Categorical Independent Variable in Mediation Relationship using #SmartPLS4

The analysis tests whether organizational commitment acts as a mediator between organization type (public vs. private) and collaborative culture, using SmartPLS4 with a categorical independent variable. Organization type is coded as 0 for public sector and 1 for private sector, and the model links type → organizational commitment → collaborative culture. The key question is whether differences in collaborative culture across public and private organizations can be explained through differences in employees’ organizational commitment.

Before running mediation bootstrapping, the workflow includes a PLS-SEM measurement check (PLS SCM algorithm) for the latent constructs that have multiple indicators—organizational commitment and collaborative culture. Because the independent variable is categorical (type of organization with two categories), it is not included in the measurement model assessment; the focus stays on the reliability and validity of the latent constructs that are measured with indicators.

Bootstrapping is then run with 10,000 resamples to evaluate significance of the direct and indirect effects. The analysis uses a one-tailed testing approach, reflecting prior assumptions about the direction of relationships: employees in public sector organizations are expected to show higher organizational commitment, and higher organizational commitment is expected to improve collaborative culture. With these directional hypotheses in place, the results show that the path from organizational commitment to collaborative culture is positive and statistically significant—meaning higher commitment corresponds to higher collaborative culture.

Mediation is assessed through the indirect effect of organization type on collaborative culture via organizational commitment. The mediation result is significant, indicating that organizational commitment indeed mediates the relationship between organization type and collaborative culture. Importantly, the mediation effect is reported as negative. In this coding scheme, the negative sign is interpreted relative to the category ordering: it points to the lower category, which corresponds to public sector (coded as 0). Put simply, the sign indicates that public sector organizations have higher organizational commitment than private sector organizations.

Putting the pieces together, the model supports the hypothesis that organizational commitment mediates the type-of-organization effect on collaborative culture, and it identifies the direction of the difference: employees in public sector organizations exhibit higher organizational commitment, which in turn is associated with improved collaborative culture. Both the direct paths involved in the mediation chain and the specific indirect effects are significant, substantiating the proposed mechanism.