I am studying the relationship between business process orientation (BPO) and cross-functional integration (CFI). BPO is formed of five distinct dimensions. Having done factor analysis two factors were also extracted for CFI, meaning that I have now two correlated DVs. My initial thought was to run two separate multiple regressions, one between the five IVs and one CFI factor (DV) and another one between the five IVs and the second CFI factor (DV). The other alternative I have found from the literature is Canonical correlation test used when there are two or more dependent variables, but it has received some criticisms due to the complexity involved in interpreting the results.

FYI, BOP is a second order latent variable with five constructs reflective in nature, and CFI is also a second order latent variable with two factors extracted but formative in nature. Attached provides a better visual explanation of my final framework.

Experts advice would be much appreciated on the two above alternatives. Many thanks!

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