Note the various manners in which heterogeneity is captured within this modeling framework. Heterogeneity in mean performance levels is captured via the different intercepts estimated per derived group. Heterogeneity in the effectiveness of the various capabilities independent variables on performance (structural heterogeneity) is modeled by the different group specific regression coefficients. The group specific variance terms also provide a gauge of heterogeneity due to unexplained factors or error (unexplained heterogeneity). While the means of the capabilities are not explicitly modeled directly, there is no constraint placed on their respective group magnitudes so that ANOVA’s can be performed post hoc to examine such mean differences in the X ’s (level heterogeneity). Thus, the proposed model can be utilized to partial out these different latent sources of heterogeneity for any empirical application. Nested model tests can be performed to test each for significance .