Revista de

Administração
Contemporânea
Journal of Contemporary Administration e-ISSN: 1982-7849

Editorial

Impact Research: Theory and Practice in the

Corporate World
Pesquisa de Impacto: Teoria e Prática no Mundo Corporativo

Orleans Silva Martins*1,2

ABSTRACT RESUMO
The impact that research has on society cannot be measured just by the O impacto que uma pesquisa causa na sociedade não pode ser medido
amount of attention (citations) that it receives. High-impact research is apenas pela quantidade de atenção (citações) que essa pesquisa atrai.
relevant to society and is helpful to strengthen or modify its practices. Uma pesquisa de alto impacto é aquela que tem alta relevância para a
However, decision-makers have to address society’s demands and participate sociedade, sendo útil para fortalecer ou modificar suas práticas. Mas, para
in the knowledge construction process, primarily through the proper use of isso, o tomador de decisão precisa endereçar suas demandas e participar
scientific findings. Thus, the approximation between theory and practice do processo de construção do conhecimento, especialmente por meio
is essential for the research to be relevant,. In this context, I propose a do uso adequado dos achados científicos. Assim, para que a pesquisa seja
relevante, é essencial a aproximação entre teoria e prática. É nesse contexto
reflection on research relevance and its connection with practice in the
que proponho a reflexão sobre a relevância da pesquisa e sua conexão com
corporate world. It is noteworthy that, despite extensive studies in the a prática no mundo corporativo. Relato que, apesar de extensos estudos
fields of management, corporate governance, and sustainability practices, nos campos da gestão, da governança e das práticas de sustentabilidade,
we continue to face frequent corporate scandals. So, where is the flaw in nós continuamos a nos deparar com frequentes escândalos corporativos.
this process? Então, onde está a falha nesse processo?
Keywords: research relevance; decision-making; corporate governance; Palavras-chave: relevância da pesquisa; tomada de decisão; governança
frauds. corporativa; fraudes.

* Corresponding Author. Como citar: Martins, O. S. (2023). Impact research: Theory and practice in the corporate world. Revista
de Administração Contemporânea, 27(3), e230077. https://doi.org/10.1590/1982-7849rac2023230077.en
1. Universidade Federal da Paraíba, Departamento de Finanças e Contabilidade, João Pessoa, PB, Brazil.
2. Associate Editor of Revista de Administração Contemporânea - RAC (Journal of Contemporary Administration).

Note: This text is translated from the original Portuguese version, which can be accessed here. Assigned to this issue: April 25, 2023.

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Impact research: Theory and practice in the corporate world O. S. Martins

WHAT IS IMPACT RESEARCH? only as input for new research in the academic environment
itself? How have corporations used scientific discoveries? I
According to Toffel (2016), the impact of a study have no intention to provide the answers to these questions,
should not be measured based on how many times it was I do not have them. My goal here is to provoke doubts and
cited. For the author, the impact refers to the research’s invite you to reflect on them.
relevance to practice. Research is relevant (or impactful) if it
can improve decision-making by managers, policymakers, IS THE THEORY DIFFERENT IN PRACTICE?
and other professionals.
However, the research process should be a two-way I never liked the phrase ‘theory is different in practice.’
street. Assuming that we have (relevant) impact research, So, I tried to get closer to the market to understand what
has this knowledge actually been used to improve the the other side needs, using this information to improve
business environment? How has this research been used in my research. It is also true that I have had the misfortune
the corporate world? Has this environment communicated to encounter situations in which some representatives of
adequately with the scientific community so that its demands ‘practice’ felt that theorists should be at their service. Thus,
are known and considered in the investigation process? I learned to face this phrase in another way. Actually, in
Have theory and practice communicated adequately? Let’s practice, the theory is different. This does not mean that the
talk a little bit about these issues. theory is wrong or irrelevant, nor that we should exclusively
blame researchers for the evils observed in practice.
HOW CAN RESEARCH IMPROVE In the theoretical field, we make assumptions and
DECISION-MAKING IN PRACTICE? simplifications to isolate the phenomenon of interest. This is
important so that the researcher can focus on their analysis.
In addition, Toffel (2016) notes that relevant research
Relevant research to influence decision-making should lead to implications that encourage practitioners to
processes has to have theoretical support and connection act on its findings. On one side, researchers need to clearly
with the real context, usually called ‘practice.’ So, in present how their results can influence the practitioners’
‘practice,’ research is relevant if it considers the ‘practical’ decisions, demonstrating, whenever possible, specific cases
context and is useful for strengthening or modifying and circumstances in which the findings are likely to apply.
society’s ‘practices.’ Also, a theory that does not consider On the other side, practitioners must support their decisions
the real context tends to be little applicable, fails to support with scientific evidence. It is not uncommon to identify in
scientific evidence, and, therefore, will have a low impact practice situations in which professionals make decisions
on society. that seem tautological, disregarding scientific knowledge.
Speaking of relevance, identifying a relevant research In the field of practice, a simple and agile solution
problem is one of the first steps in producing a study. It is often preferable, especially when decision-making must
usually originates from a subject of interest to society and be quick. In valuation, for example, market analysts tend
is associated with a gap in the literature. The researcher to prefer the use of an approximate cost of capital by a one-
establishes the objective and justifies the study, pointing factor model (CAPM), dedicating more time to knowing
out the motivation and potential contributions. Publishing the company’s business model than spending a lot of time
is the materialization of carrying out these steps properly. with a theoretically more robust model, with several factors,
Nevertheless, publishing scientific findings is only but which brings a smaller marginal gain to the valuation
the first cycle of the process. Successful research is used by process. However, the simple solution also requires scientific
agents in society, who tend to make better decisions when knowledge.
supported by scientific evidence. Theory and practice must
go together; they are mutually influential and crucial to CASES IN THE CORPORATE WORLD
address the constant changes in phenomena and society.
Research unrelated to practice tends to be useless, just as
Many advances in the field of market regulation
practice without scientific guidance tends to be erratic.
come from scientific and practical evidence. They tend to
In this editorial, I intend to provoke you to reflect on be supported by some theory. For example, in the field of
the relevance of scientific research and its connection with management, Almeida and França (2021) point out that
practice. Especially in the social sciences, how useful has our studies on agency theory and corporate governance have
research been to society? Has the knowledge we have built practical applications in dealing with elements such as
been appropriately used in the corporate environment? Or reducing conflicts of interest through compensation plans,
are we generating knowledge that, for the most part, serves optimal ownership structure, monitoring mechanisms,

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Impact research: Theory and practice in the corporate world O. S. Martins

shareholder rights, among others. Nevertheless, these accounting fraud and serious flaws in its corporate governance
authors reinforce that in Brazil, in addition to studies, there structure. From then on, IRB ceased to be seen as a model of
are several real examples of agency problems. privatization, growth, and management. Since going public
According to Almeida and França (2021), the (July 28, 2017) to March 31, 2023, the company lost 90.1%
Brazilian stock exchange has developed different segments in value, destroying more than BRL 10 billion in market
for voluntary listing, where companies commit to better value. Everything there was about regulation and scientific
corporate governance practices. The highest level was named evidence about corporate governance was easily set aside by
‘Novo Mercado’ in allusion to a new market. Companies the bad faith of a few managers. Among the many possible
listed in this segment commit to improving governance, and causes is a compensation policy with misaligned incentives
therefore, researchers theoretically consider the segment as and ineffective monitoring bodies. Again, the problem was
a proxy for ‘better governance.’ However, this is not seen in not a lack of scientific knowledge.
practice since several corporate scandals have happened to Another recent and equally scandalous case is that of
companies listed in this particular segment – and this is not Americanas. As one of the largest retail companies in Brazil,
due to a lack of scientific knowledge. In addition, Miranda it disclosed a material fact on January 11, 2023 that surprised
et al. (2021) show that listing on the Novo Mercado does not the market, informing that the company had detected
indicate lower risk, higher return, or better risk-return ratio inconsistencies in accounting entries that involved values
(these scandals are evidence of that). The segment brings
close to BRL 20 billion in debts that were not registered
together companies with greater risks, which suggests that
on its balance sheet, in addition to the resignation of its
the riskiest companies seek to be listed on Novo Mercado to
chief executive officers (CEO) and investor relations officers
obtain legitimacy regarding their governance.
(IR). The following day, the company’s shares dropped an
In recent years, several companies listed on Novo incredible 77.3% on the stock exchange. There were around
Mercado have gained the spotlight with scandals that have BRL 8.4 billion in value loss in a single day, in addition to
led to losses for different stakeholders, including society. the fear of default by around 16,300 creditors, to whom the
Americanas, IRB Brasil, JBS, Multiplus, OGX, Qualicorp, company owed around BRL 43 billion.
and Smiles are some examples of companies listed on the
Novo Mercado that destroyed value for their stakeholders. It is yet another company listed on the Novo Mercado
Although, in theory, there are nice speeches and commitments that engages in fraud. In this case, there are suspicions
to differentiated governance and management procedures, that the fraudulent practice was carried out for years, and
in practice, we observe a mix of conflicts of interest, there is evidence of similar fraud in other companies of
maximization of own benefits, disrespect for shareholder the same controlling group of Americanas. The scandal
rights, information asymmetry, and fraud, among others. involves ‘drawn risk,’ an advance payment operation offered
We have scientific evidence pointing out weaknesses and by banks to companies that buy goods from a supplier
solutions for all these cases. and need a longer period for payment. As in many other
cases involving fraud, some questions remain. Where was
IRB Brasil RE, for example, is a company with
the company’s fiscal committee? Why did the independent
over 80 years of existence that already had a monopoly
audit not identify these operations in such a high volume in
in the reinsurance sector in Brazil until it went through a
privatization process and went public in 2017. In that and an account relevant to the company? Where were the rating
the following two years, the company’s shares appreciated, agencies? Why has no one been able to spot this fraud for
respectively, 27.0%, 157.6%, and 44.5%. It was something years, but a new executive identified this within ten days at
phenomenal. In its 2018 Management Report, after beautiful the company?
words about corporate social responsibility (CSR), socio- After the publication of the facts, it seemed that
environmental impacts, and governance, IRB highlighted everything was on display, but no one noticed. It was noted
the various awards received as a prominent company in its that the company’s own executives sold more than BRL
sector, the awards received by its directors, president (CEO), 200 million in shares in the second half of 2022. The very
finance (CFO), and investor relations (IR). It was on the list banks that financed the drawn-risk operations started legal
of ‘tops’ by Institutional Investor — Euromoney. battles against the company but were accused of knowing
However, in early 2020, a letter from its manager the operations and risks involved. Bradesco went to court
corporation Squadra triggered a series of events and and managed to block the assets of the five company’s fiscal
discoveries about the company’s numbers. The house committee members until clarifying their responsibilities
of cards collapsed. The company even republished its in the case. Two credit risk rating agencies cut Americanas’
2019 Management Report, now without all the CSR and global credit ratings, Moody’s from Ba2 to Caa3, and S&P
socio-environmental emphasis, using the space to explain from B to D, which, in practice, means that it moved from

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Impact research: Theory and practice in the corporate world O. S. Martins

the position of good payer to the condition of higher risk of As a result, many companies have invested in ESG
insolvency. practices to differentiate themselves in the market and be
seen as companies committed to sustainability. However, in
Is there any difference between the cited cases and the
the theoretical field, the benefits and costs of ESG practices
famous corporate scandals outside Brazil in the 1990s and are clear. In the practical field, stakeholders’ interests are
2000s? For example, Barings in the 1990s and Enron in the not exactly aligned with expectations. One example is the
2000s. I think there are more similarities than differences. practice of greenwashing, when companies disseminate the
And it did not stop there. In the following decade, we idea of being sustainable in products and services while their
saw the Brazilian cases of Petrobras and OGX Petróleo. practices do not create value in terms of ESG.
However, after scandals emerge, researchers and regulators
usually promote advances in studies and regulation. So Despite the growing number of studies on ESG
why can these advances fail to prevent such problems from practices and the identification of greenwashing, there is
continuing to arise? Its causes and possible solutions are still a great misalignment between existing evidence in
already known. the literature and effective practices. The dissemination of
distorted information, endowed with untruths, omissions,
Most common among these cases is the moral hazard or exaggeration, is recurrent. Stating that you have
of the professionals involved. According to Martins et al. environmental, social, and governance concerns is different
(2005), although being a member of a company’s board of from showing what you are doing. Therefore, some research
directors and fiscal committee allows greater control over the findings are far from the companies’ practices, especially
executive’s decisions, professionals on these boards may not because there is significant ambiguity about which practices
be qualified to exercise these attributions. This can become are favorable to the ESG agenda and which are just ‘coverups.’
the root of most of the company’s management problems, Some cases gained visibility in Brazil. The Proteste
most often resulting from abuse of power by the controlling Associação de Cosumidores (a consumer protection
shareholder over minority shareholders or by the board over organization) denounced the company Bombril for
shareholders and third parties. environmental coverup as its product packaging stated that
Both society and the corporate world are constantly it was a ‘100% ecological product’ when it was not. Fiat
changing. Concerning company stakeholders, whether was accused of a ‘hidden trade’ practice when it promoted
managers, shareholders, creditors, customers, or other a range of tires as ‘super green,’ promising a sustainable
interested parties, their levels of engagement in relation technology for low fuel consumption and high durability
to company practices have modified the current business but disregarding what would come in return (stimulus to
environment. Thus, studies on environmental, social, and pollution by increased use of tires and the lack of clarity
governance (ESG) practices became timely and dominant, regarding disposal and reuse). Another famous case involved
especially given the unprecedented levels of proactive the automakers Ford and GM, which disclosed false
involvement of different stakeholders, which leads their attributes of their cars, giving the idea of sustainability.
Information about Ford’s Fusion EcoBoost and GM’s
interests and expectations to be increasingly considered.
Chevrolet ECO line was false, as some vehicles were rated at
This goes beyond theoretical discourse about being ‘good for
fuel consumption level D (on a scale from A to E).
the planet’ or sticking to ‘social and philanthropic causes.’ In
practice, the aim is to respond to the different stakeholders’
expectations of value creation. FINAL CONSIDERATIONS
As part of the market shift, incentives are created
Is our research really causing the expected impact on
by facilitating funding for companies that excel in ESG
society?
practices. In 2021, BlackRock, the world’s largest asset
manager, announced drastic changes in its investment Are practitioners in the corporate world using
policies, removing companies classified as polluting from its research findings properly?
portfolio. Also in 2021, Natura Cosméticos S.A. issued a What explains the persisting fraud and errors if
debt bond linked to environmental objectives of reducing scientific knowledge on a related topic has advanced?
greenhouse gas emissions and recycling plastic products,
which allowed the company to reduce the cost of raising debt Should we consider that theory has drifted far from
from 5.375% to 4.125%. In 2022, the Brazilian National practice? Or is it practice that disregards advances in theory?
Development Bank (BNDES) informed in a letter to the If you’ve come this far expecting answers, you’ve
market that socio-environmental and governance criteria forgotten how I began. I don’t have them. But I offer my
would permeate the bank’s development strategy. ‘drop in the ocean’ for reflection in this universe.

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Impact research: Theory and practice in the corporate world O. S. Martins

Many phenomena are observed indirectly in social making, fuels controversy and erodes trust in science. In any
sciences. This is the case with the quality of a company’s field of the social sciences, such as corporate governance,
corporate governance or the level of engagement of its this clutter of evidence can lead market professionals to
owners and directors with the best ESG practices. As much invest less time in applying the latest findings.
as there are a variety of scores and ratings seeking to measure If practitioners present their demands more clearly
them, all need a proxy for qualitative components. Due and researchers develop targeted scientific evidence, the
to this variety of methods, it is not uncommon to observe decision-making process in society is more efficient. We
conflicting empirical evidence in analyses of the same object. see less of a gap between theory and practice, especially
Even the evolution of the literature related to these themes in the corporate world. I emphasize that this is a two-way
brings changes, which are often not easy to be mapped and street. The market must be closer to academia to make this
distinguished. However, disseminating and using knowledge relationship more fruitful. In the end, the essence of this
in practice is easier when there is an approximation of the reflection may seem logical, but logic is often considered
theoretical and practical worlds. trivial and disregarded. For example, how can we explain
This is not unique to social science. Elliot et al. (2021) the frequency of corporate scandals being motivated by
characterize this problem in the health area during the factors about which we already have so much scientific
COVID-19 pandemic. For the authors, when there is a lot evidence demonstrating that they can become problems for
of evidence on a topic, especially when there is knowledge corporations?
evolution and a flood of new evidence, the lack of updated Finally, I hope this text incites doubts and reflections
systematic reviews that organize the accumulated knowledge on the impact and relevance of the research we have carried
can disperse the decision-makers’ attention, who tend to out in the corporate world, especially concerning the
jump from one study to another. This confuses policy- approximation between theory and practice.

REFERENCES Martins, S. M., Silva, T. R., Barros, A. S., & Tinoco, J. E. P. (2005).
Governança corporativa: Teoria e prática. eGesta – Revista
Eletrônica de Gestão de Negócios, 1(3), 76-90. https://www.
Almeida, K. K. N., & França, R. D. (2021). Teorias aplicadas à unisantos.br/mestrado/gestao/egesta/artigos/45.pdf
pesquisa em contabilidade: Uma introdução às teorias
econômicas, organizacionais e comportamentais. Editora Miranda, K. F., Melo, J. R. A., & Martins, O. S. (2021).
Firms’ legitimation through corporate governance
UFPB. and its association with risk and return in Brazil.
Elliot, J. H., Lawrence, R., Minx, J. C., Oladapo, O. T., Ravaud, RAUSP Management Journal, 56(1), 55-70.
https://doi.org/10.1108/RAUSP-05-2020-0087
P., Jeppesen, B. T., Thomas, J., Turner, T., Vandvik, P.
O., & Grimshaw, J. M. (2021). Decision makers need Toffel, M. W. (2016). Enhancing the practical relevance of research.
constantly updated evidence synthesis. Nature, 600, 383- Production and Operations Management, 25(9), 1493-
385. https://doi.org/10.1038/d41586-021-03690-1 1505. https://doi.org/10.1111/poms.12558

Authorship Conflict of Interest

Orleans Silva Martins* The author has stated that there is no conflict of interest.
Universidade Federal da Paraíba, Departamento de Finanças e
Contabilidade Copyrights
Campus I, Lot. Cidade Universitária, CEP 58051-900, João RAC owns the copyright to this content.
Pessoa, PB, Brazil
E-mail: [email protected] Plagiarism Check
https://orcid.org/0000-0002-4966-0347 The RAC maintains the practice of submitting all documents
approved for publication to the plagiarism check, using specific
* Corresponding Author tools, e.g.: iThenticate.

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Impact research: Theory and practice in the corporate world O. S. Martins

SCIENTIFIC EDITORIAL BOARD AND EDITORIAL Bryan Husted (York University, Canada)
TEAM FOR THIS ISSUE: Carlos M. Rodriguez (Delaware State University, USA)
Diógenes de Souza Bido (Mackenzie, São Paulo, SP, Brazil)
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Erica Piros Kovacs (Kelley School of Business/Indiana University, USA)
Alketa Peci (EBAPE/FGV, Rio de Janeiro, RJ, Brazil)
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Rafael Barreiros Porto (UnB, Brasília, DF, Brazil) Howard J. Rush (University of Brighton, United Kingdom)
Silvia Gherardi (University of Trento, Trento, Italy) James Robert Moon Junior (Georgia Institute of Technology, USA)
John L. Campbell (University of Georgia, USA)
Editor-in-chief
José Antônio Puppim de Oliveira (United Nations University, Yokohama,
Marcelo de Souza Bispo (UFPB, João Pessoa, PB, Brazil) Japan)
Associate Editors Julián Cárdenas (Freie Universität, Berlin, Germany)
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