Edgar Schein, one of the most influential organisational psychologists in the field of culture and leadership, argued that the earliest leaders of a company play a pivotal role in shaping its corporate culture. These founding leaders introduce the core values, beliefs, norms, and behaviours that later become embedded in “how things are done” within the organisation. Over time, these cultural elements become deeply ingrained, forming the shared mindset that guides decision-making and everyday interactions.
According to Schein, once this cultural foundation is established, organisations tend to select, promote, and reward future leaders who embody and reinforce the original culture. This creates a powerful, self-reinforcing cycle between leadership and culture. While this alignment helps maintain stability and consistency, it also makes cultural change challenging—particularly when long-established assumptions are deeply rooted and largely unconscious.
Schein emphasised that effective leaders must be able to recognise, diagnose, and work with organisational culture, rather than overlook it. He proposed that culture exists at three interconnected levels, each with varying degrees of visibility and influence.
1. Artefacts (Visible Level)
Artefacts are the tangible and observable manifestations of culture. They include physical spaces, dress codes, rituals, organisational structures, technology use, and the style of meetings or communication. While artefacts are easy to observe, they can be difficult to interpret because they do not explain why certain behaviours exist—they only show what the culture looks like on the surface.
Examples:
- Office layout (open plan vs. private offices)
- How employees interact with one another
- Symbols, logos, ceremonies, or traditions
2. Espoused Values (Stated Level)
Espoused values represent the formal strategies, goals, philosophies, and stated principles of the organisation. They appear in mission statements, company slogans, codes of conduct, and leadership messaging. These values express what the organisation claims to believe in and aspire to achieve.
However, espoused values do not always align perfectly with actual behaviour. The real test is whether employees’ day-to-day actions reflect these stated ideals.
Examples:
- “We prioritise innovation.”
- “Customer service is our top value.”
- Diversity and inclusion commitments
3. Basic Assumptions (Deep, Unconscious Level)
At the deepest level are basic underlying assumptions—the unconscious beliefs and attitudes that shape perceptions, behaviours, and decision-making. These assumptions are so taken-for-granted that they are rarely questioned or discussed. They govern what people believe is “normal,” “acceptable,” or “the right way to behave.”
Examples:
- Assumptions about leadership authority
- Beliefs about risk-taking or conflict
- Attitudes toward customers, employees, or change
Basic assumptions form the true essence of organisational culture and are the hardest elements to change, because employees may not even be aware that these beliefs exist or influence their behaviour.
Schein’s Contribution to Leadership and Culture
Schein’s model highlights that culture is both created by leaders and a powerful force that shapes future leaders. It underscores the importance of cultural awareness for anyone seeking to manage people, drive transformation, or lead organisational change. Understanding all three levels of culture enables leaders to diagnose cultural strengths and barriers and to design interventions that influence behaviour in a meaningful and sustainable way.
