What is Organizational Culture?

by Sara Russell | Feb 2, 2023 | Culture-Performance Connection

Organizational culture has received a lot of attention lately as a possible explanation for “The Great Resignation” and “Quiet Quitting” that have plagued businesses over the last two years. Could company culture be the reason for disengagement and high turnover? Yes. Culture impacts how an organization approaches its primary purpose, external environment, and internal operations. But to understand culture’s impact, you must first understand what culture is. And in order to determine whether your company’s culture is the problem, you have to know how to analyze it.

“Culture is like the wind. It is invisible; yet its effect can be seen and felt.” – Bryan Walker

What is culture?

The word “culture” implies stability, predictability, and integration of its rituals, values, and behaviors into a unified whole. Dr. Edgar Schein, one of the most prominent psychologists in organizational development, defines culture as “accumulated shared learning.” This shared learning results in a “system of beliefs, values, and behavioral norms” that, once ingrained, become “taken-for-granted assumptions.” He calls these assumptions the cultural DNA of an organization. It’s common to think of culture as primarily behavioral, for example, “how we do things around here.” However, over time and through shared learning, we also learn to share our speech patterns, observations about our surroundings, thoughts about those observations, and feelings. Therefore, viewing and analyzing culture through an evolutionary lens is beneficial. We must know what kind of learning occurred, over what length of time, and under what kinds of leadership to fully comprehend a group’s culture.

Culture is everything a group has learned in its efforts to survive, adapt to its external environment, and internally organize itself. External adaptation revolves around how a company survives in its environment. The organization’s mission, objectives, methods, measurements, and correction are examples of external adaptation. Internal integration concerns establishing internal structures that address how members will interact with each other. Examples of internal integration include language, identity and boundaries, authority, trust and openness, rewards and punishments, and the unexplainable. Organizational psychologist Dr. Paul Dyer sums up external adaptation and internal integration in two fundamental questions. How will we win? And how will we work together?

Analyzing culture

Dr. Schein suggests three levels of analysis: artifacts, espoused beliefs and values, and basic underlying assumptions. Artifacts are structures and processes and observable behavior. The physical environment’s architecture, the group’s language, technology, goods, artistic creations, myths and stories related to the group, and published lists of values are also considered artifacts. The artifact level also contains structural components like organizational charts, formal descriptions of the organization’s operations, administrative procedures, and charters. The group’s “climate” is another artifact. Climate is the result of some of the underlying assumptions. Therefore, it is an expression of the culture rather than the equivalent of culture.

All group learning ultimately reflects an individual’s (usually the founder or leader) initial beliefs and values—his or her perception of what should be, as opposed to what is. This forms the basis for the culture’s espoused or stated beliefs and values. Suppose the group takes action based on the individual’s initial beliefs and values, and it works. Over time, the initial beliefs and values become shared. Suppose the beliefs and values that give the group meaning and comfort are not consistent with those associated with effective performance. In that case, the stated values will reflect the desired behavior but not the observed behavior in many organizations. For example, it’s common in organizations in the United States to promote teamwork but actually rewards individual competitiveness. Therefore, when examining espoused beliefs and values, it is crucial to distinguish between those that are a part of the organization’s ideology or philosophy and those that are merely justifications or aspirations for the future.

Analyzing espoused beliefs and values can lead to understanding part of the culture. However, it is essential to identify basic assumptions to understand the culture entirely. Basic assumptions are ideas or ways of being that are so entrenched that people are unaware of them. Some of these assumptions can be so strong that people reject contrary information, as accepting new information would create cognitive dissonance. At this level, “cultures tell members who they are, how to behave toward each other, and how to feel good about themselves.” Once we have created and combined a set of such assumptions, we will feel most at ease around people who share our assumptions. We will be very uncomfortable and feel vulnerable in situations where different assumptions are at play. We either won’t understand what’s happening, or worse, we’ll misinterpret what other people are doing. This is why changing an organization’s culture is complex and anxiety-provoking.

The iceberg metaphor

Another way to think of the three levels of culture analysis is the iceberg concept of culture. The surface-level factors are visible. They are words, behaviors or actions, building aesthetics and layout, level of attire formality, symbols, sayings, and written policies. They are what you would most likely see, hear, and feel when you encounter a new group with an unfamiliar culture.

Even though outside observers can describe what they see and feel, they can’t determine what those things mean to the group solely based on that information alone. Therefore, we must get in the water to identify invisible factors beneath the surface. We do this by asking group members why they do what they do. This reveals the group’s ideals, goals, values, aspirations, ideologies, and rationalizations. This also includes the unspoken rules of the organization. It’s only when we dive deeper that we can understand the unconscious factors. At the unconscious level, culture is a set of fundamental assumptions. These assumptions tell us what to notice, what things mean, how to feel about situations, and how to behave in various situations. Ideas about time, human behavior and activities, truth and how we discover it, proper individual and interpersonal behavior, and the relative importance of work, family, and self-development are all examples of strong implicit, unconscious assumptions. It’s important to note that broader assumptions about human nature frequently derive from the larger culture, such as the country or industry in which the organization is embedded.

It’s challenging to condense culture into a few dimensions because it is a complex phenomenon. It is everything a group has learned while attempting to survive, adapt to its environment, internally organize itself, and thrive. Organizational culture is dynamic and evolves over time, yet it provides stability and predictability for its members. Schein’s three-level model is helpful when analyzing and describing culture from the visible to the invisible to the unconscious. You must examine all three layers in order to understand the culture because what is visible may be an inaccurate representation of the culture. Part two of this series will cover how culture is learned. Understanding what culture is and how it’s learned will give insight into how to change it if necessary.

THINK ABOUT IT

How can you see past the obvious features of culture to uncover the hidden, harder to describe features?

References

Schein, E. (2017). Organizational culture and leadership (5th ed.). Jossey-Bass.
LSAL Leadership. (2015, September 14). Cultures in organizations Unit 3: Discussion video – Ah yes, the proverbial catch 22 [Video]. YouTube. https://youtu.be/xKXxMIUnzOA