Parasitic Enterprises: How Entrepreneurial Competencies Can Foster Corruption Within Organizations

Institutional Voids and Three Dimensions of Corrupt Entrepreneurship

Not all entrepreneurship is socially beneficial—a point classically made by Baumol’s (1996) distinction between productive, unproductive, and destructive entrepreneurship. Productive entrepreneurship drives wealth creation and innovation, whereas unproductive entrepreneurship involves rent-seeking and manipulating the system for private gain (Baumol, 1996). In extreme cases, entrepreneurs engage in destructive activities that actively harm societal welfare, including organized crime or corruption. Corrupt entrepreneurship can be understood as a subset of unproductive entrepreneurship in which individuals or ventures innovate by exploiting illicit opportunities, subverting rules, and brokering power through bribery, fraud, or collusion. Such actors display hallmark entrepreneurial competencies, for example, resourcefulness and opportunity recognition, but channel these abilities into illicit avenues.

Institutional voids represent situations where frameworks required for efficient market operations are either weak or missing (Khanna & Palepu, 1997). These voids include deficiencies in structures such as constitutions, laws, property rights, and regulatory frameworks, as well as shortcomings in informal institutions like cultural norms, traditions, and religious practices (Mair et al., 2012). Institutional voids simultaneously impede and stimulate entrepreneurship (Doh et al., 2017; Mair & Marti, 2009). On one hand, such institutional shortcomings force entrepreneurs to seek alternative strategies to manage these constraints (Gao et al., 2017; Sutter et al., 2013). These voids can also stimulate entrepreneurial ingenuity, enabling entrepreneurs to discover and capitalize on emerging opportunities (Doh et al., 2017; Mair & Marti, 2009). Such opportunities can also extend to involvement in illegitimate entrepreneurial activities (Cavotta & Phillips, 2023).

Cavotta and Phillips (2023) suggest that corrupt entrepreneurs emerge in response to these same institutional voids. The corrupt are not simply opportunistic offenders but combine elements of traditional, institutional, and cultural entrepreneurship to initiate and sustain illicit enterprises by exploiting, creating, and preserving such institutional deficiencies. First, through opportunity exploitation, corrupt entrepreneurs resemble traditional entrepreneurs by identifying and capitalizing on institutional voids—such as regulatory gaps or enforcement failures—for profit (Mayer et al., 2018). Such entrepreneurs swiftly move into illicit markets, meeting demands for illegal goods or services, effectively mirroring the market-seeking behavior of legitimate entrepreneurs but within an unlawful context. Second, these entrepreneurs actively engage in institutional manipulation, acting as institutional entrepreneurs who deliberately create or perpetuate institutional weaknesses favorable to their illicit activities (Hardy & Maguire, 2008). They actively re-engineer the institutional environment through bribery, coercion, or political influence. Such strategic manipulation maintains or expands institutional voids, sustaining conditions conducive to illegal enterprise growth. Third, corrupt entrepreneurs undertake cultural legitimization, adopting the role of cultural entrepreneurs by crafting narratives and identities within local communities (Lounsbury & Glynn, 2019) improving their social license to operate. This cultural legitimation reduces societal resistance, enabling illicit enterprises to endure.

Using the example of organized crime syndicates that flourished during an Italian resource boom marked by rising demand and prices for citrus fruits, Cavotta and Phillips (2023) illustrate that corrupt entrepreneurs are multifaceted, sophisticated actors. They exploit governance-related voids while simultaneously garnering community support by positioning themselves as providers of order and assistance. Their model emphasizes that a corrupt entrepreneur’s success hinges on their ability to identify profitable opportunities, strategically manipulate institutional frameworks, and cultivate cultural legitimacy within local communities.

While this offers a valuable perspective on how corrupt entrepreneurship can emerge in response to (macro-level) institutional voids, it remains silent on how corrupt entrepreneurship may emerge from within (meso-level) organizational settings, given organizational voids that can encourage individual (micro-level) corruption that, in turn, reinforce macro-level voids. To bridge this gap, a complementary perspective can be found in Mars’ (1982) anthropological examination of occupations and workplace crime.

Workplace Crime Typology—The “Hawk” Archetype

Mars’ (1982) ethnographic work provides a framework illuminating how entrepreneurial competencies manifest in corrupt behavior among employees and small proprietors within organizational settings. Mars drew on Mary Douglas’ cultural theory (1970) to develop a typology of occupations based on two dimensions: social regulation (grid) and social integration (group). In Douglas’ framework, grid refers to the strength of hierarchical control—particularly the relationship between leaders and subordinates—while group captures the degree of social cohesion among employees within a collective. Mars extended this theory by identifying four levels along each dimension, enabling a precise placement of occupations within the grid-group schema. Among these, he characterized the Hawk as the most entrepreneurial occupation type. Hawk roles exhibit both low grid and low group characteristics, meaning individuals operate with minimal bureaucratic constraint and limited peer oversight. Mars’ analysis highlights how occupational structures—whether in Hawk roles or others—afford individuals varying degrees of agency to supplement their income through what he termed “the fiddle” (loosely, corrupt behavior) or to exercise agency for the sake of exercising agency, the pleasure of self-determination. In this respect, his work unconsciously echoes Schumpeter’s view of entrepreneurial motivation as “the joy of creation, and the dream and will to found a private kingdom” (Goss, 2005, p. 208). Hawks take the looseness of certain occupations to extremes, treating their work as if it were their own business, “taking ownership” in other words, and taking initiative to maximize gains, even illicitly. Thus, Mars’ Hawk shows how an employer’s structural conditions could breed an entrepreneurial offender, someone who uses ingenuity, proactiveness, and risk tolerance to achieve personal gain outside formal rules. Although Mars’ Hawk alludes to a behavioral micro-foundation explanation for corrupt entrepreneurship by linking a (meso-level) organizational setting with a (micro-level) entrepreneurial skillset, this archetype has yet to be applied to the corporate corruption literature. It offers a useful bridge between classic workplace deviance research and modern discussions of corrupt entrepreneurship by highlighting a continuum from petty workplace fiddling to more ambitious corrupt ventures, while acknowledging “voids” at various levels.

In sum, by challenging the view that entrepreneurship is inherently positive, the emerging literature at the intersection of corruption and entrepreneurship calls for more nuanced insights, particularly into the context-dependent nature of these “dark” practices. To illuminate how entrepreneurial energy may readily manifest in corrupt practices, our autoethnographic analysis shows how a corrupt entrepreneur and their parasitic enterprise came to thrive within an NGO on a social mission to address the country’s institutional voids pertaining to education.

Theme 1: A Company Inside a Company

What emerged was that an organized criminal operation, which we will refer to as the parasitic enterprise, had formed inside the NGO. This was a “company” with a “chief executive” (referred to hereafter as the Kingpin, who doubled as the official chief administrator of the NGO itself) with an “executive team” of enforcers in the office, and regional representatives (all headmasters) based at a geographically dispersed range of schools. The structure was not dissimilar to a franchise hub-and-spoke model, with the regional “spokes” keeping an eye out for risks and opportunities, and all spokes feeding funds to, and relying on coordination and “products” generated, by the hub. The structure was entirely different, however, to the formal structure of the NGO.

To loosen the control of the employing organization (to borrow Mars’ approach) was not difficult; the sole auditor of the project during the period when the syndicate was established (the founder) was elderly, deaf, and did not speak the local language. As the founder attempted to eke the maximum value out of donor funds, he avoided employing interpreters, instead relying on internal yet corrupt staff to literally and figuratively interpret the reality of the organization to him.

The founder was also absent for around half the year, enabling the Kingpin to create a corrupt venture that was stable, well-managed, and highly profitable. The Kingpin was someone the founder had known since childhood. He was orphaned by the 1970 cyclone, and found by rescue workers secured to a coconut tree. He grew up in the Char Fasson orphanage, which still exists to this day, where he met the founder, who at the time was a consultant to an international charity working on the island. He gained his English skills and learnt book-keeping from the founder.

What is remarkable about the Kingpin, as a Hawk, however, was that his parasitic “business” had a formal structure: it had a separate set of books, it had its own phone number (in the possession of the Kingpin), and it had its own hierarchy of staff. The hawks described by Mars followed a relatively intimate “small business” model, but the Kingpin ran a “big business.” The tentacles of the syndicate had wrapped itself around every element of the NGO where power was exercised. He partly borrowed an existing “high grid” workplace, where the vast majority of staff taught to a curriculum, a class schedule, and work hours established and monitored by the head office. Purchases, promotions, transfers from one school to another, the release of exam results, the distribution of textbooks and stationery, the distribution of salaries (done, during these years, dangerously, in cash—since banking infrastructure was, and remains quite rudimentary in these regions) had all become an opportunity to extract a corrupt tax.

To give an example, teachers might be living conveniently close to a school, in a region where public transport is scarce and unreliable, and commuting difficult. For such teachers, being transferred to another, more remote school would be more than an inconvenience; it might lead them to have to leave their family and take up lodgings near the new location, or resign. To avoid this fate, they paid a “tax”—often equivalent to several months of salary. The regional “heads” within the hub-and-spoke model were well-positioned to scope out staff vulnerable to extortion, or local families with means to purchase jobs from those insufficiently well-resourced to keep them. A “sacking” could be engineered by fabricating a misdemeanor on the part of the incumbent or exaggerating an infraction. These business operations required coordination between parties. The regional “heads,” while powerful, were powerless (except perhaps in low-grade pilfering) without the coordination and control of the Kingpin.

However, other “taxes” were invisible to the staff—they paid them without even knowing they had paid, such was the high grid nature of their roles.

The Eid festival bonus has definitely been rorted. Smart, thoughtful teachers are wrinkling their heads when I ask them the last time they got paid. They didn’t even know there had been an Eid bonus; it wasn’t announced, simply taken from them. 400 taka multiplied by every teacher. Big money. [HOC, report to board, 2015]

Curiously, the corruption that was present was largely confined to internal parties (staff and students) between people who in theory worked in the same organization, side by side. The chief exception was a significant revenue stream gained by “selling” jobs to “applicants.” Strikingly, donors’ funds had not been misappropriated. The money that was being generated by criminal means was sourced from teachers, pupils, parents and job candidates.

Corruption has been frequently defined in ways that lock out practices that occur “purely” in the private sector (Jancsics, 2014). There were in fact only two overlaps between the NGO and the government. The collection of free primary school textbooks from the government was one rare corruption-free aspect of the organization’s annual cycle of bureaucratic contact. The other key moment was getting the annual budget approved by the NGO Bureau in Dhaka. Without budget approval, funds cannot be remitted to Bangladesh, and salaries cannot be paid. This pinch point is a classic generator of “speed money” bribes (Chakravorty, 2023).

Turning to the NGO Bureau budget problem, when I began worrying aloud about it, [staff member] surprisingly said “This is a Bangladeshi situation, you know it well, corruption is everywhere. They expect some money . . . through back door.” He revealed on questioning that we had been paying between 10,000 and 15,000 taka a year to get the budget through, without [the founder’s] knowledge. [HOC, email to board, 2017]

Theme 2: Mismanagement Is Still Management

Hence, there were two parallel “companies” operating; as chief administrator, the Kingpin had to manage them both. Both had a degree of formality to them. The Kingpin kept meticulous records for both the formal and informal organization and while “staff” was theoretically singular he was talking to them about two different enterprises—a task simplified somewhat by having one phone that was “corrupt” and the other that was “clean.”

The Kingpin’s role was not simply to extract maximum profit—which in a sense is every corporate manager’s baseline task—but to create a system in which he could do so. One key task was keeping staff who were not benefiting from the scheme silent. One means was threat:

My interpreter in a low voice over breakfast said that one of the teachers had said to [syndicate member] as if he was joking, but he wasn’t, “the torture you have inflicted on all the teachers for the last 20 years is at last going to stop.” [HOC, notes, 2015]

This “torture” did not need to be directly felt to be effective:

This teacher said very quietly: “In relation to the situation in [head office], if you can maintain good relations with the people in [the syndicate], that is wise, otherwise there will be trouble, problems will arise. This I can say from experience over the years.” When we softly encouraged him to say more, he added that he dare not, just in case they were to read my notebook or open my computer at the office. I assured them no-one could read my handwriting, or know the password of my computer . . . and besides I kept it locked up. He still declined to speak further. “People here can for no reason suddenly lose their jobs.” [HOC, notes, 2015]

Threats alone can be a somewhat brittle foundation on which to build a stable structure, however not all threats required the implication of violence or other disadvantage to a particular individual. “If he becomes aware of this, he will close the whole operation” was how one teacher described the concern about the founder discovering the extent of the corruption. Everyone was implicated in that threat.

Shepherd et al. (2021), when discussing the Indian context, talk of clusters of corrupt individuals operating “autonomously” and secretively within organizations to seal off their “venture” from oversight. Such secretiveness is only necessary under certain circumstances. As noted earlier, the Kingpin had the advantage of being in control of the narrative, interpreting the local language for the founder. If someone broke cover and reported corruption directly to the founder, he would go to “investigate” with a syndicate member serving as interpreter.

In addition to threats either individually or collectively targeted, there were rewards that were more or less equitably distributed:

So [name redacted] has got into trouble trying to photograph school records being doctored showing that our schools, instead of the usual 15 days off for Eid, instead took 33 days off. . . .The headmaster I met in the town confirmed this . . . [HOC, notes, 2016]

Holidays were one “reward” that could be distributed to those outside the inner circle, without personal cost to the Kingpin or indeed the syndicate. It was not the only significant non-monetary reward however:

He says inspectors are not visiting the schools. They visit one and then fill out the forms inspection forms to indicate they’ve visited three. [HOC, email to board, 2015]

The school inspectors were significant in the syndicate’s operation, visiting all schools, and thus able to monitor not just the operations of the teachers but also check on the performance of the regional syndicate heads. Smaller monetary rewards of corruption were distributed, to some degree, to almost all members of staff. The following issue was raised by a staff member almost inadvertently. She clearly did not see this as a major issue of corruption and brought it up almost as an aside:

She said, “even today the headmistress is collecting 10 taka from each student when distributing schoolbooks and for exam fees from every student.” At this stage, the blood drained from my face. I said, let’s get this straight, students are PAYING for schoolbooks [which are given free by the government] and exams? Yes. I turned to [staff member], and asked, “how many schools is this happening at.” She said, quite emphatically, “every school.” . . . Apparently, this money gets collected by the headmaster and then distributed to the teachers at the school, and when [school inspector] brought this up [with the Kingpin], he was told, “well they do not get paid very much so . . .” Apparently, headmasters get a disproportionate share of the takings. [HOC, report to board, 2015]

As well as an additional administrative load, there is an extra layer of human resource management complexity to the managerial workload. The Kingpin displayed considerable emotional intelligence and soft skills in carrying out his role. During the 2014 to 2015 period, he would have been aware that investigations were underway, despite the HOC’s attempts to conceal the fact, as some corruption allegations began to emerge in front of junior members of the syndicate. They would have reported back to him. During this time, he remained at least superficially calm, and on the front foot, calling meetings of staff to “address” (manage) issues of concern, as if he had no stake in the truth being revealed:

One of the things that was odd about the staff meeting yesterday was that when I mentioned a comprehensive school visit, everyone seemed thoroughly thrilled about it, saying it had been too many years . . . and that many schools had never been visited. Either the corruption allegations are untrue . . . or the management is very confident that the teachers will remain silent. [HOC, email to board, 2014]

Where did this confidence come from?

Xu et al. (2018) refer to the process of “psychological kidnapping,” a stepped process of co-opting colleagues into corruption, either as insiders to share in the spoils, or outsiders who are pressed to remain silent. He had not simply worked with a group of insiders, but he had recruited the insiders, picked people with certain characteristics (including corruptibility) to his inner circle. The Kingpin had clearly mastered the “kidnapping” process. In addition to distributing rewards of significant value (additional days off) and punishments that carried severe well-being implications in a very impoverished region, he managed to create an aura of considerable local respect. Godinez et al. (2024) in a recent study of private sector family firms, show how social connection can induce individuals to participate in corruption, and how social capital can be drawn on to develop corrupt networks.

It was observed by the HOC and confirmed by sources that the Kingpin rarely left the office, trusting his syndicate. He was a very regular attendee, however, at the local mosque, and on the rare occasions he walked freely in the nearby town in the company of the HOC, showed little fear of raising public resentment. He was generally quietly spoken, somberly dressed, and showed little ostentation. Xu et al. (2018) in their study of corruption in China refer to the “soft menace” with which managers manage corrupt systems, and the Kingpin was an illustration of this, living calmly, corrupt in plain sight. He continues to live within the community, just a few hundred meters from the headquarters of the NGO he co-opted.

Managing a corrupt enterprise is not incompatible, then, with “good” management skills. After the syndicate had been purged, the HOC sat down with an elderly gentleman, a former government officer who had taken a largely ceremonial role within the NGO, his age and government connections adding gravitas to the team. Only now that investigations were complete, he conceded that corruption had been rampant. He had been silent, yes, when perhaps he should have spoken, but the organization was “running well.” That phrase was used repeatedly, “running well.”

Theme 3: Being Corrupt Is Not Easy

While “retail” corruption, involving simply buying or selling a single product outside the formal setting, is relatively simple, “wholesale” corruption of the kind described in the previous two sections is not. Corrupt “management” mimics and extends many of the key tasks and norms of management, requiring significant organization and emotional intelligence. To traverse both formal and informal sector management in a single role is additionally complex. Compared with moonlighting, where the manager might earn extra money through extra effort after work hours, the manager holding a dual role in a corrupt enterprise needs to do two jobs in parallel, one without being detected, and both jobs “well.”

There is workload as well as complexity aspects at play. An honest manager operating the study organization would have been required to make entries for three or four purchases per working day and handle 160-staff payroll calculations each month. As it was, the manager would have had to, at the very least, spend double the time. He had a broader “product list” to market, more entries in the informal books than in the formal books. Unlike other staff, he rarely had time for a cup of tea or conversation. The degree to which he had been kept busy by his work was clarified after his departure: the phone calls to the office dropped dramatically, and the extent of the “real” office administrative workload was revealed to be surprisingly light.

When the [corrupt] system was intact, [the Kingpin] always had his two phones beside him, and when he wasn’t recording something in the ledgers, he was on the phone quietly listening. After the sackings the “official” phone, ostensibly for teachers to contact head office, went silent, as if the only teachers who had been contacting the head office were those who were inside the system. [HOC, notes, 2015]

The corrupt are clearly “forced” to undertake additional administrative load (Brzezińska et al., 2018). As an example of the cognitive workload that corruption placed on the Kingpin, the HOC found a letter tucked inside an exercise book in 2016 stating:

I regrettably inform you that as from today’s date, 14^th May 2015, your services as Headmaster of [school name redacted] are terminated.

The management of [NGO] wish you success in your future.

Regretfully yours.

The letter was signed by the founder, but never sent. The headmaster had been dismissed by the founder, not the Kingpin. In making a decision not to sack a teacher (who no doubt had paid for his job, and hence, more or less, “owned it” now), the Kingpin had to make a calculation about the probability that the act, or absence of act, would be ever noted. He had to keep two “realities” in mind, instead of merely one.

I sacked the same man, eleven months later. In other words, [the founder] sacked him, [the Kingpin] withheld the letter [and didn’t sack him], and I sacked him again, this time with effect. [HOC, report to board, 2017]

Scholars have for some time noted the high cognitive load required to engage in deception (Sporer, 2016). Furthermore, to successfully amass wealth from an organization undetected requires self-control; too blatant a grab for wealth would be noticed. Self-control also places a high demand on cognitive facilities (Hofmann & Van Dillen, 2012). Trust is also not absent from the business of corruption. The corrupt manager has to take the measure of each person encountered in the setting up and maintenance of a corrupt system, rewards and threats calibrated to the case. They also need to know, or assess whether, as Uslaner (2004) puts it, their partners in corruption will deliver the “products” that they promise.

Corruption, Krastev (1999) argues, is a hidden form of protectionism, which introduces inefficiencies into the “free” market. Compared with “normal” markets of goods and services, he argues, corrupted markets place a very high value on local knowledge. “In order to corrupt public officials, one cannot rely simply on offering the biggest bribe in the biggest brown-paper bag,” he adds (1999, p. 57). “Corrupt individuals need to offer their services in certain ways,” Tajaddini and Gholipour (2018, p. 615) note. “It is not possible to spread such pieces of information via public advertising, media or recommendations.” The need for discretion makes “marketing” of the “product” by managers such as the Kingpin significantly more difficult than traditional marketing.

In summary, corruption is not just a crime; it is a set of competencies, one that requires high levels of organizational skills, financial skills, emotional intelligence, and networking skills (also see Jancsics, 2014) and risk-taking. This suite of competencies has significant overlap with the competencies of an entrepreneur.

In fact, the ability of the corrupt to cut across formal rules and create new rules and relationships is matched in the field of entrepreneurship, where informal routines play a large part in the day-to-day running of firms. Similarly, the personalized and family ties that shape the nature of employment contracts and management in entrepreneurial firms (Roberts et al., 1992), and in turn characterize corrupt networks, are not “easier” to engage in than following standardized routines.

We have detailed how a set of competencies that match conventional competencies except in their purpose, are required to succeed as an informal “businessperson” within a formal work context—what Mars called a Hawk. Corrupt human resources, corrupt administration, corrupt management all have non-corrupt analogues, but as the evidence shows, they are not exact analogues. The corrupt manager has more products to sell, more variables to monitor, and less fixed systems to rely on in arriving at answers to management problems.

Theme 4: Corrupt Behaviors Can Have Incidental Non-Corrupt Benefits

The company that had formed inside the NGO generated large profits, with the Kingpin as “owner” of the syndicate deriving the most significant benefit:

[The Kingpin] has accumulated so much wealth, his son is working in Singapore, and his daughter . . .. held a wedding reception in Gulshan, the Dhaka equivalent of Mayfair, and has bought a job at Customs, one of the most lucrative arms of the Bangladeshi government . . . [HOC, report to board, 2015]

A penniless, homeless orphan had risen to the upper middle class of Bangladeshi society through enterprise. While working for the organization, he had quietly purchased a large parcel of land down the street from the head office of the organization he was exploiting. While managing his syndicate, he lived with his family next door to the office in a modest company-provided building, all the while quietly building a comparative palace down the road.

A single instance such as this of an individual who uses his or her wiles to rise through the layers of society is not overwhelming evidence that upward mobility is commonly achieved through skill at corruption.

However, this correlation between entrepreneurship and corruption could also be observed at a school level. The HOC visited each school each year, recording issues such as the quality of upkeep of the mud floors, the planting of school gardens, or the installation of improvements by the “community,” such as brick stairs, electricity, and fans. As the regional hubs of the corrupt system were identified and analyzed, it became obvious that there was a positive correlation between corruption and the quality of schools: schools headed by syndicate members were generally the best run, with the headmasters using their skills or possibly some of their profits to gain community support for their schools. This may not speak to the entrepreneurial skills of these headmasters but rather a corrupt form of marketing, using part of their ill-gotten gains to curry continuing favor with the community.

Thus, when the NGO dismissed the ringleaders, many “good” staff were lost, and in many cases, the quality of the schools suffered. In other words, the kind of enterprise, innovation, determination and guile required to be corrupt appeared to also be valuable in running a school.

This issue was also observed in staff attraction and attrition. Every year the NGO holds exam sessions whereby all applicants for jobs with the school get an equal chance to “win” a right to sit for an interview. Success at the interview results in short-listing for jobs. Analysis of annual exam records over the last 10 years shows that each year, top performing candidates at the exams and interviews are far more likely to get a job working in a government school than worse-performing staff members, and less likely to remain at the NGO.

While this does illustrate a merit-based order, there is a corrupt catch. The government exam system is merit-based, but the final stage, the “interview” involves corruption; a bribe must be paid. The system thus mandates two skills: the typical intellectual capacity to pass entrance exams, and the atypical ability to negotiate a corrupt transaction. A candidate needs to be able to raise that money, regardless of their skill. Some of the “best” teachers observed by the HOC over the years not only worked hard at school but after hours showed additional entrepreneurial zeal moonlighting, setting up shops in the local markets or growing vegetables and raising chickens. With the accumulated wealth of honest work, they were able to eventually pay the substantial bribes required to secure better-paid government teaching roles. Others negotiated loans with loan sharks or family members to make the transition to a coveted government position. “There is a virtual pricelist for government jobs, but the prices are not advertised or fixed,” the HOC’s interpreter, who had spent his adult life working in the non-government sector told him. Thus, the attrition of high quality, driven employees continues.

The beneficiary is not however the organization that these employees transition to: the government school system does not benefit from having the “brightest” or most determined staff. Government jobs are highly valued for a number of reasons in addition to higher pay and greater benefits (e.g., retirement benefits; Rahman & Al-Hasan, 2019) that are not widely discussed in the literature. Firstly, these jobs are truly safe: since you purchased the job, the job is “yours” and this safety in turn leads to lower performance expectations; primary school teachers in government posts commonly simply do not turn up for work on most working days, moonlighting in broad daylight. It was not unusual for the HOC to meet government teachers, former staff at the NGO schools who have “won” a government role, in the markets mid-school-week, happily and publicly in dereliction of their duties.

The janitor opens up the gates in the morning and closes them in the evening. They organize a roster so that at least one teacher is present at the schools. It’s somewhat depressing. It’s not surprising our children top the high school entry exams year after year, even though we don’t have the best staff; at least our staff are at work. [HOC, notes, 2018]

The consequences of this rampant absenteeism, at least in these remote parts of Bangladesh, are measurable: as the above quote illustrates the NGO’s students consistently outperform the students emerging from government schools with more highly trained and qualified staff, working with better teaching resources—despite the NGO building schools in the most vulnerable regions. Meanwhile, the “best” teachers are skimmed off the NGO sector, into a life of relative leisure in the government sector.

Theme 5: Pervasiveness and Inescapability

A 2018 report by the Centre for Policy Dialogue in Dhaka declared that corruption in Bangladesh “most prevalent” in the primary education sector, pointing to the predominance of bribery and nepotism/favoritism in recruitment, transfer, and promotion of staff in the sector (Bhattacharya et al., 2018). The mandatory bribe to get a teaching role is illustrative of how individuals are inducted into corruption: teachers have to pay bribes to get their roles. This cannot be avoided. However, then they have the choice of whether to continue with corrupt behavior, though freedom to choose may be limited. The bribe to gain a government job commonly equates to multiples of the annual salary, and these bills have to be paid.

Encounters with other NGOs suggested that there is less freedom to “just say no” to corruption than might appear:

I also overheard the orphanage chief, telling [a visitor] that he was forced to pay bribes in [the district capital of] Bhola, because there were interminable delays . . . he’d been forced to wait five hours in an office to meet an official, and then he refused to do what was asked, and said come back later, and so on and so forth. [HOC, notes, 2016]

In a sense then, corruption becomes banal. It seems that everyone has to do it in order to fully participate in public life, and then having done so, the question becomes, does what Mars (1982) calls “the fiddle” and also a “potent drug” (p. 46) become addictive? It is hypothetically possible to farm or fish in this region, sell one’s produce on the local market, and never encounter the need to engage in corruption, but should one need to engage with government—for example to obtain a motorbike license, or engage with the healthcare sector—one will either need to be extremely patient (if that is possible) or in an albeit minor sense, partake in the corrupt economy.

Seeking Profitable Opportunities Within Institutional Voids (Traditional Entrepreneurship)

The Kingpin exhibited the classic opportunity-seeking behavior of a traditional entrepreneur (Cavotta & Phillips, 2023). He leveraged intimate institutional knowledge to craft a portfolio of illicit “products” that yielded substantial revenues. As summarized in Table 2, these schemes included monetizing organizational processes that are normally free (e.g., promotions, staff transfers, exam results, distribution of school supplies, and even salaries) and carefully balancing rewards and sanctions across his network. This approach mirrors a market-seeking entrepreneurial logic repurposed for unlawful gain. Moreover, the Kingpin practiced selective opportunism. Unlike Cavotta and Phillips’ Mafia (2023), which brazenly exploited institutional voids often through open coercion, he avoided high-visibility targets (such as donor funds) and focused on low-profile, lower-risk revenue streams within the NGO. This calculated focus underscores his entrepreneurial acumen and risk management, hallmarks of traditional entrepreneurship.

Seeking to Maintain and Expand Institutional Voids (Institutional Entrepreneurship)

The organization founded to remedy voids in a dysfunctional educational system ironically became the Kingpin’s platform to deepen those very voids. Whereas the Mafia’s institutional entrepreneurship was overt and spanned multiple sectors, the Kingpin’s was discreet and largely contained within the NGO. As summarized in Table 2, instead of using overt violence, he manipulated power structures and relationships, using the lure of employment and the threat of losing employment, for example, swaying the founder’s decisions and installing loyal school inspectors to embed corruption within legitimate operations. He also used strategic bribery to shield his enterprise, regularly paying “speed money” to officials ensured government compliance and minimal external scrutiny. Through these maneuvers, the Kingpin systematically deepened and normalized the institutional and organizational voids that his illicit enterprise needed to survive and grow.

Seeking to Construct Legitimizing Narratives (Cultural Entrepreneurship)

Consistent with Cavotta and Phillips’ (2023) model, the Kingpin engaged in cultural entrepreneurship, drawing on the local cultural knowledge to craft narratives and a personal image that legitimized his activities in the community. Whereas the Mafia openly portrayed itself as a benevolent alternative to a weak state; by contrast, the Kingpin’s legitimacy work was far more understated. As summarized in Table 2, he cultivated a pious, community-oriented persona aligned with local cultural expectations. He attended the mosque regularly, maintained a modest public lifestyle (while quietly amassing illicit wealth), and visibly upheld community norms. This carefully managed image provided significant symbolic capital, masking his misconduct behind a façade of moral leadership and respectability. Notably, schools led by his co-conspirators often ranked among the best performers, as these headmasters reinvested some of their illicit gains into school improvements. Such reinvestments fostered goodwill among villagers and even earned praise from the NGO’s senior leadership—further legitimizing the corrupt enterprise. While the Mafia’s public benevolence is conspicuous, the Kingpin’s cultural interventions remained subtle and woven into everyday operations. This low-profile strategy won local support and averted scrutiny, enabling his corrupt venture to endure over time.

Integrating the “Hawk” Archetype Into Corrupt Entrepreneurship

Our findings also reveal that the corruption observed in our NGO setting closely aligns with Mars’ (1982) Hawk archetype in his seminal work on workplace crime. This insight reveals the potential for Mars’ workplace crime typology to inform corruption studies that challenge overly optimistic portrayals of entrepreneurship, and exposes its multifaceted “dark side.” In particular, Mars’ typology provides an accessible framework for linking organizational context with deviant behavior, allowing for the contextualized and culturally informed analyses of corporate corruption.

Mars’ typology classifies occupations along two dimensions: grid (the degree of formal rules and role constraints) and group (the strength of group cohesion and peer oversight). The Hawk quadrant—characterized by weak grid and weak group—denotes an environment of minimal bureaucracy and loose peer integration. In such settings, individuals enjoy high autonomy and face few checks on their actions (Figure 2). Mars observed that roles falling in this quadrant tend to breed opportunistic, entrepreneurial misconduct. The freedom to transact on one’s own terms is highly valued, and workers take initiative to maximize gains, even if it means breaking rules. In essence, a weakly structured context provides a fertile ground for what we might call the intrapreneur-turned-deviant. The Hawk archetype thus captures the micro-level behavioral foundation of corrupt entrepreneurship within an organizational setting: it is the person who exploits structural looseness, by manipulating and exploiting institutional and organizational voids, to run an illicit, covert venture for personal gain.

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Figure 2.

Mars’ Workplace Crime Typology (Grid-Group) Adapted.

Such an individual can indeed “circumvent complex bureaucracies” and “bend the rules to suit themselves” (Thornthwaite & McGraw, 2012, p. 37). The Kingpin adeptly exploited conditions of high autonomy, insulation from oversight, and weak peer cohesion. The founder’s inability to speak the local language, his heavy reliance on intermediaries, and his role as sole auditor insulated the Kingpin, creating organizational voids ripe for exploitation. Further, the Kingpin capitalized on low group cohesion—aligning with the weak-group dimension—leveraging his freedom to strategically manipulate these internal organizational voids. He actively fostered ambiguity in roles and responsibilities, controlling communication channels, and placed loyalists in key oversight positions. These calculated moves enabled him to surreptitiously establish and maintain a parasitic enterprise. This highlights how structural looseness and low peer oversight provided precisely the fertile ground Mars described for intrapreneurial deviance. Our study thus supports and extends Castro et al.’s (2020) argument that corruption emerges not merely from individual flaws (“bad apples”) or external environments (“bad barrels”), but from a confluence of unique internal organizational structures and norms that are then shaped by entrepreneurial actors who deliberately exploit and shape them.

Our integration of Mars’ cultural typology into the study of corrupt entrepreneurship also opens up a novel analytical perspective. It suggests that different structural–cultural environments within organizations (e.g., high-grid/high-group bureaucracies vs. low-grid/low-group ventures) may give rise to qualitatively different forms of corrupt entrepreneurship and potentially point to different countermeasures. The Hawk is one archetype prevalent in loosely governed settings; other quadrants (“Donkeys,” “Wolves,” “Vultures” in Mars’ schema) might correspond to other patterns of misconduct under different constraints. Future research can build on this idea to map how various organizational settings inherently influence the type of corrupt entrepreneurship that can emerge.

In summary, our study advances understanding of corrupt entrepreneurship by extending the frameworks of Cavotta and Phillips (2023) and Mars (1982). Cavotta and Phillips (2023) conceptualize corrupt entrepreneurs as actors who exploit, maintain, and culturally legitimize institutional voids, yet their model treats organizations largely as black boxes. We extend this view by showing that corrupt entrepreneurs not only respond to external voids but also reproduce and reinforce them internally through their entrepreneurial skillset—creating parasitic enterprises, illicit ventures embedded within otherwise legitimate organizations. Unlike the overt and coercive practices exemplified by the Sicilian Mafia, the parasitic enterprise uncovered here operated through subtlety, concealment, and co-optation: the Kingpin relied on relational manipulation—offering jobs, controlling information, and cultivating moral legitimacy—to sustain loyalty and avoid scrutiny. This low-visibility, symbiotic form of corruption thrived within legitimate structures, feeding on organizational resources and reputation while remaining largely undetected.

We also extend Mars’ (1982) typology by shifting the analytical focus from deviance to entrepreneurship. Whereas Mars portrayed the Hawk as an opportunist exploiting organizational looseness, our findings show how such an actor can evolve into a corrupt entrepreneur, systematically constructing and sustaining an illicit enterprise from within. By linking the Hawk’s grid-group environment to the creation and exploitation of organizational voids, we demonstrate how specific structural and contextual conditions enable distinct forms of corrupt entrepreneurship. Together, these insights yield a multi-level theory of corrupt entrepreneurship that conceptualizes corruption as an emergent property of interconnected institutional, organizational, and individual dynamics.