Paddling Against the Tide: The Micro-Level Strategies Entrepreneurs Employ to Resist Endemic Corruption in Tanzania

Abstract

This paper explores when and how entrepreneurs who operate new organizations in environments where corruption is endemic can resist it. Despite the continued scholarly interest in corruption, anticorruption efforts by micro, small, and medium enterprises have been largely overlooked. Instead, studies have focused on the intraorganizational actions of larger established organizations (local and multinational) without sufficiently considering their interdependence with other actors in their external environments. Given the social exchange nature of corruption, we collected and analyzed data from interviews with Tanzanian entrepreneurs, and theorized about when and how they circumvent or resist corruption. Our findings illuminate the complex relationship between entrepreneurs’ motivations and capability, and highlight the strategies entrepreneurs use when they seek to resist corruption without compromising their resource needs. Subject to their leverage (i.e., resource endowments and available alternatives), entrepreneurs resist corruption by avoiding powerful focal firms, restructuring their resource dependence in a firm-focused manner, and managing risks. Considering social-relational dynamics, entrepreneurs also find ways to avoid interactions with corrupt agents and to use power strategically (through political tactics, such as co-opting and challenging) that influence agents to act in the entrepreneurs’ best interests and against corruption.