watercooler democracy: how rumors can democratize information at work – guest post by Katie Sobering

I’m posting this guest post about rumors and workplace democracy on behalf of UNT organizational ethnographer Katie Sobering.  Sobering recently virtually visited my “Organizations, Markets, and the State” grad course to answer questions about her ethnographic research on Hotel BAUEN, a worker recuperated cooperative located in Buenos Aires, Argentina.

In response to student questions about her published research, Sobering explained how she decided to focus on Hotel BAUEN over other collectivist-democratic forms.  By studying Hotel BAUEN’s trainings, meetings, everyday activities, and involvement in social movement activities, Sobering shows how we can use this case to understand how organizations pursue equality through practices such as job rotation and decision-making by consensus.  Sobering also depicted the challenges confronting the cooperative: securing ownership of the hotel, expensive, specialized maintenance of the facilities, and recruitment and retention of members. During the Q&A, Sobering traced her intellectual lineage and inspirations back to Joyce Rothschild’s seminal work on collectivist-democratic organizations and Rachel Sherman’s research on service work in hotels.  She currently is revising a book manuscript on her research.

Here’s Sobering’s take on rumors’ roles in workplace transparency, based on her research published in Work and Occupations:

“We’ve all heard rumors. Odds are, most of us have spread rumors every now and again. From the family dinner table to anonymous corners of the internet, people share unverified pieces of information to make sense of their social worlds. Rumors are especially common in the workplace, spurring the now well-known idea of the “watercooler effect.”

Managers, consultants, and academics alike have paid close attention to the role and repercussions of such informal communication at work. Much of this assumes that firms keep secrets. Thus, in lieu of access to information, workers pass rumors among themselves.

In the 21st century, transparency has become a buzzword, as work organizations like tech firms and startups flatten hierarchies, embrace informality, and remove barriers that traditionally limited access to information. Some organizations are experimenting with “radical transparency” while others warn that too much transparency can be counterproductive. Worker cooperatives and other participatory organizations often practice democratic transparency, recognizing that information-sharing is key to democratizing power. All this begs the question: in contexts of increased transparency, what is the role of rumors?

In my recent article published in Work and Occupations, I draw on long term ethnographic research in a worker-run hotel in Argentina to go behind the scenes in an organization in which workers enjoy a far more egalitarian environment than most U.S. employees experience on the job: extensive access to information, voice in the organization, and power over their jobs. I find that transparency does not quell the rumor mill. But rumors do have an important impact on the culture and practice of information-sharing.

Democratic transparency in Hotel Bauen

I conducted my research in Hotel Bauen, a twenty-story conference hotel located in the bustling center of Buenos Aires, Argentina. Built in the 1970s, the private owners declared bankruptcy in 2001 and shut down the property, leaving longtime employees out of work. In 2003, thirty former employees joined the growing movement of worker-recuperated businesses by occupying the abandoned hotel and forming a worker cooperative. Since 2004, Hotel Bauen has been open around-the-clock, hosting events, lodging overnight guests, and offering a meeting place and street-side café for passersby. Despite workers’ ongoing efforts to legalize their use of the hotel, the BAUEN Cooperative has grown from thirty founding members to 130 members in 2015. Today, it is one of the most iconic worker-recuperated business in Argentina.

Hotel Bauen is run by a worker cooperative: an organization in which all members are equal owners and govern through direct and representative forms of democracy. Since its inception, the cooperative has adopted formal policies and practices designed to make information widely available to the group. They have sought to create what Archeon Fung calls “democratic transparency,” an informational environment that allows people to collectively control the organizations that affect their lives.

First, in the BAUEN Cooperative, information is formally accessible to all members. Organizational records are kept in open book system that is available not only for managers or decision-makers, but also for members.

Second, the cooperative makes information proportional by sharing details about that which directly impacts the business and its members. While cooperatives in Argentina must hold as least one assembly each year by law, the BAUEN Cooperative organizes quarterly meetings to provide regular financial snapshots and open forums for discussion.

Finally, information is actionable through formal mechanisms that allow members to question and even overturn managerial decisions. With signatures of ten percent of the membership, members can convene an assembly of all workers to address and evaluate any decision or scenario in the cooperative.

Despite the transparency that the workers enjoyed in Hotel Bauen, rumors were part and parcel of daily working life. These whispers were often interpersonal in nature, passing hearsay about coworkers’ personal lives. But other rumors ventured into the inner workings of the organization itself.

I found that these rumors democratized information in two interrelated ways. First, rumors encouraged workers to participate in decisions, moving decision-making out of formal spaces and into the hallways where members of the cooperative could informally deliberate on the issue at hand. Second, rumors allowed members to oversee the managerial authority and empowered them to exercise their ability to hold the organization accountable.

[Check out more about worker influence after the jump]

Worker influence

Decisions in the BAUEN Cooperative are primarily made at two levels. The highest decision-making body is the Workers’ Assembly, where all members vote democratically on major decisions and elect the Administrative Council. Whereas the Workers’ Assembly usually meets quarterly, the nine-member Administrative Council holds weekly meetings to oversee routine political, operational, and financial decisions.

I spent nearly a year attending weekly council meetings, full group assemblies, and working in various sectors of the hotel, from reception and reservations to housekeeping and administration. During that time, I observed councilmembers and invited attendees frequently discussed ongoing deliberations outside the meeting itself. As if the walls could talk, very little of what was said remained confidential to the group of elected decision makers. Instead, information circulated through informal social networks as rumors—unverified accounts of decisions-in-progress. In response to rumors, councilmembers regularly called additional meetings to clarify an issue. In one meeting organized to discuss staffing issues, a councilmember explicitly stated why she called the session: because she knew how rumors spread “in the hallways.”

Rumors also complicated decision-making processes. As a long-time worker named Belén explained, “…there are a lot of [decisions made] according to attitudes or hearsay, things that are questionable. They [councilmembers] are occupied with other things and they don’t prioritize managing the business…in a business, it is more about the accounting and in a cooperative, it’s more [about] personal problems…” As Belén pointed out, councilmembers spent significant time and energy addressing rumors and sharing information. Councilmembers also expressed exasperation with the frequency and intensity of rumors: they said things like, “I’m so tired of these rumors” and “all the talking in the halls is exhausting.”


Organizational accountability

Members also used information gleaned from the rumor mill to oversee managerial authority, question organizational policy, and hold elected officers accountable. For example, during the internal elections for a new council, rumors took center stage. Many of these whispers focused on concerns over the incumbents’ use of their managerial power to influence the election.

One afternoon during the campaign, a councilmember heard through the rumor mill that a long-time worker had told a new member named Selina that she needed to vote for the incumbent council. Because they had hired her, she owed them the respect of her vote. Supposedly, Selina told her coworkers she was being pressured to vote and reported the incident to cooperative’s trustee. In response to this rumor, a councilmember approached Selina directly to assure her that she should vote “according to her conscience” and that the votes were secret. In subsequent meetings, members shared this rumor as a way to discuss and debate power dynamics that could be exploited by those who held managerial authority. In warning of misbehavior like this, the rumor ultimately reinforced the group’s collective commitment to free and fair elections.


Watercooler democracy

My research draws attention to the ways that democratic participation and deliberation take place through informal channels of communication, a phenomenon I call “watercooler democracy.”

Rumors are often considered bad for morale, with the potential to erode group cohesion and hamper productivity at work. This study shows how rumors impact efforts for transparency, highlighting the important role of informal communication in democratizing information. In addition to formal transparency efforts, which provide people with information after decisions are made or policies are implemented, rumors circulate information in real time.

Rumors do not have a uniformly “positive” effect at work. They present challenges and tensions that organizations must address. Yet by rapidly circulating information, rumors can also deepen workers’ influence and place a check against the consolidation of power in organizations.


Read More

Katherine Sobering. “Watercooler Democracy: Rumors and Transparency in a Cooperative Workplace.” Work and Occupations, 2019.”


Photo credit: Katie Sobering


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