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Organizational Culture
6.1 Definition and Edgar Schein's Model (1985)
Edgar Schein (1985) defined organisational culture as: "A pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems."
Three levels of culture (Schein):
Artefacts (Surface level): Observable, tangible manifestations — dress code, office layout, rituals, ceremonies, technology, stories, symbols, language used in the organisation. Easy to see but hard to interpret correctly.
Espoused Values (Middle level): Stated strategies, goals, philosophies, justifications — mission statements, value statements, advertising slogans, official policies. What the organisation claims to stand for.
Basic Underlying Assumptions (Deepest level): Unconscious, taken-for-granted beliefs, perceptions, thoughts, and feelings — the ultimate source of values and actions. Hardest to change but most important.
6.2 Functions of Organizational Culture
- Provides identity: Distinguishes one organisation from another
- Facilitates commitment: Generates employee loyalty beyond self-interest
- Enhances stability: Provides sense of continuity and predictability
- Guides behavior: Social control mechanism — shapes what is acceptable/unacceptable
- Reduces ambiguity: Tells employees how to do their jobs and what is important
6.3 Strong vs. Weak Culture
| Strong Culture | Weak Culture |
|---|---|
| Core values widely shared | Values not widely held |
| High consensus on "how we do things" | Disagreement on norms and values |
| More influence on behavior | Less influence; formal rules needed more |
| Often associated with higher performance | Associated with coordination problems |
| Risk: can become too rigid and resist change | Risk: lack of direction and cohesion |
6.4 Culture Change
Culture change is the most difficult organisational change. Strategies for culture change:
- Leadership must model the desired values (top management as role models)
- Hiring and socialisation of new employees aligned with desired culture
- Redesigning rewards and recognition to reinforce desired behaviors
- Changing stories, rituals, and symbols that reinforce old culture
- Organisational Crisis: May force culture change (e.g., corporate scandal forcing ethics-first culture)