Why firms introduce new management practices?

Here is another article from Prof. Birkinshaw in the same vein as Management Innovation. The last article talked about internal organizations context and external environment.  This one brings in the concept of external search (looking for management innovation outside the firms):

Management innovation is the introduction of management practices new to the firm and intended to enhance firm performance. Building on the organizational reference group literature, this article shows that management innovation is a consequence of a firm’s internal context and of the external search for new knowledge. Furthermore the article demonstrates a trade-off between context and search, in that there is a negative effect on management innovation associated with their joint occurrence. Finally the article shows that management innovation is positively associated with firm performance in the form of subsequent productivity growth.

 Below is some background:

Hamel (2006, 2007) in particular has forcefully argued that in today’s age management innovation may represent one of the most important and sustainable sources of competitive advantage for firms because of its context specific nature among others.

 The introduction of newmanagement practices is an important issue for firms as they seek to upgrade their productivity, improve the quality of customer offerings and retain competitiveness (Ichniowski et al., 1995; Pil and MacDuffie, 1996).

The article addresses this gap by considering two questions. First, under what conditions do firms introduce new management practices? The focus is on two sets of variables, around context and search. 

is management innovation something new to the state of the art (Abrahamson, 1996; Hamel, 2006), or simply new to the firm that is implementing it (Stjernberg and Philips, 1993; Zbaracki, 1998)? 

does management innovation involve conceptualizing a new practice, implementing a new practice, or both? 

 Here are three hypothesis the article presents and tests successfully:

Hypothesis 1. The larger the firm, the higher the level of introduction of new management practices.
Hypothesis 2. The more highly educated the workforce of the firm, the higher the level of introduction of new management practices.
Hypothesis 3. The greater the geographical scope of the market the firm is operating in, the higher the level of introduction of new management practices.

These are pretty intuitive except for the third one.  I guess working across cultures requires firms to innovate their management processes.  On the flip side, here are some other hypothesis (although they did not test with as much significance as others) that balance out the above:

Hypothesis 5a. The effect of internal sources on the introduction of new management practices is mitigated by size, education of the workforce, and geographic scope of the firm.
Hypothesis 5b. The effect of market-based sources on the introduction of new management practices is mitigated by size, education of the workforce, and geographic scope of the firm.
Hypothesis 5c. The effect of professional sources on the introduction of new management practices is mitigated by size, education of the workforce, and geographic scope of the firm.

A few more intuitive hypothesis that tested successfully.  The more interactions between different people and organizations, the more management innovation there is:

Hypothesis 4a. The more internal sources the firm interacts with, the higher the level of introduction of new management practices.
Hypothesis 4b. The more market-based sources the firm interacts with, the higher the level of introduction of newmanagement practices.
Hypothesis 4c. The more professional sources the firm interacts with, the higher the level of introduction of new management practices.
Hypothesis 6. The introduction of new management practices is positively associated with future firm performance, in the form of productivity growth.