The use of structural equation modeling based on the formative measurement has been increasing in the IS community. However, there has been the lack of discussions on the merits/demerits of formative measurement despite its requisite limitations in theory testing and knowledge build-up. Based on real survey data, we conducted rigorous empirical tests to uncover implications of formative measurement associated with interpretational compounding and weak external consistency. The findings are resounding: (1) The formative approach resulted in a significant interpretational compounding in which standardized weights of the measures of a formative construct widely fluctuated according to the change of dependent constructs; (2) The estimation of formative models is not necessarily consistent with the degree of external consistency highlighting the limitation of positioning the formative construct as a mediating, point variable; and (3) Formative models consistently inflated path coefficients and model fit indices increasing the chance of Type 1 error.