9.2 Organizational Culture

Organizational culture is a big topic in companies and, although it’s not tangible, it affects many visible aspects of how a company works. Understanding it is important for studying organizations.
Cultural concepts are often confused with organizational climate, but they’re different:
- Climate: refers to how people perceive their work environment, e.g., how things are around here. It’s about the present reality and is easily noticeable when joining the organization. Reichers & Schneider (1990).
- Culture: about the shared values and beliefs that guide behavior within the organization. It’s more subtle and harder to define, but it helps set the organization apart from others. Schneider et al. (2013).
Edgar Schein (2010) identifies three levels of organizational culture:
- Artifacts and behaviors: visible and observable, e.g., what people do and how they act.
- Proclaimed values: the values the organization says it stands for.
- Basic underlying assumptions: deep, often unconscious beliefs that drive behavior.
Organizational culture is hard to grasp because it’s not just about the visible things—it’s also shaped by stories, myths, and experiences that employees have, especially those they observe from leaders (Schneider et al., 2013).

Schein’s model describes three layers, with artifacts being the most visible outer layer:
- Observable artifacts: What you can see and hear, like behaviors and physical things.
- Espoused values: What the organization says it values or believes.
- Basic underlying assumptions: The deeper, often unconscious beliefs that guide actions in the organization.
Artifacts are the visible things in an organization, such as behaviors and physical items.
Trice and Beyer (1993) divide artifacts into four categories:
- Symbols: Objects or items that are clearly shown in the organization.
- Organizational language: The specific jargon, humor, or even common rumors.
- Narratives: Stories that people keep telling over time.
- Practices: Rituals or taboos that the organization follows.
Summary of the outer-to-inner progression:
- Artifacts (visible) -> Espoused values (stated beliefs) -> Basic underlying assumptions (deep, taken-for-granted beliefs).
The second layer of organizational culture is values, like "innovation" or "friendliness," which shape how employees behave and influence the visible artifacts.
The deepest layer is basic assumptions, composed of beliefs taken for granted. These are so ingrained that people don’t even question them; they shape the values and, in turn, the artifacts.

Artefacts reflect the underlying values and assumptions; they are manifestations of deeper beliefs.
Values (the second layer) influence what artifacts look like and what is considered acceptable or normal within the organization.
Basic underlying assumptions (the deepest layer) drive overall behavior, decision-making, and the interpretation of events within the organization.
Stories, myths, and experiences shared among employees, especially those observed from leaders, play a crucial role in shaping culture (Schneider et al., 2013).

Climate vs. Culture:
- Climate = perceived work environment, present reality, easily noticed upon entry. (Reichers & Schneider, 1990)
- Culture = shared values/beliefs guiding behavior; more subtle and harder to articulate. (Schneider et al., 2013)
Schein’s 3 levels:
- Artifacts and behaviors (visible)
- Proclaimed values (stated)
- Basic underlying assumptions (deep, unconscious)
- Expressed as: $3$ levels of culture.
Layers: $3$ layers in Schein’s model; artifacts are the outermost layer.
Artifacts categories (Trice & Beyer, 1993): $4$ categories.
The interplay among layers explains why surface manifestations (policies, rituals, office layout, language) may not fully reveal the culture unless viewed in light of the deeper assumptions.

When assessing or changing culture, focus on:
- What artifacts exist and what they say about current values and assumptions.
- What the organization claims to value (espoused values) and whether those values are reflected in actions.
- The deeply held beliefs (basic assumptions) that underlie everyday behavior.
Leaders influence culture through stories, leader behavior, and the experiences they model for others.
Ethical and practical implications:
- Culture shapes ethical norms and decision-making.
- Misalignment between espoused values and actual practices can erode trust.
- Real change requires engaging with all three layers, not just surface-level artifacts.

Definition: Organizational culture = shared values and beliefs guiding behavior; distinct from climate, which is a perceptual sense of the work environment. $3$ levels (Schein): artifacts, proclaimed values, basic underlying assumptions. Layering concept: artifacts (visible) -> values -> basic assumptions. Artifacts (Trice & Beyer): symbols, organizational language, narratives, practices. Culture is shaped by stories, myths, experiences, and especially leadership observations (Schneider et al., 2013).