Publication details

Comparing CB-SEM and PLS-SEM: A case showing management accounting impact on performance


ŠIŠKA Ladislav

Year of publication 2017
Type Article in Periodical
Magazine / Source Polish Journal of Management Studies
MU Faculty or unit

Faculty of Economics and Administration

Field Management and administrative
Keywords Covariance based SEM; Partial least squares; Performance; SEM; Strategic management accounting
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Description The objective of this article is to contrast two broad approaches to structural equation modelling (SEM): covariance-based (CB-SEM) and variance-based partial least square (PLS-SEM). Each approach was applied to estimate parameters of the same case model. Even though the results reveal some numerical differences, these differences do not seem to be of a great practical importance and less restrictive assumptions speak in favour of PLS-SEM. This study is one of the first attempts to apply and compare both approaches to SEM on actual (and not simulated) data, in this case data on management accounting (MA) obtained from 101 Czech and Slovak companies. From managerial viewpoint, the final model demonstrates that adoption of strategic MA techniques themselves without increase in organizational capabilities is insufficient for achieving higher return-on-assets (ROA).
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