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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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• Case | HBS Case Collection | July 2016 (Revised February 2018)

  Alphabet Eyes New Frontiers

  Juan Alcacer, Raffaella Sadun, Olivia Hull and Kerry Herman

  In October 2015, Google restructured into Alphabet, a holding company, which analysts said would facilitate innovation among its diverse subsidiaries. But when news reports surfaced revealing struggles within Alphabet companies including Nest, the smart thermostat maker, observers began to wonder if the reorganization made sense after all.

  Keywords: innovation; conglomerates; corporate restructuring; google; Corporate Strategy; Corporate Entrepreneurship; Innovation Strategy; Business and Stakeholder Relations; Research and Development; Diversification; Financial Reporting; Talent and Talent Management; Technology Industry; Computer Industry; California; United States;

  Citation:

  Alcacer, Juan, Raffaella Sadun, Olivia Hull, and Kerry Herman. "Alphabet Eyes New Frontiers." Harvard Business School Case 717-418, July 2016. (Revised February 2018.)  View Details

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• Teaching Note | HBS Case Collection | February 2018

  Earlham College Basketball: Turnaround Strategy

  Juan Alcacer and Anne Marie Knott

  Teaching Note for HBS No. 718-497.

  Citation:

  Alcacer, Juan, and Anne Marie Knott. "Earlham College Basketball: Turnaround Strategy." Harvard Business School Teaching Note 718-502, February 2018.  View Details

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