Defining Organizational Culture
Chapter One
Organizational Culture and Leadership
Second Edition, 1991
Edgar Schein
Wendy Baker-Thompson
Public Sector Organizations
April 3, 2006
Edgar Schein
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Born 1928
Sloan Fellows Professor of Management
Emeritus and Senior Lecturer at Sloan School
of Management in Massachusetts Institute of
Technology
Founding editor of Reflections - journal of
the Society for Organizational Learning
Author of numerous books and articles
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Organizational Culture and Leadership
among the most notable studies of
organizational culture
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Education:
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University of Chicago (undergraduate)
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Stanford University (MA Psychology,
1949)
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Harvard University (Ph.D. Social
Psychology, 1952)
“Culture is an abstraction, yet the forces that are created
in social and organizational situations that derive from
culture are powerful. If we don’t understand the
operation of these forces we become victim of them.”
Schein, E. (2004) Organizational Culture and Leadership, Third Edition
Schein’s formal definition of organizational culture:
“A pattern of shared basic assumptions that a group has 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 Organizational Culture
Cultural Artifacts
Levels of Expression
Technology, things and
Readily observed: Multiple
cultural meanings
Behavioral patterns
Values
Testable in the physical
Environment and by social
consensus
Observable patterns of
meanings
Basic Assumptions
Relationship to the environment
Nature of reality, time and space
Nature of human nature and
Human relationships
Not directly observable and must be
inferred from observations of the
culture
Lawson & Shen (1998). Organizational Psychology
Schein’s Examples
(of how culture helped clarify specific organizational situations)
Company 1 –
Goal: develop innovative climate; one flexible to environment
Findings: a lot of innovation but not communicated; no management support for communication
Recommendation: better listening, less interrupting, more orderly agenda, reduce frustration level
Company 2 –
Goal: improve communication, relationships, decision making
Findings: competition, emotionalism, frustration in communication
Recommendation: increase communication efforts, sharing of innovative ideas
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In both cases, suggestions made for reducing factors identified yet styles remained same despite
recommendations.
Problem?
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Assumptions – Schein was looking at both companies with his own eyes, his own culture and not those
of the company
How he thought things should work was not the same as the way his clients thought things should work
Schein realized the importance of confronting fundamental assumptions
Cultural analysis is “the encountering and deciphering of
shared basic assumptions”
Major concepts (associated with culture)
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Observed behavioral regularities in interactions (language, rituals)
Group norms
Espoused values
Formal philosophy
Rules of the game
Climate
Embedded skills
Habits of thinking, mental models and/or linguistic paradigms
Shared meanings
“Root metaphors” or integrating symbols
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Culture implies structural stability and patterning or integration
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Culture Formation
Culture
Human need for
stability,
consistency &
meaning
Stability of membership
Shared Learning
History of shared experience
Group
Three Elements of Culture
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The problem of socialization – teaching newcomers
The problem of behavior – cultural predisposition and
situational contingencies
Can a large organization have one culture? –
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Subcultures are a normal process of evolution (due to
different experiences and different sets of assumptions)
Subcultures often conflict with one another (management
and unionized labor groups)
Common assumptions come into play during crises
Culture and Leadership
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Leadership and culture must be looked at collectively – neither
can be understood by itself
Leaders should be conscious of culture otherwise it will manage
them
Cultural understanding is essential if leaders are are to lead:
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When leaders create groups and organizations they create cultures
Once cultures exist, leaders determine criteria for leadership (who will and will not
be a leader)
Dysfunction = requirement of leaders to identify the functional and dysfunctional
elements and manage evolution and change in order to survive
A strong organizational culture controls organizational behavior and can block an
organization from making necessary changes for adapting to a changing
environment
Cultural Change
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Change of culture is a major investment of time and resources
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Attempts to change organizational culture can be harmful
In some situations organizational change should not be tried (any
examples of these situations?)
(J. Steven Ott, Understanding Organizational Culture)
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Challenge of those embedded in the culture to see their reality as
something they constructed and see meaning in what is taken for
granted
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Value attached to assumptions
Culture taken for granted – not discussed and therefore seemingly
unconscious
Emotional investment leads to being defensive rather than examination
(of assumptions)
Organizational Culture
Formal Philosophy - The “HP Way”
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Hewlett Packard founders – Bill Hewlett and Dave Packard
Hewlett Packard prided itself on a management philosophy emphasizing integrity,
respect for individuals, teamwork, innovation, contribution to customers and community.
Egalitarian, decentralized system – “employees the most important resource”
Philosophy built loyalty of many thousands of employees since founded 63 years ago
 Passed away in 1996 and 2001
 Legacy was not of multi-billion dollar technology giant, but instead of the “HP Way”
Passing of founders and increasingly competitive environment may be demise of the “HP
Way”
Market forces – one of the most controversial mergers ever – HP and Compaq (49% of
HP Shareholders voted against merger)
New CEO in 1999 hired from outside the company so without history of the “HP Way”
Hired by the board to “shake up” the organization
 Criticized for disregard to employees and culture of teamwork and trust
 Was it really about employees’ resistance to (necessary) change and not about the
new CEO?
Source: Palo Alto Weekly, April 10, 2002
http://www.paloaltoonline.com/weekly/morgue/2002/2002_04_10.hpway10.html
Other Key Points
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Because basic assumptions and the factors shaping organizations differ,
every organizational culture differs
Not every “collection of people” develops a culture
Reasons :
 Insufficient stability of membership
 Insufficient shared history of experience
 Presence of too many subgroups with different kinds of shared
experiences
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Problems that all groups regardless of size, encounter:
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Survival, growth and adaptation in their environment
Internal integration that permits daily functioning and ability to adapt
For discussion
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The “HP Way”
Experience with being a “newcomer” and being subjected to the
“way we do things around here?”
Any unique factors to your organization’s culture?
Experiences with organizational change – success/challenges?
The End