Common Beliefs and Reality about Partial Least Squares : Comments on Rönkkö and Evermann

This article addresses Rönkkö and Evermann’s criticisms of the partial least squares (PLS) approach to structural equation modeling. We contend that the alleged shortcomings of PLS are not due to problems with the technique, but instead to three problems with Rönkkö and Evermann’s study: (a) the adherence to the common factor model, (b) a very limited simulation designs, and (c) overstretched generalizations of their findings. Whereas Rönkkö and Evermann claim to be dispelling myths about PLS, they have in reality created new myths that we, in turn, debunk. By examining their claims, our article contributes to reestablishing a constructive discussion of the PLS method and its properties. We show that PLS does offer advantages for exploratory research and that it is a viable estimator for composite factor models. This can pose an interesting alternative if the common factor model does not hold. Therefore, we can conclude that PLS should continue to be used as an important statistical tool for management and organizational research, as well as other social science disciplines. Institute for Management Research, Radboud University Nijmegen, Nijmegen, the Netherlands ISEGI, Universidade Nova de Lisboa, Lisbon, Portugal Faculty of Economics and Business, University of Groningen, Groningen, the Netherlands Otto-von-Guericke University Magdeburg, Magdeburg, Germany University of Newcastle, Callaghan, Australia Hamburg University of Technology, Hamburg, Germany University of Vienna, Vienna, Austria J. Mack Robinson College of Business, Georgia State University, Atlanta, GA, USA Raymond J. Harbert College of Business, Auburn University, Auburn, AL, USA Coles College of Business, Kennesaw State University, Kennesaw, GA, USA Broad College of Business, Michigan State University, East Lansing, MI, USA Corresponding Author: Jörg Henseler, Institute for Management Research, Radboud University Nijmegen, Thomas van Aquinostraat 3, 6525 GD Nijmegen, the Netherlands. Email: j.henseler@fm.ru.nl Organizational Research Methods 2014, Vol. 17(2) 182-209 a The Author(s) 2014 Reprints and permission: sagepub.com/journalsPermissions.nav DOI: 10.1177/1094428114526928 orm.sagepub.com at KENNESAW STATE UNIV on May 27, 2016 orm.sagepub.com Downloaded from