Advancing operations management theory using exploratory structural equation modelling techniques

Abstract

The structural equation modelling (SEM) technique has been touted as a useful tool for tightening links between theoretical and empirical operations management (OM) research. Despite SEM's increasing prominence in the field, leading scholars continue to call for a deeper infusion of theory into empirical OM research. To strengthen ties between theory and analysis in OM research, this study evaluates previous OM applications of SEM and identifies specific ways we can use SEM to advance operations management theory. Through judicious use of SEM techniques, we believe that OM researchers have the opportunity to confirm and extend existing theoretical frameworks. Further, we offer guidance on how to operationalise measurement models such that researchers accurately depict the causality of a construct. To demonstrate how to advance theory, we use an illustrative example of SEM in an OM context based upon data gathered from a survey of over 200 respondents.