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Home > Business Strategy Best Practice > How Firms Should Fight Rumors

Business Strategy Best Practice

How Firms Should Fight Rumors

by Andrew Hiles

This Chapter Covers

  • What a rumor is.

  • What makes a successful rumor.

  • How rumors spread.

  • The impact of rumor.

  • Examples and case studies.

  • How to fight rumors: lessons and guidelines.

Introduction: What Is a Rumor?

To understand how to fight rumors, we need first to understand what a rumor is and then how and why it circulates.

There are many definitions of “rumor,” but what they have in common is that a rumor comprises unverified, unconfirmed information of uncertain origin and doubtful veracity that has got into general circulation. It may contain elements of truth as well as unfounded allegations. A rumor may be positive (“This stock is going to rocket—they’ve struck oil”) or negative (“That restaurant serves cat as chicken”). A rumor may be substantively true, such as unconfirmed bad or good news that is being prematurely released by unofficial sources.

The scientist Robert Knapp, who helped the US Office of Strategic Services (OSS) to use rumor as a weapon in World War II, defined rumor as: “a proposition or belief of topical reference without official verification.”1

Rumor differs from propaganda, which is an organized campaign to promote a doctrine or practice. However rumor may form part of a propaganda campaign.

What Makes a Successful Rumor

The originally secret, since declassified, OSS “Doctrine re Rumors” (effectively a “How To” manual on spreading rumors)2 described an effective rumor as being “self-propelled.” It described five characteristics:

  • It is easy to remember. It is vivid, and contains local color, concrete detail, often a slogan, and humor.

  • It follows a stereotyped plot. It recalls the history and folklore of the target group and is an old story dressed in new clothes.

  • It reflects the momentary interests and circumstances of the target group. It interprets some current event and fills a knowledge gap. It contains some verifiable element of fact and appears to be supported by other events or rumors.

  • It exploits the emotions and sentiments of the target group. It provides a justification for shared, suppressed emotions and articulates them.

  • It is challenging. It contains “inside information” that cannot be verified directly and is “neither too plausible nor too implausible.”

How Rumors Spread

The OSS manual described the qualities that make a rumor spread as being:

  • Plausibility.

  • Simplicity.

  • Suitability for task—for example, slogan rumors can be short and simple, building on existing situations or beliefs. New “information” may need more narrative.

  • Vividness.

  • Suggestiveness.

The OSS “Doctrine” suggested spreading rumors by designing different, apparently independent supporting rumors in different places.

Long before the Internet, Mark Twain saw the force of rumor: “A lie can travel halfway around the world while the truth is putting on its shoes,” he wrote. Sadly, the truth travels (or at least is acknowledged) somewhat more slowly, against the tide. Rumors are spread by word of mouth at informal meetings over coffee or round the water cooler (referred to as the “watercooler effect”).3 A team of scientists and mathematicians at Rochester University has come up with dynamic social impact theory4—a model to calculate the spread of rumor. One of the motivations for spreading rumors is the kudos which the spreader gets from apparently being on the inside—“knowledge” is power.

With the advent of social media, rumor can be spread farther, quicker, and with more devastating effect. Wikipedia lists over 300 social networking sites,5 ranging from the well-known (Facebook, with more than 640 million subscribers; Myspace, 100 million plus; Twitter, over 175 million; LinkedIn, over 100 million) to specialist sites and blogs with a few thousand subscribers. Another source lists 750 “top” sites.6

Increasingly, rumors are being spread by email and SMS. Viral emails can spread globally within hours. In March 2011, an email and SMS about a nuclear radiation rain shower were reported to be spreading panic across the South East Asian region, including countries like the Philippines that are close to Japan.7 In Kyrgyzstan, Skype groups were reportedly validating rumors of ethnic disturbances. Skype currently handles 30 million concurrent users. The threat is serious enough to have made the Securities and Exchange Board of India (SEBI) issue an advisory that said intermediaries (brokerages, etc.) must have in place an internal code of conduct; ensure that employees, temporary staff, and even voluntary workers do not circulate unverified information; restrict access to blogs, chat forums, and messenger sites; and keep logs of such blogs.8

Dynamic Social Impact Theory (DSIT)

DSIT states that beliefs and attitudes are based on:

  • Strength of influential sources: You are more likely to believe a rumor told by a friend or family member.

  • Immediacy of influence: Rumors often take hold in close-knit, homogeneous neighborhoods and communities.

  • Number of sources: The more people in your network there are who believe a rumor, the more likely you are to believe it.

Based on this, Brooks and DiFonzo developed the “MBN-dialogue model of rumor transmission,” where the spread of rumor is based on the motivations (M) for spreading the rumor, the strength of belief (B) in the rumor, and the novelty (N) or newness of the rumor.

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Further reading


  • DiFonzo, Nicholas. The Watercooler Effect: A Psychologist Explores the Extraordinary Power of Rumors. New York: Avery, 2008. For the psychology of rumor. (Paperback subtitled An Indispensable Guide to Understanding and Harnessing the Power of Rumors.)
  • Doorley, John, and Helio Fred Garcia. Reputation Management: The Key to Successful Public Relations and Corporate Communication. New York: Routledge, 2010. For responses to rumors.
  • Hiles, Andrew (ed). The Definitive Handbook of Business Continuity Management. 3rd ed. Chichester, UK: Wiley, 2010. For case studies on Toyota and BP, and detail on marketing protection.
  • McCusker, Gerry. Public Relations Disasters: Talespin—Inside Stories and Lessons Learnt. Philadelphia, PA: Kogan Page, 2006. For detail on the Procter & Gamble and BA vs Virgin rumors.

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