clear indication of the importance of PLS-SEM for research and practice. As with any development in research, the proponents and critics of PLS-SEM sometimes have heated debates on the method’s advantages and disadvantages, disagreeing on whether it should be increasingly used or be applied at all. Such debates are fruitful as long as they do not develop a ritualistic adherence to dogma and do not advocate one technique’s use as generally advantageous in all situations. Against this background, this presentation reviews some of the past criticism, addresses some issues regarding the proper use of PLS-SEM, and discusses directions of future PLS-SEM developments.
Session 8a: Method Assessments
Thursday, 18 June 2015, 10:50-12:30 Room: Sal´on de Grados
Session chair: Christian Nitzl
Mirror, mirror on the wall: A comparative evaluation of new and established structural equation modeling methods
Kai Thiele, Marko Sarstedt, Christian Ringle
Structural equation modeling (SEM) has become a quasi-standard in re- search when it comes to analyzing the cause-effect relationships between latent variables. Recent research has brought forward a variety of different methods for estimating structural equation models, which have not been researched in-depth.
We extend prior research by (1) examining a broad range SEM methods such as covariance-based SEM, partial least squares (PLS), extended PLS, consistent PLS, generalized structured component analysis, and sumscores, (2) analyzing null relationships in the structural model, (3) considering measurement model results, and (4) reporting additional performance measures that allow a nuanced assessment of the results.
Evaluation of partial least squares parameter recovery Frances Chumney
The purpose of this study was to evaluate the performance of Partial Least Squares under less-than-ideal conditions selected to imitate real-world data. A simulation study with a 3×3×2×2 design was conducted. The design and data features of interest were sample size (50, 300, 1000), number of items per latent
variable (3, 5, 7), degree of model misspecification (correctly specified, misspec- ified), and nature of the relationships between items and latent variables in the measurement models (reflective, formative). Bias of model parameter estimates, and bias and accuracy of standard error estimates were examined to evaluate the performance of PLS for each experimental condition.
On the effect of measurement model misspecification in PLS Path Modeling: the reflective case
Simona C. Minotti, Tomas Aluja, Giuseppe Lamberti, Antonio Ciampi The specification of a measurement model as reflective or formative is the object of a lively debate. Part of the existing literature focuses on measure- ment model misspecification. This means that a true model is assumed and the impact on the path coefficients of using a wrong model is investigated. The majority of these studies is restricted to Structural Equation Modeling (SEM).
Regarding PLS-Path Modeling (PLS-PM), a few authors have carried out simu- lation studies to investigate the robustness of the estimates, but their focus is the comparison with SEM. The present paper discusses the misspecification prob- lem in the PLS-PM context from a novel perspective. First, a real application on Alumni Satisfaction will be used to verify whether different assumptions for the measurements models influence the results. Second, the results of a Monte- Carlo simulation study, in the reflective case, will help to bring some clarity on a complex problem that has not been sufficiently studied yet.
Partial least squares structural equation modelling (PLS- SEM) in management accounting research: Critical analy- sis, advances, and future directions
Christian Nitzl
In recent years, methods for analyzing data in management accounting re- search have grown more sophisticated. Despite the steadily growing acceptance of Partial Least Squares Structural Equation Modelling (PLS-SEM) in different business areas, relatively little and only indirect attention has been directed to- wards assessing its use in management accounting research. Reviewing eleven top-ranked management accounting journals through the end of 2013, 37 arti- cles are identified that use PLS-SEM. These articles are analyzed with respect to multiple relevant criteria, including reasons for using PLS-SEM, data character- istics, model characteristics, model evaluation and reporting. There are several critical aspects of PLS-SEM use for future management accounting research re-
lated to these criteria. The review offers recommendations to avoid common pitfalls and provides guidance for the advanced use of PLS-SEM in management accounting research. It also became evident that the capabilities of PLS-SEM are only rarely utilized to the full extend. However, especially these not far ex- ploited characteristics of PLS-SEM, like the strength of handling even complex research models can be very useful for future research conducted in the field of management accounting research.
Session 8b: PLS in Marketing
Thursday, 18 June 2015, 10:50-12:30 Room: Aula 1
Session chair: Jaime Romero
Customer equity and predictive CLV: New metrics from relationship marketing in telecommunication services of Spain
Jos´e Ram´on Segarra-Moliner, Miguel ´Angel Moliner-Tena
Recent studies in various sectors in the U.S.A., Brazil, China, South Korea, and Australia provide evidence of the antecedents of customer equity (value, brand, and relationship equity) and their influence on behavior intentions and customer lifetime value (CLV). The aim of this study is to incorporate relation- ship marketing, the multidimensionality of perceived value, and simplicity into the prediction of economic results. The sample comprises customers who have contracts with telecommunications operators in Spain. We use PLS to develop a predictive model with which to analyze the sector, and to assess the compara- bility of the three main competing companies. The results show the importance of emotional and social value in building relationship quality and in the brand equity, and reveal intentional loyalty as a precursor of future economic results.
The influence of market heterogeneity on customer loyalty:
A multigroup analysis
Araceli Pic´on, Carolina Ru´ız, Ignacio Castro
Loyalty is configured as one of the main determinants of firm performance.
Many works have proposed models that analyze the relationship between loyalty and its main determinants: the Perceived Customer Value (PV), their level of Satisfaction and their Perceived Switching Costs (PSC). Thus, the aim of this
study is to validate a model that gathers the relationships between these vari- ables and analyze the influence of customer characteristics – propensity towards switching and customer involvement – on these relationships in the insurance industry. The results show that (a) for the whole sample, perceived value, sat- isfactions and switching costs are set as antecedents of loyalty; (b) however, for customers with high tendency to switch, the path to a loyalty behavior is only mediated by the influence of their perceived value in their satisfaction;
and finally (c) for these individuals, the strength of the relationship between satisfaction and loyalty is lower than customers with low tendency to switch.
Exploring customer engagement behavior: Construct pro- posal and its antecedents
Jaime Romero, Shintaro Okazaki
Customer engagement behavior (CEB) receives increasing attention from both academics and practitioners, as it represents one of the key customer prof- itability determinants. This study attempts to provide a holistic view of CEB by (1) proposing an instrument to measure CEB, and (2) its antecedents. Based on the existent literature, we conceptualize CEB as a formative construct con- sisting of word-of-mouth (WOM), loyalty program participation, customer inter- action, and co-creation, which are determined by relationship quality, rewards, self-enhancement, learning, social integration, and company identification. In at- tempt to test these propositions, an online survey is conducted with 466 respon- dents. Our results provide empirical support for our proposed CEB construct, while corroborating five out of the six hypothesized antecedents. In closing, theoretical as well as managerial implications are discussed, while important limitations are recognized and future research directions are proposed.
Customer experiential knowledge management competence:
A third order construct estimation & predictive power test- ing
Dhouha Jaziri Bouagina, Abdelfattah Triki
This paper defines a new construct labeled CEKMC (i.e. customer experien- tial knowledge management competence), which is supported by the theoretical and managerial gaps. It draws on the customer experiential knowledge man- agement approach (CEKM) that connects the customer knowledge management theory to that of customer service experience. CEKMC is a hierarchical and specified as mixed with three layers. In order to develop a valid measurement
index, this paper aims to estimate CEKMC while testing its predictive power toward the experiential innovation performance. A quantitative research dealt with 47 senior managers of Tunisian thalassotherapy centers. Hence, PLS-SEM was performed by SmartPLS3 and the two-stage approach analysis is used. 66 items are retained to measure the construct. The results of hypotheses which involve CEKMC, financial and marketing performance of experiential innovation as well as managerial implications are discussed.
Session 8c: PLS in Management Research
Thursday, 18 June 2015, 10:50-12:30 Room: Aula 2
Session chair: Jos´e Luis Rold´an
The corporate culture for supply chain integration improve- ment
Maarten Snijders, Holger Schiele, Petra Hoffmann
This quantitative research paper aims at identifying the role of an organi- sation’s corporate culture within the integration of internal and external supply chains. The purpose of the study is to identify those corporate culture aspects that are most appropriate for supply chain management integration. And by do- ing so, getting supply chain management practices more applicable in general.
Survey data suggest that a clan culture positively influences internal supply chain integration and that an adhocracy culture positively influences supplier- and cus- tomer integration. The examination of the corporate culture values within an organisation can help to understand its contributions in a supply chain perfor- mance relationship.
Deriving a holistic cognitive fit model for an optimal visu- alization of data for management decisions
Lisa Falschlunger, Othmar Lehner, Elisabeth Grabmann, Heimo Los- bichler
Research shows that managerial decision making is directly correlated to both, the swift availability, and subsequently the ease of interpretation of the relevant information. Visualiza-tions are already widely used to transform raw data into a more understandable format and to compress the constantly growing amount of information produced. However, research in this area is highly frag- mented and results are contradicting. This paper proposes a preliminary model
based on an extensive literature review incl. top current research on cognition theory. Furthermore an early stage validation of this model by experimental research using structural equation modeling is presented. The authors are able to identify predicting and moderating variables for information perception of visual data.
Effect of competitive tactics on performance: The case of the pharmaceutical industry
Julen Castillo Apraiz, Jes´us Matey de Antonio
Competitive tactics play a key role explaining organizations’ different levels of performance since they are seen as linkers between strategy formulation and implementation. The paper focuses on the two main competitive tactics, namely Quality Orientation Competitive Tactic (Quality) and Cost Orientation Compet- itive Tactic (Cost), which are the ones that are closely related to Porter’s generic competitive strategies. Apart from that, we will analyse two other important tactics, Innovation Orientation Competitive Tactic (Innovation) and Marketing Orientation Competitive Tactic (Marketing) which will mediate the relationship between the main tactics and performance. Hence we try to adopt an integrative posture by viewing competitive tactics in the pharmaceutical industry as inextri- cably linked, forming the fundamental pillars on which sustainable competitive advantage could be established.
Information systems capabilities and organizational agility:
Understanding the mediating role of absorptive capacity when influenced by a hierarchy culture
Jos´e Luis Rold´an, Antonio L. Leal-Rodr´ıguez, Carmen M. Felipe Organizational agility (OA), as a key dynamic capability, is a firm’s ability to enable sensing environmental changes and responding efficiently and effec- tively to them. This study explores this topic further by analyzing the part played by the information systems capabilities (ISC) variable as an antecedent of OA, and absorptive capacity (AC) as a mediator construct. Furthermore, we test the negative moderating role of hierarchy culture (HC) in the ACOA link.
Using partial least squares (PLS) and the PROCESS macro, we find evidence of these relations proposed, and the existence of a conditional mediating situation generated by HC.
Session 8d: PLS in Corporate Social Responsibil- ity
Thursday, 18 June 2015, 10:50-12:30 Room: Aula s´otano
Session chair: Ramayah Thurasamy
Social responsibility and competitive success of firms in the Lisbon metropolitan region
M. Isabel Sanchez-Hernandez, Teresa Costa, Luisa Carvalho, Dolores Gallardo-Vazquez
Social Responsibility is considered a crucial issue to enhance a long-term competiveness in firms because it has been demonstrated the causal relationship with several strategic business variables. This paper develops a conceptual model and applies Structural Equations Modeling technique to a sample of 91 firms from the Lisbon Metropolitan Region in order to understand the link between Social Responsibility and competitive success. The model provides a simple guidance for upgrading competitive success in firms operating in Portugal. We consider this work as a starting point to develop a more accurate model for Portuguese economic reality in the near future.
Stakeholder salience and social responsibility: Study of small businesses in Malaysia
Mehran Nejati, Azlan Amran, Noor Hazlina Ahmad
This study empirically examined the role of stakeholders’ influence on social responsibility practices of small businesses in Malaysia, and analyzed the im- portance and current attention of small firms to these stakeholder groups using the Importance-Performance Matrix Analysis (IPMA). Findings of this study revealed that community’s influence and customers’ influence had significant positive impact on the social responsibility practices of small firms. Moreover, the results of IPMA for the social responsibility construct indicated that commu- nity’s influence had the highest importance for small businesses and was given the highest level of attention by the firms. In contrast, customer’s influence was given lower attention by small firms despite its high level of importance for social responsibility practices of the firm.
Is environmental orientation dynamic at the automobile in- dustry? Predicting future behavior based on past attitude
using the PLS analysis
Angel Peiro-Signes, Marival Segarra-O˜na, Ana Pay´a-Mart´ınez In this paper, the PLS method is used to analyze the eco-innovative dy- namism of the automobile industry. Previous studies identified product-orientation, process-orientation and market information sources as the variables affecting the eco-innovative orientation of firms within the industry and classified com- panies as belonging to an eco-blind, eco-marketer or eco-balanced group. We deploy a panel analysis to see to which point past behavior influences future decisions. Results show that environmental orientation drivers do not evolve over a short period of time while in the longer-term theres an evolution. We prove that carry-over effects have a great impact on the future behavior of the firms, showing that the evolution of organizations environmental behavior is a long-range matter. Managerial implications arise from this paper’s conclusions as the decision-making process is clarified.
Managing eco-design for reverse logistics Kuan Siew Khor, Ramayah Thurasamy
This study explored the relationships between eco-design, reverse logistics, design for disassembly, and business performance outcomes (environmental out- come and profitability). The partial least square (PLS) based structural equation modelling tool was used to empirically test the data collected from 98 electrical and electronic (E&E) manufacturing firms which were IS0 14001 certified. The findings suggest that reverse logistics is positively associated with environmental outcome and profitability while eco-design does not. Additionally, we found that design for disassembly influenced eco-design, which in turn influenced reverse lo- gistics. This study also showed that environmental outcome is associated with the profitability of reverse logistics.