7.

Introduction

The focus of the preceding chapter was to report the findings of the descriptive analysis, while the present chapter devotes its attention to the data analytical process of the multivariate analysis; in this context, structural equation modelling (SEM) using the AMOS software package. This chapter is organised into two parts: Part 1 focuses on the evaluation of the measurement model and Part II on the structural model.

The chapter commences by describing the data preparation and screening steps for the analysis, which entails procedures such as the treatment of missing data, detection of outliers and normality. The next step concerns item purification. However, this procedure has been initially performed in the measure development process (Section 5.6) and the results of the internal consistency analysis and the exploratory factor analysis were presented in Tables 5.9 (a), 5.9(b), 5.10 (a) and 5.10 (b). Therefore the measures generated from these analyses will be subjected to confirmatory factor analysis in order to validate them with a more robust procedure. It is important to note that the term validation means demonstrating measure unidimensionality (having one underlying construct), reliability (comparatively free of measurement error) and validity (measuring what it should) (Ping 2004).

Figure 7.1 depicts the data analysis process which reflects this two-step approach in SEM analysis (Fornell and Larcker 1981). Having established that all constructs in the study had achieved unidimensionality, reliability and validity, consequently the final step in the data analytical process, the structural model analysis, will be performed. The main purpose of this analysis is to examine the overall fit of the proposed structural model portrayed in the conceptual model (see Figure 4.2). To this end, the plausibility of the hypothesised links among the latent constructs will be established.

266

Figure 7.1

Data Analysis Process for Assessment of Measurement Properties

Step 1. Data Preparation and Screening Missing data Outliers Normality

Part I

Step 2. Item Purification Item-Total Correlations Exploratory Factor Analysis Cronbachs Alpha

Step 3 Confirmatory Factor Analysis Specification Identification

Step 4 Convergent validity t-values (critical ratio) Square multiple correlations

First Step Measurement Model

Step 5 Fit and Unidimensionality Assessment Fit indices t values (critical ratio) > 1.96 at p= 0.05

Step 6 Construct Reliability Item and Composite reliability Average variance extracted and Crobachs alpha

Step 7 Discriminant Validity Correlation between factors 2 Difference between paired constructs Average variance extracted Vs squared correlations Correlation standard error 1 not included

Part II Second Step Structural Model

Step 8 Test Structural Model and Competing Models Goodness-of-fit indices Standardised residuals Modification indices t-values (critical ratio) for significance R2 values for endogenous variables

Source:

Adapted from Koufteros (1999) and Shang (2002)

267

7.2

Data Preparation and Screening

The first step in the data analytical process is data preparation and screening, as it is widely recognised that although multivariate analysis techniques such as multiple regression, factor analysis and SEM have a tremendous analytical power to assist researcher to test their hypotheses, they are not without limitations (Hair et al. 1998; Tabachnick and Fidell 2001). Issues pertaining to preparation of the data are crucial considerations, particularly for multivariate analysis (in this case, for the structural equation modelling technique). Careful examination of data prior to performing this analysis is time-consuming and sometimes tedious, but the resolution of these issues is fundamental in producing plausible findings. As noted by Kline (1998), there are two main reasons why the researcher has to pay more attention to the data preparation and screening prior to this type of analysis: 1) SEM requires certain assumptions about the distributional characteristics of the

data set used for the analysis 2) Data related problems could be the reason why model estimation and fitting programs fail to produce solutions, and could at times cause the program to crash. In the following section, three broad issues with regard to data preparation and screening, namely missing data, outliers and normality will be elaborated.

7.2.1

Missing Data

Missing data (or incomplete data) is one of the pervasive problems in data analysis (Tabachnich and Fidell, 2001, p. 58), and according to Hair et al. (1998, p. 46) missing data are regarded as a fact of life in multivariate analysis. In a similar voice Olinsky et al. (2003, p.53) viewed them as a problem that permeates much of the research being done today. The issue of missing data becomes crucial because it creates difficulty in scientific research, and to make matter worse, most data analysis procedures were not designed to take account of them (Schafer and Graham 2002). As a consequence, the missing data will cause two main problems: 1) lost data will decrease the ability of a statistical test to imply a relationship in a dataset and 2) biases will arise on the parameter estimates (de Vaus 2001; Hair et al. 1998; Roth 1994). Additionally, Tabachinich and Fidell (2001) point out that the significance of missing data depends on the pattern of missing observations, frequency of occurrence of and the reasons for the missing values. 268

Accordingly, de Vaus (2001) and Schafer and Graham (2002) maintain that the missing data problem could be minimised or avoided during the survey instrument administration stage. In a similar voice, (Roth 1994) advocates that the best possible method of dealing with missing data is to prevent the problem occurring by careful planning and meticulous data collection. These suggestions were taken into consideration and were implemented by the current research. As described previously in the research design and methodology chapter (Section 5.4.1.1.1), the administration of survey instrument method employed in this study, the drop off and collect technique, which involves the hand delivery and subsequent recovery of self-completion through personal pick up has significantly reduced the missing value concern. Upon collection of the completed questionnaires, research assistants were required to ensure that the questionnaire has been completed correctly and to clarify any doubt faced by the respondents.

Apparently as the result of the research administration technique there were no item omission missing values present in the data set; however certain measures (performance and disconfirmation) employed a scale that provided an unforced option (i.e. not applicable), which was treated as incomplete data when respondent marked this option (Malhotra 1996; Schafer and Graham 2002). These incomplete observations were specified as missing intentionally, by virtue of the measurement design, which in this context was to increase the quality of the data obtained (Arbuckle and Wothke 1999; Hawkin and Coney 1981; Kamakura and Wedel 2000; Malhotra 1996; Peterson and Kerin 1981). These intentionally missing data were generally assumed as data missing at random (Byrne 2001; de Vans 2001; Kamakura and Wedel 2000; Schafer and Graham 2002).

Table 7.1 exhibits the summary of statistics of valid values and cases with missing data on each variable. It should be noted that only six items have more than 10 per cent of missing observations. However, these are acceptable because it is speculated that respondents may not have had the experience of buying products by instalment (SATPAY, DISPAY), complaining (SATCOMPL, DISCOMPL) and returning their products (SATRETUR, DISPLOLI), and interestingly similar response patterns can be observed for these measures.

269

Table 7.1 Summary statistics of the missing data for Performance and Disconfirmation measures
Missing Data PERFORMANCE Count Percent SATPAY 60 15.0 SATRETUR 50 12.5 SATCOMPL 49 12.3 SATSERV 42 10.5 SATFUNC 37 9.3 SATPROMO 33 8.3 SATSALE 30 7.5 SATRESP 30 7.5 SATCON 28 7.0 SATGUARA 26 6.5 SATCOINF 26 6.5 SATINNO 25 6.3 SATREPUT 24 6.0 SATADVIC 23 5.8 SATCONT 20 5.0 SATDEMO 20 5.0 SATRELIA 19 4.8 SATPROM 16 4.0 SATPOP 16 4.0 SATTRUST 14 3.5 SATPROF 14 3.5 SATCHOIC 12 3.0 SATCUST 9 2.3 SATAVDS 8 2.0 SATPER 7 1.8 SATCOURT 7 1.8 SATCOMP 6 1.5 SATINFO 5 1.3 SATCATAL 5 1.3 SATPRICE 4 1.0 SATEFFEC 4 1.0 SATAVAIL 4 1.0 SATKNOW 4 1.0 SATPACK 3 .8 DISCONFIRMATION DISPAY DISPOLI DISCOMPL DISSER DISFUNC DISPROMO DIRESP DISCOINF DISSALE DISGUARA DISPROM DISCON DISINNO DISDEMO DISREPUT DISRELIA DISPOP DISCATAL DISCHOIC DISADVIC DISTRUST DISPERFO DISCONT DISPROF DISAVDS DISCUST DISEFFEC DISPACK DISCOURT DISINFO DISAVAIL DISPRICE DISKNOW DISCOMP Missing Data Count Percent 70 17.5 49 12.3 42 10.5 40 10.0 37 9.3 37 9.3 36 9.0 35 8.8 33 8.3 30 7.5 26 6.5 24 6.0 23 5.8 23 5.8 22 5.5 21 5.3 20 5.0 18 4.5 17 4.3 16 4.0 14 3.5 14 3.5 13 3.3 13 3.3 13 3.3 11 2.8 10 2.5 10 2.5 9 2.3 9 2.3 8 2.0 7 1.8 6 1.5 3 .8

Prior research has strongly suggested that it is imperative to determine whether the missing observations are distributed randomly across the cases and the variables, which mean whether the missing observations occur by chance (random), or otherwise (Hair et al. 1998; Kline 1998). If the missing data are scattered randomly and no distinct patterns appear in the observations, this is known as missing completely at random (MCAR) or, making less restrictive assumptions, missing at random (MAR). However, in the situation where certain systematic patterns clearly emerge throughout the missing observations, this is known in the statistical literature as non-ignorable or not missing at random (NMAR) (Arbuckle and Wothke 1999; Little and Rubin 1989).

270

It is widely acknowledged that when missing data is non-ignorable (NMAR), any remedies to treat the missing data could yield biased results, while on the other hand any mechanism employed for MCAR or MAR data is assumed to generate acceptable results (Arbuckle and Wothke 1999; Hair et al. 1998; Tabachnich and Fidell 2001). Accordingly, Hair et al. (1998) and Tabachnich and Fidell (2001) recommend a test to empirically diagnose the randomness of the missing data patterns. This test compares the observations with and without the missing data for each variable on the other variables. If the results of the t-test are non-significant (at p > 0.05 level) this indicates that the missing data are missing completely at random (MCAR); therefore, the researcher may employ any of the remedies for missing data because no potential biases exist in the patterns of the missing data. Appendices 7.1(a) and 7.1 (b) present the results of this analysis, which was executed using SPSS (version 11). The results of the analysis reveal that significant differences (at 0.05 level) can be observed on several pairs of variables, that is 8 percent (43 out of 544 pairs of variables) for the Performance measure and 17 per cent (98 of 578 pairs of variables) for the Disconfirmation measure variables. However, the small number of significant cases that operate in a large sample size could be considered to be of marginal concern (Hair et al. 1998).

The issue of how much of the missing observations can be tolerated for a given sample size has been debated by several authors, but unfortunately, no definite guidelines have been suggested. However, Cohen and Cohen (1983) posit that 5 per cent or even 10 per cent missing data on a particular variable is not large, and that its seriousness basically depends on the importance or the usefulness of the variable in contributing to the core construct in the study (Kline 1998). In essence, many scholars agree that if the missing observations occurrence is relatively small within a large dataset, the problem could be considered less serious and almost any procedure for treating the missing data may yield similar results (Hair et al. 1998; Kline 1998; Tabachnich and Fidell, 2001). Consequently, as the degree of randomness of the missing data has been established, the remedies for treating the missing data should be considered next. It is important to mention here that even though advanced procedures (e.g. Full-information maximum likelihood, Hot-deck imputation, Multiple imputations) have recently been developed to handle and manage missing data, only the standard procedures are widely available in statistical packages, specifically the SPSS programmes. 271

Generally, there are three standard approaches to treating the incomplete data problems, which are known as listwise deletion, pairwise deletion and imputation (Arbuckle and Wothke 1999; Byrne 2001, Kline 1998). In listwise deletion (LD), the analysis is conducted only on cases with complete observations, which may result in a reduced sample size for the analysis, and as a consequence, decreased statistical power (Arbuckle and Wothke 1999; Byrne 2001; Hair et al. 1998; Kline 1998). Analysing only the complete cases is unsatisfactory because good data may be discarded with the incomplete ones and even worse, the researcher could end up tossing out the bulk of the sample if a substantial amount of missing observations are scattered in the dataset (Arbuckle and Wothke 1999; Malhotra 1996). However, the advantage of listwise deletion is that all analyses are conducted with a consistent sample size (Kline 1998).

On the other hand, pairwise deletion does not entirely eliminate cases with missing data; cases are excluded only if they are missing on the variables involved for the specific analysis computation (Arbuckle and Wothke 1999; Kline 1998). Inevitably this may cause the effective sample size to be inconsistent from analysis to analysis, thus this approach will generate a potential drawbacks for SEM or other multivariate analysis. For instance, it may yield covariance that is not positively definite (Byrne 2001; Kline 1998) or produce anomalous results such as multiple correlations greater than one in regression analysis, particularly if sample size is small (Malhotra 1996).

Finally, a third method for handling incomplete data is the imputation technique which requires the researcher to estimate the missing observations based on the valid values of other variables and/or cases in the dataset (Hair et al. 1998; Tabachnick and Fidell 2001). The missing data may be firstly estimated or replaced with values, before proceeding with the appropriate analysis (Arbuckle and Wothke 1999; Tabachnick and Fidell 2001). There are two popular mechanisms for calculating estimated scores for missing data. 1) Mean imputation, whereby the arithmetic mean is computed from the overall

sample average of the available data and substituted for a missing value (Byrne 2001; Kline 1998; Tabachnick and Fidell 2001). Its main attractiveness is that it is relatively easy to compute, the mean for the entire dataset is consistent and importantly the full dataset is retained for further analysis. The negative side of this approach is that the estimated variances and covariances of the missing cases will be underestimated and as 272

a consequence, the correlations between variables will also shrink (Bryne 2001; Fichman and Cummings 2003; Kline 1998; Tabachnick and Fidell 2001) and the frequency distribution of the imputed variable may yield too many centrally located values. Indeed, Arbuckle and Wothke (1999) cautioned researchers to carefully consider the appropriateness of data substitution, because SEM is based on variance and covariance estimations, hence substitution might have detrimental impacts on the results, and they clearly suggest that mean imputation is not a recommended mechanism for SEM. In a similar vein Fichman and Cumming (2003, p.287) assert, Listwise deletion, pairwise deletion and mean imputation are not acceptable general purpose solutions for missing data problems.

2)

Regression-based substitution is considered one of the sophisticated techniques

for computing scores for missing observations, and utilises the multiple regression procedure. The advantage of this approach is that it takes into account the respondents set of scores and hence may yield accurate values (Kline 1998; Fichman and Cumming 2003). Regression estimation depends on the assumption that the pattern of the missing data is related to the observed data only (MAR); this assumption allows estimates to be adjusted by using the available information (SPSS Version 11). However, this technique is not feasible in the situation where the variables with missing data do not covary at least moderately with other variables in the dataset (Byrne 2001; Kline 1998). Furthermore, this mechanism offers greater variability than the mean imputation, nevertheless it is still restricting variance, and the predicted value might inflate covariance (Byrne 2001; Kline 1998; Tabachnick and Fidell 2001). Indeed, the regression technique has been compared with other imputation mechanisms by various researchers. For example, Timm (1970) in his empirical study found that the regression method was superior to the data substitution by mean method.

Upon considering the advantages and the drawbacks of the remedies of treating missing data, it was decided that imputation of estimated scores by the regression mechanism is the most appropriate and logical course of action for the present study. Moreover the amount of missing observations for the majority of the variables investigated in this study can be considered small (see Table 7.1) This is also consistent with the suggestion put forward by Roth (1994) that regression substitution is a suitable method when the amount of missing data is less than 10 per cent. It is worth noting that using regression 273

to estimate missing values is convenient with SPSS (Missing Values Analysis module) because it permits the researcher to initially diagnose the pattern of the missing observations, and based on these results the researcher could make the decision on which specific technique is deemed most appropriate to be employed.

Given the minimal benefit of deleting cases by listwise or pairwise mechanisms as previously mentioned, these approaches are evidently inappropriate for this research. Moreover, the complete case method (e.g. listwise and pairwise deletion) would yield an inadequate sample size because for most multivariate analysis, in this context SEM, requires a substantial sample size, particularly when the proposed structural model is comprised of many constructs. Most importantly, since the SEM analysis estimation procedure will only work with cases for which a full set of observations is available (Hulland et al. 1996; Pallant 2001), the imputation by regression mechanism becomes the most attractive option.

7.2.2.

Outliers

Outliers are cases displaying unreasonable characteristics; for example, these cases may behave distinctively differently from other observations in the dataset (Hair et al. 1998; Kline 1998) with respect to their independent or dependent values (Bowerman and OConnell 1997). If an outlier is a case of an extreme value on one variable, this is a univariate outlier, whilst an odd combination of scores on two or more variables is a multivariate outlier. Outliers can potentially occur due to mistakes in responding to the questionnaire by respondents; errors in data recording, or some respondents may not represent the targeted population under study (Tabachnich and Fidell 2001; West et al. 1995). Outlier may or may not be influential, in this regard; influential means that removal of the outlier could cause substantial changes in the overall estimation of a specific analysis (Bowerman and OConnell 1997). It has been established that influential or problematic outliers can seriously distort statistical tests, specifically in SEM. For example, they can potentially affect the model fit estimates, parameter estimates and standard errors (West et al. 1995) and are assumed to create improper solutions (Bollen 1987; Dillon et al. 1987). Improper solutions refer to estimates that are offensive, in which the parameters are outside the admissible range (e.g. Heywood cases, in which the error variances is negative) or where correlations between latent 274

variables are greater than one (Bryne 2001; Dillon et al. 1987; West et al. 1995). These offensive estimates are more probable to occur in small samples than in large ones (Anderson and Gerbing 1984; West et al. 1995).

These potential detrimental effects of outliers on statistical analysis strongly suggest that it is essential to recognise the presence of outliers in the dataset, but there is no absolute characterisation of extreme point for the univariate outlier. A widely accepted rule of the thumb is that values more than three standard deviations away from the mean are regarded as outliers (Kline 1998) or the observations with standardised variable values exceeding 2.5 for small samples (80 or fewer observations) and scores of 3 to 4 for larger sample sizes. (Hair et al. 1998). Even though several univariate outliers could be identified in the present dataset, they were regarded as trivial because the values were considered tolerable in the current study context. For instance, survey participants were asked to describe how satisfied they were with the list of attributes; if they were to answer very satisfied or very dissatisfied, conceivably these response options could become outliers because they are the extreme points of the scale. In turn, multivariate outliers can be diagnosed with the Mahalanobis D2 measure (Byrne 2001; Hair et al. 1998; Tabachnich and Fidell 2001; West et al. 1995). It is also sometimes known as the Mahalanobis distance, which is a measure to evaluate the position of each observation compared with the centre of all observations on a set of variables (Hair et al 1998). A large Mahalanobis distance score denotes a case as having extreme values on one or more of the independent variables (see SPSS version 11). Further, (Hair et al. 1998; Tabachnich and Fidell 2001) recommend that a very conservative statistical test of significance should be use with the Mahalanobis distance measure, such as 0.001 as the threshold value.

Even though it is the prerogative of the researcher to decide whether to retain or discard outliers from the data set, it was strongly suggested by Hair et al. (1998) that they should be retained unless it is proven that they are not representative of the entire population. It was acknowledged that by discarding the outliers, the generalisability of the study might suffer. It is noteworthy that the AMOS program can identify outliers by the Mahalanobis distance; therefore, this measure was employed in this study to detect the occurrence of multivariate outliers from the variables utilised for SEM. In this study, 275

Mahalanobis distance was measured for each construct through AMOS and then compared with a critical 2 value with the degree of freedom equal to the number of independent variables a probability of p<0.001 as suggested by Hair et al. (1998) and Tabachnich and Fidell (2001).

The summary of univariate and multivariate outliers is presented in Appendix 7.2. The results revealed that there were a few outlier cases; however, it was decided that all the cases (i.e. the total sample size of 400) would be retained. In fact, upon inspection of the deviant cases it was found that the outliers did not stem from participant response errors or data recording errors (West et al. 1995). Therefore, it was speculated that a few respondents might genuinely have different opinions (i.e. unusual scores) from the majority of the sample; they certainly belong to the targeted population. This rationalisation was evidenced by the fact that the survey administration approach employed by this study carefully qualified the respondents by screening questions before they were accepted as part of the sample, and the scores which were regarded as extreme did not severely distort the SEM analysis. Furthermore, Kline (1998) postulates that the presence of a few outliers within a large sample size should be of trivial concern. Most importantly, the decision was in line with Hair et al. (1998, p.66), who posit, as outliers are deleted, the analyst is running risk of improving the multivariate analysis but limiting its generalisability.

7.2.3

Normality

The final assumption underlying multivariate analysis is the assessment of normality of the distribution. The detection of variables departure from normality is critical, particularly with SEM, which requires that the data be of multivariate normal distribution (Bryne 2001; Hair et al. 1998; Steenkaamp and van Trijp 1991). Normality is viewed as the most fundamental assumption in multivariate analysis (Hair et al. 1998); indeed, estimation procedures that are widely used in SEM programmes typically assume that dependent and mediating variables are normally distributed for continuous variables (Kline 1998). Normality is characterised as the shape of the data distribution for an individual metric variable and its correspondence to the normal distribution, which is the benchmark for statistical methods (Hair et al. 1998, p. 70). Normality could occur at univariate and multivariate level; univariate normality 276

concerns the distribution of the individual variables and multivariate normality involves combination of two or more variables. Violation of the normality assumptions may affect the estimation process or the interpretation of the results. For example, West et al. (1995) found that non normality was found to cause moderate to severe underestimation of standard errors of parameter estimates; their investigation was conducted under the condition where the measured variables were regarded as non normal (skewness = 3; kurtosis = 21).

Normality distribution can be ascertained by graphical analyses such as the histogram and normal probability plot. The normal probability plot visually compares the actual cumulative data scores against a normal cumulative distribution (i.e. straight diagonal line). In the case of normal distribution, the line representing the actual data distribution will closely follow the diagonal lines (Hair et al. 1998; Kline 1998). Two

characteristics of the distribution patterns are typically used to identify non-normality; skewness and kurtosis (Hair et al. 1998; Tabachnich and Fidell 2001; West et al. 1995). Kurtosis refers to the peakedness or flatness of the distribution compared with the normal distribution. On the other hand, skewness portrays the symmetry of the distribution; normal distributions are symmetrical about their means. Skewed distribution occurs when most of the cases are either below the mean (positive skew) or above it (negative skew). In a normal distribution, the values of skewness and kurtosis are zero (Tabachnich and Fidell 2001).

Besides the utilisation of the normal probability plot to inspect for normality, statistical tests such as calculated z value of (2.58) which exceeds a critical value at the 0.01 probability level and critical value of (1.96) at a 0.05 error level could also be used to imply normality (Hair et al. 1998). Alternatively, datasets with absolute values of univariate skew index greater than 3.0 are regarded as extreme (Hu et al. 1992; West et al. 1998) and a conservative estimation of univariate kurtosis index greater than 10 may suggest a problem, whereas values greater than 20.0 are considered extremely problematic (Kline 1998; West et al. 1995).

In the current modelling, the AMOS programme was employed to detect normality at both univariate and multivariate levels. Based on the thresholds suggested above, none of the variables included in the proposed conceptual model was regarded as non277

normally distributed; all skewnness indices exhibit values less than 3.0 and kurtosis indices less than 10.0, these results are presented in Appendix 7.3. Multivariate normality was examined by standardised residual; z scores below 2.58 indicate that multivariate normality exists (Diamantopoulos 1994). Upon inspection of all the variables used in the four validated measurement models (see Section 7.4) almost all z scores were less than 2.58, thus overall multivariate normality could be assumed. Furthermore, the skewness and kurtosis statistics for the constructs investigated in this study revealed that they are within the acceptable range as stated earlier. It should be emphasised here that the maximum likelihood (ML) estimation utilised in this study has been empirically proven to moderate the non-normality effect if it is present in the data set (Anderson and Gerbing 1988; Kline 1998). Moreover, in this case the sample size was considered large enough, thus it could compensate potential biases in parameter estimates (Hair et al. 1998). Based on these arguments, the author did not transform non-normally distributed variables, as this would introduce additional problems by altering the meanings of actual responses (De Wulf 1999).

7.3

Item and Scale Purification

After the dataset for the current study had been checked and cleaned, the issues pertaining to missing observations, outliers and normality were dealt with accordingly; consequently, the next step involves item analysis and scale purification. Initially item analysis was computed by item-total correlations, inter-item correlations and factor structure was established by exploratory factor analysis (see Section 5.6.4). Since this procedure has been discussed at length in Chapter 5, we will not elaborate on it in this section. The next step involves the validation of the purified scales by confirmatory factor analysis.

7.4

Measurement Model Evaluation

As previously mentioned, SEM generally consists of two parts: the measurement model and the structural model. The current section focuses on the measurement model, which specifies how the latent constructs are measured in terms of the observed variables, and in turn, their dimensionality, validity and reliability are assessed. Each latent construct is usually associated with multiple measures and researchers most commonly link the 278

latent constructs to their measures through a factor analytic measurement model. That is, each latent construct is modelled as a common factor underlying the associated measures. In SEM applications, the most common measurement model is the congeneric measurement model, where each measure is associated with only one latent construct, and all covariation between measures is a consequence of the relations between measures and constructs (Byrne 2001; Jreskog and Srbom 1988)

Gerbing and Anderson (1988) maintain that item-total correlation, alpha coefficient and exploratory factor analysis procedures could not ensure unidimensionality of measures, which is viewed as an important requirement of valid measurement. They strongly recommend that a more rigorous statistical procedure should be employed to refine and confirm the factor structure generated from the exploratory factor analysis. Confirmatory factor analysis (CFA) has been proposed as an analytical tool to ascertain unidimensionality of measures (Gerbing and Anderson 1988). Hence, in line with this suggestion, all the resulting measures (see Table 5.10 (a) and 5.11 (a)) were validated by using a CFA analytic procedure by employing the AMOS 4 analytical programme (see Section 5.7.4.2).

CFA is a core procedure of the structural equation modelling family tree (Kline 1998) and is generally used by researchers who have some knowledge of the underlying latent variable structure (Byrne 2001). In other words, CFA focuses exclusively on how and the extent to which the observed variables are linked to their underlying latent factors. As such, the strengths of the regression structure paths from the factor to the observed variables (i.e. the factor loadings) are of major interest. It is worth noting that in the factor analytic models such as CFA, the relationships among factors were not taken into consideration. Because CFA focuses only on the relationship between latent factors and their indicators within the framework of SEM, it has been termed a measurement model (Byrne 2001).

A measurement model is characterised as a unidimensional measure if an indicator is specified to load on only one factor and the measurement error terms are independent (Gerbing and Anderson 1988; Kline 1998) and reliable (Kline 1998). In the current modelling, the results of confirmatory factor analysis are reported for each congeneric measure. This is consistent with Baumgartner and Homburgs (1996) suggestion that 279

CFA is to be conducted on the items to be aggregated and this could present the evidence of construct dimensionality. They further postulate that if unidimensionality holds, the items may be aggregated into a single composite measure.

Consequently, CFA was performed for four sub-models, where each model comprises of a grouping of the related set of constructs generated from the conceptual model (Figure 4.2). Conceivably, CFA for the full measurement model could not be executed because this might violate the rule of thumb that postulates that the ratio of sample size to number of free parameters should at least 5:1 (Bentler and Chou 1987) in order to obtain trustworthy parameter estimates. In a similar voice, Baumgartner and Homburg (1996) echo that if the case/parameter ratio is less than 5:1, the statistical stability of the results may be doubtful. It has been suggested by several scholars that the researcher should split the research model into groupings of related variables when the hypothesised model integrates a large number of items and would probably violate the 5:1 ratio (Jap and Ganesan 2000; Kohli and Jaworski 1994; Wetzels et al. 1998). As the current conceptual model is comprised of a large pool of items, therefore the confirmatory factor analysis was conducted separately for four measurement models. The models are structured as follows: 1). The first model consists of direct seller performance, product performance and company performance. 2). The second model includes direct seller disconfirmation, product disconfirmation and company disconfirmation. 3). The third model consists of perceived equity, purchase decision involvement, relational commitment and perceived value. 4). The fourth model consists of overall satisfaction, product satisfaction, direct seller satisfaction, company satisfaction and behavioural intentions.

After the measurement model has been specified, that is a path diagram has been carefully expressed according to specific SEM notation and symbols, the mathematical specification of the model was directly derived from its path diagram. Consequently, the model was identified, which revolved around the question of whether the information provided by the empirical data (e.g. variances and covariances of the observed variables) was sufficient to allow for unique solution of the equations to be obtained (see Diamantopoulos 1994). The model was estimated by selecting the most appropriate 280

estimation procedure that was available in the statistical programme (AMOS 4). In the current context, the maximum likelihood estimation procedure appeared to be most appropriate because it is reasonably robust against the violation of multivariate normality in a moderately sized sample (Anderson and Gerbing 1984; Kline 1998) and it was set as a default method in AMOS and other SEM programmes. Moreover, the maximum likelihood technique has been widely utilised by prior researchers who used SEM as the main analysis (Baumgartner and Homburg 1996).

The sequence of analysis takes the following order: firstly, CFA was performed on each congeneric measure which is incorporated in the specific measurement model to assess unidimensionality in terms of the parameter estimates, the statistical significance of the parameter estimates and overall fit (Byrne 2001). Upon inspecting the results, at this point the researcher could decide whether to retain or delete any ill-fitting item. Secondly, CFA was performed on the overall sub-model that was comprised of several purified congeneric measures derived from the first step. Finally, all pertinent results on the measurement model were reported and discussed.

The quality of

each

measurement model

was

examined by investigating

unidimensionality, reliability, convergent validity and discriminant validity. It is important to note that all of these assessments were performed on each measurement model, except for discriminant validity assessment, which was performed on the full measurement model. Next, we will briefly describe the analysis process used to validate the measurement model, as diagrammatically portrayed in Figure 7.1. It should be emphasised here that the discussion will commence from step 4 to 7.

1)

Convergent Validity

Convergent validity provides relevant information pertaining to the nature of individual parameters and other aspects of the internal structure of a model (Bagozzi and Yi 1988). In this study, convergent validity was assessed by inspecting the parameter estimates (standardised loadings) and the accompanying tests of significance of each observed indicator. In confirmatory factor analysis (CFA), if the factor loading is significantly large as compared with its standard errors, this implies that the indicator has adequately captured the underlying construct (Koufteros 1999). A standardised loading of 0.6 or 281

greater was suggested by Bagozzi and Yi (1988). It is also expressed by the corresponding t-values; in the AMOS programme it is reported as a critical ratio. The widely accepted cut-off value for factor loadings is when t-values are greater than 1.96 or 2.58 at 0.05 or 0.01 levels respectively (Anderson and Gerbing 1988).

2)

Unidimensionality

A unidimensional indicator means that it belongs to one underlying construct and in turn, a unidimensional construct consists of unidimensional indicators (Anderson and Gerbing 1988). Hence, convergent validity could partly measure unidimensionality of scale. It was also recognised that unidimensionality could also be ascertained by

goodness-of-fit indices along with other diagnostic tools such as standardised residuals and modification indices. The overall fit of the hypothesised model can be tested by using the maximum likelihood 2 statistics provided by AMOS output. Although the 2 statistic is widely used, its significance levels are sensitive to sample size and departures from multivariate normality. Several authors (e.g. Steenkamp and van Trijp 1991) advocate that the 2 statistics should be interpreted with caution in most applications. As such, researchers are suggested to use goodness-of-fit indices that take a more pragmatic approach to the model assessment (Gerbing and Anderson 1993; Tanaka 1993). In this study, a variety of fit indices have been used such as GFI, CFI, IFI, RMR and RMSEA. However some of these indices are affected by sample size (e.g NFI) and ratio per indicator (e.g RMR) (Ding et al. 1995; Anderson and Gerbing 1984). These fit indices have been described in the research design and methodology chapter.

In order to detect any misspecification in the hypothesised model, AMOS provides two types of mechanism, which are useful in detecting any area of misfit, namely standardised residual and modification indices. Standardised residuals, also known as normalised residuals, report the residuals of the predicted covariance or correlation matrix; they are analogous to z scores (Byrne 2001). Standardised residuals are considered large if they exceeded 2.58 (Jreskog and Srbom 1988). Modification indices are conceptualised as a 2 statistic with one degree of freedom and specifically emphasised on the fixed (i.e. constrained) relationships between two variables. Accordingly, Koufteros (1999) points out that small modification indices (e.g. approximately 4.0, p < 0.05) will yield insignificant improvement in the fit relative to 282

loss of 1 degree of freedom. He further points out that any item which demonstrates a significant expected change in parameter should be examined for its lack of unidimensionality. However, several scholars (e.g. MacCallum et al. 1992) warn that any model improvement through the modification index must be justified with a clear substantive interpretation because it is inherently susceptible to capitalisation on chance.

3)

Reliability

Bagozzi and Yi (1988) suggest that three types of reliability could be examined; individual item reliability, composite measure of a latent construct and average variance extracted. Inevitably, Cronbachs alpha was also assessed for each confirmed scale. The operationalisation of reliability was as follows:

i.

Individual item reliability was computed directly by AMOS, and is listed as

squared multiple correlations in the output (R2). The R2 values on the first-order level of measurement model in the observed variables were used as estimations for a particular observed variable (item). In this regard, R2 values of above 0.50 provide evidence of acceptable reliability (Bollen 1989; Steenkamp and van Trijp 1991).

ii.

In addition, composite reliability, which is the principle method to assess

measurement model reliability, was used in the current study (Fornell and Larcker 1981). In this context, composite reliability means that a set of latent construct indicators are consistent in their measurement. Highly reliable constructs are those in which indicators are highly intercorrelated, which indicates that they are all measuring the same latent construct. However, there is no definite acceptable threshold; 0.80 was suggested by Koufteros (1999) whilst Bagozzi and Yi (1988) suggest that values greater than 0.60 are desirable. The composite reliability of a construct is calculated as: ( Standardised loading) 2 ( Standardised loading) 2 + j The summation is over the items included in the focal variable, whilst j is the measurement error for each indicator

283

iii.

Construct reliability was also assessed by estimating the average variance

extracted (AVE), which reflects the overall amount of variance captured by the latent construct. It was recommended that average variance extracted for a construct should exceed 0.50. It is calculated as: Standardised loading 2 Standardised loading 2 + j

The summation is calculated over the items incorporated in the focal construct, whereas j is the measurement error for each indicator. It is important to note here that Crobachs alpha, the customary index of

iv.

reliability, was assessed after unidimensionality of a measure has been demonstrated; this was in line with a suggestion by Gerbing and Anderson (1988). A commonly used threshold value of 0.70 (Nunnaly 1978) was utilised;, however Hair et al. (1998) suggest that values slightly below 0.70 are acceptable if the research is regarded as exploratory.

4)

Discriminant Validity

In this study, four subsequent procedures were employed towards providing evidence of discriminant validity, which are as follows: i. Correlation index among factors was examined; low to moderate correlations 2 difference test between the fixed (or constrained) and free solution (not A significantly lower 2 value for the model in which the trait

implied that discriminant validity is attained (Churchill 1995). ii. constrained to unity).

correlations are not constrained to unity would indicate the traits are not perfectly correlated; hence, discriminant validity can be supported (Anderson and Gerbing 1988). iii. Comparing the AVE with squared correlations between the latent constructs. AVE

that is substantially greater than the squared correlation indicates discriminant validity is attained (Fornell and Larcker 1981). iv. A complementary assessment of discriminant validity is to determine whether confidence interval of ( 2 standard errors) around the correlation estimated for each pair of constructs includes 1 (Anderson and Gerbing 1988). 284

7.4.1

Measurement Model 1

The results of exploratory factor analysis as reported in section 5.6.4.1 were used as the starting point for specifying the measurement models. Table 7.2 (a) below, exhibits the results of the confirmatory factor analysis for each of the congeneric measures incorporated in the measurement model 1. Next, the CFA results for each measure are described with regard to fit indices, standardised loading and critical ratio.

Table 7.2 (a)

CFA results for the congeneric measures in measurement model 1

Standardised Regression (Loading) 0.82 0.62 0.83 0.65 Critical Ratio b (t-values)

Congeneric measure Product Quality 1. Product performed as claimed 2. Product is multifunctional / multipurpose a 3. Effectiveness of product 4. Product guarantee

11.98 ---12.03 10.38

Goodness-of-Fit statistics 2 = 0.38, Degree of freedom = 2, p= 0.19 RMR = 0.003, GFI = 1.00, IFI = 1.00, CFI = 1.00 RMSEA = 0.00 Product offerings and information 1. * Product availability 2. Product information adequacy 3. Product catalogue / brochure visual appearance 4. Innovative and unique product a

0.57 0.75 0.65 0.53

7.60 8.29 8.10 ---

Goodness-of-Fit statistics 2 = 8.30, Degree of freedom = 2, p= 0.016 RMR = 0.016, GFI = 0.99, IFI = 0.98, CFI = 0.98 RMSEA = 0.09 Direct Seller performance 1. Knowledge of products and services 2. Being consistently courteous 3. Giving personal advice and attention 4. Continuity of contact 5. Availability of direct seller 6. Maintaining a professional appearance 7. Have customer interest at heart 8. Effectiveness of sales demonstration / presentation a

0.64 0.68 0.67 0.72 0.72 0.79 0.78 0.62

10.68 11.21 11.07 11.80 11.78 12.59 12.39 ---

Goodness-of-Fit statistics 2 = 61.39, Degree of freedom = 20, p= 0.001 RMR = 0.02, GFI = 0.97, IFI = 0.97, CFI = 0.97 RMSEA = 0.07

285

Table 7.2 (a) CFA results for the congeneric measures in measurement model 1-continue
Standardised Regression (loading) 0.67 0.77 0.75 0.59 Critical Ratio b (t-values)

Constructs Corporate Image 1. Companys reputation 2. Sales campaigns / promotion (contest/lucky draw) 3. Corporate information / publicity 4. * Companys popularity a

9.78 10.42 10.31 ---

Goodness-of-Fit statistics 2 = 27.09, Degree of freedom = 2, p= 0.001 RMR = 0.03, GFI = 0.97, IFI = 0.95, CFI = 0.95 RMSEA = 0.18 Corporate Customer Service 1. Handle complaints promptly 2. Concern about customers 3. * Reasonable service charge a 4. Product return / adjustment policy

0.80 0.81 0.67 0.70

12.96 13.08 ---11.83

Goodness-of-Fit statistics 2 = 41.586, Degree of freedom = 2, p= 0.001 RMR = 0.003, GIF = 0.95, IFI = 0.94, CFI = 0.94 RMSEA = 0.22
Note:
a Fixed parameter * Item deleted after confirmatory factor analysis b Critical ratio (z-statistic) represents the parameter estimate divided by its standard error RMR ( Root Mean Square Residuals), GIF (Goodness of fit), IFI (Incremental Fit Index), CFI ( Comparative Fit Index), RMSEA (Root Mean Square Error of Approximation)

The confirmatory factor analysis results presented in Table 7.2 (a) indicate that the first measurement model is comprised of a five-factor structure. congeneric measure are described next. CFA results of each

1)

Product quality

As can be observed from Table 7.2 (a), the model as a whole demonstrates an almost excellent fit to the data. The 2 statistic was non-significant at p>0.05, thereby suggesting that the fit of the data to the hypothesised model was good (see Bryne 2001) and all goodness-of-fit indices utilised for the measurement model were supportive. Notably, the entire critical ratio associated with each item in the scale was significant (greater than 1.96) at the 0.05 level of significance; therefore, the criterion for convergent validity has been established (Anderson and Gerbing 1988). In addition, by inspecting the standardised residual value, it was observed that none of the items exceeded the

286

absolute value of 2.58, the cut-off value (Byrne 2001). Suffice to say, the first step of the unidimensionality evaluation for the product quality measure was achieved.

2)

Product offerings and information

Turning to the second factor, the results evinced in Table 7.2 (a) support convergent validity as all the standardised loadings were highly statistically significant. In addition, all the goodness-of-fit statistics suggest that the proposed model represents an adequate fit to the observed data, except RMSEA, which was slightly above the acceptable cut point (0.05 0.08) and 2 was significant, thereby suggesting that the fit of the data to the proposed model was not adequate. However, as previously mentioned in the methodology chapter, this is expected because this test statistic is sensitive to sample size. In order to improve the measure, we inspected the CFA output and found that the first items (product availability) square multiple correlations (R2) estimate was rather low (0.326), thus this item was discarded for subsequent analysis. Notably, although the fourth item (innovative and unique product) was also low on the square multiple correlation estimates, it was retained because it was considered a distinct trait of a direct selling product (Rehanstat 1999), therefore the content validity was observed. This final set of items was used as a composite measure in the subsequent analyses pertaining to the hypotheses testing.

3)

Direct seller performance

The CFA results imply that the standardised loading for each item in the scale was significant, thereby demonstrating that convergent validity has been established (Anderson and Gerbing 1988). In addition, in examining the standardised residual value, none of the items exceeded the cut point of 2.58 (Byrne 2001). Furthermore, the goodness-of-fit indices, with the exception of the 2 statistic, indicated that the model represents a satisfactory fit to the data; hence, no item was deleted to improve the measure. The significance of the 2 statistic was expected, which could be possibly due to the sample size of this study (n = 400). In essence, the first step of testing for measure unidimensionality for direct seller performance was successfully achieved.

4)

Corporate image

The evidence reported in Table 7.2 (a) implied that the individual standardised loadings were significant at the 0.05 level. Although the significant 2 implied that the model did 287

not fit the data adequately, it was expected because this test statistic is widely acknowledged to be sensitive to sample size (Bagozzi and Yi 1988; Bearden et al. 1982; Diamantopoulos 1994). However, other measures of goodness-of-fit suggest that the congeneric model represents a good fit to the data, except that the value of RMSEA was outside the acceptable range. In an endeavour to improve the models overall fit, additional analysis suggested that deletion of item 4 (companys popularity) could improve the measures fit. Specifically, this item was low in the value of squared multiple correlations (0.34) and its standardised residual was relatively high (greater than 2.58). Consequently, after the unidimensionality of this measure has been validated, then these three items were used as a composite measure for subsequent analysis.

5)

Corporate customer service

The CFA results demonstrate that all the critical ratios (t-values) associated with the individual items were greater than 1.96, hence achieving the threshold level of convergent validity (Anderson and Gerbing 1988). As displayed in Table 7.2 (a), all the fit statistics implied an adequate fit to the data, with the notable exception of RMSEA value, which did not achieved the adequate level, and given the relatively large sample size, the significant 2 statistic was not surprising. In view of these results, additional analysis was employed to detect ill-fitting items. Upon inspection of the modification index, the correlations among errors for items 3 and 4 was very high and standardised residual for item 3 were considered relatively high (greater than 2.58). Residuals exceeding 2.58 might indicate that errors between two items are correlated. In addition, measurement models that contain correlated measurement error or have indicators that load on more than one construct indicate that the construct is not unidimensional (Gerbing and Anderson 1988). Moreover, since there are no theoretical grounds to justify error correlations between pairs of these items (Joreskog 1993), we did not let errors correlate. The CFA results also reported that the square multiple correlations score of item 3 was rather low (i.e. 0.45). This evidence strongly suggested that this item (i.e. reasonable service charge) had to be dropped from further analysis. The above procedure was the first step of validating unidimensionality, which evidently in this case was reasonably achieved.

288

All the five purified congeneric measures were incorporated as a sub model of measurement model 1. Confirmatory factor analysis was performed to assess the models overall fit, convergent validity, construct reliability, average variance extracted and Cronbachs alpha; a summary of these results is documented in Table 7.2 (b). Figure 7.2 schematically illustrates the output of the path diagram for measurement model 1, which hypothesised a priori that:

1).

Performance can be explained by three dimensions and in turn, these dimensions

were decomposed into five factors (direct seller performance, product quality, product offerings and information, corporate image and corporate customer service). The model suggests that the direct seller performance was unidimensional whereas product performance was further disentangled into two congeneric factors, and this applied to company performance as well. It should be noted that product and company performance was portrayed as a higher order (second order) construct, which accountable for the lower order (first order) factor. The second order constructs are illustrated in the model as a shaded ellipse. The product performance and company performance, which are considered as second order constructs, were further decomposed into two dimensions (first order). The factor structure of the measurement model is illustrated in Figure 7.2.

2).

The three factors (direct seller performance, product performance and company

performance) are intercorrelated, as indicated by two-headed arrows. There are 21 observed variables, as portrayed by the 21 rectangles, and each of these observed variables was regressed onto its respective factor.

3).

Errors of measurement associated with each observed variable are uncorrelated.

289

Figure 7.2 AMOS graphics: the output path diagram for measurement model 1

e1 e2 e3 e4 e5 e6 e7 e8

SATKNOW SATCOURT SATADVIC SATCONT .72 SATAVDS SATPROF SATCUST SATDEMO .80 r1 .80 .64 product q uality .70 Product Performance .79 .74 .78 .77 .63 .65 .68 .67 .72 direct seller performance

e9 e10 e11 e12

SATPER SATFUNC .81 SATEFFEC .68 SATGUARA

e13 e14 e15

SATINFO .64 SATCATAL SATINNO .57

.73

Product offering s and information

r2 .91

e16 e17 e18

SATREPUT SATPROMO SATCOINF .77 .79

.62 Corporate Imag e .74 Company Performance .93

r3

e19 e20 e21

SATCOMPL SATCON SATRETUR

.83 .81 .67 Corporate Customer Service

r4

The path diagram presented in Figure 7.2 illustrates a measurement model which comprises of seven latent variables with corresponding multiple indicators which have been purified previously (Table 7.2 a). Latent variables are portrayed as ellipses whilst observed indicators are presented in rectangles. The path coefficient for standardised regression (factor loading) scores of observed indicators onto an unobserved latent variable are presented between the arrows, while correlation estimates among the factors are depicted between the two-headed arrows. Measurement error associated with each observed indicator (item) is presented as small circles (e.g. e1 - e21). The residual term that represents error in the prediction of endogenous factors from exogenous factors is illustrated as small circles (r1 r4). These basic configurations are applied to other measurement models presented in this thesis. 290

Table 7.2 (b) Summarised results of measurement model 1

Std. Critical Regression Ratio b (Loading) (t-values) Composite Reliability

Constructs Product Quality 1. Product performed as claimed 2. Product is multifunctional 3. Effectiveness of product 4. Product guarantee a Product offerings and information 1. Product information adequacy 2. Product catalogue / brochure 3. Innovative and unique product a Direct Seller performance 1. Knowledge of products and services 2. Being consistently courteous 3. Giving personal advice and attention 4. Continuity of contact 5. Availability of direct seller 6. Maintaining a professional appearance 7. Have customer interest at heart 8. Effectiveness of sales demonstration a Corporate Image 1. Companys reputation 2. Sales campaigns / promotion ) 3. Corporate information / publicitya

R2

AVE 0.62

Crobachs Alpha 0.82

0.86 0.80 0.64 0.81 0.68 13.36. 11.16 13.45 --0.79 0.73 0.64 0.57 9.24 8.75 --0.92 0.65 0.68 0.67 0.72 0.72 0.78 0.78 0.63 11.11 11.42 11.30 11.98 12.04 12.79 12.69 --0.43 0.46 0.44 0.52 0.52 0.61 0.60 0.40 0.53 0.41 0.33 0.64 0.41 0.65 0.47

0.56

0.68

0.61

0.90

0.86 0.62 0.77 0.79 11.34 13.62 ---0.40 0.60 0.63

0.68

0.77

Corporate Customer Service 1. Handle complaints promptly 2. Concern about customers 3. Product return / adjustment policya

0.89 0.83 0.81 0.67 13.55 13.40 ---0.68 0.65 0.44

0.67

0.81

Overall Goodness-of-Fit Indices

2 = 444.77, Degree of freedom = 182, p= 0.001 RMR = 0.03, GFI = 0.91, IFI = 0.93, CFI = 0.93 RMSEA = 0.06
Note:
a b

Fixed parameter Critical ratio (z-statistic) represents the parameter estimate divided by its standard error

Table 7.2 (b) shows that the entire critical ratio (t-values) was significantly greater than 2.58 at the 0.01 level. All standardised loadings were greater than 0.6 except item 3 of the product offerings and information factor (i.e. 0.57); therefore, the criterion for convergent validity was moderately satisfied (Anderson and Gerbing 1988). 291

Turning to assessment of measure reliability, Table 7.2 (b) illustrates that reliability in individual item based R2 values for some indicators were greater than 0.50, however several indicators demonstrate values of less than 0.5. This implied that some indicators were less reliable (Bollen 1989; Steenkamp and van Trijp 1991). However, other measures provide evidence of reliability. For instance, in terms of composite values, all constructs achieved the recommended value of 0.70, exceeding Bagozzi and Yis (1988) recommended value of 0.60. In addition, reliability evaluation based on average variance extracted suggested by Fornell and Larcker (1981) revealed that all constructs exceeded 0.5, which is the cut-off point for this measure. This implies that the variance captured by the construct is greater than the variance accounted for by measurement error (Fornell and Larcker 1981; Hair et al. 1998). Furthermore, all Cronbachs alpha values exceeded 0.70 except product offerings and information (i.e. 0.68); this is considered tolerable, as this is the first study on customer satisfaction specifically in the direct selling context (Hair et al. 1998).

In turn, the goodness-of-fit indices suggest that the measurement model represents a satisfactory fit to the data and that the results of all the fit indices as portrayed in Table 7.2 (b) achieved the adequate fit; however, given the relatively large sample size, the significant value of 2 was not surprising. In conclusion, measurement model 1 exhibited strong evidence of unidimensionality, convergent validity and reliability. Therefore, it has adequate measurement properties and is qualified to proceed to the second stage of the analytical process, that is the structural model evaluation.

7.4.2

Measurement Model 2

Table 7.3 (a) summaries the results of the confirmatory factor analysis for each congeneric measure incorporated in measurement model 2. It should be noted that this measurement model is parallel to measurement model 1, and therefore an overall description of the CFA results is described briefly.

292

Table 7.3 (a) CFA results for congeneric measure in measurement model 2
Congeneric measure Product quality disconfirmation 1. Product performed as claimed 2. Product is multifunctional / multipurpose 3. Effectiveness of product 4. Product guarantee a Goodness-of-Fit statistics 2 = 11.33, Degree of freedom = 2, p= 0.003 RMR = 0.011, GFI = 0.99, IFI = 0.99, CFI = 0.99 RMSEA = 0.10 Product offerings and information disconfirmation 1. * Product availability 2. Product information adequacy 3. Product catalogue / brochure visual appearance a 4. Innovative and unique product Goodness-of-Fit statistics 2 = 9.85, Degree of freedom = 2, p= 0.016 RMR = 0.011, GFI = 0.99, IFI = 0.99, CFI = 0.99 RMSEA = 0.09 Direct seller disconfirmation 1. Knowledge of products and services 2. Being consistently courteous 3. Giving personal advice and attention 4. Continuity of contact 5. Availability of direct seller 6. Maintaining a professional appearance 7. Have customer interest at heart 8. Effectiveness of sales demonstration / presentation a Goodness-of-Fit statistics 2 = 167.92, Degree of freedom = 20, p= 0.001 RMR = 0.03, GFI = 0.91, IFI = 0.92, CFI = 0.92 RMSEA = 0.13 Corporate image disconfirmation 1. Companys reputation 2. Sales campaigns / promotion (contest/lucky draw) 3. Corporate information / publicity a 4. * Companys popularity Goodness-of-Fit statistics 2 = 21.31, Degree of freedom = 2, p= 0.001 RMR = 0.02, GFI = 0.97, IFI = 0.97, CFI = 0.97 RMSEA = 0.16 Corporate customer service disconfirmation 1. Handle complaints promptly 2. Concern about customers 3. * Reasonable service charges a 4. Product return / adjustment policy Goodness-of-Fit statistics 2 = 17.20, Degree of freedom = 2, p= 0.001 RMR = 0.013, GFI = 0.98, IFI = 0.98, CFI = 0.98 RMSEA = 0.14
Note:
a Fixed parameter * Item deleted after confirmatory factor analysis b Critical ratio (z-statistic) represents the parameter estimate divided by its standard error RMR (Root Mean Square Residuals), GIF (Goodness of fit), IFI (Incremental Fit Index), CFI (Comparative Fit Index), RMSEA (Root Mean Square Error of Approximation)

Standardised Regression (loadings) 0.841 0.755 0.819 0.766

Critical Ratio b (t-values) 16.61 14.94 16.23 ----

0.71 0.85 0.75 0.80

13.61 15.99 ---15.37

0.65 0.75 0.74 0.75 0.81 0.77 0.79 0.79

10.684 11.206 11.074 11.804 11.781 12.585 12.388 ---

0.75 0.78 0.84 0.73

15.87 16.52 --15.32

0.78 0.81 0.85 0.83

17.92 18.82 -----19.47

293

As can be observed from Table 7.3 (a), the model generally demonstrates an acceptable fit to the data. The 2 statistics for all congeneric measures were significant at p >0.05, thereby suggesting that the fit of the data to the hypothesised model was inadequate (see Byrne 2001). Given the relatively large sample size (Bagozzi and Yi 1988; Bearden et al. 1982; Diamantopoulos 1994) that the 2 statistic did not achieve the adequate level was expected (Bagozzi and Yi 1988; Bearden et al. 1982; Diamantopoulos 1994). However, other goodness-of-fit statistics used for the model evaluation (e.g. RMR, GFI, IFI, CFI) suggested that the proposed model achieved an adequate fit to the observed data, except RMSEA, which was slightly above the acceptable cut-off point (0.05 0.08). Notably, the entire critical ratio associated with each item in the congeneric measures was statistically significant (greater than 1.96) at the 0.05 level of significance; therefore, the criterion for convergent validity has been established (Anderson and Gerbing 1988). In conclusion, the first step of the unidimensionality evaluation for the disconfirmation scale measure was adequately supported.

Figure 7.3 AMOS graphics: the output path diagram for measurement model 2

e1 e2 e3 e4 e5 e6 e7 e8

DISKNOW DISCOURT DISADVIC DISCONT .81 DISAVDS DISPROF DISCUST DISDEMO .72 .77 .80 .79 .66 .74 .73 .74 Direct seller Disconfirmation

e9 e10 e11 e12

DISPERFO .82 DISFUNC .80 DISEFFEC DISGUARA .89 .80 .77 product q uality .87

r1

Product Disconfirmation

.84

e13 e14 e15

DISINFO DISCATAL DISINNO

.83 .72 .85 Product offering s and information r2 .86

e16 e17 e18

DISREPUT DISPROMO DISCOINF

.74 .79 .84 Corporate Imag e .85 Company Disconfirmation .93

r3

e19 e20 e21

DISCOMPL DISCON DISPOLI .84 .78

.81 Corporate Customer Serv ice

r4

294

Subsequently all the five measures were integrated as a sub model of measurement model 2. Figure 7.3 visually illustrates the output path diagram for measurement model 2, which focused on the disconfirmation measure. It hypothesised a priori that are similar to measurement model 1 as portrayed in Figure 7.2; therefore, it will not be discussed. In turn, the overall results of CFA and other measures used to assess measurement model 2 will be discussed.

Table 7.3 (b) Summarised results of measurement model 2

Standardised Critical Composite Regression Ratio b Liability (t-values) (Loading)

Constructs Product Quality 1. Product performed as claimed 2. Product is multifunctional 3. Effectiveness of product 4. Product guarantee a Product offerings and information 1. Product information adequacy 2. Product catalogue / brochure visual 3. Innovative and unique product a Direct Seller disconfirmation 1. Knowledge of products and services 2. Being consistently courteous 3. Giving personal advice and attention 4. Continuity of contact 5. Availability of direct seller 6. Maintaining a professional appearance 7. Have customer interest at heart 8. Effectiveness of sales demonstration /presentationa Corporate Image 1. Companys reputation 2. Sales campaigns / promotion 3. Corporate information / publicitya Corporate Customer Service 1. Handle complaints promptly 2. Concern about customers 3. Product return / adjustment policya

R2

AVE 0.73

Crobachs Alpha 0.87

0.92 0.82 0.77 0.80 0.80 17.62 16.21 17.12 --0.90 0.83 0.72 0.85 8.292 8.102 --0.95 0.66 0.74 0.74 0.74 0.81 0.77 0.80 0.79 13.80 16.08 15.87 16.91 18.00 16.91 17.75 --0.43 0.55 0.54 0.55 0.66 0.60 0.64 0.63 0.68 0.52 0.72 0.67 0.59 0.64 0.64

0.75

0.84

0.70

0.91

0.90 0.74 0.80 0.84 15.97 17.21 ---0.93 0.81 0.84 0.78 6.84 17.47 --0.66 0.71 0.60 0.55 0.63 0.71

0.76

0.83

0.78

0.85

Overall Goodness-of-Fit statistics

2 = 603, Degree of freedom = 182, p= 0.001 RMR = 0.03, GFI = 0.87, IFI = 0.92, CFI = 0.92 RMSEA = 0.07
Note:
a b

fixed parameter Critical ratio (z-statistic) represents the parameter estimate divided by its standard error

295

Table 7.3 (b) depicts that all indicators falling on its posited underlying factor are statistically significant; all critical ratios (t-values) were significantly greater than ( 1.96) or 2.58 at 0.05 level or 0.01 level respectively. Notably, all standardised loadings were greater than 0.6 therefore providing some evidence of convergent validity (Anderson and Gerbing 1988).

Consequently, assessment of measure reliability was executed. Table 7.3 (b) demonstrates that R2 values for all indicators were greater than 0.50, except item 1 in the direct seller disconfirmation construct. This indicates that item reliability was moderately achieved (Bollen 1989; Steenkamp and van Trijp 1991). Additionally, all constructs incorporated in measurement model 2 yielded high reliability in terms of composite values. Interestingly, all constructs attained composite validity values greater than 0.90, exceeding the suggested score of 0.60 as recommended by Bagozzi and Yi (1988). Alternatively, reliability evaluation based on average variance extracted was greater than 0.70, which exceeded the suggested value of 0.50, as posited by Fornell and Larcker (1981). This implied that the variance captured by the construct is greater than the variance accounted for by measurement error (Hair et al. 1998). Notably, all Cronbachs alpha values were greater than 0.80, which was higher than the recommended threshold value of 0.70 (Gerbing and Anderson 1988).

The goodness-of-fit indices suggested that the measurement model represents a satisfactory fit to the data; the results of all the fit indices as displayed in Table 7.3 (b) yielded adequate fit. Although the 2 statistic was significant (p < 0.001), this is not unusual with large sample sizes (Bagozzi and Yi 1988; Steenkamp and Trijp 1991). In essence, the results of the evaluation of measurement model 2 exhibited strong evidence of unidimensionality, convergent validity and reliability. Clearly, it has adequate measurement properties, and is thus qualified to proceed for further analyses.

7.4.3

Measurement Model 3

The results of exploratory factor analysis as reported in section 5.12 (a) were used as the starting point for specifying this measurement model. Table 7.4 (a) demonstrates the results of the confirmatory factor analysis for each congeneric measure incorporated in measurement model 3. The model is comprises of four congeneric measures, which are: 296

Purchase decision involvement, Perceived equity, Relational Commitment and Perceived value.

Table 7.4 (a) CFA of congeneric measure for measurement model 3

Constructs Standardised. regression (loadings) 0.64 0.82 0.74 Critical ratio b (t-values)

Purchase Decision Involvement 1. Involvement 1 2. Involvement 3 3. Involvement 4 a Goodness-of-Fit statistics 2 = 0, Degree of freedom = 0; RMR = 1.0, GFI = 1.00, IFI = 1.00, CFI = 1.00, RMSEA = 0.0 Perceived Equity 1. Fairness 1 2. Fairness 2 3. Fairness 3 a Goodness-of-Fit statistics 2 = 11.33, Degree of freedom = 0; RMR = 0.0, GFI = 1.00, IFI = 1.00, CFI = 1.00 RMSEA = 0.0 Relational Commitment 1. Commitment 1 2. Commitment 2 3. Commitment 3 a Goodness-of-Fit statistics 2 = 0, Degree of freedom = 0; RMR = 0.0, GFI = 1.00, IFI = 1.00, CFI = 1.00; RMSEA = 0.0 Perceived Value 1. Quality value 2. Knowledgeable 3. Enjoyable 4. Product information 5. Convenient 6. Value for money

10.95 11.60 ---

0.81 0.67 0.64

10.95 10.30 ---

0.80 0.84 0.83

17.17 17.97 ---

7. Time value a
Goodness-of-Fit statistics 2 = 136.46, Degree of freedom = 14, p= 0.001, RMR = 0.03, GFI = 0.95, IFI = 0.93, CFI = 0.93, RMSEA = 0.09
Note:

0.60 0.58 0.61 0.59 0.53 0.64 0.71

10.42 10.24 10.79 10.42 9.50 11.19 ---

a Fixed parameter * Item deleted after confirmatory factor analysis b Critical ratio (z-statistic) represents the parameter estimate divided by its standard error RMR Root Mean Square Residuals), GIF (Goodness of fit), IFI (Incremental Fit Index), CFI (Comparative Fit Index), RMSEA (Root Mean Square Error of Approximation)

297

As shown in the above table, the measures for Purchase Decision Involvement, Perceived Equity and Relational Commitment are comprised of three observable indicators each, hence they are regarded as just identified or saturated models, which means that the number of equations equals the number of estimated coefficient, hence the model has zero degrees of freedom and probability level cannot be computed (Arbuckle and Wothke 1999; Bearden et al. 1982; Hair et al. 1998). As such, only a summary of factor loadings were discussed for these three constructs.

The CFA results illustrated that all the standardised loadings for each of the indicators of the constructs were statistically significant at <0.05 (greater than 1.96), and thereby demonstrate convergent validity. This result was applicable to the perceived value construct, however since it was over-identified, other information such as goodness of fit indices were provided by CFA. The fit indices indicated that the measurement model was supported by the data, except that the RMSEA value was slightly above the accepted range (0.05 0.08). As expected, the 2 was significant, however substantial evidence demonstrates that this statistic is sensitive to sample size.

Subsequently, these congeneric measures were evaluated as an overall model and the results were summarised in Table 7.4 (b). Before we discuss these results, it will be fruitful to first describe the path diagram of measurement model 3, as visually illustrated in Figure 7.4. All the five purified congeneric measures were incorporated as a sub model of measurement model 2. Confirmatory factor analysis was performed to assess the models overall fit, convergent validity, construct reliability and unidimensionality. The summary of these results is documented in Table 7.4 (b), whereas Figure 7.4 schematically illustrates the path diagram and output of measurement model 3, which hypothesised a priori that: 1. The model consists of a four factor structure, which are at the first order level

only; this means that all constructs are made up of one congeneric measure only. 2. The four constructs (purchase decision involvement, perceived equity, relational

commitment and perceived value) are intercorrelated, as indicated by two-headed arrows. There are 16 observed variables, as portrayed by the 16 rectangles, and each of these observed variables was regressed onto its respective factor. 3. Errors of measurement associated with each observed variables are uncorrelated.

298

Figure 7.4 AMOS graphics: the output path diagram for measurement model 3

e1

fairness1 .67 .64

.81 Equity

e2

fairness2

e3

fairness3 .27

e4

involvement1 .82 .74

.64 Purchase Decision Involvement

e5

involvement3

.55

e6

involvement4 .18

e7

commitment1 .84 .83

.80 Relational Commitment

.55

e8

commitment2

e9

commitment3

.31

e10

quality value

.58

e11

knowledgeable

.59 .58

e12

enjoyable .59 product info .53 .64

.61 Perceived Value

e13

e14

convenient

.71 e15 value for money

e16

time value

All the four measures were integrated as a sub model of measurement model 3. Next, the summarised results of the overall CFA and other evaluations are and other measure used to assess measurement model 3 will be discussed. It should be noted here that none of the items in measurement model 3 was deleted after CFA was performed on each congeneric factor. 299

Table 7.4 (b) Summarised results of measurement model 3

Constructs Standardised regression (loading) Critical ratio b
Composite Reliability R2 AVE Crobachs Alpha

Purchase Decision Involvement 1. Involvement 1 2. Involvement 3 3. Involvement 4 a Perceived Equity 1. Fairness 1 2. Fairness 2 3. Fairness 3 a Relational Commitment 1. Commitment 1 2. Commitment 2 3. Commitment 3 a Perceived Value 1. Quality value 2. Knowledgeable 3. Enjoyable 4. Product information 5. Convenient 6. Value for money

0.83 0.64 0.82 0.74 10.95 11.60 --0.86 0.81 0.67 0.64 10.95 10.30 --0.88 0.80 0.84 0.83 17.17 17.97 --0.86 0.60 0.58 0.61 0.59 0.53 0.64 0.71 10.42 10.24 10.79 10.42 9.50 11.19 --0.35 0.33 0.37 0.34 0.30 0.41 0.51 0.64 0.70 0.70 0.66 0.45 0.41 0.41 0.67 0.55

0.62

0.78

0.67

0.74

0.74

0.86

0.48

0.82

7.Time value a

Overall Goodness-of-Fit Indices 2 = 136.46, Degree of freedom = 98, p= 0.006 RMR = 0.023, GFI = 0.96, IFI = 0.98, CFI = 0.98 RMSEA = 0.07
Note:
a b

Fixed parameter Critical ratio (z-statistic) represents the parameter estimate divided by its standard error

Table 7.4 (b) illustrates that all indicators fall on their posited underlying factors and are statistically significant; the entire critical ratio (t-values) were significantly greater than 2.58 at the 0.01 level. Noticeably, all standardised loadings were greater than 0.6 except items 2, 4 and 5 of the perceived value construct, therefore providing some evidence of convergent validity (Anderson and Gerbing 1988). Assessment of measure reliability was executed. Table 7.4 (b) demonstrates that the R 2 value for most of the indicators was less than 0.50; this implied that overall, these indicators did not satisfy the acceptable threshold of individual item reliability (Bollen 1989; Steenkamp and van Trijp 1991). However, all other evaluations of reliability achieved a satisfactory level. For example, all constructs incorporated in measurement model 3 yielded reliability in terms of their composite values. Interestingly, all 300

constructs attained composite validity values greater than 0.80, exceeding the suggested score of 0.60 as recommended by Bagozzi and Yi (1988). In addition, reliability evaluation based on average variance extracted was greater than 0.60, (except perceived value) which exceeded the suggested value of 0.50, as suggested by Fornell and Larcker (1981). This implied that the variance captured by the construct is greater than the variance accounted for by measurement error (Fornell and Larcker 1981; Hair et al. 1998). It is worth mentioning that all Cronbachs alpha values were greater than 0.70, which satisfied the recommended threshold value of 0.70 (Gerbing and Anderson 1988).

In turn, the goodness-of-fit indices suggest that the measurement model represents a satisfactory fit to the data; the results of all the goodness of fit indices employed in this study as displayed in Table 7.4 (b) yielded adequate fit, which inferred that the measurement model was supported by the data. Although the 2 statistic was significant (p < 0.001) this is not unusual as the sample size was large. In conclusion, the results of the evaluation of measurement model 3 showed strong evidence of unidimensionality, convergent validity and reliability. Therefore, it has adequate measurement characteristics for the next stage of analysis, which is the structural model evaluation.

7.4.4

Measurement Model 4

The results of exploratory factor analysis as reported in section 5.12 (a) were used as the starting point for specifying measurement model 4. Table 7.5 (a) demonstrates the results of the confirmatory factor analysis for each congeneric measure incorporated in measurement model 4. The model comprises six congeneric measures, which are: overall satisfaction, product satisfaction, direct seller satisfaction, company satisfaction, favourable behavioural intentions and unfavourable behavioural intentions. It is important to highlight here that product satisfaction, direct seller satisfaction and company satisfaction are single indicator constructs; with a single item construct, it is not possible to estimate the reliability of the construct, thus it was appropriately specified fixed at 0.90. In a correlation matrix, the loading value is the square root of 0.90 (i.e. 0.95) and the error term was set at one minus the suggested Cronbachs alpha, which resulted in 0.10 as the fixed error term (Anderson and Gerbing 1988; Hair et al. 1998). As previously explained, the measures for overall satisfaction and unfavourable behavioural intentions are comprised of three observable indicators each, hence, they are regarded as just identified constructs (Bearden et al. 1982; Byrne 2001). 301

Obviously, this left us with only one congeneric variable to be described, that is favourable behavioural intentions. Hence, only a summary of these three constructs were discussed in terms of factor loadings.

Table 7.5 (a) CFA result of congeneric measure for Measurement Model 4
Constructs Std. regression (loadings) Critical ratio c (t-values)

1. Product satisfaction a 2. Direct seller satisfaction a 3. Company satisfaction a Overall Satisfaction 1. Overall satisfaction 1 2. Overall satisfaction 2 3. Overall satisfaction 3 b Goodness-of-Fit statistics 2 = 0.0, Degree of freedom = 0.0 RMR = 0.0, GFI = 1.00, IFI = 1.00, CFI = 1.00 RMSEA = 0.0 Favourable Behavioural Intentions 1. Say positive about direct seller 2. Encourage friends 3. Say positive about company 4. * Cross buy 5. Repurchase same product from d/s 6. Continue purchase 7. Price tolerance 1 8. Price tolerance 2 9. Say favourable of product 10. * Maintain same amount of purchase 11. Continue as main provider b Goodness-of-Fit statistics 2 = 223.39, Degree of freedom = 44, p= 0.001 RMR = 0.04, GFI = 0.90, IFI = 0.92, CFI = 0.92 RMSEA = 0.10 Unfavourable Behavioural Intentions 1. Switch to other product 2. Complain to direct seller 3. Complain to friends b Goodness-of-Fit statistics 2 = 0.0, Degree of freedom = 0.0 RMR = 0.0, GFI = 1.00, IFI = 1.00, CFI = 1.00 RMSEA = 0.0
Note: Single item construct Fixed parameter * Item deleted after confirmatory factor analysis c Critical ratio (z-statistic) represents the parameter estimate divided by its standard error RMR (Root Mean Square Residuals), GIF (Goodness of fit), IFI (Incremental Fit Index), CFI (Comparative Fit Index), RMSEA (Root Mean Square Error of Approximation)
b a

0.81 0.83 0.76

15.62 15.94 ---

0.69 0.74 0.76 0.46 0.75 0.77 0.63 0.72 0.83 0.54 0.72

13.39 14.44 15.03 8.80 14.78 15.25 12.46 14.30 15.42 10.55 ---

0.66 0.84 0.67

9.51 10.00 ---

302

The CFA results illustrated that all the standardised loadings for each of the indicators of the above constructs were high and statistically significant at p<0.05 (greater than 1.96), thereby demonstrating convergent validity (Gerbing and Anderson 1988). However, since favourable behavioural intentions was an over identified construct, other information such as goodness of fit indices were provided by CFA. The fit indices indicated that the measurement model was supported by the data, except that the RMSEA value was slightly above the accepted range (0.05-0.08). Again, the 2 was significant, but as recommended by many scholars, other fit evaluations should also be employed to assess model fit. In order to improve the overall model fit, two poor-fitting items were identified; items 4 and 10, which have relatively low squared multiple correlations values.

Subsequently, these congeneric measures were evaluated as a whole model and the results were summarised in Table 7.5 (b). It will be of benefit to first describe the path diagram of measurement model 4, as visually illustrated in Figure 7.5. All the three purified congeneric measures and three single item constructs were incorporated as a sub model of measurement model 4. Confirmatory factor analysis was performed to assess the models overall fit, unidimensionality, and convergent validity and construct reliability. Figure 7.5 schematically illustrates the output path diagram for measurement model 3, which hypothesised a priori that: 1). The model is a six-factor structure, which comprises the first and second order

levels. The model suggests that the behavioural intentions construct could be disentangled into congeneric factors, i.e. favourable intentions and unfavourable intentions, which are classified as first order factors. It should be noted that behavioural intentions was portrayed as a higher order (second order) construct, which is accountable for the lower order (first order). The second order construct (i.e. behavioural intentions) is presented in the model as a shaded ellipse. The factor structure of the measurement model is illustrated in Figure 7.5. 2). Five constructs (overall satisfaction, product satisfaction, direct seller satisfaction, company satisfaction and behavioural intentions) are intercorrelated, as indicated by two-headed arrows. There are 18 observed variables as portrayed by the 18 rectangles and each of these observed variables was regressed onto its respective factor. 3). Errors of measurement associated with each of the observed variables are

uncorrelated. 303

Figure 7.5 AMOS graphics: the output path diagram for measurement model 4

e15 e16 e17

V37A V37B V37C .83 .76

.81 overall satisfaction .53 .89 .42 .49 .51 .49 .57

e18

satprod

product satisfaction

e19

satds

.90

direct seller satisfaction

e20

satco

.89

company satisfaction .75

e1 e2 e4 e5 e6 e7 e8 e9 e11

V38 V39 V41 V43 V44 V45 V46 V47 V52 r2 .42 Behavioural Intentions .69 .75 .76 .75 .77 .63 .72 .79 .72 r1 .47 favourable intentions .99 .49

.56

e12 e13 e14

v48 v49 v50

.59 .83 .66

unfavourable intentions

Table 7.5 (a) summarised the overall results of the measurement model 4 assessment. The results revealed that all indicators fall on their posited underlying factors and are statistically significant; the entire critical ratio (t-values) was significantly greater than 2.58 at 0.01 level. This demonstrates evidence of convergent validity (Anderson and Gerbing 1988). Table 7.5 (b) demonstrates that R2 value for indicators ranged from 0.35 0.71, which implied that the reliability of several individual items in this measurement model failed to satisfy the acceptable threshold level of convergent validity (i.e. 0.50). Interestingly, all constructs attained composite validity values greater than 0.70, which exceeds the suggested value of 0.60 recommended by Bagozzi and Yi (1988). 304

Table 7.5 (b) Summarised results for measurement model 4

Standardised regression (loadings) Critical ratio c (t-values) Composite Reliability R2 AVE Crobachs Alpha

Constructs 1. Product satisfaction a 2. Direct seller satisfaction a 3. Company satisfaction a Overall Satisfaction 1. Overall satisfaction 1 2. Overall satisfaction 2 3. Overall satisfaction 3 b Favourable Intentions 1. Say positive about direct seller 2. Encourage friends 3. Say positive things about company 4. Repurchase same product from direct seller 5. Continue purchase 6. Price tolerance 1 b 7. Price tolerance 2 8. Say favourable things about product 9. Continue as main provider Unfavourable Intentions 1. Switch to other product 2. Complain to direct seller 3. Complain to friends b

0.88 0.90 0.89

-------

------0.89

0.66 0.69 0.60

------0.74

0.90 d 0.90 d 0.90 d 0.84

0.81 0.83 0.76

15.62 15.94 --0.93

0.79 0.66 0.69 0.60 0.47 0.56 0.58 0.60 0.40 0.40 0.52 0.63 0.52 0.75 0.51 0.35 0.70 0.44 0.75 0.91

0.69 0.75 0.76 0.75 0.77 0.63 0.72 0.80 0.72

11.77 12.55 12.77 12.58 13.03 --12.19 13.16 12.23

0.66 0.84 0.67

9.51 10.00 ---

Overall Goodness-of-Fit Indices

2 = 356.38, Degree of freedom = 126, p= 0.001 RMR = 0.051, GFI = 0.91, IFI = 0.93, CFI = 0.93 RMSEA = 0.06
Note: Single item construct Fixed parameter c Critical ratio (z-statistic) represents the parameter estimate divided by its standard error d Fixed estimated Crobachs alpha
b a

In addition, reliability evaluation based on average variance extracted satisfied the recommended value of 0.50 (Fornell and Larcker 1981). This indicates that the variance captured by the construct is greater, as compared to the variance accounted for due to measurement error (Hair et al. 1998). Each of the observed variables satisfied Nunnalys (1978) threshold level of acceptable reliability; which is Cronbachs alpha value of 0.70 or greater.

305

In turn, the goodness-of-fit results that were based on the selected fit indices employed in this study are reported in Table 7.5 (b). This indicates that measurement model 4 yielded a moderate fit, which means that the measurement model was supported by the data. Although the 2 statistic was significant (p < 0.001), this is anticipated, as the sample size was large. In conclusion, the results of the evaluation of measurement model 4 provided evidence of unidimensionality, convergent validity and reliability. Therefore, it has adequate measurement characteristics to proceed to structural equation modelling in the second stage of the analysis.

7.5

Assessment of Discriminant Validity of the Measurement Model

After ensuring that the measures were unidimensional and reliable, the final step was to ascertain the discriminant validity of the overall measurement model. The initial method of assessing discriminant validity was to examine the intercorrelations among the 20 first order constructs that have been generated and purified by exploratory factor analysis and CFA. There is no definite limit to specify what are high correlations, however according to Hair et al. (1998, p. 643), values exceeding 0.90 should be investigated further, and even correlations exceeding 0.80 can be indicative of problems. Kline (1998) suggests a cut-off point of 0.85. Generally, low to moderate correlations between factors indicate the existence of discriminant validity. Table 7.6 displays a correlation matrix where most of the correlation coefficients were significant, of the expected direction and did not exceed the suggested cut-off point of 0.80. It is worth noting that most of the correlation estimates among the variables are significant at the 0.05 level and the highest coefficient is 0.758. In essence, the results provide some support for discriminant validity among factors examined in this study.

306

Table 7.6

Correlations at the Dimension Levels

Constructs/ factors
TOTINVOL (V1) TOTFAIR (V2) TOTCOMMI (V3) TOTALPV (V4) PQUALITY (V5) POFFER (V6) TOTDSPER (V7) IMAGEPER (V8) COSERPER (V9) PQUADIS (V10) POFERDIS (V11) DSDISCON (V12) IMAGDISC (V13) COSERDIS (V14) TOTSAT (V15) FAVBI (V16) UNFAVBI (V17) SATALLPR (V18) SATALLDS (V19) SATALLCO (V20)

V1
1 .210 ** .152** .240** .125* .209** .149** .119* .078 .155** . 117* .061 .108* .053 .141** .109* .273** .113* .155** .145**

V2

V3

V4

V5

V6

V7

V8

V9

V10

V11

V12

V13

V14

V15

V16

V17

V18

V19

V20

1 .459** .432** .297** .295** .437** .186** .277** .178** .153** .277** .174** .209** .367** .369** .243** .247** .358** .267**

1 .481** .444** .412** .498** .313** .426** .324** .294** .328** .332** .319** .417** .524** .187** .290** .381** .293**

1 .538** .510** .606** .432** .583** .484** .438** .468** .391** .466** .548** .552** .219** .443** .480** .444**

1 .538** .524** .327** .571** .568** .365** .372** .355** .453** .449** .587** .146** .586** .419** .423**

1 .564** .512** .609** .408** .518** .395** .403** .448** .364** .422** .229** .534** .470** .477**

1 .511** .694** .408** .416** .504** .402** .458** .490** .538** .162** .415** .751** .526**

1 .649** .325** .455** .311** .478** .361** .433** .370** .130* .339** .468** .584**

1 .532** .512** .459** .461** .588** .529** .561** .193** .442** .584** .687**

1 .717** .634** .542** .695** .490** .535** .152** .437** .369** .393**

1 .604** .657** .652** .403** .437** .140* .389** .334** .430**

1 .635** .758** .384** .424** .095 .298** .426** .364**

1 .726** .34**3 .414** .114* .232** .319** .410**

1 .417** .462** .093 .318** .398** .452**

1 .648** .176** .440** .358** .429**

1 .273** 1 .475** .138* 1 .410** .143** .397** 1 .424** .189** .395** .463**

** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed).

307

Alternatively, a chi-square difference test, a procedure recommended by Bagozzi and Philips (1982) was used to verify discriminant validity among the factors generated from the preceding measurement model evaluation. Technically, in this approach, discriminant validity was assessed by running the full measurement model twice, once by constraining the correlation between the latent variables to unity and once allowing them to correlate freely. In this modelling endeavour, every pair of possible intercorrelations among fifteen latent constructs was examined. A significantly lower chi-square value (greater than 3.84 at p < 0.05 or greater than 6.63 at p<0.01) for the unconstrained model would indicate that the traits are not collinear; hence, discriminant validity was evidenced (Anderson and Gerbing 1988). Appendix 7.5 presents the result of the chi square difference on pairs of latent constructs. The entire pairs of constructs were significant at the 0.01 level, demonstrating that disciminant validity was upheld. Accordingly, the procedure recommended by Fornell and Larcker (1981) was employed to further validate the discriminability of the constructs examined in this study. In this approach, it is postulated that if AVE for a construct were substantially higher than the square correlation between constructs, this would imply that discriminant validity is evidenced. Table 7.7 provides evidence that all AVE were greater than R2 (squared correlations) except for two cases; Product performance Direct seller performance and Company performanceProduct performance. Finally, there was additional evidence of discriminant validity, demonstrated by the fourth method as previously discussed. Table 7.7 illustrates that discriminant validity is achieved in all cases, as each correlation coefficient plus or minus twice the standard error does not include 1. These are correlation coefficients derived from each of the four measurement models. This therefore suggests that there is complementary evidence to support the existence of discriminant validity among the constructs hypothesised in the measurement model. In brief, given the evidence of discriminant validity by all the four methods, there is substantial evidence for this study to claim that all the constructs incorporated in the conceptual model are distinct. They are thus qualified to proceed to the next stage of the analytical process; that is, the assessment of the hypothesised structural relationships among these constructs as explicated in Figure 4.2.

308

Table 7.7
CONSTRUCT
SATALLPR a (X1) SATALLCO a(X2) SATALLDS a (X3) TOTINVOL (X4) TOTFAIR (X5) TOTCOMMI (X6) TOTALPV (X7) TOTPPERF (X8) TOTDSPER (X9) TOTCOPER (X10) DSDISCON (X11) TOTPRODI (X12) TOTBI (X13) TOTSAT (X14)

Correlations of Latent Constructs, AVE, R-Square and Confidence Interval

X1 X2 0.32 b (0.60) c --.463** .145** .267** .293** .444** .514** .526** .704** .364** .439** .367*8 .429** X3 0.32 b (0.62) c 0.43 b (0.66) c --.155** .358** .381** .480** .517** .751** .586** .426** .385** .329** .358** 0.07 b (0.3) c 0.03 b (0.23) c 0.30 b (0.60) c 0.09 b (0.35) c 0.30 b (0.59) c 0.33 b (0.64) c X4 X5 X6 X7 X8 X9 X10 X11 X12 X13 0.37 b (0.65) c 0.26 b (0.55) c 0.27 b (0.88) c X14 0.32 b (0.61) c 0.31b (0.61) c 0.20 b (0.51) c X15

--.395** .397** .113* . 247** .290** .443** .657** .415** .444** .298** .459** .365** .440**

0.62
.210** .152** .240** .176** .149** .094 .061 . 147** .249** .141**

0.67
.459** .432** .349** .437** .260** .277** .177** .374** .367**

0.74
.481** .528** .498** .392** .328** .336** .423** .417**

0.48
.619** .606** .566** .468** .502** .461** .548**

0.59
.623** .638** .446** .590** .491** .467** .510**

0.62 b (0.83) c

0.61
.667** .504** .449** .418** .490** .472**

0.81 b (0.95) c 0.55 b (0.79) c

0.68
.422** .535** .422** .539** .560**

0.70
.672** .299** .384** .754**

0.52 b (0.77) c

0.73
.412** .473** .750**

0.69 b (0.89) c 0.72 b (0.90) c

0.55
.485** .354**

0.54 b (0.81) c

0.74
.429**

.297** .472** .395** .081 .222** .358** .474** TOTCODIS (X15) Notes: ** Correlation is significant at the 0.01 level (2-tailed). * Correlation is significant at the 0.05 level (2-tailed). a represent single item construct, AVE not calculated. AVE is represented on the diagonal b represent R2 c represent confidence interval of correlation between two constructs 2 standard error

0.77

309

In line with Anderson and Gerbings (1988) suggestion, all four measurement models were assessed on the following criteria: unidimensionality, reliability, convergent and discriminant validity. In the light of the results obtained from the evaluations it can be concluded that all the constructs examined have shown adequate measurement properties, and thus they are qualified to proceed to the structural model evaluation. The final set of items is used to represent a particular construct; a composite measure was constructed by calculating the mean score of the factor validated by the preceding procedures. These composite measures were then used for the structural model assessment to test the hypotheses as stipulated in the conceptual model. The description of the verified constructs, mean score, skewness, kurtosis and scale reliability are reported in Table 7.8. Table 7.8 Description of constructs, descriptive statistics and scale reliability ()
Construct
SATALLPR SATALLCO SATALLDS TOTINVOL TOTFAIR TOTCOMMI TOTALPV TOTPPERF a PQUALITY POFFER TOTDSPER TOTCOPER a IMAGEPER COSERPER DSDISCON TOTPRODI a PQUADIS POFERDIS TOTBI a FAVBI UNFAVBI TOTCODIS a IMAGDISC COSERDIS

Description of construct
Product Satisfaction Company Satisfaction Direct seller Satisfaction Purchase Decision Involvement Perceived Equity Relational Commitment Perceived Value Product Performance Product Quality Performance Product offering and information performance Direct seller Performance Company Performance Corporate Image Performance Corporate Customer Service Performance Direct seller Disconfirmation Product Disconfirmation Product Quality Disconfirmation Product Offerings and Information Disconfirmation Behavioural Intentions Favourable Behavioural Intentions Unfavourable Behavioural Intentions Company Disconfirmation Corporate Image Disconfirmation Corporate Customer Service Disconfirmation Overall Satisfaction

No of items

Mean

Scale Skewness Kurtosis Reliability ( )

1 1 1 3 3 3 7 2 4 3 8 2 3 3 8 2 3 3 2 9 3 2 3 3

3.89 3.85 3.72 4.38 3.86 3.49 3.82 3.77 3.70 3.86 3.68 3.66 3.77 3.57 3.41 3.41 3.33 3.48 3.87 3.63 4.10 3.41 3.44 3.39

1.48 -0.56 -0.56 -1.22 -1.63 -0.51 -0.13 -0.21 -0.22 -0.22 -0.52 -0.66 -0.52 -0.58 0.34 0.31 0.14 0.38 -1.11 -0.39 -0.97 0.26 0.24 0.27

2.01 1.56 1.16 0.97 0.33 0.82 0.60 -0.11 1.02 -1.38 1.21 1.55 0.98 0.98 0.74 0.59 0.89 0.97 2.75 0.77 1.03 0.47 0.15 0.44

0.90 0.90 0.90 0.78 0.74 0.86 0.82 0.70 0.82 0.68 0.90 0.79 0.77 0.81 0.91 0.84 0.87 0.84 0.89 0.91 0.75 0.84 0.83 0.85

TOTSAT

3.67

-0.68

1.66

0.84

Note: a Second order construct

310

7.6

Structural Model Evaluation

In the first part of this chapter, attention was focused on establishing a measurement model that satisfied unidimensionality, validity and reliability requirements. The second part of the chapter turns to the assessment of the relationships among constructs incorporated in the hypothesised conceptual model. The structural model was tested using the AMOS (version 4) programme with maximum likelihood estimation. The causal process is depicted by a series of structural (i.e. regression) equations as illustrated in Figure 4.2. The hypothesised model was tested (simultaneously assessing the entire system of constructs) to establish its consistency with the data. If the goodness of fit is adequate, this would thereby demonstrate the plausibility of the postulated linkages. On the contrary, if the fit measure is not adequately achieved, the tenability of the hypothesised relationship is rejected (Byrne 2001). A schematic representation of the hypothesised model with the structural components is displayed in Figure 7.6. The error terms associated with the observed variables have been omitted for clarity. In adherence to Hair et als (1998) suggestion, the results of the structural model estimation was first examined for nonsensical or offending estimates. Offending estimates occur when the error variances are negative, standardised coefficients exceed or are very close to 1.0, or a very large standard error is associated with any estimated coefficient (Bollen 1989; Hair et al. 1998). In the review of the structural model output, one standardised regression estimate was found to be slightly above 1.0. This improper solution was treated by fixing the problematic parameter (i.e. perceived equity) measurement error to a small positive value (i.e. 0.005) to ensure that the loading would be less than 1.0, and subsequently the model was re-estimated. This improper solution is recognised to be a common problem in factors analytic maximum likelihood structural equations (cf. Fornell and Larcker 1981). Accordingly, Gerbing and Anderson (1988) point out that fixing error measurement at zero for improper estimates has no appreciable effect on parameter estimates of other factor or overall goodness-of fit indices.

311

Figure 7.6

Hypothesised Model with Measurement and Structural Components

r3 TOTFAIR

r5

percieved equity
r4 r1 1 1

relational commitment

TOTCOMMI

TOTDSPER

direct seller performance

r2 TOTALPV 1 DSDISCON

direct seller disconfirmation

SATALLDS

direct seller satisfaction

TOTSAT

perceived value
r7 r6 1

overall satisfaction

1 r9

PQUALITY POFFER

product performance
PQUADIS POFERDIS

product disconfirmation

product satisfaction
1 r10

behavioral intentions

SATALLPR

purchase involvement

TOTINVOL FAVBI r8 r11 1 UNFAVBI

IMAGEPER COSERPER

company performance

company disconfirmation

company satisfaction

SATALLCO

IMAGDISC

COSERDIS

Note: In the interest of clarity errors of measurement are not included

312

7.6.1

Goodness-of fit Assessment

In inspecting the re-estimated structural models output, no offending estimates were present; hence, the assessment of the goodness-of-fit of the structural model followed. Before discussing the results of the individual hypotheses as posited in Chapter 4, the overall fit of the structural model was estimated to validate that it was an adequate representation of the entire set of causal relationships (Hair et al. 1998). The selected goodness-of-fit statistics related to the hypothesised model have been presented in Table 5.14. The hypothesised structural model has a significant 2 value (2 = 503.68, df = 147, p< 0.001), thereby indicating an inadequate fit of the data to the hypothesised model. This result is not unexpected because in practice this statistic is very sensitive to sample size; it often suggests the rejection of a well-fitting model and provides little guidance in reflecting the degree of model fit. Indeed, MacCallum et al. (1996) have proven that the chi-square test is unrealistic in most SEM empirical research, and they proposed changes to the traditional hypothesis-testing procedure in SEM. In a similar voice, Bagozzi and Foxall (1996) assert that researchers should not exclusively rely on the chisquare test as a measure of fit. Alternatively, in the current study other measures such as GFI, RMR, RMSEA, IFI and CFI, were utilised in assessing the measurement and the structural model. As a complement to the above fit statistics, we also examined to other measure in evaluating the structural model: Parsimony-adjusted Comparative Fix Index (PCFI) and Expected Cross-Validation Index (ECVI) were utilised in comparisons among alternative models (Hair et al. 1998). There is no established acceptable threshold levels for these measures and they are discussed when competing models are analysed. The estimation of the hypothesised model yielded a GFI value of 0.88, which is somewhat lower than those of CFI (0.91) and IFI (0.91); this result is mainly due to the fact that the GFI measure is more easily affected by model complexity (De Wulf et al. 2003). In addition, the root mean square residual (RMR) value of 0.02 demonstrated a good fit ,which exceeded the posited cut-off value (<0.05). However, the root mean square error of approximation (RMSEA) value of 0.078 was at a marginal acceptance level (<0.05 to 0.08). Byrne (1994a) points out that one limitation of RMSEA is that it does not take into account the complexity of the model. Presumably, in this modelling context, this could be the reason for RMSEA value marginally satisfying the recommended threshold level, as the proposed structural model is considered complex. 313

Generally, the results of the above fit indices suggest that the hypothesised model marginally fits the data. In brief, since the overall fit results demonstrate that the model marginally fits the data, apparently some modification in specification is needed in order to establish a model that is more parsimonious and represents the best fit to the sample data. Post-hoc model fitting to identify potentially important areas of improvement (Byrne 2001) followed; this procedure will be described in section 7.6.3

7.6.2

Hypotheses Testing Results and Discussion

Turning to the evaluation of the hypothesised paths postulated in the structural model, this process involves inspecting whether the path coefficients are significant and in the hypothesised direction. To test the posited hypotheses in this research, the critical ratio associated with each parameter was ascertained (Dabholkar 1996). In this section, we will verify whether the empirical results of the structural model evaluation support the hypothesised parameter as postulated in Chapter 4. The summarised results of the proposed structural model are presented (see Table 7.9) with regard to the standardised estimates, critical ratio and significance level. Initially, the estimation of the hypothesised structural model revealed that twenty of the hypothesised links were significant whilst seven were non-significant.

314

Table 7.9
H1. H2. H3. H4. H5. H6. H7. H8. H9.

CFA for the Structural Model

Standardised Coefficient Critical Ratio (t-value) Results

Hypothesis number and hypothesised path Product disconfirmation Direct seller disconfirmation Product disconfirmation Company disconfirmation D.S. disconfirmation Company disconfirmation Direct seller disconfirmation Direct seller satisfaction Product disconfirmation Product satisfaction Company disconfirmation Company satisfaction Direct seller performance Direct seller satisfaction Product performance Product satisfaction Company performance Company satisfaction

0.69 (+) 0.21 (+) 0.68 (+) -0.11 (-) -0.14 (-) 0.00 (+) 0.91 (+) 0.85 (+) 0.84 (+) 0.19 (+) 0.74 (+) 0.13 (+) 0.38 (+) 0.17(+) 0.11(+) 0.11 (+) 0.04 0.53 (+) 0.40 (+) 0.94 (+) 0.56 (+) 0.05 0.00 0.37(+) 0.40(+) 0.27(+) 0.78(+)

9.26 **** 2.02 ** 6.12 **** -1.74* -1.39a 0.09a 13.19**** 7.53**** 10.50**** 2.78*** 11.16**** 2.34** 2.74*** 2.28*** 1.46a 1.97** 0.56a 4.82**** 3.66**** 5.45**** 3.06*** 0.28a 0.01a 6.86**** 6.82**** 3.73**** 4.92****

Supported Supported Supported Not Supported Not Supported Not Supported Supported Supported Supported Supported Supported Supported Supported Supported Not Supported Supported Not Supported Supported Supported Supported Supported Not Supported Not Supported Supported Supported Supported Supported

H10. Direct seller performanceDirect seller disconfirmation H11. Product performance Product disconfirmation H12. Company performance Company disconfirmation H13. Direct seller satisfaction Overall satisfaction H14. Product satisfaction Overall satisfaction H15. Company satisfaction Overall satisfaction H16. Purchase Involvement Perceived value H17. Purchase Involvement Product satisfaction H18. Direct seller performance Perceived value H19. Product performance Perceived value H20. Perceived value Overall satisfaction H21. Perceived value Perceived equity H22. Direct seller performance Perceived equity H23. Perceived equity Direct seller satisfaction H24. Perceived equity Relational Commitment H25. Direct seller satisfaction Relational Commitment H26. Relational Commitment Behavioural intentions H27. Overall satisfaction Behavioural intentions
Note: **** Significant at p< 0.001 (t> 3.29) *** Significant at p< 0.01 (t> 2.57) ** Significant at p< 0.05(t> 1.96)

* Significant at p < 0.10 (t > 1.65) a Non-significant

315

7.6.2.1

Hypotheses H1, H2 and H3

The discussion of the results of the hypotheses tested on the estimated paths is organised on the constructs. For instance, the first group is H1, H2 and H3, which focus on the relationships among disconfirmation constructs. As illustrated in Table 7.10, all the three hypotheses are supported and all the significant path coefficients are in the hypothesised direction.
Table 7.10 Summarised results for hypotheses H1, H2 and H3 Hypotheses Tested
H1: In the direct sales consumption system, product disconfirmation is positively related to direct seller disconfirmation. H2: In the direct sales consumption system, product disconfirmation is positively related to direct sales company disconfirmation H3: In the direct sales consumption system, direct seller disconfirmation is positively related to direct sales company disconfirmation.
Note: **** Significant at p< 0.001 (t> 3.29) ** Significant at p< 0.05 (t> 1.96)

Standardised Estimate 0.69 (+) ****

Result SUPPORTED

SUPPORTED 0.21 (+) ** SUPPORTED 0.68 (+) ****

It can be concluded that there is sufficient evidence that, in the direct sales consumption system, product disconfirmation is positively associated with direct seller disconfirmation and company disconfirmation. In turn, direct seller disconfirmation is significantly associated with direct sales disconfirmation. Stronger evidence of the relationship was revealed for the product disconfirmation with direct seller (H1) and direct seller disconfirmation and direct sales company disconfirmation (H3). However, the strength of the relationship between product disconfirmation and company disconfirmation was relatively low (H2). Interestingly, the findings from these three hypotheses were congruent with the crossover effects phenomenon as claimed by Mittal et al. (1999) in their empirical study on the automotive sector.

7.6.2.2

Hypotheses H4, H5 and H6

The results illustrated in Table 7.11 indicate that H4, H5 and H6 were not supported by the findings. It should be noted that the hypothesised relationship as posited in H4 was significant but was not supported as it lie in the opposite hypothesised direction. These findings are rather unexpected, given adequate empirical evidence demonstrating that 316

disconfirmation plays a significant role in the customer satisfaction process (e.g. Churchill and Suprenant 1982; Oliver 1980: Oliver and Bearden 1985; Spreng et al. 1996; Swan and Trawick 1981; Tse and Wilson 1988). A summary of major research findings on the predictors of customer satisfaction can be found in Appendix 3.1
Table 7.11 Summarised results for Hypotheses H4, H5 and H6 Hypotheses Tested
H4: In the direct sales consumption system, direct seller disconfirmation is positively associated to direct seller satisfaction. H5: In the direct sales consumption system, direct sales product disconfirmation is positively associated to direct sales product satisfaction. H6: In the direct sales consumption system, direct sales company disconfirmation is positively associated to direct sales company satisfaction.
Note: * Significant at p< 0.10 (t> 1.65) a Non-significant

Standardised Estimate -0.11 (-) *

Result

NOT SUPPORTED

-0.14 (-) a

NOT SUPPORTED

0.00 (+) a

NOT SUPPORTED

Prior research, portrayed previously in Appendix 3.1, reveals that the study settings and research methods used in the study were relatively different from the current study. Hence, it could be argued that these factors could contribute to the unexpected results. It was speculated that there might be other factors that exert significant influence in determining customer satisfaction in the context of direct sales consumption. For example, Spreng and Page (2001) reveal that the effect of disconfirmation on satisfaction was non-significant for the low confidence consumer but significant for high confidence group. If this assumption holds true in the current study, it appears that the characteristics of the individuals in the study could influence satisfaction judgement; however, this specific customer characteristic was not incorporated in this thesis. It could be summarised that generally disconfirmation is not a significant determinant of product and company satisfaction, whilst direct seller disconfirmation exerts a significant negative impact on direct seller satisfaction.

7.6.2.3

Hypotheses H7, H8 and H9

Table 7.12 summarises the findings for H7, H8 and H9; all the three hypotheses were supported with highly significant standardised estimates, congruent with the 317

hypothesised direction. In assessing the strength of the path coefficients between constructs, the path coefficient between direct seller performance and direct seller satisfaction (H7) is larger than 0.90, which could be regarded as troublesome. No definite threshold level has been posited by prior research to determine when a path coefficient can be considered high; however, values exceeding 0.90 are assumed to be indicative of multicollinearity (Hair et al. 1998). However, it has been previously demonstrated that there exists sufficient evidence of discriminant validity between both constructs (see Section 7.5).
Table 7.12 Summarised results for Hypotheses H7, H8 and H9 Hypotheses Tested
H7: The higher the performance level of the direct seller, as perceived by the customer, the more satisfied he/she will be with the direct seller. H8: The higher the performance level of the direct sales product, as perceived by the customer, the more satisfied he/she will be with the product. H9: The higher the performance level of the direct sales company, as perceived by the customer, the more satisfied he/she will be with the company.
Note: **** Significant at p< 0.001 (t> 3.29)

Standardised Estimate 0.91 (+) ****

Result

SUPPORTED

0.85 (+) ****

SUPPORTED

0.84 (+) ****

SUPPORTED

Referring back to the discussion pertaining to hypotheses H4, H5 and H6, the current findings validate the speculation; there are other factors that significantly influence customer satisfaction judgements. In this regard, this study offers empirical evidence that product, direct seller and company performance have positive significant impacts on the product, direct seller and company satisfaction respectively. This finding lends credence to Brady et al. (2002), Cronin and Taylor (1992), Page and Spreng (2002) and Yuskel and Remmington (1998), who cogently argue that performance effects should be modelled directly, rather than via the disconfirmation route in the customer satisfaction judgement. In addition, these findings are consistent with Oliver and DeSarbo (1988) and Spreng and Olshavsky (1991), who found strong effects of performance on satisfaction, especially when the product studied performs well (Tse and Wilton 1988). Presumably, this notion holds in the direct sales context because, from related literature and the results from this study, product performance (quality) was revealed as one of the distinctive features of the direct selling product.

318

7.6.2.4

Hypotheses H10, H11 and H12

The following hypotheses are concerned with the relationship between performance and disconfirmation at each subsystem level. The results depicted in Table 7.13 reveal that all the three hypotheses (H10, H11 and H12) were supported.
Table 7.13 Summarised results for Hypotheses H10, H11 and H12 Hypotheses Tested
H10: In the direct sales consumption system, the direct seller performance level perceived by the customer is positively related to direct seller disconfirmation. In the direct sales consumption system, the product performance level perceived by customer is positively related to product disconfirmation. In the direct sales consumption system, the direct sales organisation performance level perceived by customer is positively related to the direct sales company disconfirmation
**** Significant at p< 0.001 (t> 3.29) *** Significant at p< 0.01 (t> 2.57) **

Standardised Estimate 0.19 (+) ***

Result

SUPPORTED

H11:

0.74 (+) ****

SUPPORTED

H12:

0.13 (+) **

SUPPORTED

Note:

Significant at p< 0.05 (t> 1.96)

It appears that the relationship between product performance and product disconfirmation (H11) is relatively stronger than the two other hypotheses. In contrast to the puzzling findings in H4, H5 and H6, however, the current hypothesised relationships between performance and disconfirmation were supported by this study. Disconfirmation plays no significant role in customer satisfaction judgement. Oliver and Bearden (1985) convincingly argue that frequently, consumers perceived identical performance but express their satisfaction differently; they anticipated that other factors appear to be operating. Presumably, this factor might be disconfirmation, because other scholars (e.g. Patterson 1993; Patterson et al. 1997) noted that a consistent pattern emerged in satisfaction models which clearly suggest that disconfirmation is indeed a powerful predictor of customer satisfaction. Evidence from the customer satisfaction literature demonstrates that the disconfirmation-satisfaction link was the focus, whereas the performance-disconfirmation path was neglected even though it was postulated in the expectation-disconfirmation paradigm (see Figure 3.3). The current study offers empirical evidence that the performance-disconfirmation link is significant, compared to disconfirmation-satisfaction path, specifically in the direct sales consumption system.

319

7.6.2.5

Hypotheses H13, H14 and H15

The results exhibited in Table 7.14 reveal that satisfaction with the direct seller exerts a significant positive effect on overall consumption satisfaction (H13). Satisfaction with the product has a positive significant influence on overall consumption satisfaction and in the predicted direction (H14). However, customer satisfaction with the direct sales company does not significantly influence overall consumption satisfaction (H15).
Table 7.14 Summarised results for Hypotheses H13, H14 and H15 Hypotheses Tested
H13: In the direct sales consumption system, satisfaction with the direct seller experienced by the customer will positively affect his/her overall consumption satisfaction. H14: In the direct sales consumption system, satisfaction with the direct sales product experienced by the customer will positively affect his/her overall consumption satisfaction. H15: In the direct sales consumption system, satisfaction with the direct sales company experienced by the customers will positively affect his/her overall consumption satisfaction.
Note: *** Significant at p< 0.01 (t> 2.57) ** Significant at p< 0.05 (t> 1.96)
a

Standardised Estimate 0.38 (+) ***

Result

SUPPORTED

0.17(+) **

SUPPORTED

0.11(+) a

NOT SUPPORTED

Non-significant

One noteworthy observation is the result exhibited for H13, that the magnitude of influence of the direct seller on overall satisfaction is relatively larger than that of the product, which is considered the core aspect of the purchasing process. This signifies that in the direct sales consumption setting, satisfaction with the direct seller is of greater influence than satisfaction with the product in determining customers overall satisfaction with the direct sales channel. The link between product satisfaction and overall consumption satisfaction was supported and in the expected direction. However, H15, which posits a positive relationship between satisfaction with the direct sales company and overall consumption, was not supported. Presumably, in the direct sales consumption system the buyer deals directly with the direct seller. hence the presence of the direct sales company is not perceived as contributing much to the overall satisfaction experience. However, if a direct selling firm can establish a reputation for providing high quality service at the corporate level and mirror reputable company image, this might potentially increase customer satisfaction with the firm and 320

consequently overall consumption satisfaction. Previous hypotheses (H1, H2 and H3) provide evidence of the existence of the crossover effect phenomenon within the direct sales consumption system.

7.6.2.6

Hypotheses H16 and H17

Table 7.15 summarises the hypothesised paths which concern the purchase decision involvement construct. As posited in H16, purchase decision involvement was verified to be positively associated with perceived value. On the contrary, there is no evidence to support the postulated relationship between purchase decision involvement and product satisfaction. This finding is unexpected because there is prior evidence that demonstrates that customer involvement with a specific product type or class could significantly influence their satisfaction (e.g. Antil 1984; Churchill and Suprenant 1982; Patterson 1993).
Table 7.15 Summarised results for hypotheses H16 and H17 Hypotheses Tested
H16: Purchase decision involvement is positively associated with perceived value. That is, the more involved is the customer with the product decision, the higher the level of his/her perceived value. Purchase decision involvement is positively associated with product satisfaction. That is, the more involved is the customer with the product decision, the higher the level of product satisfaction
**
a

Standardised Estimate 0.11 (+) **

Result

SUPPORTED

H17:

0.04

NOT SUPPORTED

Note:

Significant at p< 0.05 (t> 1.96) Non significant

It should be noted that in this study context, the beauty / health care product was believed to be a high involvement product. In response to this finding, it could be concluded that in the direct sales consumption system, purchase decision involvement is not an influential factor in determining the customer satisfaction with the products examined in this study.

321

7.6.2.7

Hypotheses H18, H19 and H20

Table 7.16 summaries results pertaining to perceived value constructs. The hypothesised positive relationship between direct seller performance and perception of value by the customer (H18) was supported and in the appropriate direction (+), whilst H19, which predicted that product performance would be positively related to the perception of value, was also supported. Additionally, H20, which posited that value derived from the direct sales experience would has a positive effect on customer overall satisfaction was validated. It is worthwhile to mention here that this hypothesised link is highly significant and in the predicted direction. These findings suggest that perceived value is an essential factor in contributing to customer satisfaction in the direct sales consumption situation.
Table 7.16 Summarised results for Hypotheses H18, H19 and H20 Hypotheses Tested
H18: In the direct sales consumption system, direct seller performance is positively related to the perception of value by the customer. In the direct sales consumption system, product performance is positively related to the perception of value. The perception of value derived from the direct sales consumption experience has a positive effect on overall satisfaction. That is, the higher perceived value, the higher the level of overall satisfaction
**** Significant at p< 0.001 (t> 3.29)

Standardised Estimate 0.53 (+) ****

Result

SUPPORTED

H19:

SUPPORTED 0.40 (+) ****

H20:

0.94 (+) ****

SUPPORTED

Note:

7.6.2.8

Hypotheses H21, H22 and H23

The findings presented in Table 7.17 illustrate the results of testing hypothesised relationships concerning perceived equity. H21, which predicted that perceived value derived from the direct sales consumption experience would has a positive effect on perceived equity, was supported. In contrast, the posited positive relationship between direct seller performance with consumer perception of equity was not supported (H22). Similarly, there is no evidence of the positive association between customer satisfaction and perceived equity (H23). This finding contradicts expectations because, intuitively, in any exchange (i.e. buying and selling transaction) perceived fairness is probably most salient immediately after an exchange has taken place and regarded as an important indicator of the health of the 322

buyer-seller relationship (Gassenheimer et al. 1998, Tax et al. 1998). Indeed, several researchers (e.g. Johnson et al. 2001; Oliver and Swan 1989a, 1989b; Patterson et al. 1997) provide supporting empirical evidence for the significant influence of perceived equity on customer satisfaction.
Table 7.17 Summarised results for Hypotheses H21, H22 and H23 Hypotheses Tested
H21: The perception of value derived from the direct sales consumption experience has a positive effect on perceived equity. That is, the higher the perceived value, higher the perceived equity. Direct seller performance is positively associated with consumer perception of equity. That is, the higher the direct seller performance, the higher the level of perceived equity. Standardised Estimate 0.56 (+) *** SUPPORTED
a

Result

H22:

0.05

NOT SUPPORTED

H23: Perceived equity is positively associated with the customers satisfaction with the direct seller. That is, the higher the perceived equity, the higher the level of satisfaction with the direct seller.
Note: *** Significant at p< 0.01 (t> 2.57)
a

0.00

NOT SUPPORTED

Non-significant

However, the finding of this study is consistent line with Armstrong and Tans (2000) empirical work, which suggests that there was no evidence to validate that fairness has a significant impact on satisfaction in the corporate banking sector. At this point, a

deduction is that, in the direct sales consumption context, perceived performance of the direct seller does not exert a significant effect on the customers fairness judgment and notably perceived equity is not an important factor in contributing to the customers satisfaction with the direct seller.

7.6.2.9

Hypotheses H24 and H25

In Table 7.18, are findings concerning the hypothesised relationships associated with the relational commitment construct. H24, which postulates the relationship between perceived equity and relational commitment, is positively significant and in the hypothesised direction (+). Similarly, H25, which predicts that customers who are satisfied with their direct seller would positively influence their relational commitment with their direct seller, was validated.

323

Table 7.18 Summarised results for Hypotheses H24 and H25 Hypotheses Tested
H24: In the direct sales consumption system, perceived equity is positively associated with relational commitment In the direct sales consumption system, direct seller satisfaction is positively associated with relational commitment.
**** Significant at p< 0.001 (t> 3.29)

Standardised Estimate 0.37(+) ****

Result

SUPPORTED

H25:

0.40(+) ****

SUPPORTED

Note:

These findings lend support to the marketing literature that convincingly argues the significance of personal interaction (i.e. relationship between buyer and seller) in generating a long-term relationshiprelational commitment (Crosby and Stephens 1987; De Wulf and Schrder 2003; Johnson et al. 2001: Macintosh and Locksin 1997; Morgan and Hunt 1994). These findings indicate that if a customer perceives that he/she was treated equitably by the direct seller, this might be translated into a strong bond between them and would ultimately develop into commitment because the buyer considers that it is important to maintain the relationship. Additionally, reflecting upon H25, it implies that when a customer is satisfied with his/her direct seller, rationally he/she might make the effort to maintain the relationship (i.e. show commitment).

7.6.2.10

Hypotheses H26 and H27

Table 7.19 summaries the findings of testing the hypothesised links concerning the final construct in the proposed conceptual model, that is behavioural intentions.
Table 7.19 Summarised results for Hypotheses H26 and H27 Hypotheses Tested
H26: In the direct sales consumption system, relational commitment is positively associated with behavioural intentions H27: In the direct sales consumption system, overall satisfaction is positively associated with behavioural intentions
Note: **** Significant at p< 0.001 (t> 3.29)

Standardised Estimate 0.27(+) ****

Result

SUPPORTED

0.78(+) **** SUPPORTED

324

The results provide support for H26, showing that there would be a positive association between relational commitment and behavioural intentions. This finding implies that customers who are feeling committed to their direct seller would be most likely to undertake activities related to future behavioural consumption (e.g. repurchase intention, positive word of mouth, price tolerance, cross purchase). This study provides evidence also that overall satisfaction with the direct sales consumption system experienced by the customers would strongly influence their behavioural intentions (H27). In essence, relational commitment and overall satisfaction are two main determinants of customer behavioural intentions. More specifically, overall satisfaction is the key determinant to behavioural intentions.

7.6.3

Competing Models

The final approach to model assessment is to evaluate and compare the hypothesised model with a series of competing models, which act as alternative explanations to the initial model. As noted by Baumgartner and Homburg (1996), it is quite unlikely that the initial proposed model specified as plausible by researcher will be the one that is eventually presented as a good fitting model. In a similar voice, several authors (e.g. Hair et al. 1998; Morgan and Hunt 1994) encourage researchers to compare rival models and not just test the performance of the hypothesised model. Indeed, Hair et al. (1998, p.636) assert that, the truer test for the overall model is a comparison to a series of alternative models. Furthermore, the main benefit of testing competing models is to reassure the researcher that the proposed or revised model is truly the best model available. It is important to note that it was strongly recommended that the formulation of the alternative models must be guided by substantive theoretical and empirical considerations and they must be practically meaningful (Hair et al. 1998). Accordingly, Crudeck and Browne (1983) argue that comparisons among different plausible models nested1 in each other can be justified theoretically. With this in mind, the current modification to the hypothesised structural model adhered strictly to this suggestion.

Nested models are hierarchically related to one another in the sense that their parameter sets are subsets of one another (i.e. specific paths are freely estimated in one model, but fixed to zero in a second model

325

There are several tools available to detect model misspecification; for instance, AMOS generates the modification indices and residual analysis. For the purpose of this modelling, both of these tools were consulted to detect any meaningful evidence of misspecification, which could potentially improve the goodness-of-fit of the hypothesised model. As mentioned earlier in section 7.6.1, the hypothesised model fit was marginally adequate. Two alternative models were formulated in order to seek improvement for model fit, by re-specifying the model, based on post-hoc analyses. The first alternative model, (Model #1) posits an additional parameter; a direct path between perceived value and behavioural intentions. A schematic representation of this model is illustrated in Figure 7.7. The modification to the hypothesised model was supported by several studies, particularly from the marketing services context. It was argued that perceived value plays a significant role in influencing customer behavioural intentions or loyalty. In fact, some argue that perceived value has stronger effects on behavioural intentions than customer satisfaction (Tam 2000). Hence, it is appropriate for this study to provide evidence of the above notion. It should be noted that the effect of perceived value on behavioural intention was already hypothesised to be mediated by overall satisfaction in this studys structural model (see Figure 4.2). On the other hand, the model postulates a direct association between perceived value and relational commitment. Even though this link is very intetesting to explore, it appears that the existing literature has overlooked this path. Given the meaningfulness of this link, the hypothesised structural model was re-estimated with the aforementioned path specified as a free parameter and labelled as alternative model # 2. Examination of existing literature revealed that most studies with the pertinent scope seem to be more interested in verifying the popular link, that is, trust-commitment. A schematic representation of this model is illustrated in Figure 7.8

326

Figure 7.7

Alternative Model # 1 with Additional Path of Perceived value Behavioural Intentions

r3 TOTFAIR

r5

percieved equity
r4 r1 1 1

relational commitment

TOTCOMMI

TOTDSPER

direct seller performance

r2 TOTALPV 1 DSDISCON

direct seller disconfirmation

SATALLDS

direct seller satisfaction

TOTSAT

perceived value
r6 r7 1

overall satisfaction

1 r9

PQUALITY POFFER

product performance
PQUADIS POFERDIS

product disconfirmation

product satisfaction
1 SATALLPR r10 FAVBI UNFAVBI

behavioral intentions

purchase involvement

TOTINVOL r8 r11 1

IMAGEPER COSERPER

company performance

company disconfirmation

company satisfaction

SATALLCO

IMAGDISC

COSERDIS

Note : In the interest of clarity errors of measurement are not included

327

Figure 7.8

Alternative model # 2 with Additional path of Perceived value Relational Commitment

r3 TOTFAIR

r5

percieved equity
r4 r1 1 1

relational commitment

TOTCOMMI

TOTDSPER

direct seller performance

r2 TOTALPV 1 DSDISCON

direct seller disconfirmation

direct seller satisfaction

TOTSAT

perceived value
r7

SATALLDS

overall satisfaction
r6 1

1 r9

PQUALITY POFFER

product performance
PQUADIS POFERDIS

product disconfirmation

product satisfaction
1 SATALLPR r10 FAVBI UNFAVBI

behavioral intentions

purchase involvement

TOTINVOL r8 r11 1

IMAGEPER COSERPER

company performance

company disconfirmation

company satisfaction

SATALLCO

IMAGDISC

COSERDIS

Note : In the interest of clarity errors of measurement are not included

328

Following Morgan and Hunts (1994) suggestion, the hypothesised model was compared with the competing models based on these criteria: (1) overall fit of models by GFI, CFI, IFI, RMR and RMSEA; (2) parsimony of models by PCFI (3) and ECVI is used for comparing alternative models using one data sample (Jreskog 1993). The model with the smallest ECVI values should be the most stable model in repeated samples (Jreskog 1993). The results of the estimation for the hypothesised and alternative models are exhibited in Table 7.20. The final model is generated from the re-estimation of Model #2, after all the insignificant paths are eliminated.
Table 7.20: Comparison of Goodness-of-Fit measures for hypothesised and alternative models
Hypothesised Model 503.69 147 0.001 63 3.63 0.022 0.88 0.912 0.911 0.078 0.70 1.578 Alternative Model #1 503.66 146 0.001 64 3.45 0.022 0.88 0.912 0.911 0.078 0.70 1.583 Alternative Model # 2 463.18 146 0.001 64 3.17 0.018 0.90 0.92 0.92 0.074 0.71 1.482 Final Model 466.51 152 0.001 58 3.07 0.018 0.90 0.92 0.92 0.072 0.74 1.460

Discrepancy Degrees of freedom P Number of parameters Discrepancy / df RMR GFI Incremental fit index (IFI) Comparative Fit Index (CFI) RMSEA Parsimony adjusted CFI Expected cross-validation index (ECVI)

The results presented in the above table imply that the estimation of model #1 yielded almost the same values on each of the fit statistics when compared with the hypothesised model. A small improvement to the 2 /df ratio was exhibited; on the hand, there was a marginal increase in ECVI value. The overall model difference ( 2 ) was negligible and furthermore the re-specified parameter estimate (Perceived value-Behavioural intention) was not statistically significant (critical ratio = 0.137). This finding shows contrasting evidence to the argument that perceived value could have significant direct impact on behavioural outcomes (Tam 2000). In essence, these findings offer empirical evidence that the effect of perceived value on behavioural intention is mediated by satisfaction (Eggert and Ulaga 2002: McDougall and Levesque 2000; Kristensen et al. 1999). Therefore, based on the above evidence, Model #1 was disregarded for further consideration. Alternatively, the 2 difference between the hypothesised model and Model #2 was statistically significant (2(1) = 40.5 at p = 0.01). This signifies that Model # 2 demonstrates a better fit to 329

the data. Additionally, the ECVI dropped a little further, to 1.482, compared to the hypothesised model. Furthermore, the re-specified path (Perceived valueRelational commitment) was highly significant (standardised coefficient of 0.70, critical ratio = 5.51 at p = 0.001). This finding affirms the assertion that perceived value received from the direct sales consumption experience strongly influences customer commitment towards the direct seller. Clearly, these results demonstrate that Model #2 represented the best fit to the sample data thus far in the analyses. Hence, no further consideration was given to inclusion of additional parameters, as doing so might result in an over-fitted model (Byrne 2001). In the interest of parsimony, a final model was re-estimated with all the non-significant paths eliminated from Model #2; five parameters that were non-significant, (direct seller performance perceived equity), (perceived equity direct seller satisfaction), (product - disconfirmationproduct satisfaction), (company disconfirmationcompany satisfaction), (direct seller satisfaction relational commitment) were removed. This procedure was recommended by Jreskog (1993). He demonstrates that the inclusion of non-significant paths would not improve the overall fit of model. Furthermore, by discarding the non-significant paths, this could markedly improve the parsimony of the proposed model (Byrne 2001). Estimation of the final model after deletion of the non-significant paths yielded an overall 2(152) = 466.51. Even though there was a slight erosion in model fit compared to 2(146) = 463.18 of Model #2, this change is to be expected due to the deletion of several parameters (Byrne 2001). The important aspect of this change in model fit is that the 2 difference between Model #2 and the final model was not significant (2(5) = 3.33). Furthermore, as illustrated in Table 7.20, the values of other fit statistics remained virtually unchanged, and some improved marginally. For instance, there is a marginal improvement in parsimony-adjusted CFI when the final model (0.74) is compared with Model # 2 (0.71) and a slight drop in the ECVI value (1.460) in the final model as compared to Model # 2 (1.482). This indicates that the final model has the greatest potential for replication in other samples of direct sales consumption system. This final model is the most parsimonious model and represents the best fit to the data overall. A schematic representation of this final model is exhibited in Figure 7.9. The final models estimation results, which are comprised of standardised coefficients and critical ratios, are exhibited in Table 7.21.

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Figure 7.9 Final Structural Model

perceived equity direct seller satisfaction

relational commitment

direct seller performance

direct seller disconfirmation

perceived value

overall satisfaction

product performance

product satisfaction

product disconfirmation Purchase Decision Involvement

behavioural intentions

company performance company disconfirmation

company satisfaction

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Table 7.21 Summary of the Parameter Estimates for the Final Model
Structural Paths Product disconfirmation Direct seller disconfirmation Product disconfirmation Company disconfirmation Direct seller disconfirmation Company disconfirmation Direct seller disconfirmation Direct seller satisfaction Direct seller performance Direct seller satisfaction Product performance Product satisfaction Company performance Company satisfaction Direct seller performanceDirect seller disconfirmation Product performance Product disconfirmation Company performance Company disconfirmation Direct seller satisfaction Overall satisfaction Product satisfaction Overall satisfaction Company satisfaction Overall satisfaction Purchase Involvement Perceived value Direct seller performance Perceived value Product performance Perceived value Perceived value Overall satisfaction Perceived value Perceived equity Perceived equity Relational Commitment Direct seller satisfaction Relational Commitment Relational Commitment Behavioural intentions Overall satisfaction Behavioural intentions Perceived value Relational commitment
Note: **** Significant at p< 0.001 (t> 3.29) *** Significant at p< 0.01 (t> 2.57) ** Significant at p< 0.05 (t> 1.96)

Standardised Coefficient 0.69 (+) 0.20(+) 0.69(+) -0.11 (-) 0.96 (+) 0.71(+) 0.84 (+) 0.20 (+) 0.73 (+) 0.13 (+) 0.30 (+) 0.19 (+) 0.12 (+) 0.11 (+) 0.48 (+) 0.44 (+) 0.87 (+) 0.52 (+) 0.22 (+) 0.40 (+) 0.22 (+) 0.77 (+) 0.60 (+)

Critical Ratio (t-value) 9.30 **** 1.99 ** 6.18 **** -1.72* 13.76**** 11.29**** 13.37**** 2.87*** 11.19**** 2.44** 2.80*** 2.58*** 1.59a 1.98** 4.81**** 4.31**** 5.96**** 9.23*** 3.86**** 6.82**** 2.86**** 4.84**** 8.49****

* Significant at p< 0.10 (t> 1.65) a Non significant

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7.7

Concluding Remarks

This chapter is organised into two parts based on the two-step approach of SEM analysis; the first step of the analysis is documented in Part 1, which mainly concerned the assessment of the measurement model by confirmatory factor analysis. Part II presents an account of the results of the SEM-based path analysis for the conceptual model, as depicted in Figure 4.2, and tests the hypotheses postulated in Chapter 4.

All the measurement models achieved adequate measurement properties; thus, composite means were constructed for all the scales and these indices were used as new variables in the structural model evaluation. This second step of the SEM analysis was focused on assessing the goodness-of-fit of the hypothesised structural model. In this regard, the overall hypothesised system of fifteen constructs was simultaneously assessed by the AMOS programme. Twenty-seven hypotheses, which were formulated in Chapter 4, were tested for significance. Twenty of the hypothesised paths were statistically significant, whilst seven were non-significant (see Table 7.21).

In view of the fact that the overall fit results revealed that the hypothesised structural model was considered a marginal fit to the data, thus post-hoc model fitting was performed in order to seek potential area of improvement of the model goodness-of-fit. Model # 2 was found to be more parsimonious and a better fit to the data compared to the hypothesised model; this was then re-estimated after discarding the non-significant paths. Eventually, the final model was generated and subsequently accepted, as it is the most parsimonious model, which represents the best fit to the data (see Figure 7.9, p. 331).

Drawing upon the research evidence reported in this chapter and chapter 6, the next (Chapter 8) will attempt to address and discuss the research questions as formulated in Chapter 1, and conclusions of the structural equation modelling will be presented.

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