The Social Use of Rumors in Business Firms


The prevalence of rumors in a business firm indicates a corporate communication crisis. Rumors are difficult to trace and almost impossible to stop. It takes a concentrated effort to dispel them. If remain unchecked, rumors can undermine company morale and, eventually, productivity.  And the primary weapon in putting an end to unwarranted rumors in the company is effective communications. The company story must be put across in a positive light.  The media appreciates quick, accurate, and thorough responses, which should be provided. Staff members should also be used to spread the truth. Other potential allies can be contacted and persuaded to help. The best way to dispel a rumor is to establish a policy regarding the problem and let everyone involved know about it (Horton, 1983).

 “Rumors are common in any organization. Some rumors are destructive and may cause considerable stress, sidetrack the work of key people, or damage the image of an organization. Associations are as vulnerable to rumors as corporations. The environment is especially vulnerable to rumors because so many meetings are held with results that are not made public” (William, 1985).

Rumors are a form of informal company communication. Studies have shown that informal lines of communication, such as rumors, must be kept open because they are a vital part of any organization. Rumors provide feedback to employees and to management; they also justify feelings about situations and help individuals understand the way they feel about certain things (Schaeffer, 1984).

In his studies of the role of rumors in companies, Larry Hirschhorn concluded that rumors have a strong positive role to play in keeping an organization healthy. When rumors are going around, they provide important clues as to what is happening in the company and act as a safety valve to relieve tensions and worries. If people stop spreading rumors, it implies that the workplace reality is so grim that they build psychological barriers to distance themselves from it.  A lack of rumors is a sign of sharp demoralization of a business organization (Hirchhorn cited in Bensahel, 1982).

Managers should pay attention to rumors. By listening to rumors, it does not always mean that they are true. Rumors deal with the internal affairs of the company. Even if they are false, they often reveal the concerns of insecurity, uncertainty or worry among employees. A good manager can prevent many internal crises if they are addressing the concern reflected in rumors (Adler, 1977).

It has been hypothesized that an organization’s culture may affect the propensity to engage in rumors. “In some organizations, the culture may advocate considerable formal communication while informal communication may, at the same time, be discouraged (Kurland and Pelled, 2000, p. 434). In this case, an anti-rumor or gossip culture may cause individuals to refrain from seeking information from sources other than officially sanctioned ones” (Michelson and Mouly, 2004, p. 195).

An exhaustive review of the literature identified fours motivations for consumers to share rumors in the marketplace. It included anxiety management motivation, information sharing motivation, relationship management motivation and self-enhancement motivation (Sudhir and Unnithan, 2014).

Rumors are always present in a business firm. The role of the manager is not to eliminate them, but to learn from them in order to improve the company’s human resource and information management system in order to achieve corporate goals!


Sources of Photos:

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s