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Since the publication of Venkatraman and Grant's (1986) article two decades ago, considerably more attention has been directed at establishing the validity of constructs in the strategy literature. However, recent developments in measurement theory indicate that strategy researchers need to pay additional attention to whether their constructs should be modeled as having formative or reflective indicators. Therefore, the purpose of this chapter is to highlight the differences between formative and reflective indicator measurement models, and discuss the potential role of formative measurement models in strategy research. First, we systematically review the literature on construct measurement model specification. Second, we assess the extent of measurement model misspecification in the recent strategy literature. Our assessment of 257 constructs in the contemporary strategy literature suggests that many important strategy constructs are more appropriately modeled as having formative indicators than as having reflective indicators. Based on this review, we identify some common errors leading to measurement model misspecification in the strategy domain. Finally, we discuss some implications of our analyses for scholars in the strategic management field.

Information and communications technology (ICT) offers enormous opportunities for individuals, businesses and society. The application of ICT is equally important to economic and non-economic activities. Researchers have increasingly focused on the adoption and use of ICT by small and medium enterprises (SMEs) as the economic development of a country is largely dependent on them. Following the success of ICT utilisation in SMEs in developed countries, many developing countries are looking to utilise the potential of the technology to develop SMEs. Past studies have shown that the contribution of ICT to the performance of SMEs is not clear and certain. Thus, it is crucial to determine the effectiveness of ICT in generating firm performance since this has implications for SMEs’ expenditure on the technology. This research examines the diffusion of ICT among SMEs with respect to the typical stages from innovation adoption to post-adoption, by analysing the actual usage of ICT and value creation. The mediating effects of integration and utilisation on SME performance are also studied. Grounded in the innovation diffusion literature, institutional theory and resource-based theory, this study has developed a comprehensive integrated research model focused on the research objectives. Following a positivist research paradigm, this study employs a mixed-method research approach. A preliminary conceptual framework is developed through an extensive literature review and is refined by results from an in-depth field study. During the field study, a total of 11 SME owners or decision-makers were interviewed. The recorded interviews were transcribed and analysed using NVivo 10 to refine the model to develop the research hypotheses. The final research model is composed of 30 first-order and five higher-order constructs which involve both reflective and formative measures. Partial least squares-based structural equation modelling (PLS-SEM) is employed to test the theoretical model with a cross-sectional data set of 282 SMEs in Bangladesh. Survey data were collected using a structured questionnaire issued to SMEs selected by applying a stratified random sampling technique. The structural equation modelling utilises a two-step procedure of data analysis. Prior to estimating the structural model, the measurement model is examined for construct validity of the study variables (i.e. convergent and discriminant validity).

The estimates show cognitive evaluation as an important antecedent for expectation which is shaped primarily by the entrepreneurs’ beliefs (perception) and also influenced by the owners’ innovativeness and culture. Culture further influences expectation. The study finds that facilitating condition, environmental pressure and country readiness are important antecedents of expectation and ICT use. The results also reveal that integration and the degree of ICT utilisation significantly affect SMEs’ performance. Surprisingly, the findings do not reveal any significant impact of ICT usage on performance which apparently suggests the possibility of the ICT productivity paradox. However, the analysis finally proves the non-existence of the paradox by demonstrating the mediating role of ICT integration and degree of utilisation explain the influence of information technology (IT) usage on firm performance which is consistent with the resource-based theory. The results suggest that the use of ICT can enhance SMEs’ performance if the technology is integrated and properly utilised. SME owners or managers, interested stakeholders and policy makers may follow the study’s outcomes and focus on ICT integration and degree of utilisation with a view to attaining superior organisational performance.

This study urges concerned business enterprises and government to look at the environmental and cultural factors with a view to achieving ICT usage success in terms of enhanced firm performance. In particular, improving organisational practices and procedures by eliminating the traditional power distance inside organisations and implementing necessary rules and regulations are important actions for managing environmental and cultural uncertainties. The application of a Bengali user interface may help to ensure the productivity of ICT use by SMEs in Bangladesh. Establishing a favourable national technology infrastructure and legal environment may contribute positively to improving the overall situation. This study also suggests some changes and modifications in the country’s existing policies and strategies. The government and policy makers should undertake mass promotional programs to disseminate information about the various uses of computers and their contribution in developing better organisational performance. Organising specialised training programs for SME capacity building may succeed in attaining the motivation for SMEs to use ICT. Ensuring easy access to the technology by providing loans, grants and subsidies is important. Various stakeholders, partners and related organisations should come forward to support government policies and priorities in order to ensure the productive use of ICT among SMEs which finally will help to foster Bangladesh’s economic development.

The assumption that a set of observed variables is a function of an underlying common factor plus some error has dominated measurement in marketing and the social sciences in general for decades. This view of measurement comes with assumptions, which, however, are rarely discussed in research. In this article, we question the legitimacy of several of these assumptions, arguing that (1) the common factor model is rarely correct in the population, (2) the common factor does not correspond to the quantity the researcher intends to measure, and (3) the measurement error does not fully capture the uncertainty associated with measurement. Our discussions call for a fundamental rethinking of measurement in the social sciences. Adapting an uncertainty-centric approach to measurement, which has become the norm in in the physical sciences, offers a means to address the limitations of current measurement practice in marketing.

Measures are comparable if and only if measurement equivalence has been demonstrated. Although comparability and equivalence of measures are sometimes used interchangeably, we advocate a subtle but important difference in meaning. Comparability implies that measures from one group can be compared with measures from another group. It is a property of the measures, which is given or not. In particular, comparability presumes valid measures within each group compared. Measurement equivalence, by contrast, refers to the way measures are derived and estimated. It is intrinsically tied to the underlying theory of measurement. Thus, measurement equivalence cannot be dealt with in isolation. Its assessment has to be incorporated into the theoretical framework of measurement. Measurement equivalence is closely connected to construct validity for it refers to the way manifest indicators are related to the latent variable, within a particular culture and across different cultures. From this it follows that equivalence cannot, or should not, be treated as a separate issue but as a constitutive element of validity. A discussion of measurement equivalence without addressing validity would be incomplete.

There is currently a great deal of attention in psychometric and statistical methods on ensuring measurement invariance when examining measures across time or populations. When measurement invariance is established, changes in scores over time or across groups can be attributed to changes in the construct rather than changes in reaction to or interpretation of the measurement instrument. When measurement in not invariant, it is possible that measured differences are due to the measurement instrument itself and not to the underlying phenomenon of interest. This chapter discusses the importance of establishing measurement invariance specifically in postsecondary settings, where it is anticipated that individuals' perspectives will change over time as a function of their higher education experiences. Using examples from several measures commonly used in higher education research, the concepts and processes underlying tests of measurement invariance are explained and analyses are interpreted using data from a US-based longitudinal study on bioscience PhD students. These measures include sense of belonging over time and across groups, mental well-being over time, and perceived mentorship quality over time. The chapter ends with a discussion about the implications of longitudinal and group measurement invariance as an important conceptual property for moving forward equitable, reproducible, and generalizable quantitative research in higher education. Invariance methods may further be relevant for addressing criticisms about quantitative analyses being biased toward majority populations that have been discussed by critical theorists engaging quantitative research strategies.

The strategic management literature emphasizes the concept of business intelligence (BI) as an essential competitive tool. Yet the sustainability of the firms’ competitive advantage provided by BI capability is not well researched. To fill this gap, this study attempts to develop a model for successful BI deployment and empirically examines the association between BI deployment and sustainable competitive advantage. Taking the telecommunications industry in Malaysia as a case example, the research particularly focuses on the influencing perceptions held by telecommunications decision makers and executives on factors that impact successful BI deployment. The research further investigates the relationship between successful BI deployment and sustainable competitive advantage of the telecommunications organizations. Another important aim of this study is to determine the effect of moderating factors such as organization culture, business strategy, and use of BI tools on BI deployment and the sustainability of firm’s competitive advantage.

This research uses combination of resource-based theory and diffusion of innovation (DOI) theory to examine BI success and its relationship with firm’s sustainability. The research adopts the positivist paradigm and a two-phase sequential mixed method consisting of qualitative and quantitative approaches are employed. A tentative research model is developed first based on extensive literature review. The chapter presents a qualitative field study to fine tune the initial research model. Findings from the qualitative method are also used to develop measures and instruments for the next phase of quantitative method. The study includes a survey study with sample of business analysts and decision makers in telecommunications firms and is analyzed by partial least square-based structural equation modeling.

The findings reveal that some internal resources of the organizations such as BI governance and the perceptions of BI’s characteristics influence the successful deployment of BI. Organizations that practice good BI governance with strong moral and financial support from upper management have an opportunity to realize the dream of having successful BI initiatives in place. The scope of BI governance includes providing sufficient support and commitment in BI funding and implementation, laying out proper BI infrastructure and staffing and establishing a corporate-wide policy and procedures regarding BI. The perceptions about the characteristics of BI such as its relative advantage, complexity, compatibility, and observability are also significant in ensuring BI success. The most important results of this study indicated that with BI successfully deployed, executives would use the knowledge provided for their necessary actions in sustaining the organizations’ competitive advantage in terms of economics, social, and environmental issues.

This study contributes significantly to the existing literature that will assist future BI researchers especially in achieving sustainable competitive advantage. In particular, the model will help practitioners to consider the resources that they are likely to consider when deploying BI. Finally, the applications of this study can be extended through further adaptation in other industries and various geographic contexts.

Multivariate latent growth modeling (multivariate LGM) provides a flexible data analytic framework for representing and assessing cross-domain (i.e., between-constructs) relationships in intraindividual changes over time, which also allows incorporation of multiple levels of analysis. Using the chapter by Cortina, Pant, and Smith-Darden (this volume) as a point of departure, this chapter discusses important preliminary data analysis and interpretation issues prior to performing multivariate LGM analyses.

Entrepreneurial orientation (EO) has emerged as a core concept in the field of entrepreneurship. Yet, there continue to be questions about the nature of EO and how best to conceptualize and measure it. This chapter makes the case that EO has grown beyond its roots as a firm-level unidimensional strategy construct and that a new multidimensional version of EO is needed to capture the diverse manifestations and venues for entrepreneurial activity that are now evident around the world – global entrepreneurial orientation (GEO). Building on the five-dimension multidimensional view of EO set forth when Lumpkin and Dess (1996) extended the work of Miller (1983) and Covin and Slevin (1989, 1991), the chapter offers an updated definition of EO and a fresh interpretation of why EO matters theoretically. Despite earnest efforts to reconcile the different approaches to EO, in order to move the study of EO and the theoretical conversation about it forward, we maintain that as a group of scholars and a field, we need to acknowledge that two different versions of EO have emerged. Given that, we consider original approaches to measuring EO, evaluate formative measurement models, consider multiple levels of analysis, call for renewed attention to EO configurations, and discuss whether there is a theory of EO.

Smart card-based E-payment systems are receiving increasing attention as the number of implementations is witnessed on the rise globally. Understanding of user adoption behavior of E-payment systems that employ smart card technology becomes a research area that is of particular value and interest to both IS researchers and professionals. However, research interest focuses mostly on why a smart card-based E-payment system results in a failure or how the system could have grown into a success. This signals the fact that researchers have not had much opportunity to critically review a smart card-based E-payment system that has gained wide support and overcome the hurdle of critical mass adoption. The Octopus in Hong Kong has provided a rare opportunity for investigating smart card-based E-payment system because of its unprecedented success. This research seeks to thoroughly analyze the Octopus from technology adoption behavior perspectives.

Cultural impacts on adoption behavior are one of the key areas that this research posits to investigate. Since the present research is conducted in Hong Kong where a majority of population is Chinese ethnicity and yet is westernized in a number of aspects, assuming that users in Hong Kong are characterized by eastern or western culture is less useful. Explicit cultural characteristics at individual level are tapped into here instead of applying generalization of cultural beliefs to users to more accurately reflect cultural bias. In this vein, the technology acceptance model (TAM) is adapted, extended, and tested for its applicability cross-culturally in Hong Kong on the Octopus. Four cultural dimensions developed by Hofstede are included in this study, namely uncertainty avoidance, masculinity, individualism, and Confucian Dynamism (long-term orientation), to explore their influence on usage behavior through the mediation of perceived usefulness.

TAM is also integrated with the innovation diffusion theory (IDT) to borrow two constructs in relation to innovative characteristics, namely relative advantage and compatibility, in order to enhance the explanatory power of the proposed research model. Besides, the normative accountability of the research model is strengthened by embracing two social influences, namely subjective norm and image. As the last antecedent to perceived usefulness, prior experience serves to bring in the time variation factor to allow level of prior experience to exert both direct and moderating effects on perceived usefulness.

The resulting research model is analyzed by partial least squares (PLS)-based Structural Equation Modeling (SEM) approach. The research findings reveal that all cultural dimensions demonstrate direct effect on perceived usefulness though the influence of uncertainty avoidance is found marginally significant. Other constructs on innovative characteristics and social influences are validated to be significant as hypothesized. Prior experience does indeed significantly moderate the two influences that perceived usefulness receives from relative advantage and compatibility, respectively. The research model has demonstrated convincing explanatory power and so may be employed for further studies in other contexts. In particular, cultural effects play a key role in contributing to the uniqueness of the model, enabling it to be an effective tool to help critically understand increasingly internationalized IS system development and implementation efforts. This research also suggests several practical implications in view of the findings that could better inform managerial decisions for designing, implementing, or promoting smart card-based E-payment system.

In order to determine the status quo of PLS path modeling in international marketing research, we conducted an exhaustive literature review. An evaluation of double-blind reviewed journals through important academic publishing databases (e.g., ABI/Inform, Elsevier ScienceDirect, Emerald Insight, Google Scholar, PsycINFO, Swetswise) revealed that more than 30 academic articles in the domain of international marketing (in a broad sense) used PLS path modeling as means of statistical analysis. We assessed what the main motivation for the use of PLS was in respect of each article. Moreover, we checked for applications of PLS in combination with one or more additional methods, and whether the main reason for conducting any additional method(s) was mentioned.