Research in Progress: Understanding corporate rumors and the psychology of how they spread

By Fan Yang, University at Albany, and Holly Overton, University of South Carolina

Coca-Cola contains a bug-based dye, alcohol or pork?! Naked Juice smoothies have a toxic preservative, formaldehyde?! Rumors like these can circulate quickly on social media and harm corporate reputation.

Environmental responsibility has been deemed a pillar of corporate social responsibility (CSR) by companies across different industries. According to research, corporations ranging from the traditional (automobile and pharmaceutical) to the new (information technology) are striving to be environmentally-friendly. Occasionally, however, corporate rumors like the ones of Coca-Cola and Naked juices circulate on various social media platforms. These rumors sap sales, sully reputations and, more importantly, damage the long-term relationship between the corporations and the public.

Rumors related to the environment can be especially deceptive and infectious. The public can be baffled by environmental issues that usually involve certain levels of scientific knowledge making them susceptible to rumors of this kind more than other types of rumors.

Environmental issues are usually highly controversial due to their grave impact on health, thereby stimulating productions of rumors among publics who are already experiencing uncertainty and anxiety. Failing to properly handle environment-related rumors that can go viral within hours on social media could be catastrophic to corporate success and survival.

Corporations need a social media rumor management system. Without one, practitioners and managers can struggle to combat corporate environmental rumors. While different tactics have been accumulated—ranging from denial to campaigning to using the “wait and see” method—they are highly discretional with only varying degrees of effectiveness.

Rumors, as absurd as they may be, contain a certain level of truth—a truth that is not about the content per se–but about the human psychology hidden behind it.

Without a deep understanding of the types, effects and prevalence of corporate rumors, as well as the psychology of rumor-spreading behaviors on social media, public relations professionals face significant constraints to devise systematic and effective management strategies.

When it comes to important issues, individuals are more likely to spread negative rumors than positive ones, especially when the individuals are prone to high levels of credulity, uncertainty and anxiety. They are also more likely to spread rumors that serve to justify their pre-existing opinions regarding a company.

With funding from a Page Center Legacy Scholar Grant, our study will explore corporate environmental rumors that are widespread online. We will examine the psychological factors that drive spreading behaviors of rumors online using a multi-study approach. Findings of this research could offer insights for practitioners, organizations, and policymakers who endeavor to fight misinformation in the fast-paced digital information age.

More importantly, results could serve as an educational moment of media literacy for the public to be mindful of misinformation on social media and to think critically about their social media sharing behaviors.

For further information on this study, email Yang at fyang@albany.edu or Overton at overton@sc.edu. Results from the study will be available early next year. This project is supported by a Page/Johnson Legacy Scholar Grant from the Arthur W. Page Center.