What is Organisational culture? Role, significance, Influence

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What is Organisational culture?

Organisational culture is a set of beliefs, assumptions, values, shared feelings & perceptions which influence the actions & decisions taken by the organisational members based on what is considered right and what is considered wrong.

For e.g., if the culture encourages innovativeness, any problem will make people take initiative & risks, & try out new ways of doing things. On the other hand, if the organisational culture is security-oriented, the same problem situation would cause people to start looking for rules, procedures as a mode of response.

Organisational culture stresses on sharing of norms & values that guide the organisational members’ behaviour. These norms & values are clear guidelines as to how employees are to behave within the organisation and their expected code of conduct outside the organisation.

Schein, (1987) further indicates culture as the personality of an organisation. While people cannot actually see a corporation’s culture, they can infer a lot about it by observing the following.

  • The basic philosophy of the organisation.
  • The values that underlie organisational norms.
  • The norms that guide behaviour.
  • The status accorded to certain individuals
  • The formal and informal rule that have developed for getting a task done.
  • A type of language used in the organisation

Edgar Schein, (1987) illustrates organisational culture as a hierarchical model with three levels:

  • the lowest level contains the unconscious, taken for granted beliefs, thoughts, and feelings which are called the basic “underlying assumptions”

  • the next level contains the strategies, goals, and philosophies of the organisation which are called “espoused values;”

  • the uppermost and most visible level contains the organisation’s structure and processes and is referred to as “artefacts.”

Schein, (1987) indicates organisational culture as the deeper level of basic assumptions and beliefs that are shared by members of the organisation, that operate unconsciously, and that define in a ‘taken for granted’ fashion and organisation’s view of itself and its environment.

It is accepted as the unseen and unobservable force that is always behind the tangible activities of an organisation, which can be observed and measured. We can also characterise culture as consisting of three levels.

Schein, (1987) contends that it is important to consider culture as having a number of levels, some of which are essentially manifestations of underlying beliefs.

According to his model, culture is represented at three levels:

  1. behaviours and artefacts;
  2. beliefs and values;
  3. underlying assumptions.

These levels are arranged in terms of their visibility such that behaviour and artefacts are the easiest to observe, while the underlying assumptions need to be inferred. To understand what the behaviours or beliefs actually mean to the participants, the underlying assumptions have to be surfaced. This is most difficult as assumptions are considered to be taken for granted and out of awareness.

Artefacts, Values and Assumptions

Behaviour and artefacts: The most visible level is behaviour and artefacts. This is the observable level of culture, and consists of behaviour patterns and outward manifestations of deeper levels culture: perquisites provided to executives, dress codes, level of technology utilised (and where it is utilised), and the physical layout of workspaces.

The first and most visible level Schein terms ‘artefacts’ includes architecture, technology, office, layouts, dress codes, written communications, advertisements, and the reception that receives visitors are all included. Artefacts are the surface level of culture, easy to identify but difficult to interpret without an understanding of the underlying logic.


At the next level of culture are valued. Values to a large extent determine behaviour, but they are not directly observable, as behaviours are. There may be a difference between stated and operating values. People will attribute their behaviour to stated values. Values represent a sense of ‘what ought to be’ based on convictions held by certain key people.

For example, if an organisation has a problem such as high level of rejections in production or low sales, decisions might be made to use high quality but more expensive raw materials or to advertise more aggressively. These are seen originally as the decision maker’s values, which can be debated or questioned.

Many of the strategies used by organisations start in this way, and many will reflect values held by the strategic leader. These values once shared by a large number of members of the organisation they become embedded into the culture.

Assumptions and beliefs

To really understand the culture, we have to get to the deepest level, the level of assumptions and beliefs. Schein contends that underlying assumptions grow out of values until they become taken for granted and drop out of awareness.

If the alternative is acceptable and successful it may well be tried again and again until it becomes common practice. In this way, the value becomes a belief and eventually an assumption about behaviour practised by the organisation.

These basic underlying assumptions are Schein’s third level, and they represent the ‘taken-for-granted ways of doing things or solutions to problems. These assumptions determine how group members perceive, think and feel.

Schein suggests that cultural paradigms are formed which determine ‘how organisation members perceive, think about, feel about, and judge situations and relationships and these are formed on a number of underlying assumptions.

The basic assumptions which refer to the organisation’s relationship to its environment, the nature of truth and reality, the nature of human nature, activity and relationships are, in Schein’s view, the essence of organisational culture; the artefacts and values being just manifestations of that culture

Seven primary characteristics seem to capture the essence of an organisation’s culture:

  • Innovation and risk-taking: The degree to which employees are encouraged to be innovative and take risks.

  • Attention to detail: The degree to which employees are expected to exhibit precision, analysis, and attention to detail.

  • Outcome orientation: The degree to which management focuses on results or outcomes rather than on the techniques and processes used to achieve them.

  • People orientation: The degree to which management decisions take into consideration the effect of outcomes on people within the organisation.

  • Team orientation: The degree to which work activities are organised around teams rather than individuals.

  • Aggressiveness: The degree to which people are aggressive and competitive rather than collaborative and cool.

  • Stability: The degree to which organisational activities emphasise maintaining the status quo in contrast to growth.

Role and significance of organisational culture

Each organisation is recognised by its culture. Whenever people name an organisation, the culture attached to the organisation is immediately recalled. One organisation is different from other organisations because of cultural values, beliefs & norms.

Following are the functions performed by organisational culture:

  • Organisational culture creates the boundary beyond which no employees are allowed to go. They automatically observe the organisational standards & norms of behaviour.

  • An organisation is well recognised by its culture. The culture of an organisation provides its stability. People like to continue with the organisation. Employees, customers, financiers& other related persons like to remain with the organisation.

  • The social recognition of the organisational culture makes the organisation grow & develop in all ways.

  • Organisational culture acts as a motivator that guides & controls the employees. Satisfied employees get more spirit & enthusiasm for performing their jobs.

  • The attitude &behaviour of the employees are directed towards the achievement of goals through a sound culture. Disciplined employees make other employees disciplined & well-behaved.

  • Culture gives rise to a positive attitude &behaviour which are again an addition to culture. Culture leads to good behaviour& good behaviour makes good culture which is useful for better behaviour. Both employees & the organisation enjoy culture.

A strong culture ensures better performance. Culture enhances organisational commitment & increases the consistency of employee behaviour.

Influence of Organisational Culture on Organisational Processes

The important concepts, meanings and messages that reflect culture are embedded in organisation’s practices such as:

Each of these practices has instrumental manifestations and expressive manifestations. Instrumental manifestations are the ways in which the organisation pursues its publicly stated goals. Expressive manifestations are the psychological and sociological effects on the members.

Organisation Design

The modal personality of the executive group affects organisation design. For example, if the organisation culture is a self-sufficient one, in which individual achievement and independence are valued, the firm will probably be organised along product lines because of the way it is simpler to allocate responsibility and costs to individuals.

In this form, managers of product divisions have more control and therefore can be held more accountable. If the modal personality is suspicious, the functional form of departments is more likely. Since more cross-function coordination is needed, the top management group retains greater control.

Selection and Socialisation strategies

Organisations will develop ways to select and indoctrinate members with values consistent with the culture. In one company, which was trying to develop a self-sufficient culture emphasising teamwork, commitment and cooperation, job candidates were asked whether or not they had worked in volunteer fire departments.

The justification for such a question was that this type of job requires teamwork and a willingness to contribute, both of which were socialised and trained in groups, with very little individualised training. In order to increase the level of cohesiveness of the members.

Selecting and socialising members so that their values are congruent with the organisation culture increases job satisfaction and commitment to the organisation and lowers turnover.

Class Distinctions

These refer to accepted power and status relations between subgroups. They are one basis for legitimising influence relationships between subgroups. The most obvious class distinctions in an organisation are hierarchical. These are consistent with the ordering of organisational levels and delegating the responsibility and authority associated with levels.

Other types of class distinctions develop. In some organisations, certain positions have higher status than others even though they are presumably at the same organisational level. In universities, there are often status distinctions between professors, such as a professor of medicine and a professor of education. High-status groups will have more power and find it easier to get resources.


The culture of any organisation is built around a shared ideology. The ideology of an organisation is the “relatively coherent set of beliefs that bind some people together and explain their worlds in cause-effect relations”. Ideologies help members make sense of decisions.

For example, the major U.S auto firms in the mid-1970s did not respond to the small car import growth and the oil crisis. They believed deeply that it was unnecessary to move aggressively into small cars because their technical and managerial superiority would, in the long run, win in the marketplace.

Myths and Symbols

Myth is a dramatic narrative of imagined events, usually to explain the origins or transformations of something. They are one of the subsets of historical descriptions such as sagas, legends, stories and folktales that have different degrees of accuracy. They all represent important events or circumstances that are passed on from one generation to another and become a basis of action.

For example, Lee Iacocca had a reputation as an effective, tough-minded manager who can deliver results. This image began in the 1960s during his days at Ford. There were many stories about him at Ford. Several of these described his personal role in the development of the first Mustang, which was a very successful product in the 1960s.

Others described his no-nonsense decision-making style. When he left Ford, some of the same events became part of the evidence used to justify action. How much truth and how much fiction are in the myths and stories that arise from the organisation’s culture is not important, and serve as a basis of control.


In every organisation, a unique specialised language exists. Like the mother tongue of a country, the organisation’s language is best used and understood by its members. Using it properly is, in fact, a way for individuals to be identified as a member.

The organisation’s language is made up of jargon, signals, signs, jokes, humour and metaphors, all of which allow members to convey very specific and clear meaning to other members. When the “right” language is used to explain an act, it is accepted because it reflects the culture.

Rites and Ceremonials

Rites are “relatively elaborate, dramatic, planned sets of activities that consolidate various forms of cultural expressions into one event, which are carried out through social interactions, usually for the benefit of an audience. A ceremonial is a system of several rites connected with an occasion or event. Like symbols and myths, rites and ceremonials convey important cultural meanings.

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