Project Management Institute

Factors Versus Composites

Guidelines for Choosing the Right Structural Equation Modeling Method

Structural equation modeling (SEM) is a widely applied and useful tool for project management scholars. In this Thoughtlet article, we critically reflect on the measurement philosophy underlying the two streams of SEM and their adequacy for estimating relationships among concepts commonly encountered in the field (e.g., team performance). We also discuss considerations to ponder when making the choice between the two types of SEM as well as between SEM and regression analysis.
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