What is Schein’s Model of Organizational Culture? The Schein’s Model of Organizational Culture In A Nutshell

Schein’s model of organizational culture was developed in 1980 by Edgar Schein, then Sloan Professor Emeritus at the Sloan School of Management at MIT.  Schein’s model of organizational culture is a framework explaining the impact of company culture on an organization with a focus on learning and group dynamics.

Level of CultureDescriptionExamples
Artifacts– The most visible elements of culture. – Includes observable aspects like office layout, dress code, and behaviors. – Provides surface insights into culture. – Changing artifacts may not lead to significant cultural change.– Office layout and decor – Dress code – Observable employee behaviors – Symbols and logos
Espoused Values– Deeper than artifacts. – Includes values communicated through mission statements, charters, and explicit cultural statements. – Offers more insight into culture. – Can be altered to influence culture.– Organizational mission and vision statements – Company values and principles – Team contracts and agreements
Underlying Beliefs– The deepest and often subconscious cultural elements. – Encompasses assumptions about work, success, and failure. – Not usually documented but profoundly impact culture. – Difficult to change.– Subconscious beliefs about decision-making – Assumptions about collaboration and teamwork – Deeply ingrained attitudes towards risk and innovation

Understanding Schein’s model of organizational culture

Schein believed organizations developed a culture over time as employees experienced various changes, adapted to the external environment, and solved organizational problems.

What’s more, company culture affected the way employees felt and acted within the organization itself.

Based on these observations, Schein developed his organizational culture model to define a series of basic assumptions.

These assumptions are used by employees to solve problems associated with external adaptation and internal integration.

In theory, successful assumptions are then passed on to new employees as the correct way to perceive, think, and feel when faced with organisational problems.

Schein believed culture was far more complex than the relatively superficial way employees acted in a workplace in response to management or reward systems.

Instead, successful culture develops over a period of time as employees use insights from past experiences to embody culturally acceptable traits.

The three levels of Schein’s model

Sometimes depicted as a pyramid, Schein’s original model was based on three different levels.

In the context of Schein’s model, a level describes the degree to which cultural phenomena are visible to the observer.

From most visible to least visible, the three levels are:


Or the characteristics of an organization easily viewed, heard, and felt by individuals. Artifacts may encompass office furniture, facilities, employee behavior, and dress code.

Schein suggested artifacts yielded little insight into the company culture. As a result, altering them would not achieve significant cultural change.

In essence, artifacts provide the internal or external observer with clues into the surface manifestation of an organization’s culture.

Since they are often described as the outermost of Schein’s layers at the top of the pyramid, artifacts are the most visible part of culture and are often considered to be superficial at best.

While artifacts are the most visible, it is important to note that their meaning is sometimes subjective. In other words, the individual attributes some meaning to an artifact that was unintended by the organization.

This scenario emphasizes the importance of veracity, which can be verified by asking a company directly or consuming information about the intended meaning of the most obvious aspects of a culture.

One example is Amazon headquarters in Seattle and its unique, bold, and audacious dome design which embodies similar traits in the company itself.

Espoused values

These are the things an organization says about its culture and way of operating. Espoused values are deeper, less visible indicators of company culture than artifacts.

They may include factors such as organizational values, company or employee charters, team contracts, and mission or vision statements.

Espoused values provide more insight into the organizational culture than artifacts and can be altered to affect a reasonable degree of cultural change.

These values – particularly when espoused in a mission or vision statement – shape an organization’s culture and how it is seen by society.

They also influence the organization’s core philosophy as they become embodied by staff over time. 

Nevertheless, values tend to cascade from the most senior levels of management in a top-down fashion.

If senior staff exhibit values that contradict the organizational mission, vision, and purpose, these same values are likely to be adopted by subordinates.

Patagonia’s espoused values support its sustainability endeavors and position the company as one that is part of society and thus part of the climate change problem.

Patagonia updated its core values in 2022 to celebrate 50 years in business:

  • Quality – provide the best service and build products that provide as much back to the Earth as they take.
  • Integrity – this means to learn from mistakes, meet commitments, and examine business practices in a way that is both open and honest.
  • Environmentalism – Patagonia acknowledges that it is part of nature and must reduce its environmental impact, share solutions with others, and embrace regenerative practices.
  • Justice – embrace the work required to be just, equitable, and antiracist. 
  • Not bound by convention – success is realized by Patagonia doing things its own way.

Underlying beliefs

The deepest indicators of organizational culture because they reflect the way it operates internally and perceives the world.

Underlying beliefs are held by employees, including assumptions regarding how they should work with colleagues and the sort of behavior that leads to success or failure.

These beliefs typically constitute subconscious and highly integrated behaviors that are not written down, recorded, or even spoken about.

As a result, they have a significant impact on organizational culture but are extremely difficult to change or relearn.

Facebook was praised by multiple sources in 2017 as one of the best places to work.

One source that analyzed Glassdoor data found that employees felt valued and trusted because they were afforded more autonomy in roles that matched their skillsets and were encouraged to question superiors.

These beliefs have been nurtured by Facebook’s senior management, with Zuckerberg in particular known for his transparent, open-door policy.

Amazon’s work culture is in many respects the polar opposite.

Employees work long hours and are expected to be productive, innovative, and customer-obsessed at all times.

There are also frequent mentions of dishonest management and an “every man for himself” mentality where one employee’s success comes at the expense of someone else. 

Much of Amazon’s culture is dictated by its belief that it should maintain the passion, energy, and enthusiasm of a start-up.

While this mentality has resulted in business success, it has also dictated numerous underlying beliefs that have caused a somewhat adversarial and unsustainable culture.

Case Studies

1. Hiring and Onboarding:

  • Artifacts: During the onboarding process, new employees observe office layout, decor, dress code, and daily routines, providing cues about the company’s culture.
  • Espoused Values: Orientation sessions may emphasize the organization’s mission, vision, and values to align new hires with the company’s cultural principles.
  • Underlying Beliefs: Over time, employees learn underlying beliefs by observing how colleagues collaborate, make decisions, and handle challenges, influencing their assimilation into the organizational culture.

2. Organizational Change:

  • Artifacts: A company undergoing a cultural shift may redesign office spaces, introduce new symbols or branding, or implement changes in leadership style.
  • Espoused Values: Leaders communicate revised values and expectations, emphasizing the desired cultural transformation.
  • Underlying Beliefs: Changing underlying beliefs often requires more time and effort, as it involves reshaping ingrained behaviors and thought patterns. This may involve leadership modeling new behaviors and reinforcing cultural change over an extended period.

3. Mergers and Acquisitions:

  • Artifacts: Merged companies may face challenges in integrating different office layouts, corporate symbols, and dress codes.
  • Espoused Values: The merging organizations may articulate shared values to bridge cultural gaps and foster a sense of unity.
  • Underlying Beliefs: Aligning underlying beliefs across merged entities can be complex and may require cultural sensitivity and compromise to achieve a harmonized organizational culture.

4. Leadership Development:

  • Artifacts: Leadership training programs may include sessions on office decor, presentation styles, and attire to convey the importance of visual leadership.
  • Espoused Values: Leadership development often emphasizes values such as integrity, ethical decision-making, and communication skills.
  • Underlying Beliefs: Effective leadership requires addressing underlying beliefs about leadership styles, decision-making authority, and team dynamics. This may involve challenging and reshaping deep-seated beliefs among leaders.

5. Nonprofit Organizations:

  • Artifacts: Nonprofits often use visuals like logos and office spaces to communicate their mission and values to staff, volunteers, and donors.
  • Espoused Values: Mission and vision statements play a critical role in conveying the organization’s values and commitment to its cause.
  • Underlying Beliefs: Nonprofits may have deeply ingrained beliefs about social impact, community engagement, and altruism that guide their work. These beliefs shape how they approach fundraising, volunteer engagement, and program development.

6. Educational Institutions:

  • Artifacts: Educational institutions use physical spaces, classroom layouts, and educational materials to create an environment conducive to learning.
  • Espoused Values: Academic institutions often articulate their commitment to academic excellence, diversity, and the pursuit of knowledge through mission statements and educational policies.
  • Underlying Beliefs: Beliefs about the importance of education, pedagogical approaches, and the role of educators and students in the learning process significantly impact an institution’s culture and teaching methods.

7. Tech Startups:

  • Artifacts: Startup culture is often associated with open office layouts, casual dress codes, and flexible work hours.
  • Espoused Values: Many tech startups espouse values related to innovation, disruption, and a fast-paced work environment.
  • Underlying Beliefs: The underlying beliefs in tech startups may revolve around risk-taking, learning from failure, and a preference for agile decision-making, which shape the entrepreneurial culture.

8. Healthcare Organizations:

  • Artifacts: In healthcare, the design of clinical spaces, the use of technology, and the presence of medical equipment communicate important cultural aspects.
  • Espoused Values: Patient-centered care, safety, and medical ethics are often emphasized in healthcare organizations.
  • Underlying Beliefs: Underlying beliefs may include values related to compassion, evidence-based practice, and the importance of interdisciplinary collaboration among healthcare professionals.

Key takeaways

  • Schein’s model of organizational culture is a framework explaining the impact of company culture on an organization with a focus on learning and group dynamics. It was developed by MIT professor Edgar Schein in 1980.
  • Schein’s model of organizational culture is based on a belief that culture develops over time as employees use basic assumptions to solve internal and external problems. These assumptions, if proven to be effective, are then passed on to new employees.
  • Schein’s model of organizational culture is based on three levels: artifacts, espoused values, and underlying beliefs. Each level describes the degree to which cultural phenomena are visible to the observer.

Key Highlights

  • Developed by Edgar Schein: Schein’s model of organizational culture was developed by Edgar Schein, a professor at MIT, in 1980. It focuses on how company culture impacts an organization’s functioning, emphasizing learning and group dynamics.
  • Culture Evolution: According to Schein, organizational culture evolves as employees adapt to changes, handle external challenges, and solve problems. This culture affects how employees feel and behave within the organization.
  • Three Levels: Schein’s model comprises three levels that represent different depths of cultural understanding:
    • Artifacts: These are visible elements like office layout, dress code, and behaviors. They provide surface insights into culture but altering them doesn’t necessarily lead to significant change.
    • Espoused Values: These are deeper than artifacts and include values communicated through mission statements, charters, and values. They offer more insight into culture and can be changed to influence culture.
    • Underlying Beliefs: These are the deepest and hardest-to-change cultural elements. They encompass subconscious assumptions about work, success, and failure. They significantly shape culture but aren’t usually documented.
  • Examples of Cultures: Examples illustrate the model’s levels:
    • Patagonia: Known for sustainability and quality, Patagonia’s espoused values reflect its commitment to the environment and ethical business practices.
    • Facebook: Facebook’s culture values transparency and autonomy. Its underlying beliefs are nurtured by open communication, particularly by Mark Zuckerberg.
    • Amazon: Amazon’s intense culture stems from valuing innovation and productivity. Underlying beliefs include a competitive work environment and customer obsession.
  • Impact on Behavior: Schein’s model explains how culture influences behavior, decision-making, and interactions within organizations. Understanding these levels aids in deciphering the complexities of organizational dynamics.
  • Cultural Change: The model suggests that while artifacts are the most visible, changing them might not lead to substantial cultural change. Espoused values can be modified to influence culture, but altering underlying beliefs is difficult due to their subconscious nature.
  • Learning and Adaptation: Schein’s model emphasizes that culture is learned over time. Effective assumptions about problem-solving are passed on to new employees, creating a shared perception of how to deal with challenges.
  • Hierarchy of Visibility: The three levels are often depicted as a hierarchy: artifacts are the most visible, followed by espoused values, and underlying beliefs are the least visible but most impactful.

Connected Business Frameworks

Portfolio Management

Project portfolio management (PPM) is a systematic approach to selecting and managing a collection of projects aligned with organizational objectives. That is a business process of managing multiple projects which can be identified, prioritized, and managed within the organization. PPM helps organizations optimize their investments by allocating resources efficiently across all initiatives.

Kotter’s 8-Step Change Model

Harvard Business School professor Dr. John Kotter has been a thought-leader on organizational change, and he developed Kotter’s 8-step change model, which helps business managers deal with organizational change. Kotter created the 8-step model to drive organizational transformation.

Nadler-Tushman Congruence Model

The Nadler-Tushman Congruence Model was created by David Nadler and Michael Tushman at Columbia University. The Nadler-Tushman Congruence Model is a diagnostic tool that identifies problem areas within a company. In the context of business, congruence occurs when the goals of different people or interest groups coincide.

McKinsey’s Seven Degrees of Freedom

McKinsey’s Seven Degrees of Freedom for Growth is a strategy tool. Developed by partners at McKinsey and Company, the tool helps businesses understand which opportunities will contribute to expansion, and therefore it helps to prioritize those initiatives.

Mintzberg’s 5Ps

Mintzberg’s 5Ps of Strategy is a strategy development model that examines five different perspectives (plan, ploy, pattern, position, perspective) to develop a successful business strategy. A sixth perspective has been developed over the years, called Practice, which was created to help businesses execute their strategies.

COSO Framework

The COSO framework is a means of designing, implementing, and evaluating control within an organization. The COSO framework’s five components are control environment, risk assessment, control activities, information and communication, and monitoring activities. As a fraud risk management tool, businesses can design, implement, and evaluate internal control procedures.

TOWS Matrix

The TOWS Matrix is an acronym for Threats, Opportunities, Weaknesses, and Strengths. The matrix is a variation on the SWOT Analysis, and it seeks to address criticisms of the SWOT Analysis regarding its inability to show relationships between the various categories.

Lewin’s Change Management

Lewin’s change management model helps businesses manage the uncertainty and resistance associated with change. Kurt Lewin, one of the first academics to focus his research on group dynamics, developed a three-stage model. He proposed that the behavior of individuals happened as a function of group behavior.

Organizational Structure Case Studies

Airbnb Organizational Structure

Airbnb follows a holacracy model, or a sort of flat organizational structure, where teams are organized for projects, to move quickly and iterate fast, thus keeping a lean and flexible approach. Airbnb also moved to a hybrid model where employees can work from anywhere and meet on a quarterly basis to plan ahead, and connect to each other.

eBay Organizational Structure

eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.

IBM Organizational Structure

IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.

Sony Organizational Structure

Sony has a matrix organizational structure primarily based on function-based groups and product/business divisions. The structure also incorporates geographical divisions. In 2021, Sony announced the overhauling of its organizational structure, changing its name from Sony Corporation to Sony Group Corporation to better identify itself as the headquarters of the Sony group of companies skewing the company toward product divisions.

Facebook Organizational Structure

Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams based on the main corporate functions (like HR, product management, investor relations, and so on).

Google Organizational Structure

Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.

Tesla Organizational Structure

Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.

McDonald’s Organizational Structure

McDonald’s has a divisional organizational structure where each division – based on geographical location – is assigned operational responsibilities and strategic objectives. The main geographical divisions are the US, internationally operated markets, and international developmental licensed markets. And on the other hand, the hierarchical leadership structure is organized around regional and functional divisions.

Walmart Organizational Structure

Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.

Microsoft Organizational Structure

Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.

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