How Organizational Gossip Networks Influence Informal Power Structures

Abstract

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This study examines how organizational gossip networks influence informal power structures through a quantitative investigation of 100 employees in 3 mid-sized organizations, mapped for gossip network centrality and correlated with informal influence measures. Grounded in Social Network Theory (Burt, 1992) + Informal Organization Theory, the research investigates underlying mechanisms and organizational implications. Gossip network centrality predicted informal influence more strongly (r=0.58) than formal hierarchy position (r=0.34). Information brokers who connected gossip clusters wielded 2.4x more informal power than peripheral members. Positive gossip (praise-sharing) increased the gossiper's social capital (r=0.44), while negative gossip temporarily increased influence (r=0.38) but decreased trust over time (r=-0.42 at 6 months). Regression: network betweenness centrality (Beta=0.38), gossip valence balance (Beta=0.26), information exclusivity (Beta=0.24) explained 44% of variance in informal power ratings. The findings provide theoretical and practical contributions to management science and organizational practice.