Fake News & Stakeholder Management Skills

A contribution to the global academic research blog series

Created by Olga Viktorovna Novoselova
Ph.D. Candidate, Corvinus University of Budapest
Senior Lecturer, Ural Federal University (Ekaterinburg, Russia)

The concept of “fake news” is not new. The concept, known as “disinformation” during the World Wars and as “freak journalism” or “yellow journalism” during the Spanish war, can be traced back to 1896. However, the wide spreading of fake news in recent years has been caused by the rise of social media worldwide since nowadays this medium has become the main source of getting information. Thus, during a 2020 survey, more than 70 percent of respondents from Kenya, South Africa, Chile, Bulgaria, Greece, and Argentina stated that they used social media as a source of news. Conversely, less than 40 percent of adults in France, the UK, the Netherlands, Germany, and Japan add the same.

There the information source gets blurred and a piece of information may be shared by multiple sources. The algorithm of this process allows posts with higher popularity (e.g. in the form of more likes and shares) to further fuel unverified information to be distributed and mistaken as legitimate information. Further, the situation with fake news in social media would only exacerbate due to the fact that special machines will write articles that have already appeared. Obviously, in the process of writing texts, a robot would be very loose with facts, using them just to fill the text. And, It will issue thousands or hundreds of thousands of such texts per day working nonstop.

The intention of fake news is to deceive readers who are, in fact, stakeholders of any company or project and create more traffic, which ultimately leads to someone profiting. Websites effectively “buy” their audiences using Facebook content marketing which in turn leads to thousands of dollars of revenue for the publisher. This phenomenon touches different areas starting from political marketing to brand management. 

At first, fake news started targeting politicians and political organizations, marketing interest in the phenomenon came later when some multinational companies faced a boycott wave around their stakeholders after falling victims of fake news. For example, Pepsi stock fell around 4 % just prior to the 2016 US presidential election when a fake news story about Pepsi’s CEO, Indra Nooyi, telling Trump supporters to “take their business elsewhere” went viral. Brands can appear associated with spurious stories, and this can tarnish or contaminate them, while lending validity to the content. Consumers reading of an apparent affair between Yoko Ono and Hillary Clinton might have been reassured of the story’s validity because Fiat-Chrysler’s Ram Trucks brand prominently sponsored the page. Brands also risk consumer backlash if consumers interpret that brands support suspect or misleading news. For instance, this was the case when Kellogg Co. was forced to pull its sponsorship of the “alternative fact” site Breitbart.

The question arises how to work with stakeholders in such situation?

 It becomes obvious that managing stakeholders appeared to be a critical skill for improving the situation which enforces leadership development.

Stakeholders can be divided into internal and exnternal stakeholders being those directly involved in an organization’s decision-making process (e.g. owners, customers, suppliers, employees) and external stakeholders being those affected by the organization’s activities in a significant way (e.g. neighbors, local community, the general public, local authorities).

Why exactly stakeholder management skill is necessary?

The concept and definition of stakeholder management is evolving to acknowledge and, increasingly, to accommodate issues such as uncertainty, risk, ethics, empowerment and sustainability which happen to occur as a consequence of any fake news propagation.

An very important part of stakeholder management skill is the ability to appropriately influence the expectations of these stakeholders regarding the outcome of their investment. The more you engage with your stakeholders and communicate with them in an effort to manage them, the greater are the chances that you uncover some potential risks, which may otherwise go unnoticed. The sooner these risks are identified, the better opportunity you have to reduce them by taking effective measures.

Close work with stakeholders before and after any fake news propagation concerning to the company or any project developed could be a strong anti-crise tool in the process of fighting with negative consequences and brand damages. However, this process is very complex because the influences of stakeholders depend on their power and interest, and these are ever-changing. It is thus necessary for an organization always to understand the outlook of its stakeholders at each point in the communication life cycle and be able to respond in the most appropriate way.

What approach should we apply during the process of stakeholder collaboration?

Flow theory by Csikszentmihalyi 1975 could be seen as a base applied by the company in the way of evolving leadership. Flow mode is characterized by “a narrowing of the focus of awareness, so that irrelevant perceptions and thoughts are filtered out, by loss of self-consciousness, by a responsiveness to clear goals and unambiguous feedback, and by a sense of control over the environment” (Csikszentmihalyi 1977, p. 72). Flow is a complex construct that attempts to integrate motivation, personality, and subjective experience.

Therefore, it could be employed in the way of placing stakeholders in the Flow because Flow experience could develop many positive attitudes and behaviors, including intention of use and exploratory use. And as skill and challenge are the most important variables in Flow theory, stakeholder management skill.

To make the research devoted to this theory application during work with stakeholders could greatly contribute in various spheres including anti crises management after fake news impact, and strengthening relations with stakeholders, and leadership development in stakeholder’s collaboration.

Contact: Olga Viktorovna Novoselova
Ph.D. Candidate, Corvinus University of Budapest
Senior Lecturer, Ural Federal University (Ekaterinburg, Russia)

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