Aspects of corporate sustainability, such as human rights, ethical marketing rules, fair labor standards, and environmental protection are becoming expected from all business entities. These aspects of business known as corporate social responsibility (CSR) bring benefits to both the environment and society, and have typically been developed and implemented in large companies (Snider, Hill, & Martin, 2003). However, small and medium-sized businesses (SMEs) are now facing pressure to adopt CSR programs. SMEs have an advantage over larger firms and represent a perfect opportunity for the implementation of an environmental sustainability initiative. Due to the relative size of SMEs, fewer layers of management exist in these firms. Hence, there is an absence of bureaucratic constraints which hinder the passing or corporate initiatives such as a program to focus on environmental sustainability. SMEs enjoy the advantage of being well positioned for the quick implementation of a CSR solution (Freisleban, 2011). But how can SMEs implement a CSR program to best reach the intended beneficiaries?
One way in which small businesses can implement a CSR program and have it reach its intended target is through the cluster or network approach. The challenges faced by the SMEs in implementing CSR will be minimized by being part of a network. The cluster approach relies on strong, consolidation and trusted information channels amongst other small businesses. The cluster approach is made possible by setting up specific clusters of SME’s based on a geographic location. The cluster of SME’s share in communication tools to annunciate their expertise and best practices, operational models, and guidelines in support of working towards a CSR initiative (Battaglia, Bianchi, Frey, & Iraldo, 2010).
Collaboration amongst SME’s presents an opportunity to bring together the core competencies of different businesses for the achievement of common CSR goal. However, all participating SME’s need to share in their common values and their alignment should be based on the long-term interests of each member of the formed SME’s coalition (Wall, 2008). The forming of a cluster amongst small businesses also helps in the sharing of the costs of associated with implementing a socially responsibility program (Harggett, & Williams, 2009). Thus, small businesses can look at a cluster as an chance to provide shared costs and an opportunity to be responsible, as its contributions to social and environmental programs do more than just add costs to the company.
With pressure from government agencies demanding that small businesses start to comply with CSR programs as larger companies do, some small businesses maintain a CSR program as merely a reactive-defensive strategy rather than as a concentrated effort to do good (Clarkson, 1995). By joining a cluster of SMEs with a concentrated goal, companies can do more than merely comply with the minimum regulatory requirements. The combined costs and efforts of businesses to comply with CSR initiatives can be viewed as a built-in activity, and embedding as a substantial part of business strategy, thus helping companies to not only comply with regulation but also to help generate profits (Grayson and Hodges, 2004). In using a cluster of SME’s, the sustainability of a small business as well as the achievement of a CSR program becomes enhanced.
Battaglia, M., Bianchi, L., Frey, M., & Iraldo, F. (2010). An innovative model to promote CSR among SMEs operating in industrial clusters: evidence from an EU project. Corporate Social Responsibility & Environmental Management, 17(3), 133-141. doi:10.1002/csr.224
Clarkson, M. B. (1995). A stakeholder framework for analyzing and evaluating corporate social performance. The Academy of Management Review 20(1), 92– 117. doi:10.5465/amr.1995.9503271994
Conway, E. (2014). Assessing Sustainability Support to Small and Medium Sized Enterprises (SMEs). International Journal of Performability Engineering, 10(4), 377-386. doi:10.1186/s13705-015-0060-x
Freisleban, G. (2011). Benefits & burdens of CSR for SMEs. Financial Executive, 27(8), 53-56. Retrieved from: http://www.financialexecutives.org
Grayson, D. and A. Hodges: 2004, Corporate Social Opportunity! 7 Steps to Make CSR Work for Your Business. Sheffield, UK: GreenLeaf.
Hargett, T. R., & Williams, M. F. (2009). Wilh. Wilhelmsen Shipping Company: Moving from CSR tradition to CSR leadership. Emerald Journal 9(1), 73–82. doi:10.1108/14720700910936074
Snider, J. P., Hill, R. & Martin, D. (2003). Corporate social responsibility in the 21st century: A viewfrom the world’s most successful firms. Journal of Business Ethics, 48(2), 175-187. doi:10.1023/b:busi.0000004606.29523.db
Wall, C. (2008). Buried Treasure: Discovering and Implementing the value of Corporate social Responsibility. Sheffield, UK: GreenLeaf.
The transformational leadership theory is one of the most studied and thus most popular theories of leadership. The ability to translate across cultural boundaries while being applied to more situations than many of the other studied theories of leadership contributes to the popularity of this theory of leadership. The main premise of this theory is the transfer of the leader’s vision to their subordinates, which inspires the subordinates to focus on a higher order of intrinsic needs and organizational goals (Zwingmann, et al., 2013). To accomplish this goal, transactional leaders have to inspire followers through motivation to become engaged in their work, thus sharing in the vision of the organization. Transactional leaders use these four components to become an effective leader: idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration.
Having idealized influence refers to a leader’s ability to provide a clear vision, and instills pride in accomplishing the goals of an organization. Subordinates will respect and trust a leader who exhibits an ethical behavior and has high morals. When a leader inspires motivation in their subordinates, that leader demonstrates the ability to communicate their high expectations goals which followers are expected to accomplish. By having been provided with such motivation, the followers become committed to the shared vision of the leaders of an organization (Northouse, 2013).
Transformational leaders stimulate the intellect of their subordinates by allowing for innovative and creative approaches towards accomplishing their work within an organization. Subordinates are encouraged to create new methods of accomplishing tasks by questioning assumptions and applying new frameworks to established situations (Bass & Riggio, 2006). The final component of the transformational leadership theory is an individualized consideration which requires leaders to take on the role of a coach or mentor to a subordinate. Managers using a transformational theory of leadership provide a climate that is supportive to their followers, and they listen carefully to the needs of all members of their team.
Because the transformational leadership theory creates a strong bond between leaders and subordinates, the transformational leadership theory leads to longer lasting benefits between leaders and subordinates. This theory is unlike another popular theory of leadership, the transactional theory, which tends to view the relationships between leader and followers as shallow and good only for a short period of time. The exchange of rewards for achievements in a transactional leadership theory often leads to resentment between the leaders and followers. Thus the bond created is not as strong as in the transformational leadership theory.
References
Bass, B.M. & Riggio, R.E. (2006). Transformational leadership. New York, NY: Psychology Press.
Northouse, P.G. (2013) Leadership Theory and Practice. Thousand Oaks, CA: Sage Publications, Inc.
Zwingmann, I., Wegge, J., Wolf, S., Rudolf, M., Schmidt, M., & Richter, P. (2014). Is transformational leadership healthy for employees? A multilevel analysis in 16 nations. Zeitschrift für Personalforschung, 28(1/2), 24-51. doi:10.1177/239700221402800103
Benjamin Franklin said “Money makes Money. And the money that money makes, makes money.” Benjamin Franklin knew the importance of saving money, and that there is no greater surety of wealth than the compounding of interest on one’s money. However, today 53% of Americans do not have access to or fail to contribute to a company sponsored 401K plan. In the United States, 17% of the workforce have not even given thought towards contributing to a retirement plan. Half of all Americans over the age of 55 do not have a savings plan set aside for their retirement. In the United States, 45% of workers who have failed to start contributing towards a retirement account by age 55 plan on working many more years to generate an income source, instead of retiring (Carosa, 2016).
A reason many people give for failing to contribute to a retirement account is competing financial responsibilities and priorities. In a company sponsored 401K plan, each dollar that an employee contributes towards a retirement plan is tax-free. Each dollar that an individual spends on a competing financial priority is subject to federal income tax. For example, if an individual earns between $37,651 and $91,150 then each dollar spent on a competing financial priority and not in a 401K plan has been diminished by 25%, or the applicable tax rate for a single filing taxpayer. Thus, the money that could have been saved and could begin to compound interest has already been diminished by 25% on the competing financial responsibility. In 2016, an individual with access to a company sponsored 401K plan can contribute up to $18,000 tax-free. An individual over the age of 50 can contribute an additional $6,000 tax-free.
References
Carosa, C. (2016). Why retirement savers love 401(k)s. Benefits Selling, 14(2), 38-38. Retrieved from http://ezp.waldenulibrary.org
With a low inflation rate, the 2016 flexible spending maximum contribution for employees is expected to remain unchanged. According to industry experts, the maximum contribution will remain at $2,550 barring a surge in inflation during the fourth quarter of this year.
For tax year 2016, the contribution limit for 401K/403b/457 plans will stay at $18,000. The catch-up contribution limit for employees over age 50 will also stay at the current contribution limit of $6,000.
Section 132 Qualified Transportation Benefits
A change has occurred to the way commuter benefits plans are managed. Beginning January 1, 2016, employees who use a qualified transportation method to commute to work will need to use a section 132 credit card to pay for your commuting costs. The credit cards will be provided by the company sponsored plan. Submitting electronic or paper claims for transportation will no longer be a valid form for reimbursement. Electronic and paper claims will be continue to be accepted for parking related expenses.
As of the posting of this message, the maximum contribution for pre-tax transportation benefits will remain at $130 per month for 2016. The pretax parking contribution limit has been raised to $255 per month starting in January 2016.
