Reasons for HOM

The main reasons to include higher order model t is to reduce the number of relationships in the structural model, making the model more parsimonious and easier to grasp (Hair et al., 2014).

Each higher order construct must have at least 2 lower order construct.

First order vs HOM

First order construct

The model has single layer of constructs.

Higher order construct

The model has multiple layers of constructs.

Second order model has two layers of constructs.

Why HOM?

To reduce number of relationships in structural model. So, path model is more parsimonious and simpler.

Higher order model typically eliminates the problems caused by multicollinearity issue.

Note:

Decision of using higher order model must be theoretically supported.

Exercise

Click here to download the data set, and click here to download the model

Further Readings

Nawanir, G., Fernando, Y., & Lim, K. T. (2018). A Second-order Model of Lean Manufacturing Implementation to Leverage Production Line Productivity with the Importance-Performance Map Analysis. Global Business Review, 19(3_suppl), S114-S129. doi:10.1177/0972150918757843 Click here.

Nawanir, G., Lim, K. T., Othman, S. N., & Adeleke, A. Q. (2018). Developing and validating lean manufacturing constructs: an SEM approach. Benchmarking: An International Journal, 25(5), 1382-1405. doi:doi:10.1108/BIJ-02-2017-0029. Click here.