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Functions of Persistent Rumors in Business Organizations

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Introduction

It is normal in any business organization to hear rumors against the company, managers, supervisors as well as fellow employees. Unlike gossip, rumors deal with social issues, not personalities, that affect a sector of a company or the entire business organization. People may immediately dismiss rumors as hearsay and unproductive talk. But if they persist, they might have a structural basis that requires a closer examination and analysis.

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A persistent rumor about the company or workplace usually has structural roots that need attention and solution. All companies which face bankruptcy or imminent demise are always forewarned by rumors. Before Enron collapsed, for instance, rumors about the company fraudulent accounting persisted. But it seemed that the early warning signs were ignored by the company leading to its closure. “A detailed look at the Enron accounting scandal reveals the circumstances that made it possible for Enron to succeed in deceiving the public. There was connivance with external auditors & banks, while SEC gave Enron exemptions from investment laws, instead of paying heed to the early warning signs”(http://www.brighthub.com/office/finance/articles/101609.aspx).

Rumor as an Indicator of a Serious Issue and Lack of Transparency

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A company which hides some vital information to their valued customers, stockholders, employees and to the public is prone to rumors. In today’s social media age, it only takes a post, selfie, or viral video to spread the rumors if a business firm is found deceiving the stockholders or customers about the true state of the company, products or services.As the saying goes, “If there’s a smoke, there’s fire!”. The smoke is the rumor, the fire is the negative effect that destroys the company. A firm cannot hide the reality to the public. It is only a matter of time that the fire will come out and burn the entire house! So, if there’s a persistent smoke or rumor, it is better for house managers or CEOs to put it off before it burns the company. And this could only be done if the company starts providing clear and convincing information to the affected sector about the issue. A transparent system is less prone to rumors. Thus, when rumors came out about the bending of iphone 6, Apple immediately issued a statement and credible explanation to stop the rumors on the alleged defects of the phone. And it did apparently succeeded in putting off the smoke as Apple posted a historical profit of $18 billion last year due to massive sale of iphone 6 and 6plus.

Rumor as An indicator of a Management Problem.

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It is important that managers must be empirically updated with what’s going in the company. It there is a discontent in the company, the manager must be the first to know it, not the last one. S/he must open to suggestions and willing to listen even to people whom s/he dislike.

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Rumors can serve as warning signs and guide for managers on what management area that s/he needs to examine and improve. A feedback mechanism is therefore necessary to check once in a while the general sentiment of employees in the company as well as the true state of things in the company. This feedback must come from below, from rank and file employees up to the top managers in order that the general picture of true state of the company will come out. The Japanese firms which use the inductive method of management are good on this. They usually ask feedback or opinion from people below before they create or implement a major policy that affects the entire business firm.

Remember: a persistent rumor can be an allay not an enemy in business when used wisely by business managers. They serve as a guide or indicator on what area to improve on in the company!

GIF Credits: Giphy.com

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How to Handle Rumors and Gossip in Business or Public Life

Understanding Rumors and Gossip

Have you been a victim of nasty rumors and gossip? Is your company prone to rumors and gossip that affect your professional life? How would you properly handle them if they affect corporate or public life?

A gossip is “a private conversation between two people about someone else who is not around. The information they are discussing is represented as factual even though the truth may not have been confirmed. Gossip tends to be spoken by people about someone they know, not celebrities or historical figures” (http://education-portal.com). A gossip usually deals with personal matters or traits such as sexual orientation, hidden immoral act, undesirable personal attitude or an embarrassing physical defect or disability.

A rumor is a piece of information gathered informally that is used to interpret an ambiguous situation (Schaefer, 2005). It is an unsubstantiated “news” about a subject that is spread informally by people. Like gossip, a rumor is also an unverified piece of information or story. But unlike gossips, rumors are more focused on social issues or matters that affect a group or community. Thus, if the release of salary for the employees on a specified date is delayed without prior notice from the company, rumors are expected to circulate to explain why this incident occurred.

There is a thin line which separates rumors from gossip. For instance, a manager who occupies a top position in the company and is being gossiped for wrongdoing can probably generate rumors if this act can affect the welfare of the company. Thus, a company president who is gossiped to be a womanizer and corrupt can generate a rumor that the company would soon be bankrupt because the corporate funds were embezzled by him to maintain his mistresses.

Rumors and Gossip Thrive in Ambiguous Situations

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Rumors and gossip thrive in ambiguous and doubtful situations. They remind people, especially public figures, to follow the social norms, whether moral or legal. They also prepare and warn people to cope with an impending corporate change. If a business firm, for instance, is about to collapse, rumors and gossip would usually precede it to prepare employees and managers of its actual demise and to enable them to prepare psychologically and to start searching for new jobs promptly. If not handled properly, rumors and gossip can wreck careers, sabotage ambitions or even topple big companies. With the advent of the internet and digital technology, rumors and gossip can spread like forest fires, ready to destroy people and companies. Indeed, rumors and gossip are unavoidable in corporate and public life. One cannot avoid rumors and gossip especially if one lives in a corporate culture where “playing politics” is a dominant mode of interaction.What is important then is how one handles them and turn them into challenges and motivations for growth.

The Degree of Rumors and Gossip Depends on Organizational Culture

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The magnitude of rumors and gossip in a company would depend on the organizational culture and overall system of the business firm. If you have an environment which is efficient, transparent, supportive and rewarding, one cannot expect much humors and gossip. Expect this company to attract the best and most qualified talents (Is Google of this kind? That’s why job hunters prefer to join this company?). Thus, Richard Branson’s advice with regard to hiring people into the company is wise. He said that the foremost consideration in hiring people into the firm is to determine whether the applicant’s personality can fit into the company’s culture (Branson, 2013). An applicant may be highly qualified for the job. But if his/her personality does not fit into the firm’s culture, s/he will not last in the job. Thus, recruiters and HR personnel must have a firm grasp of their company’s organizational culture to be able to select the most qualified and culturally fit applicant for the firm. A highly qualified new employee who is not used to rumors and gossips would surely leave the company after a brief stint in the workplace.

Less Rumors and Gossip in an Efficient and Happy Environment

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In an organizational culture where politics is less and “everyone is happy”, it is unlikely to see employees leaving or maligning their managers through rumors and gossip . If there is a high level o

f job satisfaction and compensation, efficient and clear information system, and strong corporate bonding, one can expect less rumors and gossip. But if the company’s system is irrational, unpredictable, full of power cliques, and low in compensation and rewards, expect higher levels of rumors and gossip from people who want to control the firm’s resources and rewards. Rumors and gossip are

instruments of power and resistance. Any power holder or resister in the company can use them to advance his/her personal and group interests. Resisters manufacture information or even use negative facts and shocking discoveries to change the system and weaken their enemies in the business firm. Thus, a company may seem functional outwardly but crumbling due to internal dissatisfaction, division, and power struggle of employees and managers to control the system inwardly. Because of this internal dissension, the company’s productivity suffers and the personnel’s creativity is stifled. Under a “bad” system, people’s energies are more spent to politics than promoting innovation and achieving the firm’s goals and forecasts.

How to Handle Rumors and Gossip

1. Don’t remain silent: speak, reach out to the discontented, or say sorry if needed

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Silence may not always be the wisest cause of action in dealing with rumors and gossip—of course, trivial things do not need to be dignified with an answer. If the allegation is serious and persistent and the person or party involved remains silent, people would more likely think that the rumor or gossip is true. It has been said that silence means (tacit) yes. Unless of course the rumor or gossip is true and victim just wants to let it be. But this will not stop the rumor from mutating and multiplying. People usually want to hear the truth directly from the horse’s mouth so to speak. Statements from spokespersons are often unconvincing for many people.Tiger Woods faced the public and addressed the rumors and gossip about his extramarital affairs directly and thus allowed the issue to rest. If one is a popular businessman/woman or a celebrity, it would be wise to clarify things directly and honestly in a public statement, press conference, tweet, post or interview with the media. A manager can call a formal and informal meeting with his/her subordinates to clarify some vague policies or issues which caused the rumors or gossip. S/he must be transparent and provide a frequent and clear information on matters that affect every employee in the office to avoid intrigues. S/he can also engage in friendly dialogue instead of immediately sanctioning people who sow intrigues in the office (of course, following due process s/he must also sanction violators who are out to maliciously defame others and destroy the company’s image).

2. Take gossip as constructive feedback to improve one’s self.

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Gossip can be interpreted as a constructive feedback to improve one’s self. If the source of the gossip is your physical and personal traits, the solution is within your reach. Go and consult with a cosmetic surgeon, dermatologist, fashion designer, religious adviser or personality coach to improve your self. Gossip is also a constructive criticism from others about some undesirable personal traits. The Looking Glass Theory in Sociology states that the other is your mirror in order that you can see your self objectively. So it is important to listen to constructive gossip and do something to change these gossips into a means to achieve admiration and social acceptance.

3. Provide a frequent, clear and convincing Information.

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Rumors and gossip are most likely to spread when there is a lack of clear, frequent communication between management and workers (Seidenfeld, 2013). They thrive in situations of uncertainty, doubt, and utter lack of information. Thus, the only way to counter rumors and gossips is to provide a clear, frequent and convincing information about the personal or public matter that is being intrigued in order that people would not further speculate and imagine things to enlighten their ignorance or lack of knowledge. Doubt and uncertainty can provide an opportunity for resisters and haters to exploit the situation to their advantage and to destroy the person or system they dislike. Rumors and gossip are tools of social resistance for people who are dissatisfied with their managers, leaders, or co-workers or with the state of things or management they are in. They may seem trivial or insignificant. The celebrity, CEO or manager can immediately dismiss them as nonsense. But if the allegations are serious and are not responded to promptly and satisfactorily by the parties involved, rumors and gossip can spiral into a bigger overt or covert group protest and mass action. The dissatisfied can convince their colleagues to join their cause. Indeed, rumors and gossips can topple regimes and companies if not handled effectively. They can destabilize companies and wreck havoc to people’s career and plans.

4. For managers/CEOs: Reshuffle people to minimize the influence of power cliques.

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If the corporate culture is personalistic, i.e., social ties matter more than merits, and lax in law enforcement or social control, influential power groups among employees and managers, competing to control the company’s resources and rewards, are more likely to arise. The group which has more allies or connections with the top management would emerge as the hegemonic or most powerful elite group. Within a division or sector in a company, power cliques can also arise.To promote their group interest, these cliques would usually use rumors and gossip as a tool to undermine the system, their competitors, or to whoever blocks their way. The task for the CEO or manager of the company is to identify these power cliques and their leaders and to break their control and network.To minimize their negative impact to the company’s goals, s/he must reassign or reshuffle them, making sure that their networks in the company cannot further create more politics and difficulties for others in the workplace.

5. If possible, avoid a highly politicized organizational structure.

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If your social upbringing is conservative and less political, then avoid a group or company whose organizational structure is highly politicized. If this is not possible, then join a power clique or group in the company which is more aligned with your personal principles or religious values to get group support and to survive in the business firm. But if you aim to maximize your benefits from the company, then join a power group which has a strong connection with the top management or owner/s of the firm would be an ideal choice . There are basically two kinds of political groups in a highly politicized business environment: the pro-administration which are aligned with power holders and the anti-administration which are identified with social resisters and opposition groups in the company such as a critical labor union.

6. Live a moral, honest and upright life and be generous!

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The best way to avoid humors and gossip is to live a moral, honest and upright life. People with many vices and hidden transgressions are prone to gossip and rumors. Just do your duty efficiently and be friendly to all in the workplace. Be also generous to people, not just your friends in the workplace. Greet or give them gifts or cards on their birthdays! Treat them to a light snacks. The point here is to create a “debt-of-gratitude” (Utang na loob) to every person in your social environment. In general, people “don’t bite the hands that feed them” or create gossips and humors to their benefactors or people who care for them. Be friendly with your enemies. Find means to make them your friends.If you can discover your enemy’s need where you can best fulfill it, you’re a winner! An enemy who becomes a friend can be powerful ally especially if s/he has many followers!

If you are a manager or in position of authority, exercise your power judiciously and don’t go beyond the limits of the authority given you by the company. Abuse of power attracts social resistance from subordinates. They may not show their opposition or resistance to your domination directly and overtly for fear of sanction, but they can show it indirectly through rumors and gossip to put you in a bad light, hoping that a higher authority can notice it, and eventually fire you from your job!

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Rumors and gossip in public and corporate life illustrate that power is not possessed by people but exercised through the use of right strategies and tactics. Rumors and gossip are strategies of power and resistance.To avoid their negative effects to one’s public or professional life,one must also be creative and think of ways to counteract rumors and gossip in a proactive way and convert them into occasions for personal and professional growth in business or in public life!

GIF Credits: Giphy.com

References

Schaefer, Richard (2005). Sociology: A Brief Introduction. Princeton, N.J.

Seindenfeld, Martin (2013). “Workplace, Gossip and Rumors”. Retrieved from http://www.alnmag.com/articles/2013/10/workplace-gossip-and-rumors.

Sternheimer, Karen (2008). The Sociological Meaning of Rumors. Retrieved from http//: nortonbooks.typepad.com/everydaysociology/2008/09/the-sociologica.html.

Houghton, Valerie (n.d.) Types of Mass Behavior: Definitions & Examples. Retrieved from http://education-portal.com/academy/lesson/types-of-mass-behavior-definitions-examples.html#lesson.

http://www.healthsystem.virginia.edu/pub/feap/work-life/newsletters/workplace-gossip-updated.pdf

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