Methods Showcase—Using PLSF-SEM in Business Communication Research

Abstract

Structural equation modeling (SEM) is a data analysis method that is widely used in business communication research, as well as research in many other fields, when scholars need to test complex models with multiple outcomes, interactions, or operations across different situations. To date, however, researchers have had to choose between using covariance-based SEM, and dealing with convergence problems; or composite-based SEM, and facing serious methodological issues. This article describes a way to combine strong aspects of both SEM types through PLSF-SEM. By utilizing this novel method, empirical researchers can employ several of the same tests traditionally used in covariance-based SEM, as well as new tests that rely on latent variable estimates, in a succinct and scholarly way. PLSF-SEM builds on partial least squares (PLS) algorithms to generate correlation-preserving factors; the F refers to it being factor-based, as opposed to composite-based. A primer on the use of PLSF-SEM in business communication research is provided, based on an illustrative model inspired by motivating language theory, and where simulated data was analyzed with the software WarpPLS.