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• Article | Strategy Science

  Applying Random Coefficient Models to Strategy Research: Identifying and Exploring Firm Heterogeneous Effects

  Juan Alcácer, Wilbur Chung, Ashton Hawk and Gonçalo Pacheco-de-Almeida

  Strategy aims at understanding the differential effects of firms’ actions on performance. However, standard regression models estimate only the average effects of these actions across firms. Our paper discusses how random coefficient models (RCMs) may generate new insights about firm heterogeneity and its effects on performance in empirical settings in strategy. RCMs allow testing for and predicting firm-specific coefficients, thereby distinguishing between effects that have a significant mean versus significant variance. RCMs may also be used to explore the sources of firm heterogeneous effects. We develop a simulation testbed using synthetic datasets to show that RCMs are more precise at allocating firm heterogeneous effects to model slopes and intercepts than standard regression models. We also discuss RCMs’ possible limitations due to sample size requirements, nonconvergence problems, and potentially restrictive assumptions. Overall, RCMs allow strategy researchers to test and build new theories at a more granular level.

  Keywords: Strategy; Research; Competitive Advantage; Competitive Strategy; Performance;

  Citation:

  Alcácer, Juan, Wilbur Chung, Ashton Hawk, and Gonçalo Pacheco-de-Almeida. "Applying Random Coefficient Models to Strategy Research: Identifying and Exploring Firm Heterogeneous Effects." Strategy Science 3, no. 3 (September 2018): 481–553.  View Details

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• Book | 2018

  Trust: Creating the Foundation for Entrepreneurship in Developing Countries

  Tarun Khanna

  Entrepreneurs in developing countries who assume they will have the same legal, governmental, and institutional protections as their counterparts in the West will fail. To succeed, they need to build trust within the existing structures—and this book shows how it's done.

  Keywords: Entrepreneurship; Developing Countries and Economies; Trust;

  Citation:

  Khanna, Tarun. Trust: Creating the Foundation for Entrepreneurship in Developing Countries. Oakland, CA: Berrett-Koehler Publishers, 2018.  View Details

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• Case | HBS Case Collection | March 2018 (Revised July 2018)

  Whole Foods Under Amazon

  Dennis Campbell, Tatiana Sandino, James Barnett and Christine Snively

  In August 2017, Amazon acquired Whole Foods Market for $13.7 billion. Whole Foods was struggling with high costs and faced growing competition from traditional supermarkets offering more organic products. Prior to the acquisition, Whole Foods began rolling out a new order-to-shelf (OTS) inventory management system that many observers believed had led to shortages. For years, store team leaders at Whole Foods were empowered to make inventory decisions and tailor their stores to meet local needs, but the OTS system, and an increasing number of strict rules for purchasing and displaying goods, upset many employees. Should Amazon push Whole Foods to improve performance by emphasizing efficiency and standardization? Or should it aim to maintain a sense of empowerment among employees?

  Keywords: Performance Efficiency; Performance Improvement; Employee Relationship Management; Acquisition; Change Management; Food and Beverage Industry; Retail Industry;

  Citation:

  Campbell, Dennis, Tatiana Sandino, James Barnett, and Christine Snively. "Whole Foods Under Amazon." Harvard Business School Case 118-074, March 2018. (Revised July 2018.)  View Details

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