicate that relational capability facilitates sensing capability, absorptive capacity, and integrative capability. Further, all of these dynamic capabilities affect stages of the adoptive management innovation process; from initiation through to implementation. As innovation results can be intangible and lagging, and consequently difficult to measure, the method offers managers an alternative by monitoring the effects of different capabilities at each stage of the adoptive management innovation process. •This study shows how dynamic capabilities affect management innovation with a new scale.•The study operationalizes four dynamic capabilities and four phases of adoptive management innovation.•The study measures adoptive management innovation as a process.•The study describes the fundamental role of relational capability in innovation.•The study describes adoptive management innovations in 264 Chinese firms.