How to Apply Necessary Condition Analysis in PLS-SEM

This chapter illustrates the application of necessary condition analysisNecessary condition analysis (NCA) in the context of partial least squares structural equation modeling (PLS-SEM)Partial Least Squares (PLS)structural equation model (PLS-SEM). We demonstrate the joint use of the two methods using the standard software applicationSmartPLS SmartPLS 4Partial Least Squares (PLS)SmartPLS 4, which incorporates PLS-SEMPartial Least Squares (PLS)structural equation model (PLS-SEM) and the core NCA computation capabilities, and we offer background information on the key steps and interpretations associated with the combined application. We introduce the fundamentals of necessity logicNecessity logic and NCA, outlining key differences to PLS-SEMPartial Least Squares (PLS)structural equation model (PLS-SEM) and its underlying logic. Using a recently published guideline and an illustrative example of the combined application of the two methods, the chapter provides guidance on generating results and interpreting must-have and should-have factors in the PLS-SEMPartial Least Squares (PLS)structural equation model (PLS-SEM) context, enabling researchers to identify necessary conditions that may underlie their significant but also nonsignificant structural modelStructural Equation Model (SEM)structural model relationships. The consideration of both must-have and should-have factors through the joint use of PLS-SEMPartial Least Squares (PLS)structural equation model (PLS-SEM) and NCA is a unique way of assessing causality that may advance research in multiple fields. Our approach contributes to the further diffusion of the two logics in research applications. Our guidelines and systematic application of the two methods will assist researchers in exploiting these analyses’ valuable potentials in their own studies.