1. COURSE TITLE: SEMINOR IN FINANCE COURSE CODE: MPH 622
Synopsis of article: Why Can’t Michael Jackson Do Heart Surgery?
By Lawrence J. Gitman, Professor of Finance, San Diego State University, San Diego, CA
Article published in: Financial Practice and Education, (Spring/Summer 1992), pp. 73-75.
Submitted to: Prof. Dr. Radhe Shyam Pradhan, Masters of Philosophy in Management, TU
Submitted by: Sudarshan Kadariya, Roll No 05/’010, Second Semester
Purpose: To explains the findings of Mary F. Mobley and Harry Kuniansky’s (M&K) article “Chief Financial
Officers’ Views of Academicians Versus Practitioners in the Field of Finance”
An Overview of article findings by M&K:
Based on survey of 110 CFOs using 5 points scale measurement on eight different professional dimensions, findings
shows there was significant difference on seven dimensions between finance practitioners and finance academicians.
 Practitioners who were sampled from the Fortune 500 firms rated that they have a better knowledge of business
in general, knowledge of problems facing business, ability to generate creative ideas and ability to solve practical
business problems compare to academicians.
 On the other hand, practitioners provided higher ratings for academicians on knowledge of research
methodologies, knowledge of current research findings and ability to generate creative ideas compare to
themselves.
Similarly, the ratings of 110 CFOs’ readership for the various finance academic journals and selected business
periodicals were measured in 7 point scale with additional response alternative for ‘not familiar with the periodical’.
The finding shows;
 Only three popular business press periodicals were reported by a majority of the respondents as being read
frequently to extensively.
The author of this article concluded that findings of M&K’s study confirm the obvious reasoning that CFOs know
more about the practice and problems of business and academics know more about academic dimensions: research
methodologies, research findings and financial theory. Gitman tried to explain the findings of M&K’s study on the
basis of the five points. The explanation of them is presented as below;
Specialization Creates Competitive Advantage: Competitive advantage can achieve through specialization, this is
the market reward system. While we talk about Michael Jackson and heart surgeons, the former had his
specialization in sings and later on heart surgery so that they created their competitive advantage. Similarly, CFOs
and academicians also specialized in their concerned field that why they can make their reward system much
stronger. CFOs are paid for their specialized skill on financial management, policies, strategies and tools so that the
objective of the firms mainly profit maximization, sales revenue maximization, and shares price maximization in
stipulated time. Likewise, they are also paid for developing understandable reports for the Chief Executive Officer
(CEO) and the board. It’s the core specialization area of CFOs because unless the key decision makers understand
and feel comfortable with the new policies, strategies and tools, they will not implement these new techniques
regardless their financial attractiveness. On the other hand, finance academicians are paid to teach, advance and
communicate with the frontiers of financial understanding. The core specialization or concern of academicians is to
publish academic articles. These provide space for their career development, recognition and better payoff.
Broadly, researches are classifies into four types – theoretical, empirical, applied and interpretive. Market determine
the status of the journals, academic journals generally divided into top journals which focus on theoretical and

2. empirical research while lower tier journals publish more applied and interpretive. The market reward system tends
to favor publication in top journals. Mostly, the sources of new ideas, techniques, tools and strategies come from the
top journal articles.
Educational choice and the filtering down of new ideas: Ben Collier and Mike Wilson’s paper support the
statement that, those who wish to practice finance and become a CFO tend to focus their formal education on
accounting and finance. They want to obtain practical financial problem solving skills to develop solid ground in
finance. Besides that, those want to be a financial academician expects to hold Ph.D. or DBA have solid research
skills and understand the important literature in the field.
The process of a logical progression of acceptance for the new financial techniques and ideas takes time to reach
from the academicians to practitioners. The process starts from the class room, executive education, or business
consultation where learners exposed with the new financial techniques and ends when they implemented it into
practice. There is a lag between theoretical and operational validation of new ideas. Generally, the time lag
constitutes about 20 years, results from the life-cycle of learning. For example; development of beta and CAMP
which were initially developed in 1964 and 1965 then became the domain of financial management in early 1980s.
Because it takes time to develop a broad base understanding at the practitioner level.
Professional reading and career choice are highly correlated: M&K’s finding concerning the practitioner
readership of academic journals validate the previous research findings that very little readership of academic
literature devoted financial research issues. Mostly, practitioners read the popular business periodicals namely Wall
Street Journal, Forbes and Fortune. This finding is also very much expected because they want to learn about
practical matters, the economy and what competitors in other companies are doing. But, does not fully bypass the
academic literature they also prefer the lower tier academic journals such as Harvard Business Review and Financial
Analyst Journal.
Why many academicians read practitioner journals and probably fewer practitioners read academic journals? The
first reason is: the availability of the journals. Academicians read practitioners journal because they contains general
interest articles which academics use for teaching materials. Second: interest of the practitioners.
How can we improve the knowledge transfer? : The valid finding of M&K’s article is that both academicians and
practitioners are doing well in their job because they are specialized in their concern areas. The most deserving way
of improving knowledge transfer is through those platforms where the future and the present practitioners are gather
to learn the new knowledge, strategies and ideas and particularly, that could be the MBA classroom, executive
training, seminars and consultation.
Even specialists can do a better job: CFOs and financial academicians have different jobs and although each may
be capable of performing the other’s jobs but their voluntary career choice indicate that they do not want to do so.
Even though they are specialized in their respective fields, they can also do better in their jobs which results greater
application of financial management tools in practice and shortening of the time lag for implementing new ideas in to
practice.
Critical appraisal of the article
Strengths: The author presents in a simple and illustrative way so that I found this is supportive to know better and
in detail about the findings of M&K’s work. And, it raised the numbers of questions as well as its solutions which
help to broaden the reader’s knowledge.
Weaknesses: The author only relates the findings of M&K’s work despite clarifying its weaknesses in terms of
sample characteristics (only CFOs as respondents), selection of limited dimensions of study (only 7 or 8 items),
judgmental errors, procedures (lack of internal consistency test – Alfa coefficient), etc.
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