Besides the common use of complicated statistical techniques to analyze the hypotheses in management and organization studies, usually the type of relationship between the latent variable and their indicators are ignored. Hypothetically, scale items reflecting the scales, in other words, reflective relationship between scale and scale items is accepted. But the relationship between scale and scale items cannot be always assessed as reflective. When indicators comprise latent variable and present the causes rather than its’ effects, formative measurement should be applied. The scale, of which indicators comprising of the scale instead of repeating the same definition, is called as formative scale. This research discusses theoretical background of reflective and formative scales , latent variables used structural equation modelling. In this study, decision criteria about the scales used to represent the constructs in structural equation modeling for the researchers and the consequences of misspecified scales are presented
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