It's a tough world out there, and getting tougher.

You heard that the CEO at the competition got ousted and there's nobody at the helm right now.

Somebody said that his whole business would be up for sale soon and you'll pounce on that if it happens.

You heard about another company that was trying to start up in your area and you wouldn't want them to get a toehold in any way because you know their business practices aren't exactly ethical. You know, because a friend sent you an e-mail about them.

The Watercooler Effect, by Nicholas DiFonzo, c.2008, Avery Books, $27.50, 291 pages.

But what, exactly, do you really know? Maybe not much, as you'll see in The Watercooler Effect, by Nicholas DiFonzo.

Although your mama probably told you that there is no such thing as a good rumour, DiFonzo says that's not entirely true.

Rumours come in three basic types: Wish rumors (the whole business would be up for sale soon); dread rumours (you heard about another company that was trying to start up in your area); and wedge-driving rumours that confuse or "drive a wedge" into the situation at hand (a friend sent you an e-mail about them). The overwhelming majority of rumours appear to fall into the latter two categories.

So why do we perpetuate rumours? DiFonzo says it's because we are social creatures and rumours pull us together in unity. They serve to give us importance in a group - if you're "in the know," you're someone everybody wants to talk to.

Rumours also help us deal with (and prepare for) ambiguity and threat.

If we hear a rumour that a business is closing, we have time to steel ourselves for the brutal announcement.

So what can be done about word-of-mouth, particularly of the damaging kind?

DiFonzo says you can be proactive in checking out a rumour's veracity before repeating it by asking for clarification directly from supervisors, vendors or superiors. As for email rumours (those incessant fear-inducing forwards), utilize truthorfiction.com or Snopes.com before you hit forward.

Then, although few people really do it, make it a policy to send retractions to anyone to whom you've sent a false rumour email.

And if you're on the receiving end of a nasty whisper-campaign, DiFonzo says you're not alone.

Lots of corporations have successfully sued malice-minded rumour-mongers.

Pssssst. Want to find a book that explains why rumours run so rampant in today's business place? You'll find that here, and more.

The Watercooler Effect is a bit of a surprise, in that it goes beyond making sense of scuttlebutt and delves deep into the anatomy of whispered information.

DiFonzo uses many real-life examples and plenty of personal stories to illustrate how rumours start, why they're so ubiquitous, what purpose they serve, how they differ from gossip and urban legend, and what you can do to foster or squash them.

If you've been the victim of rumours, or if you're guilty of a few furtive whispers yourself, learn more about this fascinating phenomenon by reading The Watercooler Effect. And then - shhhhhhh - pass it on.

(Terri Schlichenmeyer can be reached at schlichenmeyer@businessedge.ca)