Reining in Rumors

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Thomas R. Horton, former president of the. American Management ... dia, Horton advised. ..... hear a rumor about a hit-and-run accident two or three times before ...
By applying theory to practice, managers can avoid the often costly effects of false rumors.

Reining in Rumors NICHOLAS DIFONZO PRASHANT BORDIA

p umors do not just fill up time around the ^ \ w a t e r fountain. They can drain productivity, reduce profits, create stress in the workplace, or sully a company's image. Some rumors tear at a company's credibility, with both personnel and customers. Others have catapulted firms into financial disaster. It is imperative that managers know how to deal with the spread of questionable information, but even "experts" give a bewildering array of mixed signals. For instance, there is disagreement on whether a company should deny rumors. Sociologist Frederick Koenig, author of Rumor in tlie Marketplace (Auburn House, 1985), recommends that, "If a company is the target of a rumor, it should deny it immediately as forcefully and publicly as possible, showing the evidence that proves it is unfounded." But many public relations experts consider denials counterproductive. Business writer Owen Edwards stated that "about the only way not to counter a rumor is to deny it, since any denial tends to give rumor added clout. The more vehement the denial, the more credible the story becomes."

RALPH L. ROSNOW

There also is disagreement on something more basic: whether to comment at all. Thomas R. Horton, former president of the American Management Association, advised, "Above all, avoid having any company representative answer any media question with 'no comment'" If it cannot be answered, then explain why it cannot be answered to the media, Horton advised. Some authorities, however, subscribe to the World War II dictum: "Keep mum!" Management consultant David Walke said he believes that "the safest thing to say is that our company policy is not to comment on rumors." There also is little consensus on the treatment for rumor-plagued organizations. Managers often find themselves forced into a predicament similar to that of a tribal medidne man who has at his disposal a variety of mostly prescientific folk remedies, nostrums, and incantations. Often, the reason managers have so little to rely on is that savvy intuitions about how to combat rumors may not take into account recent findings on the way rumors get generated and transmitted. Thus, on the whole, efforts to create rumor

The authors acknowledge tlmt funding pr this research was provided by tlie Vanderveer Endowment Fund. 47

Nicholas DiFonzo is a doctoral candidate in the social and organizationai psychology program at Temple University, where he has taught statistics, research methods, and psychology as a social science. He earned a master's degree in counseling from Rider College and a bachelor's degree in engineering from Lafayette College. For several years, he served as executive director of a non-profit social service agency. DiFonzo's current research activities include workplace absenteeism norms, judgment processes involved in rumor-based securities trading, the use of probablistic mental models to assess rumor veracity, rumor intervention strategies. dissemination of contrived rumors, and conditions under which rumors warrant belief.

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guidelines have not been based on rumor theory. In addition, they have not been tested for their effectiveness against rumors. We addressed these shortfalls by reviewing rumor theory in an organizational context, and by conducting in-depth interviews with managers in nine companies in the United States and India. These interviews explored actual instances in which these managers confronted rumors. The result was that theorybased guidelines fared well—managers adhering to them either prevented or neutralized damaging rumors. This article updates rumor theory and proposes some guidelines to prevent and confront rumors that can do harm. Interspersed throughout are excerpts from the interviews. Before this presentation, however, consider the recent case of a company that avoided harmful rumors—and their detrimental effects—during a sustained organizational crisis.

KROY, INC.: A CASE STUDY The story of how Kroy, Inc., based in Scottsdale, Arizona, maintained employee morale and productivity, as well as vendor loyalty, illustrates the way theory-based guidelines can powerfully repel damaging rumors that arise during an organizational crisis. In the case of Kroy, Inc., a labeling equipment and commercial sign manufacturer, the crisis involved a struggle to emerge from the U.S. Bankruptcy Code's Chapter 11 protection as well as a change in management. At the beginning of the crisis period, Suellyn McMillan, director of marketing services, described Kroy's 229 employees as "beleaguered." A year later, McMillan extolled the success of the company's "crisis communications program." Employee surveys showed that, under the program, morale rose above what it was before the company filed for Chapter 11 protection. Employees were "confident in management's ability to weather financial problems," vendors continued doing business with the company, and a 500-member dealer network actually grew. From the program's onset, the company

used dramatic, extraordinary, and comprehensive measures to demonstrate its strong commitment to the maintenance of trust and confidence among organizational constituencies. It removed executives' office doors, for instance. The chief executive officer (CEO) held monthly meetings—open forums—with all employees, and walked around the firm to explain "what was going on with the company." The communications program kept employees abreast of the insolvency, anticipated staff cuts, and potential cost-cutting strategies. To answer common questions, the company prepared special handbooks for employees, vendors, and dealers, along with video tapes. And it established a toll-free hotline, staffed by senior executives, for employees to obtain immediate answers. As we will show, these measures are all compatible with rumor theory.

THE IMPORTANCE OF EFFECTIVE GUIDELINES: RUMORS CAN DAMAGE Not all rumors are so potentially harmful that they justify as comprehensive a policy as Kroy's. But those that can cause damage may affect both tangible and intangible assets. Rumors hindering sales—tangible assets—are particularly troublesome. In March of 1991, for instance, a false rumor circulated that the Ku Klux Klan manufactured Tropical Fantasy Soda Pop, and that the beverage caused sterility in black men. Fantasy's sales plummeted by 70 percent, delivery trucks were attacked, and vendors dropped the product. In another example. Pop Rocks candy was falsely accused of causing stomachs to explode when eaten v^ith soda. This caused a substantial sales loss. And Bubble Yum bubble gum sales plummeted when rumormongers claimed {again, falsely) that it was contaminated with poisonous spider eggs. More commonly, rumors impinge on intangible assets, especially trust. In every interview we conducted, a depletion of trust was at the root of the rumors' harmful consequences. Rumors eat away at people's faith in fellow workers, management, or the corpora-

Prashant Bordia is enrolled in the Ph.D. program in social and organizational psychology at Temple University, where he has taught research and quantitative methods and is assisting in program evaluation at the Institute of Survey Research. He received a bachelor's degree in psychology at St. Xavier's College and a master's degree in social psychology from the University of Bombay. He currently is examining crosscultural perspectives in rumor theory development, rumor communication patterns on electronic networks, compliance-gaining behavior, dissemination of contrived rumors, and psychological aspects of communication roles within organizational grapevines.

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Hon. One manager, facing innuendo that his consulting firm was incompetent, feared the consequences brought on by a loss of credibility: "When credibility is undermined, that undermines just about everything else. Your clients can't trust you; they can't trust your word, your future activity, nor any dealings with you whatsoever."

RUMOR THEORY

Ralph L. Rosnow holds the Thaddeus L. Bolton Chair and is director of Temple University's social and organizational psychology program. After receiving his B.S. from the University of Maryland, M.A. from The George Washington University, and Ph.D. from The American University, he taught at Boston University and Harvard University. He has studied rumor for 25 years and has written extensively on this and other topics in social psychology, research methods, and statistics. His recent books include Essentials of Behavioral Research: Methods and Data Atialysis (2nd ed., McGraw-Hill, 1991), Writing Papers in Psychology (2nd ed., Wadsworth, 1992), and Understanding Behavioral Science: A Conoeptual Primer (Macmiltan, 1993). He is a fellow of the American Association for the Advancement of Science, the American Psychological Association, and the American Psychological Society.

Generally defined, rumor is unverified information, usually of local or current interest, intended primarily for belief In other words, rumors are propositions or allegations colored by various shades of doubt, because they are not accompanied by corroborative evidence. Thus, rumors scamper about organizations like some mischievous poltergeist, until skillful managers exorcise the allegations or the allegations vanish into thin air. Excepting their lack of proof, rumors are similar to news. Both explain important events, pertain to people or to affairs that don't involve people, and may be positive or negative. But news is always confirmed, while rumors are, by definition, unconfirmed. The eminent sociologist, Tamotsu Shibutani, referred to rumors as "improvised news." A second characteristic of rumors is that they spring from collective concerns. Improvised news is of interest to group members (the rumor public). That group interests motivate rumors is indicated by the close connection between rumors and collective interests. Exhibit 1 lists some subclasses of organizational rumors we found, along with the collective interests that spawn them. Turnover, job-security, and job-quality rumors are usually

rooted in worries and ambiguities that stem from impending changes in management policy or personnel. Pecki?ig-order rumors typically grow out of employees' doubts and insecurities about their position in a firm and their hope for a promotion. Costly-error rumors reflect concerns about damage caused by mistakes. Consumer-eoncern rumors usually

reflect consumer fears about a company 50

EXHIBIT 1 TYPICAL ORGANIZATIONAL RUMORS R U M O R TYPE

ILLUSTRATIVE EXAMPLES

COLLECTIVE INTEREST

TURNOVER

Top-level manager will leave the company to start his own business.

Management and co-workers were interested in how subsequent staff changes might affect job duties or advancement opportunities. Workers were interested in how staff changes might affect working conditions. Workers were interested in how staff changes might affect working conditions. Management and co-workers were interested in how staff changes might affect working conditions.

Industrial relations manager will resign.

Popular CEO will leave the division and return to the parent company. Marketing director will leave the corporation. PECKINGORDER

JOB-SECURITY

OR JOBQUALITY

The chairman of the smaller, more successful subsidiary will replace the parent company CEO.

Employees were concerned about their own job stability; stockholders were interested in how new corporate management might affect stock prices.

The smaller division will merge with the larger division. A large salary increase is forthcoming.

Sales staff were concerned about job security after the merger. Employees were interested in their compensation. Workers were concerned about their job security. Sales staff were concerned about their job security and levels of compensation. Workers were concerned about levels of compensation. Top and middle management job duties might be dramatically affected by the consultant's tasks.

The company will close a manufacturing plant. The company is circumventing sales statf by using direct-mail sales efforts. Union leaders are colluding with corporate management. The consultant (systems programming) is incompetent. COSTLY-ERROR

A major, costly computer error was committed. A major, costly human error was committed.

CONSUMER

CONCERN

After the merger, product lines may be discontinued The proposed manufacturing plant location will be adversely affected.

Stockholders were concerned about stock prices; employees and managers were concerned about corporate reputation. Stockholders were concerned about stock prices; employees and managers were concerned about corporate reputation and job security. Retailers were concerned that valued product lines would be discontinued. thus affecting retail sales. Area residents were concemed about deleterious environmental and health effects.

product or service. A third characteristic of rumors is that they are intended primarily for belief, when reliable information is unavailable. Rumors, according to the forerunners of rumor research. Harvard Professors Cordon W. Allport and Leo Postman, are an "effort after meaning." They are speculations that arise to fill knowledge gaps or discrepancies. This function differentiates rumor from gossip, which is meant primarily to entertain or convey mores. Cossip is a tasty hors d'oeuvre savored at a cocktail party; rumor is a morsel hungrily eaten amid an information famine. Recent findings lead us to believe that, when people have interests in situations for which information is incomplete, practically all rumors go through three stages. The stages are as follows: STAGE

l: Generation

Ehiring this stage, people develop a susceptibility to rumor^—they are motivated to receive or transmit a bit of improvised news. Our research and other studies confirm that rumor susceptibility depends on whether there is an optimum combination of uncertainty and anxiety. Uncertainty refers to the psychological state of doubt that arises when unexplained events occur. Numerous studies show that rumors develop on the heels of ambiguous events because the unsettled questions are themselves unsettling. Noted social psychologist Leon Festinger found that rumors will arise when events are cognitively unclear (ambiguous) or unstructured—when they cannot be understood readily because they lack a suitable context. Cognihvely unclear events produce discomfort and insecurity because their effect is unpredictable. Rumors are explanations that give a "structuring" or "frame" to the ambiguous events within a context. Rumors give the events meaning and predictability, and thus ease the discomfort. In a recent investigation of the hnk between uncertainty and rumor generation, researchers collected rumors about a South Eastern Pennsylvania Transit Authority (SEP52

TA) strike. The rumors clearly afforded predictability to transit patrons. The rumors included "if SEPTA does strike, it will be a long one," and "the fare increase would be at least 25 cents." They also included that "the Red Arrow line will strike at midnight tonight," and "the Route 45 bus will only be running to City Line Avenue, and no further." Other examples abound in everyday life of the ways that uncertainty spawns rumors. For instance, rumors of conspiracy and organized crime connections to John F. Kennedy's assassination persist, presumably because the incident is shrouded in ambiguity. Rumors that circulate during labor negotiations arise partly because the talks are secretive. Rumors also abounded in the Soviet Union during the cold-war era, when official news was untrustworthy. One of the managers we interviewed, representing a company in India, told us that his company's failure to explain office renovations led to a rumor that a popular executive was being ousted: So, the rumor was that there would be a new person coming in, new people are coming in, and the organizational structure was changing and therefore the current president is making way for the new man to take over. Now the fact that the company had not made an official announcement explaining the reason why these cabins were being refashioned fueled the uncertainty of the people. Our interview with a U.S. manager underscores how a company's failure to be forthcoming can fuel a rumor: One of the biggest mistakes 1 have seen is failure to manage the flow of information, causing upheavals in the rumor mills. For example, our claims department is backed up, very backed up. And the rumor is that we cannot get any claims solved. Well, it's not that bad. It's blown way out of proportion. What you have to do is to sit down and say, "The claims department

is handling x amount of claims per day." They are handling maybe a thousand claims per day and we are sending in eleven hundred. So you have to explain to them: "Your claim will now be delayed another week to two weeks to three weeks until they catch up and this is the plan for catching up." Besides uncertainty, an essential ingredient of rumor generation is anxiety: the fear that negative events will likely occur or that positive events won't occur. Researchers have found that anxiety is the factor most strongly associated with rumor transmission. In the case of SEPTA, the previously mentioned transit authority, anxious patrons were more apt to spread rumors than those without anxiety. In fact, the rumormongering may alleviate anxiety, since often it is used to determine whether the rumor is true, and to gain some control over an anticipated negative event. Various research studies as well as the incidents respondents reported during our interviews produce palpable evidence of the role anxiety plays during rumor incidents. Most of the rumors in Exhibit 1 are dreaded events, such as changes in working conditions or threats to security or compensation. The anxiety associated with such events can be picked up easily from the language and emphatic tenor used to describe them. For example, at a manufacturing plant plagued with layoff rumors, "Anxiety still looms large in the minds of the workmen," as one respondent put it. There was rampant fear of another "traumatic" plant closing.

STAGE

2: Evaluation

Research suggests that people are more inclined to spread a rumor they believe is true than one they believe is false. A study of university personnel who anticipated a strike showed that the reason they are more likely to pass along rumors that they believe may stem from the penalties of delivering false messages. If the false rumor describes a pipe

dream, for example, the messenger may become known as a source of disappointment. If the rumor excites fears, the messenger is the creator of undue anxiety. Either way, the reputation of those who raise false hopes or trigger false alarms gets tarnished. How do people judge an idea's truthfulness? Rumors, like prejudices, appear to be evaluated in light of salient cognitions about the truth. The more a story agrees with conventional wisdom or readily available thoughts and presuppositions, the more likely it will be viewed as probably true. Two aspects of this process warrant elaboration. • Cognitions can be theoretically categorized by their accessibility (how easily they come to mind, for example). Frequent thoughts are described as highly "available." Available cognitions may in turn act to modify rumor propositions so they fit better with cognitions (i.e., the cognitions modulate the hearing of the rumor). For example, a racist maintains a highly available set of negative racial stereotypes. The racist emphasizes or deemphasizes events so they are consistent with these stereotypes—incoming data are "worked over." In 1967 and 1968, for example, a false rumor circulated in Detroit, Mich., alleging that a child using a shopping mall lavatory had been castrated by a teenage gang. When the story was repeated in the white community, the gang was described as black and the victim as white. In the black community, the gang was said to be white and the victim black. The assailants' skin color changed, lo match the listeners' racial stereotypes. Those trying to interpret events will rely more frequently on available cognitions than unavailable cognitions. Thus, available cognitions predispose rumor evaluation. At the height of the OPEC oil crisis, rumors circulated that the oil shortage was created by giant corporations in a massive conspiracy to boost gasoline prices. The rumors were embellished by tales of heavily loaded oil tankers secretly waiting outside major U,S. porls until prices rose, and of aerial photographs of corporation sites that revealed 53

hidden vats filled to the brim with oil. These rumors found fertile ground in the minds of those who were already highly distrustful of Big Business. Rumors also tend to make relevant cognitions available. They incite observers to attend to those events that seem to verify the rumor. Rumors of a bank's insolvency, for instance, may precipitate a panic by focusing stockholders' attention on loans to developing nations and on recent savings and loan failures. At Reebok, marketing consultants speculated that rumors that the company was involved with South Africa may have focused attention on the British flag printed on Reebok shoe boxes, or on the company's name, which coincidentally sounds like the name of an African animal. In recent laboratory studies, we found that rumors that a company was about to announce its profits influenced "investors" to focus on the upswings, and away from earlier price trends. Such positive rumors caused price upswings to become more salient and led "investors" to predict continued price hikes. This justified their purchase of stock when they otherwise would have sold. These investors lost money. • Rumors are assessed along a probablistic continuum that ranges from very likely to very unlikely to be true. Thus, rumors need not be 100 percent believed for transmission or reaction. Herbert A. Simon's explication of "bounded rationality" applies here. If humans are rational creatures, why do they act in an ostensibly irrational manner? The reason is that rationality has a variety of limitations. One limit involves our ability to determine whether a statement is true. Because humans cannot always, or even often, completely accomplish this, they must be content with less-than-certainty. Others who consider the statement as improbable will, in turn, assess any reaction as irrational. Often, the most perceptible characteristic of rumor recipients is their credulity. For instance, certain rumor publics believed "Continental Bank is about to file for Chapter 11 status" and "Coca-Cola is contaminat54

ed with carcinogenic food additives," as well as "General Motors' CEO is about to be replaced." Although the Continental rumor was false, it was plausible to the financial community, because the bank had loaned large sums to Third World investors and many smaller banks had recently become insolvent. The Coca-Cola rumor (part of the Villejuif rumor known throughout Europe) probably circulated the most readily among consumer activists who feared food contamination. And GM lost money for years, yet Chairman Stempel was slow to lay off workers. (Eventually, GM replaced him.) These rumors were quite plausible to those they were told to. STAGE

3: Dissemination

Under uncertain and anxiety-provoking circumstances, a plausible rumor spreads like wildfire and causes as much damage. Two aspects of dissemination are particularly troublesome because they lead to a stronger belief in the rumor. Eirst, as cognitive psychologists have shown, repetition fosters belief. Merely hearing a tale several times increases our confidence in its veracity. Second, as a rumor circulates, it mutates into a more plausible proposition. During social interchange, rumors don't merely get relayed, they get refined according to what the transmitter believes is true. Sanford Weinberg and his associates found evidence that people tended to hear a rumor about a hit-and-run accident two or three times before they passed it along. Eloyd H. Allport and Milton Lepkin found that those who had previously heard wartime rumors about waste and special privilege believed the rumors more than those who had never heard them. As we shall see, the significance of the two aspects of dissemination is that timeliness is critical for combatting rumors. Early intervention or a disruption of rumor circulation slows the rise of a rumor's credibility. Based on what we know about generation, evaluation, and transmission, we can suggest some theory-based guidelines for company managers. There are two critical

EXHIBIT 2 THEORETICAL FRAMEWORK FOR PREVENTING AND NEUTRALIZING RUMORS

STAGE

Factors associated with stage

GENERATION

EVALUATION

DISSEMINATION

UNCERTAINTY & ANXIETY

CREDULITY

TIME& REPETITION

Cuidelines addressing stages PREVENTION 1, REDUCE CENERATION

-explain the unexplained -dispel anxiety -anticipate rumors 2. REDUCE CREDULITY -hold a rumor workshop

-establish trust 3. REDUCE DISSEMINATION

-detect early NEUTRALIZATION 1. IGNORE IMPOTENT RUMORS 2. CONFIRM THE RUMOR

3. Do COMMENT 4. REFUTE EFFECTIVELY -based on truth -with internal consistency - with appropriate spokesperson - with understandable message - without repeating rumor - using town meeting format^

' Assumes that explanatory information is given by an appropriate spokesperson early in the life of a rumor.

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points at which we can intervene: when the rumors can be prevented or their harm can be rendered neutral. Exhibit 2 lists guidelines for these stages, and the factors they are designed to reduce.

GUIDELINES FOR PREVENTING RUMORS Managers can prevent rumors by reducing the conditions (uncertainty and anxiety) that make people susceptible to them, or by reducing the credulity of potential participants. Reduce Generation Explain the unexplained. In most situations, un-

certainty is easier to dispel than anxiety because it requires only an explanation of events. A common scenario we found is what we call the "fill-in-the-blank" announcement. A disclosure that someone is leaving, for instance, without an announcement of who will fill the position, surely will spawn rumors. People are naturally concerned about how staff changes will affect them. And they will speculate, as recounted by the following manager: Our company would typically announce one move then announce subsequent moves later, so that many people would keep a score card, trying to predict the upcoming move and who was going where. Dispel anxiety. It appears that efforts to dispel anxiety in organizations are rare; we found no instances of such efforts in our study. We suggest, however, that tactics aimed at dispelling anxiety could be enticing to managers who are accustomed to weighing procedure costs and benefits. A procedure that costs nothing, for example, is a relaxed demeanor. Calm managers send a signal that matters are not so dire riiat they warrant anxiety. Anticipate rumors. Avoid potential uncertainty or anxiety-producing events. This is usually easier said than done. How can we predict how much anxiety or uncertainty a $6

given event will produce? Such predictions are most difficult at the very times they are most needed, as recounted by this manager during a strike: Well, if there had been a calm observer who could brainstorm and say, "These are all the possible rumors that may come about as consequences of this lock-out," rumors might have been anticipated. But it was a situation of turmoil, turmoil for the management as well as turmoil for the workmen. So people were not really thinking, anficipating, or planning ahead. Unfortunately, rumor prevention does seem to require a discerning observer who can anticipate potential rumors. The following manager told how he employed the sensibilities of a "radar man" (not always the same person): I trusted him (i.e., the "radar man"] for having a good sense about what would generate rumors. He would say, "You know this could start rumors," or "You better watch out," or "You better be very discreet about this because people are watching, people are anticipating this to happen." He was always someone who was kind of plugged into the grapevine, but he was also one whose judgment 1 really trusted. He was usually a peer or a boss, more or less like a mentor or a friend. Reduce Credulity Hold a loorkshop. Encourage skepticism about rumors in general through rumor workshops. The workshops involve careful instructions about the nature of rumors, rumor transmission, and potential consequences. When done without forethought, however, such workshops in a climate of distrust could backfire. Without trust, workers may view the workshops as the company's attempt to deter them from assessing unfair management practices. Establish trust. Trust not only makes workshops more effective, it also reduces the

credibility of harmful rumors. Trust predisposes interpretafions of ambiguous events as non-antagonistic. Consider how turnover rumors affected promotion decisions at two of the companies we examined. One company had a climate of trust; the other, a climate of cutthroat competition. In the trusting environment, the manager ignored the turnoverbased rumor that he was looking for another job. When asked whether the rumor might have hurt his chances for a promotion, he said that his boss's responsibility was to assess performance based on merit, and he trusted his boss would ignore the rumors. This manager explicitly stressed the necessity of trust within the organization. "Mutual trust is very, very important in an organization and the higher up you go, the more important it is that trust be characteristic of your relationships with people," he said. Apparently, this manager's trust was well-founded—the company has promoted him regularly. In contrast, the manager in the competitive environment dared not rely on such trust. In fact, his boss had quickly granted credence to the rumor: A co-worker had heard that I was leaving the company and that I was starting my own competitive business. My first thought was that if this gets to my immediate boss and he is considering me, among a group of other people, for promotion, this could really hurt my chances. Also, the rumor had become so widespread that I was sure that he had heard it without telling me. And when I did go to my boss, he was waiting for me to come to him to tell him that I was resigning, and he had planned to promote another person instead of me. Reduce Dissemination Harmful rumors get repeated during their dissemination. This may raise anxiety, highlight uncertainties, and focus attention on those presuppositions that heighten people's belief in the rumors. Thus, early detection is essential to

curbing the effects of the dissemination. Even unruly rumors may be tractable if in their early stages. One strategy was to recruit a trusted subordinate to be a "sonar man" who would report rank andfilerumors quickly. "The sonar man was one whom I could trust to hear rumors and report them faithfully to me," the manager said. He continued as follows: Then I would usually test the rumor with one or two people by asking, "Did you hear this?"—I would see the extent of it. If it was just a wild thing then I would probably let it go [ignore itl but if it was something that people were concerned about, I would pull them together and say "Look, from the top Icorporate hierarchy], this is not going to happen." The subordinate should be instructed to report rumors in a way that doesn't jeopardize anyone's job. This is not only ethical, it is also practical. It prevents the sonar man arrangement from eroding trust. With no early detection mechanism, rumors may do significant damage by the time management hears about them, as recollected by this sales manager: "I lost some ground with my salespeople because by the time salespeople reluctantly brought the rumor to you, it had already damaged morale; they'd been ruminating about it for a couple of weeks."

GUIDELINES EOR NEUTRALIZING RUMORS Even the most conscientious prevention efforts fail at times, and a rumor sweeps through the organizational ranks. There are methods to treat such rumors, as outlined in the remaining guidelines. These guidelines, again aimed at reducing either rumor generation, belief, or dissemination, are as follows: Ignore Impotent Rumors Ignoring a rumor addresses the issue of dissemination, because it does not involve repeating the rumor. But it is dearly the weak57

est neutralizing tactic. A rumor may be safely ignored when, given the group's susceptibility, the rumor is so implausible that it will die on its own. Nevertheless, what is incredible to one person may be believed by another. To determine the plausibility of a rumor, turn to the radar and sonar people. If the rumor is incredible to organization members, then it may suffice to disregard it. The ignore-it approach is a luxury that few managers ever enjoy. An absolute ignore-it approach is only usable when there are no queries to management about the rumors. The manager who had employed the sonar man held such an option because he heard the rumors early enough. Once a question has been asked, however, management must respond: Either confirm or deny the rumor, or refuse to comment. Confirm the Truth Rumors often contain a grain of truth. And one way to reduce rumor generation is to confirm the part that is true. One bank officer quickly killed a costly-error rumor with the truth. The officer explained: Rumore were everywhere that [a very large number of] credit cards had been mailed to incorrect addresses, but the reality was more like [a much smaller number]. We got as much information to the people by the mail, as quickly as we could. My way of dealing is to tell the truth. I mean, don't fool around here or try to hide. In this case the best thing to do is give the information out.

Do Comment A "no comment" response to an inquiry is a comment—it communicates that "we don't want to talk about it," or worse yet, "we have something to hide." These unintended messages will most likely give more credence to the rumor. One public relations official stated that "'no comment' by itself is generally taken as 'yes.'" It also introduces another unexplained event, adding to the uncertainty.

Thus, a plausible reason should be provided for the refusal to comment so that, even though the rumor is ignored, the inquiry gets a response. A particularly effective method is to ridicule the rumor—dismiss it as so obviously absurd that it doesn't warrant a defense. This approach was used successfully to deal with a turnover rumor in a noncompetitive environment. The manager explains as follows: One fine morning one of our union leaders came and told me that our manager of industrial relations is resigning and leaving. Although I was surprised, I asked him "Who told you?" He had no answer. I didn't think it was necessary to take any further action because the rumor source was not credible. Also, because the manager of industrial relations was reporting to me, I thought I had enough rapport with him so that he would have come and informed me first. By challenging the source's credibility, this manager implicitly cast the rumor as ludicrous. Again, the tactic was appropriate because of a weak rumor (implausible) and low susceptibility (low uncertainty or anxiety). Refute Effectively Many highly credible rumors crop up in susceptible environments. And sometimes a strong refutation is needed to reduce confidence in the rumor. But caution is in order here. Denials may turn out to be disloyal rather than faithful servants: There is evidence that denials are at best ineffective in combatting rumors, in some instances. A denial may actually increase credulity in a rumor. Most of the personnel we interviewed were shy about denial. "Too much denial communicates that there must be something going on," a public relations manager said. Personnel recognize that "the company seems to be talking about this rumor a great deal, therefore they must be trying to hide it, trying to move it aside." Here are some tips for effective denials:

Base them on the truth. In most circumstances, a denial based on the truth stands the best chance of diminishing someone's belief in a rumor. Besides being ethical, honesty also is the best policy. If consistent, it improves a manager's reputation and increases trust. Dishonesty, especially a false denial, doubles the damage by tarnishing the reputation. False denials also are doomed to fail because there are always informants around. As one manager put it, "You better be correct because the press could find out in forty seconds." Informants get beaten to the punch by prompt and truthful disclosures. A major corporation failed to heed this advice, and paid for it with its reputation and stock equity. A costly human error had been leaked to the press. When questioned, those involved denied the mistake had occurred. But the denials didn't stick because informants continued to leak, as recalled by this public relations officer: Monday morning, a reporter called me and said that she understood that we had a real problem. I checked a little bit with the management and though they knew there was a problem, they did not mention it to anyone. The next day the reporter called me again. She really seemed to have some facts here. On the fourth day she told me that it was quite serious, she knew the numbers, the error would cost hundreds of millions, so I went back to the management and said "What's going on?" They said, "Yes, we do have this problem." She ran a story that afternoon. Make sure everything the organization says is

consistent. Effective denials diminish rumor credulity through the consistency of the organization's statements. One way to achieve this is to designate one spokesperson to represent the organization. Consider what happened to the manager who was called by the reporter: Then, rather than everybody in management getting together and designating one spokesman who gets the facts straight and stays with the press (that should have probably been me or

somebody very senior in management), instead, there were too many senior guys who were talking to the reporters, all going with the idea that they were going to put out the fire. But there was no consistent kind of message, they were talking about this angle and that angle.. .It was absolutely a mess. The rumors became rampant. Select the appropriate spokesperson. An ap-

propriate spokesperson has a rank that matches the scope and seriousness of the rumor. Denials typically fail to reduce credulity because they are issued by someone with an insufficient rank—lower ranking officials are not perceived as credible. Consider what happened when a CEO did not rebut a widespread and persistent layoff rumor, leaving the task to lower echelon managers. As one of the managers put it: I think much more time could have been spent by top management getting involved with the union leaders and reassuring them. This is because the union does have a feeling that, despile what the personnel people and the middle managers might say, ultimately the decision maker is the top guy. And, until he gives us a reassurance, we really don't know whether the denial has much credibility. In contrast, another company's CEO denied a rumor that he was leaving. "So the president stood up at the meeting and said that he wasn't going and he clarified the rumor," a manager said. "This seemed to have squashed the rumor, eventually, because of the fact that the chief executive stated it." As a rule, higher level sources are considered more credible, unless the spokesman's status is inappropriate for the rumor's scope. Using too high a source may draw undue attention to the rumor, raising speculation that the rumor is more serious than it appears. As one public relations officer put it: If the building is on fire, the chairman should go and take over because it's very serious. If a manager on the sixth 59

floor has a fire, you don't send the chairman, because what ends up happening is that it's just a little fire, and if he runs in there, he will get this fire smell all over his clothes, and it takes a long time for the smell to go away. Denials should be easy to understand. Denials should be brief, pithy, and concise. Denials that are lengthy, vague, and verbose are unconvincing and sound like a cover-up. "You know, when there is too much explanation, and there are too many words, and it's too verbose, then people begin to say, 'Well, this sounds like all those management people,'" said a public relations officer. Another officer trained himself to speak in "sound bytes" which are "the distilled essence of what we're trying to convey." People remember sound bytes; they forget lengthy, complicated, or abstract explanations. Don't repeat the rumor. Repetition fosters belief, so more frequently heard rumors have a better chance of being believed and transmitted. When McDonald's rebutted false rumors that it used worm meat in its hamburgers, for example, the corporation always publicly referred to "protein supplements." When countering false rumors that Pop Rocks candy explodes in the stomach when it is washed down with soda, the sweet's inventor referred to "a lot of wild rumors" (without repeating them) and stressed the product's safety. Similarly, Pepsi's recent open letter to customers thanked them for disbelieving untrue "hoaxes." But the company did not repeat the false allegation about reports of hypodermic needles being found in Pepsi cans. Hold town meetings. Town meetings involve gathering the rumor public, issuing a denial, and providing for a spontaneous dialogue between the spokesperson and the rumor public. Wlien effective, the meetings dispel uncertainty, raise the manager's credibility, and demolish the rumor's credibility. One manager described this "ll-o'clock conference" approach to rumor control: I would pull them all together and say, "Look, I hear this is going around, let 60

me set you straight." Usually there was an element of truth in the rumor, but it had been distorted, so it was a matter of just letting them know as much as I could, truthfully, and setting it straight, and trying to be honest and truthful. Many times I pulled together whoever the involved parties were, or simply the whole team. The town meeting not only quelled rumors, it prevented further rumors, as recounted here: The company had an open forum to deal with employee concerns, grievances, anxieties, and rumors. On a regular quarterly basis, the company would send out a questionnaire asking employees...to list any grievances or frustrations they had. The data were collected anonymously and they were summarized in the form of overhead transparencies and slides. So, unedited, the president of the company would meet the respondents, in batches of 25 to 50, and respond to every issue. A variant of this approach was used at another company as explained below; Every quarter, the five top senior management people go to the cafeteria for a large meeting. Everybody in the building—literally everybody from the guy who sweeps to the guy at the top^—sits there and they have a two- or three-hour meeting. They discuss the progress in all areas of the company and handle questions.

CONCLUSION Effective guidelines for rumor prevention and control are critical to surviving the kinds of organizational problems often encountered in today's competitive environment. The guidelines presented here, derived from rumor theory, have fared well in practice. The overarching idea is that rumor guidelines can be implemented at strategic points in the rumor process: generation, evaluation, and dissemination.

Company managers will never be completely unaffected by harmful rumors. They can't explain every event, or quiet all anxieties. And organizational members can't always remain skeptical of rumors. Anxiety and uncertainty are commonplace, especially in a sluggish economy, and they can quickly foment a witch's brew of malicious rumors that are plausible. But managers need not rely on folk remedies or incantations; they can use sound practices to understand and control rumors. Harmful ru-

mors, then, are like unwelcome guests: They will arrive unbidden, but they need not rule our house.

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SELECTED BIBLIOGRAPHY

Frederick Koenig's quote appeared in Daniel Goleman, "Anatomy of a Rumor: It Flies on Fear," The New York Times. June 4,1991, p. C5. Owen Edwards' quote was taken from "Leak Soup," GQ Magazine, April 1989, p. 228. Thomas Horton's quote was taken from "Rumors: A Corporate Communication Crisis," Security Management, June 1983, p. 21. David Walke was quoted in Debbie Galant, "Responding to Rumors," Institutional Investor, March 1990, p. 58. The Kroy case study was reported by Suellyn McMillan in "Rumor Mill," Personnel lournal, Oct. 1991, pp. 98-101. The definition of rumor is an amalgamation from the work of various rumor researchers including Gordon W. Allport and Leo Postman, The Psychology of Rumor (New York: Holt, Rinehart & Winston, 1947), Tamotsu Shibutani, Improvised News: A SiKiological Study of Rumor (Indianapolis: Bobbs-Merriil, 1966), and Ralph L. Rosnow, "Inside Rumor: A Personal Journey," American Psychologist, May 1991, pp. 484-496. The term rumor public and the concept of rumor as "effort after meaning" are taken from G.W. Allport and L. Postman's book. The comparisons of rumor with news are discussed in "Mass Me-

diated Rumor and Gossip," by Allan J. Kimmel, Douglas Moore, Bruce Rind, and Ralph L. Rosnow (unpublished manuscript). The long line of research on uncertainty in rumor generation includes Stanley Schachter and Harvey Burdick in "A Field Experiment on Rumor Transmission," lournal of Abnormal and Social Psychology, May 1955, pp. 363-371. Cognitive unclarity is discussed in "A Study of Rumor: Its Origin and Spread," Leon Festinger, et al. Human Relations, 1948, pp. 464-485. SEPTA rumors were from raw data culled by James L. Esposito and outlined in his unpublished doctoral dissertation, "Subjective Factors and Rumor Transmission: A Field Investigation of the Influence of Anxiety, Importance, and Belief on Rumormongering" (Temple University, 1987). Rumors in the Soviet Union are described by Raymond A. Bauer and David B. Gleicher in "Word-ofMouth Communication in the Soviet Union," Public Opinion Quarterly, Fall 1953, pp. 297310. Studies investigating the role of anxiety include Susan Anthony, "Anxiety and Rumor," Journal of Social Psychology, 1973, pp. 91-

98; and Charles J. Walker and Carol Beckerlie, 61

"The Effect of State Anxiety on Rumor Transmission," Journal of Soeial Beliavior and Personality, August 1987, pp. 353-360. Evaluation's role in rumor transmission was investigated in Ralph L. Rosnow, James L. Esposito, and Leo Gibney, "Factors Influencing Rumor Spreading: Replication and Extension," Language and Communication, 1988, pp. 29-42. Rumors among university personnel during labor negotiations are described in "Belief in Rumor and Likelihood of Rumor Transmission," by Ralph L. Rosnow, John Yost, and James L. Esposito, Language and Communication, 1986, pp. 189-194. Availability is discussed by Amos Tversky and Daniel Kahneman in "Judgments of and by Representativeness," by D. Kahneman, P. Slovic, and A. Tversky (eds.), in Judgment Under Uncertainty: Heuristics and Biases (New York: Cambridge University Press, 1982). The role of belief in "working over" rumors is discussed by Floyd H. Allport and Milton Lepkin in "Wartime Rumors of Waste and Special Privilege: Why Some People Believe Them," Jouriml of Abnormal and Social Psychology, 1945, pp. 3-36. The radal rumor circulating in Detroit was reported by Marylynn Rosenthal in "WTiere Rumor Raged," Trans-Action, 1971, pp. 34-43. Rumors occurring during the OPEC oil crisis were reported by Donald A. Bird in "Rumor as Folklore: An Interpretation and Inventory," (unpublished doctoral dissertation, Indiana University, 1979). Frederick Koenig analyzed the devastating effect of a false rumor that Continental Bank of Illinois was insolvent in Rumor in the Marketplace (Dover, MA: Auburn House, 1985). The Reebok rumor was reported in Harold Unger, "Psst — Heard About Pop Rocks? Business Rumors and How to Counteract Them," Canadian Business, June 1979, p. 39. The role of rumors in making price

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trends salient was investigated by Nicholas DiFonzo in "Rumor and Behavior: Effects of Rumors on Individual Trading Patterns in the Stock Market," (unpublished master's thesis. Temple University, 1993). Herbert A. Simon's explication of bounded rationality can be found in Administrative Behavior (New York: Macmillan, 1947). The Villejuif rumor is described by Jean N. Kapferer in "A Mass Poisoning Rumor in Europe," Public Opinion Quarterly, April 1991, pp. 467-481. For the finding that repetition fosters belief, see Lynne Hasher, David Goldstein, and Thomas Toppino, "Frequency and the Conference of Referential Validity," journal of Verbal Learning and Verbal Behavior, 1977, pp. 107112. For the finding that a rumor mutates to a more plausible form, see Theodore Caplow, "Rumors in War," Social Forces, 1947, pp. 298302; and Warren A. Petersen and Noel P. Gist, "Rumor and Public Opinion," American Journal of Sociology, 1951, pp. 159-167. The hit-andrun study may be found in "Anatomy of a Rumor: A Field Study of Rumor Dissemination in a University Setting," by Sanford B. Weinberg, et al.. Journal of Applied Communication Research, February 1980, pp. 156-160. The rumors of waste and special privilege are in the investigation previously mentioned by Floyd H. Allport and Milton Lepkin. Research findings that cast doubt on refutation strategies are in "Using Information Processing Theory to Design Marketing Strategies," Alice M. Tybout, Bobby J. Calder, and Brian Sternthal, journal of Marketing Research, February 1981, pp. 73-79. The quote from the Pop Rocks candy inventor was from Harold Unger's article, as was the McDonald's corporation strategy of referring to "protein supplements." Pepsi's open letter to customers was in The Trenton Times on June 21, 1993, p. A9.