{"id":16137,"date":"2019-04-22T01:32:27","date_gmt":"2019-04-22T01:32:27","guid":{"rendered":"http:\/\/www.lifeandnews.com\/articles\/?p=16137"},"modified":"2019-04-23T10:59:23","modified_gmt":"2019-04-23T10:59:23","slug":"youre-unallocated-and-other-bs-companies-use-to-obscure-reality","status":"publish","type":"post","link":"https:\/\/www.lifeandnews.com\/articles\/youre-unallocated-and-other-bs-companies-use-to-obscure-reality\/","title":{"rendered":"“You’re unallocated!” and other BS companies use to obscure reality"},"content":{"rendered":"

Kate Suslava<\/a>, Bucknell University<\/a><\/em><\/span><\/p>\n

Corporate America has invented many ways to avoid letting the public know it\u2019s laying people off \u2013 or telling employees themselves \u201cYou\u2019re fired.\u201d <\/p>\n

Common parlance includes \u201cdownsizing,\u201d \u201cheadcount management,\u201d \u201crestucturing\u201d or even the unsightly \u201cinvoluntary separation program<\/a>.\u201d Or a boss might say \u201cYour position has been made redundant\u201d or simply, \u201cYou\u2019ve been let go.\u201d General Motors recently came up with a new one: \u201cYou\u2019re unallocated.\u201d <\/p>\n

That\u2019s basically how the automaker announced<\/a> it was getting rid of several plants and potentially hundreds of employees \u2013 leading to much confusion<\/a> among workers about what \u201cunallocated\u201d actually meant<\/a>. <\/p>\n

To better understand why companies turn to euphemisms rather than spill bad news with plain language, I pored over<\/a> thousands of conference calls, where these mild, vague and often ridiculous paraphrases often surface. As I found, using corporate BS can often backfire. <\/p>\n

Euphemistically speaking<\/h2>\n

Humans have always used euphemisms<\/a> to camouflage harsh realities and to avoid offending an audience. <\/p>\n

People employ euphemistic terms to talk about anything they find embarrassing. For example, \u201crest room\u201d is a euphemism for lavatory or toilet, even though no one goes there to rest. In educational circles, dropouts are referred to as \u201cearly leavers.\u201d And \u201cglass ceiling\u201d often disguises discrimination at work.<\/p>\n

To be considered a euphemism, an expression should first refer to something unpleasant \u2013 in GM\u2019s case, layoffs and plant closures.<\/p>\n

Second, it should be a mild way of referring to the unpleasantness, so \u201cunallocated\u201d is a substitute for the blunt expression \u201cWe are firing workers and shutting down the facilities.\u201d <\/p>\n

Finally, it should be a secondary meaning to an already used term. In business, unallocated funds refer to the money that is not currently used in a project.<\/p>\n

A field guide to corporate usage<\/h2>\n

In the context of corporate disclosures, euphemisms are also used to refer to<\/a> something embarrassing or difficult to predict and control.<\/p>\n

To develop a proxy for euphemism usage, I created a dictionary of corporate communication euphemisms by analyzing 78,000 earnings call transcripts for U.S. companies over the last 14 years. <\/p>\n

During a 2011 conference call, for example, TriQuint Semiconductor Inc. CEO Ralph Quinsey talked about \u201ccloudier near-term visbility\u201d<\/a> rather than simply discussing his company\u2019s failure to plan ahead. The same year, Lennox International Chief Financial Officer Bob Hau used \u201cheadwinds\u201d to suggest the impact of markets is as fickle as the weather. And in 2005, Marty Singer, chief executive of Pctel, a provider of wireless security services, called his failure to execute on a plan merely a \u201chiccup.\u201d<\/p>\n

The most common euphemisms I uncovered tended to be rather banal or technical sayings, such as citing \u201cheadwinds\u201d instead of clearly explaining outside challenges hurting a business or \u201clumpiness\u201d to describe operational problems with delivering a product. To soften the blow of a particular bad quarter, corporate executives often call it a \u201ctransition period.\u201d <\/p>\n

Why companies resort to euphemism<\/h2>\n

Euphemisms were most popular in the cyclical industries, such as consumer companies, where managers need strong verbal skills to explain the perennial ups and downs. <\/p>\n

I also found that their use spiked during the financial crisis, as companies tend to use more euphemisms when they are going through tough times. In addition, the companies that use euphemisms the most tend to be older businesses with fewer opportunities for growth, falling earnings and recent stock drops. <\/p>\n

To me, this shows that these phrases are used to sugarcoat what companies would rather leave unsaid altogether to avoid giving investors, employees and other concerned parties bad news.<\/p>\n

But this often backfires. <\/p>\n

After analyzing the conference calls for euphemisms, I examined how markets reacted. When a company is reporting bad news, typically, share prices react quickly and then stabilize after the information has been absorbed. I found that when companies used a lot of euphemisms on earnings calls, investors didn\u2019t seem to fully understand the magnitude of the bad news. <\/p>\n

As a result, shares tended to slide for several months after an earnings call filled with euphemisms, as investors are having a delayed reaction to the bad news. And managers with strong BS skills tend to succeed in delaying<\/a> the scrutiny of the \u201chiccups\u201d to the period after the call when there is less focus on company performance.\"The<\/p>\n

Kate Suslava<\/a>, Assistant Professor of Management, Bucknell University<\/a><\/em><\/span><\/p>\n

This article is republished from The Conversation<\/a> under a Creative Commons license. Read the original article<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Kate Suslava, Bucknell University Corporate America has invented many ways to avoid letting the public know it\u2019s laying people off \u2013 or telling employees themselves \u201cYou\u2019re fired.\u201d Common parlance includes \u201cdownsizing,\u201d \u201cheadcount management,\u201d \u201crestucturing\u201d or even the unsightly \u201cinvoluntary separation program.\u201d Or a boss might say \u201cYour position has been made redundant\u201d or simply, \u201cYou\u2019ve […]<\/p>\n","protected":false},"author":44,"featured_media":16133,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[5],"tags":[2982,2579,172,2756,4085,149,2197,104],"_links":{"self":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/16137"}],"collection":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/comments?post=16137"}],"version-history":[{"count":2,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/16137\/revisions"}],"predecessor-version":[{"id":16141,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/posts\/16137\/revisions\/16141"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media\/16133"}],"wp:attachment":[{"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/media?parent=16137"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/categories?post=16137"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lifeandnews.com\/articles\/wp-json\/wp\/v2\/tags?post=16137"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}