The entrepreneur is the role model for employees. If your behavior includes lying to customers, taking money out of the cash register, or taking home some of the inventory or supplies, you cannot be surprised if your employees follow your lead. Your family members may see the business as their own and take things that really belong to the business. Employees may see this as being dishonest, or as a conflict with their needs for a raise in pay.
The community expects your business to operate in an ethical manner that enhances the image of the community as a whole. If you are located in a mall, for example, your code of ethics will help or hinder customer traffic for the other businesses too. A reputation for telling customers anything they want to hear, regardless of the truth, eventually hurts your business and other businesses around you. It usually isn't illegal to lie to customers, but it isn't good business.
Ethical behavior is merely making good business decisions based on an established "code of ethics". Entrepreneurs should establish a written code of ethics that can serve as a framework for decisions to be made by the entrepreneur as well as the employees. In developing this code of ethics you should consider the following items:
1. Identify your general principles that would lead to fair business practices.
2. Check with your industry association for basic standards to review
3. Allow for the fact that ethical questions do not always have a unique, faultless answer.
4. Write out specific statements that will assist you and others in making day-to-day ethical decisions.
5. Apply your code of ethics to a written policy and procedure manual identifying the major rules for operating your business.
6. Train your employees (and family members) to make ethical decisions about the business.
Your code of ethics will apply to all types of business operations including the following.
* Handling cash and checks from customers
* "Negotiating" special prices for a friend without permission
* Accepting gifts from suppliers and business associates
* Selling damaged merchandise
* Warranties on products
* Merchandise return policies for customers
* Returning merchandise to suppliers
* Handling shoplifters
* Accounting procedures for cash sales
* Employee theft
* Insurance coverage adequate to protect the business and employees
* Supporting your advertising promises
* Checking in merchandise when received from suppliers
* Keeping the premises clean and free from harmful substances or germs.
* Handling employee performance problems
* Telling customers the truth