Bridging Theory - Practice Gap in Corporate Finance
The QuarterlyReviewof Economics and Finance,Vol. 35, Copyright0 1995 Trustees of the Universityof Illinois All rightsof reproductionin any form reserved. ISSN 003%5797
NO.
1, Spring, 1995, pages 7347
Bridging the Theory-Practice Gap in Corporate Finance: A Survey of Chief Financial Officers
EMERY A. TRAHAN and LAWRENCE J. GITMAN Northeastern University and San Diego State University
The primary objective of this article is to assess general research opinions, barriers to using sophisticatedfinancial utilization, management decision-making techniques, and the understanding, and research preferaces of practicing financial managers. Data is gathered
through 4 mail survqr of the CFOs of the Fortune 500 largest industrial companies and Forbes 200 best small companies. Overall the respondents appear to have little interest in the current state of academic research in corporatefinance financial &cision methods, suggesting and in utiliringjinanceprofasors
as paid or unpaid internal consultants. They do express a desire to know more about many that existing academic research can be better expractitioners and plained and operationalized. There is also some indication that neu academic research is
desired in some areas. There is a need for more dialogue betweenjnance academics to establish how communications how practitioners provide might effectively learn more about financial academic institutions and finance
with practitionerscan be improved and to assess decision methods that they in academia professors to become more
deem important. Economic necessity and the increased competitionforresources an incentive fm responsive to the specific research preferaces of practitioners.
I.
INTRODUCTION recent indictments of business education have come from both the
Numerous
practitioner and academic communities. The American Assembly of Collegiate Schools of Business (AACSB) (1991) questioned the relevance of the current business curriculum.
NO.
1, Spring, 1995, pages 7347
Bridging the Theory-Practice Gap in Corporate Finance: A Survey of Chief Financial Officers
EMERY A. TRAHAN and LAWRENCE J. GITMAN Northeastern University and San Diego State University
The primary objective of this article is to assess general research opinions, barriers to using sophisticatedfinancial utilization, management decision-making techniques, and the understanding, and research preferaces of practicing financial managers. Data is gathered
through 4 mail survqr of the CFOs of the Fortune 500 largest industrial companies and Forbes 200 best small companies. Overall the respondents appear to have little interest in the current state of academic research in corporatefinance financial &cision methods, suggesting and in utiliringjinanceprofasors
as paid or unpaid internal consultants. They do express a desire to know more about many that existing academic research can be better expractitioners and plained and operationalized. There is also some indication that neu academic research is
desired in some areas. There is a need for more dialogue betweenjnance academics to establish how communications how practitioners provide might effectively learn more about financial academic institutions and finance
with practitionerscan be improved and to assess decision methods that they in academia professors to become more
deem important. Economic necessity and the increased competitionforresources an incentive fm responsive to the specific research preferaces of practitioners.
I.
INTRODUCTION recent indictments of business education have come from both the
Numerous
practitioner and academic communities. The American Assembly of Collegiate Schools of Business (AACSB) (1991) questioned the relevance of the current business curriculum.
References: American Assembly of Collegiate Schools of Business. March 7,199l. TheAACSBAcmditation Pmject, Final Report. Fmks. 1991. “The 200 Best Small Companies.” November 11: 268-332. Fortune. 1991. “The 500 Largest U.S. Industrial Corporations.” April 22: 286-336. Keating, P J. and S. E Jablonsky. 1990. Changing Roles of Financial Management: Getting Close to the Business. New York: Financial Executives Research Foundation. Larsen, M. D. and S. S. Ahlstrand. 1991. Educating Financial Executives. New York: Financial Executives Research Foundation. Mobley, M. E and H. Kuniansky. 1992. “Chief Financial Officers’ Views of Academics Versus Practitioners in the Field of Finance.” Financial Practice and Education, (Spring/Summer): 67-71. Pruitt, S. W. and L. J. Gitman. 1987. “Capital Budgeting Forecast Biases: Evidence from the Fortune 500.” Financial Managemat, (Spring): 46-51. Ramirez, G. G., D.A. Waldman and D. J. Lasser. 1991. “Research Needs in Corporate Finance: Perspectives From Financial Managers.” Financial Management, (Summer) : 17-29.