Organisational Culture: Beyond “How Things Are Done Around Here”

Culture is often summed up as “how things are done around here,” a phrase that captures the informal norms shaping everyday behaviour. While this definition is memorable, it barely scratches the surface. Culture is not just about routines it is about the invisible forces that influence decisions, relationships, and organisational performance.

Edgar Schein, widely regarded as the father of organisational culture studies, argued that culture operates at multiple depths. In his seminal work Organisational Culture and Leadership, Schein wrote:

“Culture is a pattern of shared basic assumptions learned by a group as it solved its problems of external adaptation and internal integration.”

This definition highlights two critical points:

• Culture is learned, not imposed.

• It evolves as organisations adapt to challenges.

• 

Schein’s framework identifies three levels of culture, each progressively harder to observe and change.

The Three Levels of Culture

1. Artifacts – The visible, tangible elements: dress codes, office layouts, rituals, and even the language used in meetings.

2. Espoused Values – The stated principles and strategies: mission statements, leadership philosophies, and official policies.

3. Underlying Assumptions – The unconscious beliefs that truly guide behaviour: assumptions about trust, authority, and risk.

Understanding these layers is essential because interventions at the artifact level (e.g., redesigning office space) rarely succeed if underlying assumptions remain unchanged.

1. Artifacts: The Visible Layer

Artifacts are the most tangible aspects of culture the things you can see, hear, and feel in an organisation. They include physical and behavioural elements that signal “what matters here.” Common examples are:

• Dress code: Formal suits versus casual attire.

• Office layout: Open-plan spaces versus private offices.

• Rituals and ceremonies: Town halls, award events, onboarding practices.

• Language and symbols: Acronyms, jargon, and branding.

Artifacts are easy to observe but notoriously difficult to interpret. For instance, a modern office design with beanbags and breakout areas might suggest collaboration and creativity, but without deeper inquiry, you cannot confirm whether collaboration is truly valued or simply a design trend. Similarly, a company that celebrates “Innovation Week” may still punish risk-taking behind the scenes.

Insight: According to a CIPD survey, 72% of UK employees say their workplace environment influences their sense of belonging yet physical design alone rarely changes behaviour without cultural alignment.

2. Espoused Values: The Stated Principles

Espoused values are the declared strategies, goals, and philosophies that organisations claim to uphold. They appear in:

• Mission statements

• Leadership speeches

• Policy documents

• Corporate websites

For example, a council might state “community engagement is at the heart of our work,” but if decisions are consistently made behind closed doors, the espoused value does not align with reality. This gap between espoused values and actual behaviour is where cultural tension often lies.

“Values are what people say they value; assumptions are what they actually believe.” Schein

Research shows that 58% of employees in the UK believe their organisation’s stated values do not match day-to-day practices (Institute of Leadership & Management). This disconnect can erode trust and engagement.

3. Underlying Assumptions: The Invisible Core

At the deepest level are basic underlying assumptions unconscious beliefs that truly drive behaviour. These assumptions are rarely articulated because they are taken for granted. Examples include:

• “Customers always come first.”

• “Conflict should be avoided.”

• “Only senior leaders make decisions.”

• “Mistakes are career-ending.”

These assumptions shape how people think and act, often overriding formal policies or stated values. For instance, an organisation may have a policy encouraging innovation, but if the underlying assumption is that failure equals incompetence, employees will avoid risk.

Statistic: McKinsey research suggests that 70% of cultural change programmes fail because they do not address these deep-seated assumptions.

Why This Matters

Understanding these levels is critical for leaders, HR professionals, and consultants who aim to influence culture effectively. Many change initiatives fail because they focus only on surface-level artefacts or espoused values, without addressing the underlying assumptions that truly drive behaviour. McKinsey reports that 70% of organisational change programmes fail, and cultural misalignment is one of the most cited reasons.

“If you do not manage culture, it will manage you.” Schein

When leaders overlook these deeper layers, they risk implementing cosmetic changes such as new branding or office redesigns that do little to shift entrenched behaviours. Real transformation requires uncovering and challenging the assumptions that underpin decision-making and interpersonal dynamics.

Use Case: Diagnostic Interviews and Observations

Edgar Schein advocates a diagnostic approach to uncover hidden assumptions. Two key methods stand out:

• Interviews:

  Ask employees questions that reveal cultural norms, such as:

  • “How are decisions really made here?”

  • “What happens when someone makes a mistake?”

  • “What does success look like in this organisation?”

These questions often expose discrepancies between stated values and lived experience.

• Observation:

  Watch how meetings run:

  • Who speaks first?

  • How is feedback delivered?

  • Are dissenting views welcomed or shut down?

Patterns in these behaviours often point to the real cultural drivers. For example, if junior staff never challenge senior leaders, the underlying assumption may be that hierarchy equals authority even if the organisation claims to value collaboration.

Insight: According to the Chartered Institute of Personnel and Development (CIPD), only 31% of UK organisations conduct cultural diagnostics before major change programmes, despite evidence that this step significantly improves success rates.

Key Takeaways

• Artefacts are visible but superficial

  They provide clues about culture such as dress codes, office layouts, and rituals but they only show symptoms, not root causes. A trendy open-plan office might suggest collaboration, but without deeper inquiry, it could mask a culture of hierarchy and control.

• Espoused values reveal intent but may not reflect reality

  Mission statements and leadership speeches often sound aspirational, but the lived experience of employees may tell a different story. When there is a gap between what is said and what is done, trust erodes and engagement suffers. Research by the Institute of Leadership & Management found that 58% of UK employees believe their organisation’s stated values do not match day-to-day practices.

• Underlying assumptions form the true foundation of culture and are hardest to change

  These unconscious beliefs such as “failure is unacceptable” or “only senior leaders make decisions” shape behaviour more than any policy or slogan. They are deeply embedded and often invisible, which makes them the most challenging aspect of culture to shift.

• Effective cultural change starts with diagnosing and challenging these assumptions

  Cosmetic changes like redesigning offices or rewriting mission statements rarely succeed if underlying assumptions remain untouched. Leaders must use diagnostic tools such as interviews and observations to uncover these hidden drivers and align them with organisational goals.

Conclusion

Edgar Schein’s model reminds us that organisational culture is not a surface phenomenon; it is a layered system of visible artefacts, stated values, and invisible assumptions. For leaders and HR professionals, the temptation to focus on what is easy to see office design, branding, or slogans is understandable but misguided. Real transformation happens when we dig deeper, uncovering the beliefs that silently govern behaviour. In a world where 70% of change initiatives fail due to cultural misalignment, understanding these three levels is not optional it is essential. By diagnosing and addressing underlying assumptions, organisations can create cultures that truly support their strategies, empower their people, and deliver sustainable success.