A comparison of two PLS-based approaches to structural equation modeling

This paper presents a new approach to path modeling named SO‐PLS path modeling (SO‐PLS‐PM) and compares it with the more well‐known PLS path modeling (PLS‐PM). The new method is flexible and graphically oriented and allows for handling multidimensional blocks and diagnosing missing paths. In order to allow for a thorough comparison between the two methods, new definitions of total, direct, and indirect effects in terms of explained variances are proposed, along with new methods for graphical representation. The two PLS methods are tested on two well‐known data sets in the PLS‐PM literature from customer satisfaction analysis and descriptive sensory analysis. The find- ings from the empirical applications serve as a basis for recommendations and guidelines regarding the use of the SO‐PLS‐PM versus PLS‐PM