This video is great at explaining the difference between formative and reflective models. Why is this distinction important? Because when you use factor analysis, structural equation modeling or any multidimensional concept (which is the norm in management research), then you will need to explain the reasons for your choice. For more information, feel free to also consult some articles, such as:
Coltman, T, Devinney, TM, Midgley, DF & Veniak, S, Formative versus reflective measurement models: Two applications of formative measurement, Journal of Business Research, 61(12), 2008, 1250-1262
Diamantopoulos, A. & Siguaw, J. A. (2006). Formative Versus Reﬂective Indicators in Organizational Measure Development: A Comparison and Empirical Illustration. British Journal of Management, Vol. 17, 263–282.