It is known that the companies that support innovation grow the most. Innovation comes as a result of companies’ ability to see new market opportunities, companies’ ability to act on those new markets and converting them to their customers.

Therefore for a company to grow it has to create friendly innovative regulations to enhance innovation in the company. There are six important components which when an organization works with them can encourage innovation. These components are:

Vision and Strategy supporting Innovation

The organization should have vision and mission aiming at shaping the future of the company. This will encourage employees to work towards achieving the set goals hence they will look for new ways of reaching the company’s goal, therefore is achieved.

Top Management Team leading Innovation

Innovation should be supported by all top team members. They should share the leadership with the CEO and embrace the vision and mission of the company.

Cross-Functional Team

The organization should be able to realize its returns from its technologies and innovation. This will enable it to balance the two thereby not suppressing one at the expense of other.

Empowering Employees

 This done by encouraging innovation from employees by accepting their new ideas and efforts, rewarding those who come up with new ideas and exposing them to the trending issues in business world through seminars and workshops.

The culture and climate of the organization

It should be a culture of the organization to embrace innovation, and the organization should also create a conducive climate for innovation.

Mapping Innovation Roads

The organization should be regularly checking its weakness and finding possible ways of doing away with them therefore strengthening its self.


General electric aims to focus unique energy technology that is environmental friendly. For example use of solar energy, hybrid, locomotive fuel cells, lower emission aircraft engines, lighter and stronger materials, efficient lighting and water purification technology.

GE enhances completion among world’s largest companies to accelerate the emerging clean technology economy hence influencing innovation in these competing companies.

BP is one of the world’s largest energy groups. Its new green logo and environmental and society initiative aims at creating awareness on the importance of recycling of their products to reduce the carbon footprint of the BP MS 150.

According to Deep water Horison Oil Leak 2010, these GE and BP initiatives are merely PR exercise because they preach wear while drinking wine. They talk of caring for the environment at the same time polluting water and we know pretty well that water is part of the environment.

 Assignment 2: Ethical Issue: Reclassification of Receivables

Respond to the following ethical issue concerning the reclassification of receivables in your initial post:

Moss Exports is having a bad year. Net income is only $60,000. Also, two important overseas customers are falling behind in their payments to Moss, and Moss's accounts receivable are ballooning.

The company desperately needs a loan. The Moss Exports board of directors is considering ways to put the best face on the company's financial statements. Moss's bank closely examines cash flow from operations. Daniel Peavey, Moss's controller, suggests reclassifying as long-term the receivables from the slow-paying clients. He explains to the board that removing the $80,000 rise in accounts receivable from current assets will increase net cash provided by operations. This approach may help Moss get the loan.


1. Using only the amounts given, compute net cash provided by operations, both without and with the reclassification of the receivables. Which reporting makes Moss look better?


Without reclassification

With reclassification

Net income



Increase in accounts receivable






Net cash provided by (used in) operations




The reporting with reclassification makes Moss look better.


2. Under what condition would the reclassification of the receivables be ethical? Unethical? Support your response.

Reclassification of receivables is ethical only when there is a genuine reason for such an act. For E.g., if the credit terms are in such a way that the amounts are receivables only after 12 months from the end of the financial year or after the current operating cycle, as applicable, such receivables may be classified as long – term. This is reasonable and ethical.

However, classifying the receivables as long-term just to present a better cash flow to earn a loan from a bank s not considered ethical unless the company is able to legally and logically substantiate its position.