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• Case | HBS Case Collection | November 2018

  Governance Transition at Anadolu Group

  Paul M. Healy and Esel Y. Cekin

  Kamil Yazici and Izzet Ozilhan founded and built Anadolu Group Holding; a family business that grew into a multi-billion-dollar regional powerhouse. For 57 years they were equal partners in running the company. They then handed over a leadership role to a next generation family member; Izzet’s son Tuncay; who became the CEO and later also chairman. Under Tuncay’s leadership; the company was primarily run by professional managers; supplemented by a limited number of second- and third-generation family members in senior executive positions. However; in 2017; when the number of next-generation family members reached 85; Kamil and Tuncay began work on a governance structure they hoped would sustain the company when they left. Under their plan; family members would no longer be allowed to hold general management positions. As a result; Tuncay retired as CEO and other family members with senior executive roles resigned. A holding company was created to bring all the company’s subsidiaries under a common structure. And a process was created to allow some members of the two surviving families to hold board seats. Although the stock market reacted positively to the increased transparency brought about by the changes; it remains to be seen whether the new formula will achieve its goal of successfully transitioning the company from a family-managed business to professionally-run company.

  Keywords: family-managed business; professionally-run company; second-generation; third-generation; governance; governance changes; succession planning; corporate culture; shareholders; board of directors; long-term sustainability; conglomerate; Family Business; Corporate Governance; Change Management; Management Succession; Leadership; Transition; Organizational Structure; Consumer Products Industry; Turkey; Central Asia; Middle East;

  Citation:

  Healy, Paul M., and Esel Y. Cekin. "Governance Transition at Anadolu Group." Harvard Business School Case 119-048, November 2018.  View Details

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• Case | HBS Case Collection | September 2018 (Revised November 2018)

  From Beirut With Love (A)

  Christina R. Wing, Esel Y. Cekin and Samer Al-Rachedy

  This case describes how Robert Fadel, CEO and chairman of ABC, one of Lebanon’s leading retail and real estate groups, professionalized the family business. Robert was the second son of the company’s founder, Maurice Fadel, who had run it single-handedly. Concerned that the business might be affected by rivalry between his four sons after he died, Maurice set up a trust in 2002 that designated Robert as his successor, and in May of 2009, Maurice revised the trust, granting Robert full control of the board as well. In June 2009, Maurice Fadel passed away, and according to the provisions of the trust, Robert became the chairman and CEO of ABC for a period of five years, with the possibility of extending his term by an additional three years, on condition that he had the support of at least one of his brothers. In his new role, Robert set two main goals for the company. First, he wanted to turn ABC into a professionally managed organization at all levels. Second, he wanted to invest in long-term projects that would expand the business. Actualizing his vision was not an easy task given the family conflicts and Lebanon’s economic and political environment. However, Robert achieved both of his goals by the end of his eighth year, in 2017, when he stepped down as ABC’s CEO. The dilemmas at that point were whether he should appoint someone from outside the Fadel family as ABC’s new CEO, and whether he should step down from the board chairmanship.

  Keywords: family conflicts; sibling rivalry; second-generation; foundation; trust; governance; work-life balance; succession planning; corporate culture; shareholders; board of directors; retail; department store; shopping mall; real estate; Growth; non-executive chairman; sustainability; Family Business; Conflict Management; Management Succession; Leadership; Transformation; Leading Change; Organizational Structure; Management; Growth and Development; Retail Industry; Real Estate Industry; Lebanon; Middle East;

  Citation:

  Wing, Christina R., Esel Y. Cekin, and Samer Al-Rachedy. "From Beirut With Love (A)." Harvard Business School Case 619-024, September 2018. (Revised November 2018.)  View Details

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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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