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The objective of this chapter is to provide strategy researchers with a general resource for applying structural equation modeling (SEM) in their research. This objective is important for strategy researchers because of their increased use of SEM, the availability of advanced SEM approaches relevant for their substantive interests, and the fact that important technical work on SEM techniques often appear in outlets that may not be not readily accessible. This chapter begins with a presentation of the basics of SEM techniques, followed by a review of recent applications of SEM in strategic management research. We next provide an overview of five types of advanced applications of structural equation modeling and describe how they can be applied to strategic management topics. In a fourth section we discuss technical developments related to model evaluation, mediation, and data requirements. Finally, a summary of recommendations for strategic management researchers using SEM is also provided.

There has been little research discussing the role that new product creativity plays in achieving alliance ambidexterity and how causal ambiguity may be a potential moderator in the association between new product creativity and alliance ambidexterity. The purpose of this study is to identify the contingent role of causal ambiguity and examine the relationships between new product creativity, causal ambiguity and alliance ambidexterity.

In this empirical study, a questionnaire approach is used to collect data, and moderated structural equation modeling is used to test the hypotheses.

The findings indicate that new product creativity has a positive influence on alliance ambidexterity, whereas causal ambiguity moderates these associations. When causal ambiguity increases, the positive impact of new product creativity on alliance ambidexterity is attenuated.

This study integrates the ambidexterity literature and the alliance literature by applying the concept of ambidexterity to a strategic alliance context. The moderating role of causal ambiguity echoes previous research postulating causal ambiguity as a barrier to knowledge transfer in alliances. Given a higher level of causal ambiguity, firms face more difficulty when they attempt to develop new product creativity to achieve the desired level of alliance ambidexterity.

Managers could initiate incentive programs and build supportive environments that facilitate new product creativity. Firms will be capable of elaborating the potential of new product creativity to further facilitate alliance ambidexterity. Managers need to pay attention to causal ambiguity that may have a moderating influence on the relationship between new product creativity and alliance ambidexterity.

This study contributes to the synthesis of new product creativity and alliance ambidexterity and helps scholars and managers to better understand the moderating effect of causal ambiguity in the context of the innovation and ambidexterity literature.

The purpose of this paper is to integrate the findings of articles appearing in European Journal of Marketing’s special section on covariance-based versus composite-based structural equations modeling (SEM).

This is an editorial which uses literature review to draw conclusions regarding areas of agreement, areas for further research, and changing the discussion around composite-based SEM methods.

There are now four new areas of agreement regarding composite-based SEM. Researchers should adopt a toolbox approach to their methods and know the strengths and weaknesses of the research tools in their toolbox. Partial least squares (PLS) SEM and covariance-based SEM are not substitutes, and it is inappropriate to use the language of confirmatory factor analysis (CFA) in reporting measurement estimates from PLS SEM. Measurement matters and researchers need to devote effort to using reliable and valid multi-item measures in their investigations.

This postscript article outlines recommendations for authors, reviewers and editors regarding the analysis of data and reporting of results using structural equations models.

Innovation for service contributes to service quality and customer satisfaction, and further benefits service-centered organizations to sustain competitive advantages. However, concurrent mediating and moderating mechanisms underlying innovation for service at both the group and individual levels have been scarcely investigated. The purpose of this study is to explore multilevel mediating and moderating mechanisms behind the relationship between dual-level transformational leadership (TFL) and innovation for service at the group and individual levels.

Data were collected from two countries (i.e. China and Australia). Multilevel structural equation modeling was employed to validate the research model. Bootstrapping with 5,000 replications and latent moderated structural equation modeling were used to respectively examine the mediating and moderating mechanisms.

The cross-national results showed that task interdependence and creative role identity respectively played as the group-level and individual-level mediating roles between TFL and innovation for service. It was also found that task interdependence played as a cross-level predictor enhancing individual innovation for service. Task interdependence was a moderator on the relationship between individual-level TFL and creative role identity among Australian employees, but not among Chinese employees. The relationship between creative role identity and individual innovation for service was not moderated by task interdependence among both Chinese and Australian employees.

This study contributes to advancing the TFL–innovation research through revealing dual-level TFL as the antecedent of innovation for service at both the group and individual levels. It also extends the understandings of the mediating and moderating mechanisms behind this dual-level relationship between TFL and innovation for service.

The purpose of this paper is to focus on home care organization employees, and examine how the interaction between job demands (emotional demands, patient harassment, workload, and physical demands) and job resources (autonomy, social support, performance feedback, and opportunities for professional development) affect the core dimensions of burnout (exhaustion and cynicism).

Hypotheses were tested with a cross‐sectional design among 747 Dutch employees from two home care organizations.

Results of moderated structural equation modeling analyses partially supported the hypotheses as 21 out of 32 (66 per cent) possible two‐way interactions were significant and in the expected direction. In addition, job resources were stronger buffers of the relationship between emotional demands/patient harassment and burnout, than of the relationship between workload/physical demands and burnout.

The conclusions may be particularly useful for occupational settings, including home care organizations, where reducing or redesigning demands is difficult.

The findings confirm the JD‐R model by showing that several job resources can buffer the relationship between job demands and burnout.

The purpose of this paper is to examine the impact of perceived environmental quality of the stadium on fans’ future intentions to attend a game by highlighting the moderating effect of team loyalty.

Using latent moderated structural equations modeling, this study tested the direct impacts of stadium factors on consumers’ desire to stay and revisit intentions and the moderation effects of team loyalty based on Mehrabian and Russell’s environmental psychology behavioral model.

The results showed significant direct effects of team loyalty and desire to stay on revisit intentions. The stadium environment influenced desire to stay and revisit intentions only by the interactions with team loyalty. More specifically, higher loyalty led to higher desire to stay and revisit intentions, whereas fans’ positive experience of stadium environment intensified the effect.

The authors highlight the significant role of desire to stay on revisit intentions by incorporating the cognitive-affective system of human behavior. In addition, this study provides essential information for identifying the interaction effects of environmental factors and team loyalty on consumer behavior in sport settings.

The purpose of this paper is to examine the impact of team building and employee empowerment on employee competencies and examine the moderating role of organizational learning culture in between these relationships.

An integrated research model is developed by combining resource-based view, signalling theory and experiential learning theory. The validity of the model is tested by applying moderated structural equation modelling (MSEM) approach to the data collected from 653 employees working in cement manufacturing companies. The reliability and validity of the dimensions are established through confirmatory factor analysis and the related hypotheses are tested by using MSEM.

The findings suggest that organizational learning culture significantly strengthens the relationships of team building and employee empowerment on employee competencies.

The research is undertaken in Indian cement manufacturing companies which cannot be generalized across a broader range of sectors and international environment.

The findings of the study have potential to help decision makers of manufacturing companies to develop strategies which will enable them to improve employee competency, to formulate effective human resource development interventions and to enhance the capability of the employees to achieve desired goals and objectives of the organization.

The research is unique in its attempt to combine three frameworks to build a new theoretical model explaining the importance organizational learning culture along with team building and employee empowerment.

Information technology is associated with psychological and physical risks such as high stress levels and antisocial behavior. The purpose of this paper is to understand why people engage in technology risk behavior, despite the negative consequences that might follow. Focusing on online games, this study identifies factors that affect individuals' intention to play online games and investigate whether the effects of these factors differ across different risk levels.

Experimental design was used as the research methodology. Subjects were randomly assigned to a single treatment with two conditions: high and low risk scenarios. A total of 597 responses were analyzed to test the research hypotheses.

The research findings reveal that subjective norms, curiosity and playfulness have a positive effect on the intention to play online games, while critical mass has no effect on the intention decisions. Further, among the three significant constructs, playfulness turned out to be the only factor that is affected by risk levels.

This study extends prior literature on technology adoption by examining the effect of different risk levels on adoption intention decisions. It further extends prior literature on online games by identifying the factors that drive individuals to play games while accounting for the risks associated with playing these games.

The research study identifies factors that should be taken into consideration when promoting the adoption of technologies, including online games.

This study offers a new understanding of technology adoption decisions that takes into account the different levels of risk associated with technology use. It shows that an individual's curiosity and the pressure emanating from one's social network are powerful behavior drivers that persist regardless of the level of risk. Further, this research study is among the first to apply categorical least squares methodology combined with a procedure for a moderated structural equation model to test a structural equation model with categorical multiplicative terms in LISREL.

The purpose of this paper is to re-examine the moderating effect of career stage on the relationship between job embeddedness and innovation-related behaviour (IRB).

Data were collected from a sample of 310 Chinese media organisation employees and were analysed using moderated structural equation modelling.

Career stage significantly moderated the relationship between job embeddedness and IRB; individuals who experienced high job embeddedness in their early career stage were found to be engaged in more IRBs than those who experienced low job embeddedness in their early career stage. Moreover, the author also found that individuals who experienced high job embeddedness at mid-late career stages were less engaged in IRB, as compared to those at earlier career stages.

These findings contribute to the understanding of the relationship between employee job embeddedness and IRB at different career stages. The findings are limited by the cross-sectional nature of the data.

This study demonstrates that individuals at a mid-late career stage may define their work roles differently to those at an early career stage. Employers often expect individuals in the mid-late career stage to facilitate the work of others and to assist junior colleagues in their professional growth (Super et al., 1996).

The authors examine the interactive effects of work engagement and work autonomy in enhancing job crafting behaviour and performance.

Dyadic data from a sample of 320 white-collar employees in an Indian manufacturer are analysed through structural equation modelling.

The level of job crafting is highest when both work engagement and work autonomy are high. Job crafting fully mediates the interactive effect of work engagement and autonomy on task performance and partially on contextual performance.

There is value in reviewing organisational constraints on employee autonomy to foster the ways in which highly motivated workers can craft their jobs and, thus, maximise their performance.

This study demonstrates the interactive effects of work engagement and autonomy in enhancing job crafting and, through this mechanism, employee performance.