Search results

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.

Most empirical balanced scorecard (BSC) studies have shown a tendency to wrongly employ reflective indicators instead of the more theoretically suitable formative indicators. However, formative indicators are difficult to apply due to the lack of statistical software support and a standardized model testing method. The paper aims to discuss these issues.

This study empirically compares the reflective and formative measurement method with standardized model comparison criteria. After collecting 217 valid questionnaires from companies in South Korea, the authors applied a structural equation modeling technique to analyze the data.

The result shows that the formative measure provides greater validity for the corporate performance measurement using BSC. Further, this study shows the indicators’ relative influence on each BSC perspectives using the formative measure.

This study proved the usefulness of the formative measure analysis method and suggested its practical use, focusing on the indicators most useful in developing corporate strategies. In addition, the authors showed that formative indicators could be used in the corporate environment by overcoming the limitations of conventional studies that were confined to causal relationships with latent variables.

This study may be the pioneering work that compares formative and reflective indicators simultaneously, addressing the usefulness of formative measurement and its application validity in the existing empirical studies using reflective measurements.

The purpose of this paper is to provide an understanding of the issues related to formative modeling and the implications for its use, including some practical suggestions on methods for utilizing causal indicators within models.

In order to understand and explore the issues relating to formative models, this paper explores both formative and reflective indicators that together address the basic approach to the causal relationship within measurement models in structural equations modeling. Process recommendations for formative model/variable conceptualization and development are presented as well as a discussion of several evaluative issues including identification and proportionality. Some of the main arguments for and against its use are also discussed.

While the literature on formative models stresses its contribution to behavioral sciences, perhaps its greatest contribution is the flexibility of choice that it provides researchers in the development of models to more accurately estimate the relationship under consideration.

The paper contributes to the on-going debate on the relative advantages and disadvantages of the formative and reflective approaches to modeling and examination. Although the pendulum has swung in recent years away from an almost singular focus on reflective models, both approaches provide useful and complementary tools to theoretical management research modeling.

While the conceptualization and operationalization of export performance has been receiving increased attention in the literature, practically all multi‐item measures of export performance available are based on reflective (effect) indicators. Explores an alternative measurement approach based on formative (causal) indicators and examines the implications of constructing an index rather than a scale of export performance. The aim is to assist researchers in choosing the appropriate measurement model for their needs when conducting substantive export performance studies.

The purpose of this paper is to test and compare different conceptual approaches for perceived value in a service context.

Perceived value is an outcome construct that results from various benefits received and sacrifices devoted to achieve a particular exchange of a service. The paper compares three different modeling approaches (Type 1, Type 2, and Type 4) for perceived value using data from an in‐flight survey. The questionnaire covered topics such as perceived service quality and overall satisfaction, price perception, customer value, and customer retention.

The theoretical discussion repeatedly emphasizes that only the formative modeling of perceived value fits the arguments put forward in the existing literature. This study replicates and extends a study by Lin et al. in the airline service context. The paper reports details about the impact of the proposed seven “get” and “give” components, together with an analysis of the consequences perceived value has on satisfaction, loyalty, and word‐of‐mouth.

The findings suggest extensions and improvements concerning measurement and conceptual issues.

Perceived value shows a substantial effect on behavioral consequences. Service operations must observe the perception of atmospherics emerging from the main service encounters next to considering functional aspects.

Misconceptualizations of multi‐item constructs are well known. However, critical discussions and empirical tests are still scarce in the tourism field. This paper tests and compares different conceptual approaches for perceived value in a service context.

This paper aims to introduce the Schmid–Leiman solution (SLS) as a useful tool to interpret the results of higher-order factor analyses in marketing research irrespective of the type of higher-order factor structure used (formative or reflective).

Two studies, one with retail shoppers in India and another with undergraduate students in Hong Kong, are used to compare different types of higher-order factor structures to test the utility of SLS.

The authors show that whether a reflective or a formative model is used to operationalize a higher-order construct, using SLS as an additional analysis gives useful insights into the factor structure at different levels and helps isolate their unique contributions to the explained variance.

The authors test higher-order models for store environment and consumer impulsiveness with data from retail shoppers and undergraduate students in two Asian countries, which may restrict the generalizability of the study findings. Future research may try to replicate our findings with other higher-order constructs and consumers in other countries.

The authors offer a checklist that can be used by future researchers to evaluate alternate higher-order factor structures and choose the appropriate one for their research context.

The authors show that using SLS is especially useful when there is a lack of clarity on the nature of relationships between the factors at different levels or about the independent contribution of the factors at different levels, in a higher-order factor structure.

The objective of this study is to investigate how country risk, different political actions from the government and bureaucratic behavior influence the activities in industry supply chains (SCs) in emerging markets. The main objective of this study is to investigate the influence of these external stakeholders’ elements to the demand-side and supply-side drivers and barriers for improving competitiveness of Ready-Made Garment (RMG) industry in the way of analyzing supply chain. Considering the phenomenon of recent change in the RMG business environment and the competitiveness issues this study uses the principles of stakeholder and resource dependence theory and aims to find out some factors which influence to make an efficient supply chain for improving competitiveness. The RMG industry of Bangladesh is the case application of this study. Following a positivist paradigm, this study adopts a two phase sequential mixed-method research design consisting of qualitative and quantitative approaches. A tentative research model is developed first based on extensive literature review. Qualitative field study is then carried out 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. A survey is carried out with sample of top and middle level executives of different garment companies of Dhaka city in Bangladesh and the collected quantitative data are analyzed by partial least square-based structural equation modeling. The findings support eight hypotheses. From the analysis the external stakeholders’ elements like bureaucratic behavior and country risk have significant influence to the barriers. From the internal stakeholders’ point of view the manufacturers’ and buyers’ drivers have significant influence on the competitiveness. Therefore, stakeholders need to take proper action to reduce the barriers and increase the drivers, as the drivers have positive influence to improve competitiveness.

This study has both theoretical and practical contributions. This study represents an important contribution to the theory by integrating two theoretical perceptions to identify factors of the RMG industry’s SC that affect the competitiveness of the RMG industry. This research study contributes to the understanding of both external and internal stakeholders of national and international perspectives in the RMG (textile and clothing) business. It combines the insights of stakeholder and resource dependence theories along with the concept of the SC in improving effectiveness. In a practical sense, this study certainly contributes to the Bangladeshi RMG industry. In accordance with the desire of the RMG manufacturers, the research has shown that some influential constructs of the RMG industry’s SC affect the competitiveness of the RMG industry. The outcome of the study is useful for various stakeholders of the Bangladeshi RMG industry sector ranging from the government to various private organizations. The applications of this study are extendable through further adaptation in other industries and various geographic contexts.

This study aims to fill this paucity of knowledge by exploring and formulating a formative index to measure the up-to-date quality of online food delivery (DEQUAL). The quality measurements for online food delivery have not been well recognized and even little is known after the COVID-19 outbreak. This study fills this paucity of knowledge by exploring and formulating a formative index to measure the up-to-date quality of online food delivery (DEQUAL).

Owing to the explorative nature and the lack of developed quality theory under the unprecedented COVID-19 pandemic, DEQUAL is conceptualized as a formative construct. This study adopts a mixed-method approach including expert interviews and online surveys to ascertain the underlying structure of DEQUAL.

Using partial least squares structural equation modeling as the analytical method, the results support that DEQUAL is a formative construct with 32 indicators. This study provides a measurement index with robust psychometric properties to assist practitioners in evaluating DEQUAL.

This study contributes a theoretical and empirical-based conceptualization of DEQUAL as a multi-dimensional construct. Supplementing the past studies which commonly applied the reflective approach, this study evinces that the formative approach is also appropriate and thence furnishes the relevance of the formative index in the service management theories.

Practitioners are suggested to apply the validated indicators for service audit and customer relationship management. By systematically monitoring and measuring the online food delivery service quality, restaurants can improve customer satisfaction and loyalty.

This study offers various insights to the service quality literature in the food delivery service context.

When assessing the psychometric properties of measures and estimate relations among latent variables, many studies in the social sciences (including management and marketing) often fail to comprehensively appraise the directionality of indicants. Such failures can lead to model misspecification and inaccurate parameter estimates. The purpose of this paper is to apply a post hoc test called confirmatory vanishing tetrad analysis (CTA hereafter) to a single construct called mass media consumption information exposure, which antecedent studies conceptually posited to be a formative (causative) representation.

This paper analyses a consumer sample of 585 US respondents and applies the CTA test to a single construct by its inclusion in various matrices within a statistical analysis system‐macro that takes into account nonnormal data characteristics. The matrices are derived from Mplus 5 through the estimation of a single‐factor congeneric model. The CTA test calculates a test statistic similar to an asymptotic χ² distribution with degrees of freedom equal to the number of nonredundant tetrads tested.

The preliminary data analyses reveal that the data characteristics are nonnormal which is not uncommon in social research. The CTA results reveal that the reflective (emergent) item orientation cannot be fully ruled out as being the correct model representation. This is in contrast to prior theoretical conceptual work which would strongly support this construct being a formative representation.

Insofar as the authors are aware, there is no paper with a particular focus on how the CTA might not provide sound results with a demonstrated example. The paper makes a valuable contribution by discussing modelling philosophy and a procedure for directionality testing. The authors advocate the implementation of pre and post hoc tests as a key component of standard research practice.

Sport teams not only compete with other teams for the ultimate prize but also for a share of customer mind space. For winning fan loyalty and resultant economic success, management of sport teams need to focus on team-branding, and thus, developing and measuring a team’s brand equity becomes essential, which is the core purpose of this paper.

Current work builds upon previous efforts to develop a reliable and, more importantly, a parsimonious sport team brand-equity (STBE) index, as opposed to the usual multi-dimensional reflective scales, too complicated and not of much use to practitioners.

The authors propose that the STBE index having eight indicators is enough to capture the full domain of the concept and provide a snapshot about the ability of a team’s administration to create strong emotional bonds with its fans.

Apart from demographics of the respondents, an important drawback is that the STBE index is from the perspective of television or online viewers and not those watching live in stadiums. This work contributes to extant sports brand equity literature by proposing a simpler scale made of casual variables, as opposed to reflective scales running into large number of similar items, a first of its kind in this domain. The authors also are able to forward the growing call for developing more of such scales through this effort.

Not only can the present scale be easily used by sport-marketers and researchers, it will be especially useful for marketing managers who want to associate their brands with sport teams, as it affects performance of their own brand.

The work represents a novel effort for developing a team-based brand equity and, to the authors’ knowledge, has not been attempted in this literature before.