Keywords

Introduction

Although entrepreneurship is usually associated with positive outcomes for entrepreneurs, firms, economies, communities, and societies, it can also lead to unproductive and destructive outcomes. Unproductive entrepreneurship entails “activities of questionable value to society” (Baumol, 1996: 6), and destructive entrepreneurship entails activities that utilize resources to capture rents or appropriate wealth. Baumol (1996) proposes that the extent to which entrepreneurial effort is oriented to unproductive and destructive outcomes hinges on the “rules of the game”—namely, the economic and social conditions driving such behavior.

As such, entrepreneurship can generate economic and social benefits and be a source of negative consequences. Consistent with this duality, an emerging research stream is starting to recognize that entrepreneurship can be detrimental (Antony et al., 2017; Shepherd et al., 2013), serving as an important counterbalance to the vast literature on its positive outcomes. Thus far, this research stream has taken a more macro-perspective focusing on the economic and social conditions that drive destructive entrepreneurship. Therefore, there is an opportunity to explore inside a specific economic and social context to gain deeper insights into how individual entrepreneurs make sense of their circumstances and decide to undertake entrepreneurial action that, despite producing some benefits for themselves and others, also produces significant negative outcomes for the localcommunity, the environment, and the entrepreneurs themselves.

Indeed, although previous research has described how some people engage in destructive entrepreneurship, a more micro-level perspective is needed to clarify how and why entrepreneurs engage in, justify, and persist with entrepreneurial action that generates substantial negative outcomes, thereby complementing the extensive prior research on entrepreneurs’ positive outcomes. We take such a perspective to shed light on the entrepreneurial process at the micro-level. In particular, we explore how bunkerers—oil thieves—engage in, justify, and persist with entrepreneurial action that generates some benefits for the entrepreneurs and the localcommunity and causes significant harm to the local environment, the community, and the entrepreneurs’ health.

Like the other entrepreneurs we have discussed throughout this book, the entrepreneurs in this context also face substantial personal adversity. By entrepreneurs, we mean people who “discover [or otherwise identify or construct], evaluate, and exploit” potential opportunities, or “situations in which new goods, services, raw materials, and organizing methods can be introduced and sold at greater than their costs of production” (Shane & Venkataraman, 2000: 218, 220). In this context, we view bunkerers as entrepreneurs and their illicit venturing to access, refine, and sell oil as entrepreneurial action since they are introducing and selling a new product (locally, illegally sourced, and refined oil) at a greater price than its cost of production. Our personal adversity model of justifying entrepreneurial action generates substantial negative outcomes (for the localcommunity and the environment) has three main contributions.

First, most entrepreneurship research has explored the benefits of entrepreneurship (Carter, 2011) while relatively ignoring the consequences. Indeed, although some macro-level research has recognized destructive entrepreneurship (Desai et al., 2013), micro-level research has mostly overlooked the high costs of entrepreneurial action undertaken by proximal others. Thus, in this chapter, we investigate the negative and positive outcomes of entrepreneurial action within a specific context—namely, within a specific geographic location, industry, set of economic conditions, etc. By shedding light on how entrepreneurs initiate, justify, and persist with such entrepreneurial action, we start to connect elements of entrepreneurship under adversity to significant costs (and some benefits) experienced by localcommunities that are already facing substantial hardships.

Second, numerous studies have discussed the role individuals’ agency plays in driving new ventures and other forms of entrepreneurial action (McMullen et al., 2020). In this chapter, we show that entrepreneurs rely on different levels of agency as they develop, refine, and apply justifications for their entrepreneurial action. In particular, research has shown that people often try to avoid punishment for negative outcomes by claiming a lack of agency over the underlying action and/or its consequences (e.g., displacement or diffusion of responsibility) (Bandura, 1986). We extend this prior work by showing that people can justify their entrepreneurial action by claiming both a lack of agency and considerable agency. Thus, we provide new insights into how entrepreneurs can claim varying levels of agency in the same justification for the same action.

Finally, entrepreneurship studies focusing on motivation have revealed that venturing can be predominately motivated by self-interest, predominately motivated by other-interest, or dually motivated by both interests in a hybrid form (Battilana & Lee, 2014; Murnieks et al., 2020). We add to this research stream by revealing how entrepreneurs’ dual focus on both themselves and others is also part of their efforts to justify entrepreneurial action that has significant negative outcomes for the localcommunity and the environment. Research on justifications and moral disengagement has shown that when justifying their behavior, individuals tend to de-emphasize self-interest while emphasizing the benefits to others and/or discounting the costs to others (Tillman et al., 2017). The findings presented in this chapter provide a deeper understanding of the entanglement of the self and others in justifying entrepreneurial action by claiming others share the benefits and oneself shares the costs. This self–other entanglement is a new type of justification and could even be a new moral-disengagement mechanism. Indeed, the claims of both a lack of agency and considerable agency and this self–other entanglement in justifying entrepreneurial action that leads to negative outcomes reflect what Moore (2015: 200) considered to be increasing interest in how moral disengagement is triggered and “how [individuals] construe morally meaningful choices.”

Theoretical Background

Destructive and Necessity Entrepreneurship

Destructive entrepreneurship can be defined as “activities that produce a welfare transfer and that, in doing so, result in a net reduction of social welfare” (Minniti, 2016: 218). For example, destructive entrepreneurial action sometimes arises in tourism ventures. Specially, tourism operators can damage the environmental and social features of localcommunities, resulting in community members’ diminished health, decreased incomes, and increased neighborhood crime. As a result, for some regions, the social costs of tourism overshadow its benefits (Lindberg et al., 2001). Other examples of destructive entrepreneurial action include drug smuggling, dynamite fishing, and slash-and-burn agriculture (Desai & Acs, 2007); human trafficking (Chapter 6); and governmentcorruption (Chapter 7).

Most research exploring how talent is allocated to different entrepreneurial outcomes has assumed that individuals choose to engage in entrepreneurship, which is not always true. For instance, entrepreneurs in less developed countries typically operate under resource scarcity, meaning they have limited strategic options and are thus often pushed into self-employment to earn an income (Block & Wagner, 2010; Tobias et al., 2013). While recent work has provided deeper insights into necessity entrepreneurship in general, it is important to note that some individuals feel they have little or no choice but to undertake entrepreneurship, including illicit venturing. Thus, we explore how individuals in a less developed economy begin to engage in entrepreneurial action that produces significant negative outcomes for the localcommunity and the environment and how these entrepreneurs justify persisting with this course of action.

Unethical Behavior and Moral Disengagement

Unethical behavior can result in negative consequences. Accordingly, scholars have paid significant attention to exploring why individuals engage in unethical behavior. For instance, employees can engage in unethical and deviant behavior that is costly to their organizations by directly obstructing organizational functioning, such as diminishing their own and/or other employees’ effectiveness on work tasks (Fox et al., 2001: 292). Other unethical employee behavior includes theft, sabotage, and “slacking off” (Nielsen & Einarsen, 2012). This research stream has provided numerous explanations for employees’ deviant behavior, including the offenders being “bad apples,” having a particular type of personality and demonstrating both low emotional stability and low integrity (e.g., Berry et al., 2007; DeShong et al., 2015). Studies have also shown that situational and organizational factors, such as person-job and person-vocation fit, organizational culture, and organizational policies (Aquino & Lamertz, 2004; Fine et al., 2010; Harold et al., 2016), affect employees’ engagement in unethical and costly behavior and that organizations themselves can engage in such deviance.

Scholars have also paid considerable attention to how individuals justifytheir unethical behavior. Drawing on social cognitive theory, Bandura (1986) proposes moral disengagement as an overarching framework to explain such behavior. Specifically, ethical behavior arises because individuals have internal moral standards that guide their conduct, and they feel distressed if they breach those standards. In anticipation of these feelings of distress, people are typically motivated to avoid making decisions and taking actions that breach their moral standards. However, moral standards can only impact ethical behavior when individuals’ self-regulatory process are activated. In contrast, unethical behavior arises when individuals’ self-regulatory process is deactivated, in which case their moral standards are decoupled from their decision-making and action-taking to enable unethical behavior without self-censure and thus without feelings of distress (Detert et al., 2008).

A robust research stream has outlined a set of cognitive mechanisms that can deactivate individuals’ self-regulatory process to enable unethical behavior. Collectively, these cognitive mechanisms are known as moral disengagement (Bandura, 1986), and they can be differentiated by their locus of attention. First, mechanisms with an agency locus absolve a person of responsibility for a negative outcome from their unethical behavior (i.e., displacing or dispersing responsibility or blame). Second, mechanisms with an outcome locus ignore, lessen, or distort the consequences of unethical behavior. Third, mechanisms with a behavior locus disengage individuals’ moral standards by cognitively misconstruing unethical behavior to make it appear more morally appropriate (i.e., moral justification, euphemistic labeling, and advantageous comparison). Finally, mechanisms with a victim locus decrease individuals’ identification with those they harmed through their unethical behavior (i.e., dehumanization and attribution of blame) (Bandura, 1986, 2018; Detert et al., 2008).

Moral disengagement has been associated with many different types of unethical behavior, including aggression against others, cheating, theft, and workplace misconduct (Gino & Galinsky, 2012; Gino et al., 2014). Further, the effects of moral disengagement on individuals’ probability of engaging in unethical behavior are amplified when people experience anxiety and insecurity, personal distress, and psychological closeness to others who are acting unethically (Chugh et al., 2014; Gino & Galinsky, 2012). Accordingly, this research stream has included calls for future research to more deeply examine the “unethical social life” (Caparara et al., 2009: 504).

In the entrepreneurship literature, Qin and colleagues (2020; see also Shepherd et al., 2013) investigated how disengaging one’s pro-environmental values affect entrepreneurs’ decisions to pursue potential opportunities that damagethe natural environment, which can, in turn, have negative impacts on localcommunities. Indeed, some people pursue opportunities based on “economic motivation without taking into consideration the importance of the environment for human life” (Nugroho et al., 2017: 66). As a result, these people may over-exploit environmental resources, thereby negatively affecting others’ health and quality of life. Moreover, Baron et al. (2018) showed that entrepreneurs who are more driven by financial gains have a higher likelihood of disengaging their morals to make unethical decisions than entrepreneurs who are less driven by financial gains.

Thus, prior research has revealed the important role moral disengagement plays in explaining unethical behavior, including some recent work on entrepreneurial behavior. However, in light of the complexity of illegal entrepreneurship (compared to the specific tasks and decisions outlined in the ethics and moral disengagement literature), we elucidate how entrepreneurs who face substantial adversity themselves engage in entrepreneurial action that results in substantial costs to the localcommunity and environment and how they use moral disengagement to justify starting and continuing their entrepreneurial ventures.

Context

Scant research has taken a micro-perspective to explore individuals’ thinking and activities when initiating and engaging in entrepreneurial action that produces significant negative outcomes for a localcommunity and the environment. Thus, we chose to take such a perspective to investigate the entrepreneurial action of bunkering. Specifically, we explore bunkerers—oil thieves—in the Niger Delta as this context is ideal for addressing our research questions for several reasons.

First, bunkerers start illegal ventures that access and sometimes refine, transport, and sell oil. Since accessing oil is inexpensive, bunkerers can sell the oil they collect at lower prices than legal suppliers and thus profit from doing so. As such, bunkering generates profits for the bunkerers themselves and reduces oil costs for their customers. All bunkerers follow essentially the same process to access, refine, and transport oil to customers: “In order to access the oil, a small group of welders will puncture a pipeline at night, establishing a tapping point from which the group can operate” (Council on Foreign Affairs, 2015). From this tapping point, the workers “siphon the crude via rubber hoses up to 2 km long into barrels aboard small craft” (Reuters, 2019). The crude oil is then transported to the “illegal artisanal refineries located in the Delta, [where the workers] cook the crude into separate petroleum products. The end product yields 2 percent petrol, 2 percent kerosene, and 41 percent diesel” (Council on Foreign Affairs, 2015). “They then sail alongside larger vessels, allowing the contraband to be pumped ship-to-ship into oil tankers bound for export, usually to Asia—mixed imperceptibly in a ratio as small as 10 percent with the legitimate product” (Reuters, 2019). While it is impossible to fully account for how much oil the bunkerers take, according to one estimate, bunkering amounts to 200,000–300,000 barrels of oil stolen per day (Obenade & Amangabara, 2014).

Second, the entrepreneurial process of bunkering entails many substantial costs, particularly for the natural environment. Specifically, “pipeline vandalism from bunkering leaves pipes especially vulnerable to leaks, spills, and major accidents.... The remaining 55 percent of crude goes to waste, most of which is dumped into the nearby water or a shallow pit” (Council on Foreign Affairs, 2015). This damage to the natural environment, in turn, reduces many locals’ quality of life:

Environmental degradation is the most visible and direct impactof illegal refining and oil theft. Photographic evidence gathered at sites visited across Delta, Bayelsa, and Rivers States show the terrible impacts of artisanal refining on the local environment. Vegetation is visibly affected by the resulting pollution; crude saturates the mangroves, and oil disturbs the surface water. The environmental destruction associated with illegal oil refining harms traditional livelihoods tied to the land and water. Oil pollution is a significant barrier to cooperative, integrated fish farming, one of the few businesses that could provide sustainable employment and incomes. Nigeria spent over N100 billion on the importation of frozen fish in 2010, some of which is necessary for Niger Delta communities to replace the fish they once caught. Oil theft and artisanal refining have significant health risks for those involved and the environment as well. The handling and heating of the crude oil pollute the air. The camps have a toxic feel, and the health impacts of those working there are unknown. Communities are constantly exposed to inhalation of poisonous gases, causing coughing and breathing problems. However, many are in denial about the potential medium to long-term health implications because of the short-term economic gains. (Obenade & Amangabara, 2014: 28)

Finally, bunkering is especially prevalent in the Niger Delta. According to one estimate, bunkering is “costing Nigeria about a tenth of its crude production,” with “75% of the stolen oil being exported [and] the rest... being refined in illegal ‘artisanal refineries’ and marketed along the Nigerian streets as cooking fuel, gasoline, and diesel” (Odalonu & Eronmhonsele, 2015: 10, 12). Thus, bunkering results in costs to the Nigerian people in the form of lost income to the government and a reduced natural resource endowment.

Considering the prevalence of bunkering in the Niger Delta and the known negative impacts on the natural environment, localcommunities, and the country, we expected the bunkerers we interviewed to have strong opinions about their entrepreneurial action. Indeed, we were a bit taken aback by how open these entrepreneurs were when describing their activities, their thinking when starting their ventures, their decision to persist with this business, and the subsequent negative outcomes for the various parties involved. For more information on sample selection, research method, and analysis, see Shepherd, Osofero, and Wincent (2022).

Findings

As illustrated in Fig. 5.1, our findings led to a personal adversity model of justifying the costs of entrepreneurial action. Some individuals facing personal adversity believe they have no options other than undertaking entrepreneurial action that generates financial benefits for themselves and some benefits for the localcommunity while also producing significant costs for others (the local community and the environment) and non-financial costs for themselves. To justify this entrepreneurial action, these entrepreneurs use claims of agency (switching between low and high agency) and claims of motivation (switching between self-based and others-based). Successfully justifying their entrepreneurial action frees these entrepreneurs to continue their activities, which has ongoing implications for the local community, the environment, and themselves.

Fig. 5.1
A model explains that personal adversity motivates entrepreneurial action and generates the outcomes selectively used in justifying entrepreneurial action.

A personal adversity model of justifying the costs of entrepreneurial action

Full size image

Personal Adversity

Despite living in an oil-rich country, many Nigerian people experience poverty, with 44% of the population (Quartz Africa, 2018) living below the poverty line of USD 1.90 per day (World Bank, 2020). This disparity between the county’s abundant oil endowment and the Nigerian people’s poverty is most evident in the Niger Delta. People who live in the Niger Delta endure substantial poverty (Joel, 2008) and thus experience suffering in many forms, including adults suffering cognitive problems, socio-emotional issues, and both physical and mental health problems and children suffering psychological, social, and physical problems (Hair et al., 2015; Wyk & Bradshaw, 2017).

According to our findings, these individuals faced substantial adversity before becoming entrepreneurs, and this adversity motivated them to begin bunkering. For instance, Odili (entrepreneur) indicated this adversity-based motivation when he said, “Because in this, our country, Nigeria, you don’t have anything. You graduate from the university, and as a graduate, there is no job. For me, this [bunkering] is the only means for now because I can do this for survival.” This statement also highlights the lack of employment opportunities in Nigeria, one of the key reasons Nigerians face adversity. Indeed, Kalio, an entrepreneur, also mentioned the difficulties he has faced in finding employment:

I have taken my CV to so many places looking for a job. They always tell me there is no job, yet they employ [other] people every day. So, I just looked for a way to help myself and my family because I cannot suffer and go to school, and after graduating, there isn’t a job for me to do.

Due to the substantial adversity they face and the resulting need to fight for their survival, the bunkerers tend to vilify the powerful, including the government and foreign oil companies. These powerful entities are vilified for disregarding their responsibilities and deceiving and neglecting the Nigerian people. Moreover, the bunkerers believe that the government’s incompetence, duplicity, and negligence have ultimately led to great harm to the local environment, thus requiring them to fight for their survival.

First, the government and foreign oil companies work together to generate considerable revenue, which they then keep. In particular, a middle manager at a legal oil company (Manager 2) told us, “The nation owns the oil reserve. There are agreements between the government and the oil companies on investments and profit-sharing. The government has the larger share.” According to the government and the press, Nigeria generates 1.65 million barrels per day (OPEC, 2019), which equates to roughly USD 76 million per day. In the Niger Delta, oil companies generate 1.6 million barrels per day, equaling approximately $73.7 million per day (Climate Scorecards, 2019). Despite these substantial figures, the Niger Delta locals do not feel this wealth is being adequately shared with the people, and they largely blame the government for this unfair distribution. For example, Eze described this blame on the government in the following:

But the government is not making jobs available for the youths graduating from schools. So, people graduate from school and still come to sit at home unemployed. If you steal, you will be killed. So, the government should provide jobs for the Nigerian youths, especially those from the Niger Delta area.

Second, the bunkerers also believe the government deceives them due to the government not fulfilling its responsibilities. The entrepreneur Odili, for example, told us that he believes the government sells the oil for more than it claims: “The government sells their own, and they come back to tell us, the citizens, that one barrel is sold for some chicken change, and they keep deceiving us while we know what is involved in the market.” Similarly, Kalio—another entrepreneur—explained how the government manages the oil and the resulting proceeds:

After all, people in government are stealing this money that is generated from the Niger Delta oil extraction business, yet they don’t give us anything. We are all here suffering while they are flying their private jets and couldn’t care less about us. So, this is my right, and anything that wants to happen, I am also ready for it. As they are sitting in government, their children are schooling abroad, and once they finish studying, they get good jobs. I am done with school, and there is no job for me, so I have to find a way to help myself.

Consistent with stories about the government’s mismanagement and deceit, an entrepreneur named Toby explained that the oil companies are “stealing our oil in a way that the federal government does not even understand. They are taking multiples of what they declare and using our oil to enrich their countries.”

Finally, for the reasons described above, people living in the Niger Delta generally believe the powerful do not care about them, so they respond to this lack of care with apathy and sometimes anger. For instance, when asked if he cares about the oil companies, Odili said,

Those of us here know what we are doing [bunkering], so if they give me a big machine to operate, it won’t take me much to learn how to operate it. But they won’t employ us; they won’t engage us. So, I am not concerned about them.

Indeed, a worker at a legal oil company confirmed the locals’ complaints about the lack of care, explaining:

There are negative impacts that, in some cases, are not the intended outcomes but happen by nature of the society we live in and our operations and societal impact. By societal impact, we need to understand that the oil and gas industry cannot operate in isolation of the general environment and behavioral patterns of the people in the communities where our operations are located. There are so many expectations for the governmentby local communities as the communities feel they should be part of the process.

Ultimately, the bunkerers’ frustration about the lack of employment opportunities in Nigeria is rooted in the financial difficulties caused by these circumstances, the shame they feel from being educated yet unemployed, and the refusal to change this “unacceptable” statusquo by the government and the oil companies. Indeed, buyers of the bunkerers’ products recognized the entrepreneurs’ motivations for engaging in bunkering as a means to survive, and one community member even described these entrepreneurs’ entry into bunkering as a form of self-help.

Outcomes of Entrepreneurial Action

As discussed, the opportunity the entrepreneurs in our study are pursuing entails illegally accessing crude oil from pipes, sometimes refining the oil, and then selling the resulting oil-related products. Pursuing this opportunity involves costs to the natural environment, the localcommunity, Nigerian people, and entrepreneurs.

First, in pursuit of this opportunity, the bunkerers often destroy specific aspects of the local environment. In particular, the bunkerers sometimes cause oil spills when puncturing pipes to access the oil, which has deleterious effects on local ecosystems. Indeed, according to an environmental report on the Niger Delta, the area is “one of the most polluted places on earth” (Amnesty International, 2018). When asked about these oil spills, entrepreneur Toby explained,

Yes, we have had such problems a couple of times. After taking the oil, we try to seal the drilled portion of the pipe back, but at times, we still experience some spill because we don’t have the right expertise for that. But we are improving on how we do these things, and the spills are reducing.

Another entrepreneur, Tamuno, reported similar situations:

Sometimes we experience a spill due to not following normal safety procedures. We are not really trained on that, so whenever we experience spills, we just leave the spot and go to another place. After government intervention in the abandoned area, then we can go back there.

Bunkering also has destructive effects on “the river and contaminates our fish” (Ogbonna, entrepreneur). As Igwe (entrepreneur) explained, there is “pollution in the environment.... Water will be polluted, and fish will die.” Accordingly, Obi (entrepreneur) explained his distress over these circumstances, stating, “I am concerned about the environment and my family.” A middle manager (Middle Manager 2) in a legal oil company also described the environmental impact the bunkerers had in pursuing their opportunity:

The end products of these refineries don’t meet the international specs of such products. They present a danger to the users and lead to a lot of fire incidents and danger to equipment. The byproducts are not properly managed and are returned to the environment, leading to pollution. When they are caught, the refining equipment becomes metal waste.... The economic benefit derived from it does not measure up to the danger they present.

Second, given the considerable harm done to the natural environment, pursuing this opportunity also causes some damage to the localcommunity and people. For instance, one community member (Community Member 1) told us he believes “the waste products affect the natural environment, [and] our waters are also contaminated. Rivers are no longer safe for use; crops and trees are no longer growing well.... It makes the local natural environment unbearable because of pollution.” Other community members detailed how the pollution impacts their health (Community Members 1, 2, and 5), “destroys the basic means of livelihood of the Niger Delta people... [and destroys] the rivers and the farmlands” (Community Member 2; also Community Members 3, 5, and 6), makes food scarcer and more expensive for locals (Community Member 3), and causes community unrest (Community Member 5). Moreover, the entrepreneurs also recognize that bunkering damages the environment in ways that harm the local community. When asked about the negative environmental impacts from his bunkering activities, for instance, Chukwudi disclosed,

Yes, I know that there are negative impacts on the environment because if you look, you will see that we have an oil spill on our land, on the river, and it also affects our fish and crops. That is why, for me, I am careful with how I extract this product from the pipe.

Finally, while pursuing this opportunity provides financial benefits to the entrepreneurs, accessing and refining the oil puts their health at risk. Indeed, according to a middle manager at an oil company (Middle Manager 2), “In places where they break into pipelines, they have a lot of accidents, leading to fire and several deaths.” Refining the oil also threatens the bunkerers’ health, as indicated in Kalio’s explanation of the refining process:

Well, I have a reservoir tank where I take the crude oil first. From the reservoir tank, the crude oil goes into the burning pot, where we heat it up to a very high temperature. When we heat it up, the level of temperature gives a particular product depending on the exact product we want to get. As we heat up the pot, we keep taking samples from the product and testing it to know if we have attained the level of a particular product. It’s not as if there is a thermometer to measure the temperature.

Justifying Entrepreneurial Action That Causes Harm to Others

Entrepreneurs’ Claims of Agency. Although the entrepreneurs recognize that their entrepreneurial action causes damage to the environment and the localcommunity and threatens their own health and safety, they justify this action by switching between claims of low and high agency. Agency refers to “being in control of one’s actions and their consequences” (Demanet et al., 2013: 574).

The entrepreneurs claim low agency over obtaining legal employment. In line with the blame, they place on the government and the oil companies for their adversity (as discussed earlier), the entrepreneurs justifytheir destructive entrepreneurial action by alleging they have no choice but to establish ventures to bunker oil. For example, entrepreneur Tamuno called out the government directly in his claim of low agency regarding employment:

This question is for the government to answer because we have so many graduate youths that are unemployed in the community. If they are gainfully employed, they will not be doing this business. The government should do something about unemployment. Imagine people graduating from school for years without being employed. Some of these graduates are supposed to be working with the oil companies, but this is where they find themselves because no one will employ them.

Perhaps counterintuitively, although the entrepreneurs claim low agency over their entrepreneurial action and the subsequent consequences, they also claim high agency over this action and its consequences. For example, despite claiming they initially could not prevent oil leakages, the bunkerers also claim they are skilled in stopping such leakages from occurring: “When I started the business newly... it used to be disastrous, but now we know how to take care of it. We are taking care of it; we are very careful with our operations” (Odili, entrepreneur). Indeed, since they have gained experience tapping into the pipes, the bunkerers have likely developed skills to avert spills (but not other sources of environmental harm).

Moreover, the entrepreneurs know they are breaking the law but are confident enough to successfully avoid punishment, again claiming high agency. In particular, although the bunkerers take extra measures to avoid getting caught (e.g., operating at night), they actively engage in corruption in case they do. By paying bribes, the entrepreneurs can persist with their illegal activities, but these illicit payments undermine the rule of law (i.e., contributing to a corrupt system [see Chapter 7]). Indeed, when we asked Obi (entrepreneur) if he is worried about being caught, he told us the following, which highlights the bunkerers’ approach to avoiding punishment:

Certainly, I worry about being caught. That is why we put every arrangement in place so that the “cat will not run out of the cage”—you understand what I mean.... I am sure you are a Nigerian. So, you know how the system runs. You pay money and free yourself. The business we do gets us good money, so we use part of [that money] to free ourselves when we are caught.

Interestingly, the bunkerers seem to demonstrate the greatest sense of agency for avoiding sanctions.

Finally, the entrepreneurs claim high agency over collecting, refining, and selling the oil. For example, Toby indicated high agency when he described the expertise needed to collect the oil, and Odili expressed high agency when explaining how he gained knowledge about how to refine the oil best:

The first thing is to crack the pipe with our tools. We have special tools for doing this. Then we connect our long hose from that pipeline to where we want to receive the crude oil in our containment. That will be as much as I can say about the process. It is confidential. (Toby, entrepreneur, emphasis added)

I take the oil to my local refining point [local refinery], where I have my reservoir tank and my burning pot. The burning pot is where I heat up the crude oil to get my different products. The burning pot is exactly the same way we produce palm oil in the village. We burn the crude oil in the pot to get our products from it. (Odili, entrepreneur, emphasis added)

Thus, the entrepreneurs switch between low and high agency claims over their entrepreneurial action and its consequences when justifying their illicit venturing. However, these claims of different agency levels are not always independent, as the entrepreneurs often combine them in the same justification. For instance, Chukwudi (entrepreneur) told us he lacks agency over generating money legally but then also mentioned his ability to influence the situation:

I can start mentioning communitiesand local governments that you can visit now to see that the government is not doing anything. Nothing is working, and that is why you see us getting ourselves involved in this crude oil business because for us when we extract this product, refine [it], and sell it, we make sure we provide those things that we have the capacity to do for our people to feel the impact of what we are doing positively because if we wait for the government, they will not do anything.

In a similar vein, Igwe (entrepreneur) noted both his powerlessness in obtaining employment and his helpful background that gave him competence for his venture: “[It] is very okay for me to take the oil because since I graduated from school, I suffered unemployment. And since I come from anoil-producing community, I realized that this is one of best available jobs I can engage in” (emphasis added).

The entrepreneurs also combine claims of low and high agency when describing similar tasks, as evidenced in the following statement by Odili (entrepreneur) about his agency over environmental harm:

I care about the environment, and that is why I don’t want to allow any spillage. I use my pressure valve so that there won’t be any spillage. I am being careful because I know the disaster it can cause. For the gas and byproducts of my burning pot, there is nothing I can do for that. So that’s not my business for now. We just pour it inside the water, and it flows away. If the fish in the river die, we will manage the imported frozen fish in the market since the government really wants the Niger Delta to go down. (emphasis added)

Claims of Motivation. The entrepreneurs’ justifications entail claims of a self-focus and an other-focus as the underlying motivation for their entrepreneurial action. As with their adversity, in justifying their venturing, the entrepreneurs highlight the suffering they have endured from being highly educated but having few employment opportunities and how they believe the government and the foreign oil companies have deceived them. Thus, they justify starting their ventures by focusing on their circumstances and need to survive—a self-focus. For example, Kalio’s (entrepreneur) justification for his venturing indicated his motivation to satisfy his personal needs:

I don’t feel bad. I don’t feel bad because, naturally, the oil belongs to me. It is my property because I am a bonafide son of the Niger Delta. So, it is my property. It is my right…. So, I don’t feel bad at all for taking [it].… I have to find a way to help myself.

While the entrepreneurs acknowledge some of the harm bunkering causes to the localcommunity, they use claims with an other-focus to justify how their illicit venturing benefits the local community by (1) looking after the community, (2) creating employment, and (3) reducing the incidence of other vices. For example, Ikechukwu, an entrepreneur, compared the community benefits the bunkerers provide to those provided by the government: “Our government, after taking the oil, they sell it out cheaply in the crude form. Then they process it outside Nigeria and sell the refined products to us Nigerians at higher prices. So, refining it locally is helping the country to cut costs.” Similarly, the entrepreneur Chukwudi described how his bunkering activities are helping the community:

There are many people that I am sponsoring in school. I also renovate the primary school buildings, and I provide pipe-borne water for the community. Since the federal government refuses to do those things, we do the little we can do from our proceeds in this business. Sometimes, too, we donate money to the health centers to buy medicines and take care of the old people.

The entrepreneurs also explained how they create employment in the community: “I have six graduates in my father’s house, and four out of six are into this business” (Obi, entrepreneur); “We involve them [the local youth] in the business and help them make some money” (Odili, entrepreneur); and “Some of the youths that work with us are able to put food on their tables from this job. So, they are happy. If it was affecting them negatively, they would have stopped our operations here” (Toby, entrepreneur). Indeed, the bunkerers often talk about how their employees feel “happy” (Toby, entrepreneur; Ogbonna, entrepreneur) and “empowered” (Tamuno, entrepreneur; Igwe, entrepreneur). Moreover, some entrepreneurs believe their illicit venturing is valuable to the community because it prevents themselves and their employees from engaging in other vices, such as street crime, which they assert are even worse for the community than bunkering. Odili (entrepreneur), for instance, reported that because of his entrepreneurial action, “we are keeping them [the community youth] away from social vices and criminality, such as robbery and kidnapping, which has become the order of the day in Niger Delta.”

Finally, similar to the claims of low and high agency, the entrepreneurs often entangle a self-focus and an other-focus in justifying their entrepreneurial action and its negative outcomes, which reinforces the statusquo of bunkering and the associated entrepreneurial action. For example, Chukwudi (entrepreneur) entwined a focus on others’ needs and a focus on himself (positive emotions):

So, we are doing these things by ourselves because if we don’t do it, we won’t be able to helpour childrenand our brothers that cannot go to the places to get the oil. So that’s what we do. It is very okay for me to do it because I derive joy from it. (emphasis added)

Likewise, both Toby and Kalio entwined a focus on their personal needs and a focus on the community (positive emotions):

I couldn’t have stayed idle and jobless since then, so I need to help myself. And I am not the only one benefitting from the business, even the villagers are benefitting because that’s the only way they can put food on their tables. That’s the only way they can smile…. And even when they give out money for remediation, it doesn’t get down to the community. So, we are justified to do what we are doing. What is the essence of going to school if I can’t get a job? (Toby, entrepreneur, emphasis added)

I have created job for myself. I even employ people working for me, and these people are well paid and happy. This is a very good job for me. I am benefitting from it, and I don’t have issues. I give to everybody I need to give to, and I go with my own, so there are no issues; everybody involved is happy. (Kalio, entrepreneur, emphasis added)

Thus, overall, in justifying their entrepreneurial action and its negative outcomes for others, the entrepreneurs switch between claims of low and high agency and between claims of a self-focus and an other-focus. Next, we discuss these findings and their implications for theory and practice.

Discussion

Based on the findings presented above, we theorized on the initiation, justification, and persistence of entrepreneurial action that has significant negative consequences for the localcommunity and the natural environment (as well as some benefits for the entrepreneurs and the local community) by people facing personal adversity. Our findings reveal that when justifying their entrepreneurial action, the bunkerers we spoke to do not deny the costs of their entrepreneurial action or their role in creating those costs. Instead, they switch between claims of low agency and high agency and entangle a self-focus and an other-focus to justify their illicit venturing. In justifying their venturing in this way, the bunkerers can continue their entrepreneurial action regardless of its costs.

Theorizing the dynamics of persistent entrepreneurial action that produces negative consequences for others is salient because it underscores how entrepreneurship is a tool. Scholars have frequently focused on how entrepreneurs use this tool for good, often overlooking how they can use it in ways that produce negative outcomes, such as significant costs to localcommunities, the natural environment, and entrepreneurs themselves. By theorizing on the initiation, justification, and persistence of such entrepreneurial action and consequences, we offer new insights into the costs of entrepreneurship.

First, while the entrepreneurship literature has acknowledged contexts that facilitate the destructive capabilities of entrepreneurship at the macro-level (Baumol, 1990, 1996; Desai et al., 2010), at the micro-level, we show how individuals facing personal adversity sometimes think and act in ways that drive them to initiate and persist with entrepreneurial action that produces significant costs to their localcommunities, the natural environment, and themselves. Therefore, at the micro-level, the negative consequences from entrepreneurial action go beyond a person being pushed by personal adversity into an opportunity that generates costs to others (and for him- or herself), blaming others for the adverse conditions he or she is experiencing, starting and managing an illegal venture, or diminishing the harm of his or her action while overstating the benefits. A micro-perspective iteratively captures all of these venturing-related thoughts and activities. Overall, by revealing how adversity pushes people to undertake entrepreneurial action that produces negative outcomes for local communities and the environment and is used in justifications of such action, we begin to connect adversity-driven entrepreneurship and its subsequent negative outcomes for local communities and the environment.

Second, we extend research on the micro-dynamics of entrepreneurship’s benefits by providing new insights into the role agency plays in the entrepreneurial process. Prior entrepreneurship research has mainly explored entrepreneurs’ high agency and the independence and autonomy offered by the entrepreneurial context (Haynie & Shepherd, 2011; McMullen et al., 2020). Even in the more extreme necessity context, entrepreneurial action facilitates individuals’ agency beliefs (see Chapters 3 and 4). We complement this prior work by elucidating how the entrepreneurs we studied switch between high and low agency claims to justify their entrepreneurial action even though that action produces significant negative consequences for the localcommunity, the environment, and themselves.

This switching back and forth between claims of a lack of agency and considerable agency is central to our model. These claims emerge in entrepreneurs’ minds as they develop, refine, and use justifications for their entrepreneurial action and the resulting negative consequences. Theoretically, we extend arguments on agency in moral disengagement by highlighting these low and high agency beliefs in entrepreneurs’ justifications. Specifically, research on moral disengagement has mainly focused on how individuals use claims of low agency to justify behavior inconsistent with a positive moral code, so they can avoid punishment (by themselves and/or others). For instance, scholars have explained moral indiscretions in terms of the agency loci of dispersing responsibility (e.g., “I only performed my task, and many other people had to perform tasks for my actions to have a negative implication”) and displacing responsibility (e.g., “I had no choice but to follow orders”) (Bandura, 2018). Such indiscretions have also been explained by an outcome locus, whereby people claim agency but deny, overlook, or discount the costs of their behavior (Bandura, 2018). While prior research has revealed the use of these and other moral disengagement mechanisms in isolation, before our study, no one had explored their use in combination to justify specific action.

Filling this gap, we offer new insights into the use of claims of both a lack of agency and considerable agency by the same individual to justify the same action. Our findings reveal that the bunkerers claim a lack of agency to justify starting their illegal activities (e.g., due to necessity, they had no other option but to act given the prevailing adverse forces in the environment). They also claim high agency to justify their ongoing engagement in their entrepreneurial action (given they had already initiated their ventures). On the one hand, this combination of claims shields the entrepreneurs because they cannot be blamed for circumstances beyond their control. On the other hand, however, these entrepreneurs have agency over their own lives, which prevents feelings of helplessness and provides a sense of meaning in their lives (which would be unavailable if they lacked agency). While we explain how this combination of a lack of agency and considerable agency is used to justify entrepreneurial action that produces negative consequences for a localcommunity and the environment specifically, we anticipate this combination and resulting justifications have important implications for future work on constructing meaning under highly adverse living and working conditions more generally.

Third, we add to recent research on combining motivations to help others and the self by starting a new venture (Williams & Shepherd, 2016). In particular, we highlight how individuals use self-focus and other-focus claims to justify their entrepreneurial action and the subsequent significant costs of that action. While motivations to benefit others and the self can contradict each other and thus entail trade-offs that are challenging to manage (Pache & Santos, 2013), the entrepreneurs we investigated seem to have no problem claiming both a focus on themselves and a focus on others—at least in terms of justifying their entrepreneurial action and the negative consequences it generates for the localcommunity and the environment. It appears that entrepreneurs have an easier time using this dual focus to justify their venturing than building these motivations into their ventures structurally.

Specifically, although self-interested motivations may drive action that produces negative consequences for others, justifications for such action rarely beget benefits for the self. Instead, justifications generally underscore the benefits for others while discounting the costs to others (e.g., framing using euphemistic language and advantageous comparison [Bandura, 2018]). Our findings show that the bunkerers actively include benefits for the self in their justifications for their venturing, which is unsurprising given the adversities these individuals face, and that they intertwine these benefits for the self with benefits for the localcommunity. Therefore, although the bunkerers distinguish between the self and others, many of their justifications entangle the two. This self–other entanglement in justifying entrepreneurial action that produces negative outcomes for other people seems to safeguard the entrepreneurs from their action’s negative repercussions because they “put themselves in the same boat” as those other people. As such, this form of justification represents a new mechanism of moral justification. Indeed, in our case, the justifiers’ adverse situation and the local community set the stage for an unbreakable bond (at least rhetorically) to blame the justifiers for their self-interested action or separate them from their action’s costs.

Overall, our findings show that the entrepreneurs in our study claim opposing levels of agency for the same action and are motivated by a dual focus (i.e., self–other entanglement), which they use to form broad justifications for their entrepreneurial action so they can continue with activities that produce significant costs to the localcommunity, the environment, and themselves.

Implications for Practice

This chapter and the underlying study have some important practical implications. First, as we have explained throughout this book, poverty is prevalent worldwide. According to the World Bank (2020), 736 million people across the world live in poverty, a significant percentage of whom comprise the populations of less developed economies, such as the Democratic Republic of Congo (77% in poverty), Tanzania (35% in poverty), and Nigeria (46.7% in poverty) (Quartz Africa, 2018). The World Bank (2020) also reported that “of the 736 million living in extreme poverty worldwide, half live in just five countries; India, Nigeria, Democratic Republic of Congo, Ethiopia, and Bangladesh.” This poverty is often aggravated by corrupt governments that exploit natural resources but refuse to share the proceeds with their citizens, a practice that is especially common in less developed economies. This mix of poverty and low regard for the rule of law often leads to considerable hostility and resentment among citizens. These adverse conditions, in turn drive some individuals to undertake illicit venturing to save themselves and their communities. However, their venturing also generates significant costs to the natural environment, their communities, and the entrepreneurs themselves and further undermines the rule of law. Thus, our findings emphasize how a lack of governmental transparency can result in feelings of deception, lack of regard for the rule of law, and reinforcement of corrupt systems. Thus, transparency about governmental decisions and actions concerning a nation’s natural resources could have substantial flow-through effects for the natural environment, local communities, and citizens. Moreover, our study has practical implications for protecting the natural environment and improving locals’ living conditions, both of which are intertwined. Specifically, as locals come to see the connection between nature and their quality of life, they are unlikely to tolerate the few individuals who undertake entrepreneurial action that harms either. While no one implication is a silver bullet, hopefully, as we reveal more about the micro-dynamics of justifying entrepreneurial action that produces significant costs to local communities and the environment, we can encourage countervailing actions to reallocate entrepreneurial talent to more fruitful endeavors.

Conclusion

While a substantial research stream has explored how and why people enter into entrepreneurship and how individuals under chronic adversity are motivated to engage in entrepreneurial action to overcome their adverse circumstances, most of this work has inherently assumed that entrepreneurial action is a tool for good. Therefore, despite recognizing that some people engage in entrepreneurial action that negatively affects others, we do not fully understand how and why these people initiate, justify, and persist with such entrepreneurial action. We hope that by revealing the micro-dynamics of justifying entrepreneurial action that has significant costs to localcommunities (as well as some benefits) and the environment, we encourage future research to explore entrepreneurs’ thoughts and activities that are otherwise unavailable to scholars exclusively focusing on entrepreneurship as a tool for good.