OrganizationCulture andLeadership

Third Edition

Organizational Culture

and Leadership

Edgar H. Schein

OrganizationCulture andLeadership

Third Edition

Copyright 2004 by John Wiley & Sons, Inc. All rights reserved.

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Library of Congress Cataloging-in-Publication Data

Schein, Edgar H.

Organizational culture and leadership / Edgar H. Schein.3rd ed. p. cm.(The Jossey-Bass business & management series)

Includes bibliographical references and index. ISBN 0-7879-6845-5 (alk. paper)

1. Corporate culture. 2. Culture. 3. Leadership. I. Title. II. Series. HD58.7.S33 2004

302.3'5dc22

2004002764

Printed in the United States of America

THIRD EDITION

HB Printing 10 9 8 7 6 5 4 3 2 1

The Jossey-Bass

Business & Management Serie

Contents

Preface

The Author

Part One: Organizational Culture

and Leadership Defined

1. The Concept of Organizational Culture: Why Both

2. The Levels of Culture

3. Cultures in Organizations: Two Case Examples

4. How Culture Emerges in New Groups

Part Two: The Dimensions of Culture

5. Assumptions About External Adaptation Issues

6. Assumptions About Managing Internal Integration

7. Deeper Cultural Assumptions About Reality and Truth

8. Assumptions About the Nature of Time and Space

9. Assumptions About Human Nature, Activity, and Relationships

10. Cultural Typologies

11. Deciphering Culture

12. How Leaders Begin Culture Creation

13. How Leaders Embed and Transmit Culture

14. The Changing Role of Leadership in Organizational Midlife

15. What Leaders Need to Know About How Culture Changes

16. A Conceptual Model for Managed Culture Change

17. Assessing Cultural Dimensions: A Ten-Step Intervention

18. A Case of Organizational (Cultural?) Change

19. The Learning Culture and the Learning Leader

References

Index

Preface

Organizational culture has come of age. Not only did th have staying power but it is even being broadened to oc cultures and community cultures. Culture at the nation more important than ever in helping us to understand i conflict. As it turns out, culture is essential to understan group conflict at the organizational level as well. My ye sulting experience with Digital Equipment Corporati provided useful case material (as the Action Company) vious editions, but it was only through my attempt to fu stand why DEC initially succeededand, in the end, businessthat I came to realize the true importance of tional culture as an explanatory concept. What happens zations is fairly easy to observe; for example, leadershi marketing myopia, arrogance based on past success, and in the effort to understand why such things happen, c concept comes into its own (Schein, 2003).

In an age in which leadership is touted over and over critical variable in defining the success or failure of organ becomes all the more important to look at the other side o ership coinhow leaders create culture and how culture d creates leaders. The first and second editions of this book to show this connection, and I hope that I have bee strengthen the connection even more in this third editio

The conceptual models of how to think about the str functioning of organizational culture, and the role that plays in the creation and management of culture have

tions with whom I have worked over the years.

All of the chapters have been redone and edited. Some been shortened; more have been lengthened with additional material that I was able to incorporate. In addition, I have s tively incorporated relevant material from a great many other b and papers that have been written about organizational cu since the last edition. It is clear that there are still different m available to scholars and practitioners on how to think abou ture. I have not reviewed all of them in detail but have tri show, wherever possible, variations in point of view. I apolog those colleagues whose work I may have overlooked or chose to include, but my purpose is not to write the definitive textbo culture; rather, it is to explore a way of thinking about culture I believe best suits our efforts to understand groups, organizat and occupations.

This edition is organized into three parts. Part One focus organizational and occupational cultureshow to think a them, how to define them, and how to analyze them. Leade is referred to throughout and leadership issues are highlig but the focus is clearly on getting a better feel for what cult and does.

Part Two focuses on the content of culture. In a sense, cu covers all of a given groups life; hence the content is, in prin endless and vast. Yet we need categories for analysis, and he can draw on anthropology and group dynamics to develop a dimensions that are most likely to be useful in making some ceptual sense of the cultural landscape as applied to organizat

In Part Three the focus shifts to the leader as founder, man and, ultimately, a victim of culture if the leader does not under how to manage culture. A crucial element in this analysis understand how culture coevolves with the organization as su

pletely different. This aspect of leadership is almost c ignored in most leadership books.

Acknowledgments

My most profound gratitude is to the readers of the first a edition. Were it not for their positive and critical feed their use of this book in their courses and their consulti would not have had the energy to write a third edition. S stimulation from colleagues again played a key role, esp feedback from John Van Maanen, Otto Scharmer, Joan Mary Jo Hatch, Majken Schultz, and Peter Frost.

The publisher, Jossey-Bass, has always been totally en and their editorial staff, especially Byron Schneider, ur relentlessly but in a positive and supportive way. The re provided were essential to gaining perspective on a boo first published in 1985. I got many good ideas about what ing and should be preserved, what needed to be cut out, needed to be added or enhanced. I thank each of them.

I think it is also important to acknowledge the treme itive impact of word processing technology. Work on th was launched with a set of chapters scanned in from the s tion, permitting immediate on-line editing. Material fro edition that I decided to bring back in the third editio scanned and immediately incorporated where it belon back from readers could be incorporated into the text di used or not used, without additional retyping. Final cop sent to the publisher directly on discs or electronically. O were corrected they stayed corrected. All of this is a mo and pleasant experience for an author who can reme writing was like with carbons, ditto paper, and endless re

tronic marvels, so she is now more understanding of how sc capture our attention.

May 2004EDGAR H. SC

Cambridge, Massachusetts

The Author

EDGAR H. SCHEIN was educated at the University of C Stanford University, where he received a masters degr chology in 1949; and at Harvard University, where he re Ph.D. in social psychology in 1952. He was chief of the S chology Section of the Walter Reed Army Institute of while serving in the U.S. Army as a captain from 1952 to joined the Sloan School of Management at the Massachu tute of Technology (MIT) in 1956 and was made a p organizational psychology and management in 1964.

From 1968 to 1971 Schein was the undergraduate professor for MIT, and in 1972 he became the chairm Organization Studies Group at the Sloan School, a p held until 1982. He was honored in 1978 when he was Sloan Fellows Professor of Management, a chair he held u

At present he is Sloan Fellows Professor of Managem itus and continues at the Sloan School part time as a s turer. He is also the founding editor of Reflections, the the Society for Organizational Learning, which is devot necting academics, consultants, and practitioners around of knowledge creation, dissemination, and utilization.

Schein has been a prolific researcher, writer, teacher sultant. Besides his numerous articles in professional jo has authored fourteen books, including Organizational (third edition, 1980), Career Dynamics (1978), Organiza ture and Leadership (1985, 1992), Process Consultation Vol. 1

Development Board, entitled Strategic Pragmatism (MIT Press, 1 and he has published an extended case analysis of the rise and f Digital Equipment Corporation, entitled DEC Is Dead; Long DEC: The Lasting Legacy of Digital Equipment Corporation (Be Koehler, 2003). He was coeditor with the late Richard Beckha the Addison Wesley Series on Organization Development, whic published over thirty titles since its inception in 1969.

His consultation focuses on organizational culture, organiz development, process consultation, and career dynamics; amon past and current clients are major corporations both in the U.S overseas, such as Digital Equipment Corporation (DEC), Geigy, Apple, Citibank, General Foods, Procter & Gamble, I rial Chemical Industries (ICI), Saab Combitech, Steinbergs, A Motorola, Hewlett-Packard, Exxon, Shell, Amoco, Con Ed the Economic Development Board of Singapore, and the Int tional Atomic Energy Agency (on the subject of safety cultu

Schein has received many honors and awards for his wri most recently the Lifetime Achievement Award in Workplace L ing and Performance of the American Society of Training D tors, February 3, 2000; the Everett Cherrington Hughes Awa Career Scholarship from the Careers Division of the Acade Management, August 8, 2000; and the Marion Gislason Awa Leadership in Executive Development from the Boston Univ School of Management Executive Development Roundt December 11, 2002.

He is a Fellow of the American Psychological Associatio the Academy of Management. Schein is married and has three dren and seven grandchildren. He and his wife, Mary, live in bridge, Massachusetts.

Organizational Culture

and Leadership

Part One

ORGANIZATIONAL

CULTURE AND

LEADERSHIP DEFINE

In this section of the book I will define the concept of c show its relationship to leadership. Culture is both a dyn nomenon that surrounds us at all times, being constant and created by our interactions with others and shaped ship behavior, and a set of structures, routines, rules, and guide and constrain behavior. When one brings culture t of the organization and even down to groups within the tion, one can see clearly how culture is created, embedde and ultimately manipulated, and, at the same time, ho constrains, stabilizes, and provides structure and mean group members. These dynamic processes of culture cre management are the essence of leadership and make o that leadership and culture are two sides of the same coi

Leadership has been studied in far greater detail than tional culture, leading to a frustrating diffusion of con ideas of what leadership is really all about, whether one

ated with leadershipthe creation and management of cultu As we will see, this requires an evolutionary perspecti believe that cultures begin with leaders who impose their own ues and assumptions on a group. If that group is successful an assumptions come to be taken for granted, we then have a cu that will define for later generations of members what kinds of ership are acceptable. The culture now defines leadership. B the group runs into adaptive difficulties, as its environment ch to the point where some of its assumptions are no longer valid, ership comes into play once more. Leadership is now the abil step outside the culture that created the leader and to start e tionary change processes that are more adaptive. This ability to ceive the limitations of ones own culture and to evolve the cu adaptively is the essence and ultimate challenge of leadership If leaders are to fulfill this challenge, they must first under the dynamics of culture, so our journey begins with a focus on nitions, case illustrations, and a suggested way of thinking a organizational culture. In this part, I begin in Chapter One some brief illustrations and a definition. Chapter Two expand concept and argues for a multilevel conception of culture. In C ter Three, I examine in some detail two cases that illustrate we complexity of culture and will be used throughout the rest o book. And in Chapter Four, I show how culture arises in the prof human interaction.

At this point, the most important message for leaders is this to understand culture, give it its due, and ask yourself how wel can begin to understand the culture in which you are embedde In Part Two of this book we turn to the content of culture in Part Three, to the dynamic processes involved in the interaof leadership and culture.

T H E C O N C E P T O F

O R G A N I Z AT I O N A L C U LT U R E

W H Y B OT H E R ?

Culture is an abstraction, yet the forces that are create and organizational situations that derive from culture are If we dont understand the operation of these forces, we be tim to them. To illustrate how the concept of culture he minate organizational situations, I will begin by describi situations I have encountered in my experience as a con

Four Brief Examples

In the first case, that of Digital Equipment Corporation was called in to help a management group improve its co tion, interpersonal relationships, and decision making. A in on a number of meetings, I observed, among other t high levels of interrupting, confrontation, and debate; sive emotionality about proposed courses of action; (3) tration over the difficulty of getting a point of view acro a sense that every member of the group wanted to win al

Over a period of several months, I made many suggest better listening, less interrupting, more orderly process agenda, the potential negative effects of high emotionalit flict, and the need to reduce the frustration level. The gr bers said that the suggestions were helpful, and they modifi aspects of their procedure; for example, they scheduled mo some of their meetings. However, the basic pattern did n No matter what kind of intervention I attempted, the ba the group remained the same.

project, to help create a climate for innovation in an organiz that felt a need to become more flexible in order to respond increasingly dynamic business environment. The organization sisted of many different business units, geographical units, and tional groups. As I got to know more about these units and problems, I observed that some very innovative things were on in many places in the company. I wrote several memos described these innovations and presented other ideas from my experience. I gave the memos to my contact person in the com with the request that he distribute them to the various geogr and business unit managers who needed to be made aware of ideas.

After some months, I discovered that those managers to w I had personally given the memo thought it was helpful and o get, but rarely, if ever, did they pass it on, and none were eve tributed by my contact person. I also suggested meetings of man from different units to stimulate lateral communication, but f no support at all for such meetings. No matter what I did, I coul seem to get information flowing, especially laterally across divisi functional, or geographical boundaries. Yet everyone agreed in ciple that innovation would be stimulated by more lateral co nication and encouraged me to keep on helping.

In the third example, Amoco, a large oil company tha eventually merged with British Petroleum (BP), decided to tralize all of its engineering functions in a single service Whereas engineers had previously been regular parts of pro they were now supposed to sell their services to clients who w be charged for these services. The engineers resisted violentl many of them threatened to leave the organization. We unable to reorganize this engineering organization to fit the company requirements.

up on criminal charges for allegedly failing to report the p asbestos in a local unit that had suffered an accident. workers, who took pride in their heroic self-image of k lights on no matter what, also held the strong norm th not report spills and other environmental and safety p such reports would embarrass the group. I was involved i year project to change this self-image to one in which th model would be to report all safety and environmenta even if that meant reporting on peersor bosses. All were supposed to adopt a new concept of personal resp teamwork, and openness of communication. Yet no m clear the new mandate was made, safety problems contin ever peer group relations were involved.

I did not really understand the forces operating in an cases until I began to examine my own assumptions a things should work in these organizations and began to te my assumptions fitted those operating in my clients sys stepexamining the shared assumptions in the organ group one is dealing with and comparing them to ones o one into cultural analysis and will be the focus from here

It turned out that at DEC, an assumption was shared managers and most of the other members of the organiz one cannot determine whether or not something is true unless one subjects the idea or proposal to intensive debat ther, that only ideas that survive such debate are worth and only ideas that survive such scrutiny will be impleme group assumed that what they were doing was discover and in this context being polite to each other was relativ portant. I became more helpful to the group when I re and went to the flip chart and just started to write down t ideas they were processing. If someone was interrupted, I

finally understood and entered into an essential element of thei ture instead of imposing my own.

At Ciba-Geigy I eventually discovered that there was a s shared assumption that each managers job was his or her pr turf, not to be infringed on. The strong impression was com nicated that ones job is like ones home, and if someone give unsolicited information, it is like walking into ones home vited. Sending memos to people implies that they do not alr know what is in the memo, and that is potentially insulting. I organization managers prided themselves on knowing wha they needed to know to do their job. Had I understood this, I w have asked for a list of the names of the managers and sen memo directly to them. They would have accepted it fro because I was the paid consultant and expert.

At Amoco I began to understand the resistance of the engi when I learned that in their occupational culture there are s assumptions that good work should speak for itself and engi should not have to go out and sell themselves. They were us having people come to them for services and did not have a role model for how to sell themselves.

At Alpha Power I learned that all work units had strong n and values of self-protection that often overrode the new req ments imposed on the company by the courts. The groups had own experience base for what was safe and what was not, w they were willing to trust, whereas the tasks of reporting env mental spills and cleaning them up involved new skills that ers were eventually willing to learn and collaborate on.

In each of these cases I initially did not understand wha going on because my own basic assumptions about truth an and group relations differed from the shared assumptions o members of the organization. And my assumptions reflecte occupation as a social psychologist and organization consul

spective; learning to see the world through cultural lense ing competent in cultural analysisby which I mean bei perceive and decipher the cultural forces that operate organizations, and occupations. Once we learn to see through cultural lenses, all kinds of things begin to make initially were mysterious, frustrating, or seemingly stupid

Culture: An Empirically Based Abstrac

Culture as a concept has had a long and checkered hist been used by the layman as a word to indicate sophisti when we say that someone is very cultured. It has be anthropologists to refer to the customs and rituals tha develop over the course of their history. In the last sever it has been used by some organizational researchers and to refer to the climate and practices that organization around their handling of people, or to the espoused v credo of an organization.

In this context, managers speak of developing the rig culture, a culture of quality or a culture of custome suggesting that culture has to do with certain values that are trying to inculcate in their organizations. Also impl usage is the assumption that there are better or worse cu stronger or weaker cultures, and that the right kind of c influence how effective the organization is. In the manag ature there is often the implication that having a cultur sary for effective performance, and that the stronger the c more effective the organization.

Researchers have supported some of these views by findings that cultural strength or certain kinds of cu relate with economic performance (Denison, 1990; K Heskett, 1992; Sorensen, 2002). Consultants have toute

ture than what I will be arguing for here. As we will see, ma these usages of the word culture display not only a superficia incorrect view of culture, but also a dangerous tendency to e ate particular cultures in an absolute way and to suggest that actually are right cultures for organizations. As we will als whether or not a culture is good or bad, functionally effec or not, depends not on the culture alone, but on the relatio of the culture to the environment in which it exists.

Perhaps the most intriguing aspect of culture as a conc that it points us to phenomena that are below the surface, th powerful in their impact but invisible and to a considerable d unconscious. In that sense, culture is to a group what personal character is to an individual. We can see the behavior that re but often we cannot see the forces underneath that cause ce kinds of behavior. Yet, just as our personality and character and constrain our behavior, so does culture guide and constrai behavior of members of a group through the shared norms th held in that group.

To complicate matters further, one can view personality character as the accumulation of cultural learning that an ind ual has experienced in the family, the peer group, the schoo community, and the occupation. In this sense, culture is with as individuals and yet constantly evolving as we join and create groups that eventually create new cultures. Culture as a conc thus an abstraction but its behavioral and attitudinal consequ are very concrete indeed.

If an abstract concept is to be useful to our thinking, it sh be observable and also increase our understanding of a set of e that are otherwise mysterious or not well understood. From point of view, I will argue that we must avoid the superficial m of culture and build on the deeper, more complex anthropolo models. Culture as a concept will be most useful if it helps us to

What Needs to Be Explained?

Most of us, in our roles as students, employees, managers ers, or consultants, work in and have to deal with groups nizations of all kinds. Yet we continue to find it amazing to understand and justify much of what we observe and e in our organizational life. Too much seems to be burea political or just plain irrationalas in the four cases that I at the beginning of this chapter.

People in positions of authority, especially our i bosses, often frustrate us or act incomprehensibly; those w the leaders of our organizations often disappoint us. Wh into arguments or negotiations with others, we often can stand how our opponents could take such ridiculous When we observe other organizations, we often find it i hensible that smart people could do such dumb things. nize cultural differences at the ethnic or national leve them puzzling at the group, organizational, or occupatio

As managers, when we try to change the behavior o nates, we often encounter resistance to change to an e seems beyond reason. We observe departments in our or that seem to be more interested in fighting with each othe ting the job done. We see communication problems and standings between group members that should not be between reasonable people. We explain in detail why som ferent must be done, yet people continue to act as if the heard us.

As leaders who are trying to get our organizations t more effective in the face of severe environmental pressu sometimes amazed at the degree to which individuals and the organization will continue to behave in obviously i

of conflict between groups in organizations and in the comm is often astonishingly high.

As teachers, we encounter the sometimes mysterious phe enon that different classes behave completely differently from other, even though our material and teaching style remain same. As employees considering a new job, we realize that co nies differ greatly in their approach, even in the same industr geographic locale. We feel these differences even as we walk thr the doors of different organizations, such as restaurants, b stores, or airlines.

As members of different occupations, we are aware that be doctor, lawyer, engineer, accountant, or other professional inv not only the learning of technical skills but also the adoption o tain values and norms that define our occupation. If we violate of these norms we can be thrown out of the occupation. But w do these come from and how do we reconcile the fact that occupation considers its norms and values to be the correct on

The concept of culture helps to explain all of these pheno and to normalize them. If we understand the dynamics of cu we will be less likely to be puzzled, irritated, and anxious whe encounter the unfamiliar and seemingly irrational behavior of ple in organizations, and we will have a deeper understandin only of why various groups of people or organizations can be s ferent, but also why it is so hard to change them. Even more im tant, if we understand culture better we will better unders ourselvesbetter understand the forces acting within us that d who we are, that reflect the groups with which we identify a which we want to belong.

Culture and Leadership

When we examine culture and leadership closely, we see that are two sides of the same coin; neither can really be understo

be argued that the only thing of real importance that le to create and manage culture; that the unique talent of their ability to understand and work with culture; and t ultimate act of leadership to destroy culture when it is dysfunctional.

If one wishes to distinguish leadership from mana administration, one can argue that leadership creates an cultures, while management and administration act wit ture. By defining leadership in this manner, I am not imp culture is easy to create or change, or that formal lead only determiners of culture. On the contrary, as we will s refers to those elements of a group or organization that ar ble and least malleable.

Culture is the result of a complex group learning pro only partially influenced by leader behavior. But if the g vival is threatened because elements of its culture hav maladapted, it is ultimately the function of leadership a of the organization to recognize and do something about tion. It is in this sense that leadership and culture are co intertwined.

Toward a Formal Definition of Cultur

When we apply the concept of culture to groups, organiza occupations, we are almost certain to have conceptual a tic confusion, because such social units are themselves define unambiguously. I will use as the critical defining c tic of a group the fact that its members have a shared hi social unit that has some kind of shared history will have culture, with the strength of that culture dependent on of its existence, the stability of the groups membershi emotional intensity of the actual historical experiences shared. We all have a commonsense notion of this phe

effects, but when we try to define it, we have completely diff ideas of what it is.

To make matters worse, the concept of culture has bee subject of considerable academic debate in the last twenty years and there are various approaches to defining and stud culture (for example, those of Hofstede, 1991; Trice and B 1993; Schultz, 1995; Deal and Kennedy, 1999; Cameron Quinn, 1999; Ashkanasy, Wilderom, and Peterson, 2000; and tin, 2002). This debate is a healthy sign in that it testifies t importance of culture as a concept, but at the same time it cr difficulties for both the scholar and the practitioner if defini are fuzzy and usages are inconsistent. For the purpose of this i ductory chapter, I will give only a quick overview of this ran usage and then offer a precise and formal definition that make most sense from my point of view. Other usages and points of will be further reviewed in later chapters.

Commonly used words relating to culture emphasize one critical aspectsthe idea that certain things in groups are shar held in common. The major categories of observables that are ciated with culture in this sense are shown in Exhibit 1.1.

All of these concepts relate to culture or reflect culture in they deal with things that group members share or hold in com but none of them can usefully be thought of as the culture organization or group. If one asks why we need the word cult

Exhibit 1.1. Various Categories Used to Describe Culture.

Observed behavioral regularities when people interact: the language they u the customs and traditions that evolve, and the rituals they employ in a w variety of situations (Goffman, 1959, 1967; Jones, Moore, and Snyder, 19 Trice and Beyer, 1993, 1985; Van Maanen, 1979b).

Group norms: the implicit standards and values that evolve in working groups, such as the particular norm of a fair days work for a fair days pay

Espoused values: the articulated, publicly announced principles a that the group claims to be trying to achieve, such as product quali leadership (Deal and Kennedy, 1982, 1999).

Formal philosophy: the broad policies and ideological principles t groups actions toward stockholders, employees, customers, and oth holders, such as the highly publicized HP Way of Hewlett-Packar 1981; Pascale and Athos,1981; Packard, 1995).

Rules of the game: the implicit, unwritten rules for getting along i nization; the ropes that a newcomer must learn in order to becom accepted member; the way we do things around here (Schein, 196 Van Maanen, 1979a, 1979b; Ritti and Funkhouser, 1987).

Climate: the feeling that is conveyed in a group by the physical l the way in which members of the organization interact with each o customers, or other outsiders (Ashkanasy, Wilderom, and Peterson, Schneider, 1990; Tagiuri and Litwin, 1968).

Embedded skills: the special competencies displayed by group me accomplishing certain tasks, the ability to make certain things that on from generation to generation without necessarily being articula ing (Argyris and Schn, 1978; Cook and Yanow, 1993; Henderson 1990; Peters and Waterman, 1982).

Habits of thinking, mental models, and linguistic paradigms: the shar tive frames that guide the perceptions, thought, and language used bers of a group and taught to new members in the early socialization (Douglas, 1986; Hofstede, 2001; Van Maanen, 1979b; Senge and ot

Shared meanings: the emergent understandings created by group they interact with each other (as in Geertz, 1973; Smircich, 1983; and Barley, 1984; Weick, 1995).

Root metaphors or integrating symbols: the ways in which groups characterize themselves, which may or may not be appreciated cons become embodied in buildings, office layout, and other material art group. This level of the culture reflects the emotional and aesthetic members as contrasted with the cognitive or evaluative response (a Gagliardi, 1990; Hatch, 1990; Pondy, Frost, Morgan, and Dandridg Schultz, 1995).

Formal rituals and celebrations: the ways in which a group celebrat events that reflect important values or important passages by mem as promotion, completion of important projects, and milestones (as Kennedy, 1982, 1999; Trice and Beyer, 1993).

cept of sharing: structural stability, depth, breadth, and patte or integration.

Structural Stability

Culture implies some level of structural stability in the g When we say that something is cultural, we imply that it i only shared, but also stable, because it defines the group. On achieve a sense of group identity, it is our major stabilizing and will not be given up easily. Culture survives even when members of the organization depart. Culture is hard to ch because group members value stability in that it provides mea and predictability.

Depth

Culture is the deepest, often unconscious part of a group a therefore, less tangible and less visible than other parts. From point of view, most of the concepts reviewed above can be tho of as manifestations of culture, but they are not the essence of we mean by culture. Note that when something is more d embedded it also gains stability.

Breadth

A third characteristic of culture is that once it has develop covers all of a groups functioning. Culture is pervasive; it influ all aspects of how an organization deals with its primary task, it ious environments, and its internal operations. Not all groups cultures in this sense, but the concept connotes that when we to the culture of a group we are referring to all of its operation

and that further lends stability is patterning or integrat elements into a larger paradigm or gestalt that ties to various elements and that lies at a deeper level. Culture implies that rituals, climate, values, and behaviors tie tog a coherent whole; this patterning or integration is the what we mean by culture. Such patterning or integr mately derives from the human need to make our envir sensible and orderly as we can (Weick, 1995). Disorde lessness makes us anxious, so we will work hard to reduce iety by developing a more consistent and predictable vi things are and how they should be. Thus organizationa like other cultures, develop as groups of people struggl sense of and cope with their worlds (Trice and Beyer, 19

How then should we think about the essence of c how should we formally define it? The most useful wa at a definition of something as abstract as culture is t dynamic evolutionary terms. If we can understand whe comes from and how it evolves, then we can grasp some is abstract; that exists in a groups unconscious, yet that ful influences on a groups behavior.

How Does Culture Form?

Culture forms in two ways. In Chapter Four I will show taneous interaction in an unstructured group gradual patterns and norms of behavior that become the cultu groupoften within just hours of the groups formatio formal groups an individual creates the group or becomes This could be an entrepreneur starting a new company, person creating a following, a political leader creating a a teacher starting a new class, or a manager taking o department of an organization. The individual founder

the group and/or select members on the basis of their similar thoughts and values.

We can think of this imposition as a primary act of leader but it does not automatically produce culture. All it produ compliance in the followers to do what the leader asks of t Only if the resulting behavior leads to successin the sense the group accomplishes its task and the members feel good a their relationships to each otherwill the founders beliefs an ues be confirmed and reinforced, and, most important, come recognized as shared. What was originally the founders indiv view of the world leads to shared action, which, if successful, to a shared recognition that the founder had it right. The g will then act again on these beliefs and values and, if it cont to be successful, will eventually conclude that it now has the rect way to think, feel, and act.

If, on the other hand, the founders beliefs and values do no to success, the group will fail and disappear or will seek other le ship until someone is found whose beliefs and values will lead t cess. The culture formation process will then revolve around new leader. With continued reinforcement, the group will be less and less conscious of these beliefs and values, and it will beg treat them more and more as nonnegotiable assumptions. A process continues, these assumptions will gradually drop o awareness and come to be taken for granted. As assumptions to be taken for granted they become part of the identity of the g are taught to newcomers as the way to think, feel, and act; if violated, produce discomfort, anxiety, ostracism, and event excommunication. This concept of assumptions, as opposed to b and values, implies nonnegotiability. If we are willing to argue something, then it has not become taken for granted. Therefore initions of culture that deal with values must specify that culture sists of nonnegotiable valueswhich I am calling assumptions.

tioning. For such shared learning to occur, there must b of shared experience that, in turn, implies some stabilit bership in the group. Given such stability and a shared h human need for stability, consistency, and meaning will various shared elements to form into patterns that even be called a culture.

Culture Formally Defined

The culture of a group can now be defined as a pattern of s assumptions that was learned by a group as it solved its proble nal adaptation and internal integration, that has worked wel be considered valid and, therefore, to be taught to new mem correct way to perceive, think, and feel in relation to those pr

I am not arguing that all groups evolve integrated c this sense. We all know of groups, organizations, and s which certain beliefs and values work at cross purposes beliefs and values, leading to situations full of conflict an ity (Martin, 2002). This may result from insufficient s membership, insufficient shared history of experience, o ence of many subgroups with different kinds of shared ex Ambiguity and conflict also result from the fact that belongs to many groups, so that what we bring to any gi is influenced by the assumptions that are appropriate to groups.

But if the concept of culture is to have any utility, draw our attention to those things that are the prod human need for stability, consistency, and meaning. C mation is always, by definition, a striving toward patte integration, even though in many groups their actual experiences prevents them from ever achieving a clear-c biguous paradigm.

major sets of problems that all groups, no matter what their must deal with: (1) survival, growth, and adaptation in their ronment; and (2) internal integration that permits daily func ing and the ability to adapt and learn. Both of these areas of g functioning will reflect the larger cultural context in whic group exists and from which are derived broader and deeper assumptions about the nature of reality, time, space, human na and human relationships. Each of these areas will be explain detail in later chapters.

At this point, it is important to discuss several other elem that are important to our formal definition of culture.

The Process of Socialization

Once a group has a culture, it will pass elements of this culture new generations of group members (Louis, 1980; Schein, 1968 Maanen, 1976; Van Maanen and Schein, 1979). Studying wha members of groups are taught is, in fact, a good way to discover of the elements of a culture; however, by this means one only l about surface aspects of the cultureespecially because mu what is at the heart of a culture will not be revealed in the ru behavior taught to newcomers. It will only be revealed to me as they gain permanent status and are allowed into the inner c of the group in which group secrets are shared.

On the other hand, how one learns and the socialization cesses to which one is subjected may indeed reveal deeper ass tions. To get at those deeper levels one must try to understan perceptions and feelings that arise in critical situations, and must observe and interview regular members or old-timers t an accurate sense of the deeper-level assumptions that are sha

Can culture be learned through anticipatory socializati self-socialization? Can new members discover for themselves

deciphering can be successful only through the feedba meted out by old members to new members as they e with different kinds of behavior. In this sense, there i teaching process going on, even though it may be quite im unsystematic.

If the group does not have shared assumptions, as times be the case, the new members interaction with old will be a more creative process of building a culture. shared assumptions exist, the culture survives through them to newcomers. In this regard culture is a mechanis control and can be the basis for explicitly manipulating into perceiving, thinking, and feeling in certain ways (Va and Kunda, 1989; Kunda, 1992; Schein, 1968). Whether approve of this as a mechanism of social control is a sepa tion that will be addressed later.

Behavior Is Derivative, Not Central

This formal definition of culture does not include over patterns (although some such behaviorparticularly fo alsdoes reflect cultural assumptions). Instead, it emph the critical assumptions deal with how we perceive, th and feel about things. Overt behavior is always determin the cultural predisposition (the perceptions, thoughts, a that are patterned) and by the situational contingencies from the immediate external environment.

Behavioral regularities can occur for reasons other th culture. For example, if we observe that all members cower in the presence of a large, loud leader, this could b biological, reflex reactions to sound and size, or on ind shared learning. Such a behavioral regularity should not, be the basis for defining culturethough we might late

ularities, we do not know whether or not we are dealing with tural manifestation. Only after we have discovered the deeper l that I define as the essence of culture can we specify what i what is not an artifact that reflects the culture.

Can a Large Organization or

Occupation Have One Culture?

My formal definition does not specify the size of social unit to w it can legitimately be applied. Our experience with large orga tions tells us that at a certain size the variations among the groups is substantial, suggesting that it might not be appropria talk of the culture of an IBM or a General Motors or Shell. I evolution of DEC over its thirty-five-year history one can see a strong overall corporate culture and the growth of powerful cultures that reflected the larger culture but also differed in im tant ways (Schein, 2003). In fact, the growing tensions amon subcultures were partly the reason why DEC as an economic e ultimately failed to survive.

Do Occupations Have Cultures?

If an occupation involves an intense period of education apprenticeship, there will certainly be a shared learning of attit norms, and values that eventually will become taken-for-gra assumptions for the members of those occupations. It is ass that the beliefs and values learned during this time will remai ble as assumptions even though the person may not always b group of occupational peers. But reinforcement of those ass tions occurs at professional meetings and continuing educatio sions, and by virtue of the fact that the practice of the occup often calls for teamwork among several members of the occupa

Determining which sets of assumptions apply to a wh or a whole organization, or a whole subgroup within an or or occupation, should be done empirically. I have found a combinations; their existence is one reason why som emphasize that organizational cultures can be integrated, ated, or fragmented (Martin, 2002). But for the purpose culture, it is important to recognize that a fragmented or ated organizational culture usually reflects a multiplicity tures, and within those subcultures there are shared assum

Are Some Assumptions More Important than O

As we will see when we examine some of our cases mo organizations do seem to function primarily in terms of of assumptions, some smaller set that can be thought of tural paradigm or the governing assumptions, or as critic in the cultural DNA. For the researcher, the problem ferent organizations will have different paradigms with core assumptions. As a result, cultural typologies can be leading. One could measure many organizations on the dimensions, but in some of those organizations a particu sion could be central to the paradigm, whereas in other ence on the organizations behavior could be quite perip

If the total set of shared basic assumptions of a given tional culture can be thought of as its DNA, then we ca some of the individual genes in terms of their centrality in forcing certain kinds of growth and behavior, and oth terms of their power to inhibit or prevent certain kinds o We can then see that certain kinds of cultural evolution mined by the genetic structure, the kind of autoimmu that the organization generates, and the impact of mut hybridization.

that it helps to explain some of the more seemingly incompre sible and irrational aspects of what goes on in groups and orga tions. The variety of elements that people perceive to be cul was reviewed, leading to a formal definition that puts the emp on shared learning experiences that lead, in turn, to shared, ta for-granted basic assumptions held by the members of the gro organization.

It follows that any group with a stable membership and a hi of shared learning will have developed some level of culture, group that has had either considerable turnover of member leaders or a history lacking in any kind of challenging events well lack any shared assumptions. Not every collection of p develops a culture; in fact, we tend to use the term group r than, say, crowd or collection of people only when there has enough of a shared history for some degree of culture formati have taken place.

Once a set of shared assumptions has come to be take granted, it determines much of the groups behavior, and the and norms are taught to newcomers in a socialization process is itself a reflection of culture. To define culture one must go b the behavioral level, because behavioral regularities can be c by forces other than culture. Even large organizations and e occupations can have a common culture if there has been en of a history of shared experience. Finally, I noted that the sh assumptions will form a paradigm, with more or less central or erning assumptions driving the system, much as certain genes the genetic structure of human DNA.

Culture and leadership are two sides of the same coin, in leaders first create cultures when they create groups and orga tions. Once cultures exist they determine the criteria for leade and thus determine who will or will not be a leader. But if elem of a culture become dysfunctional, it is the unique function of

ronment.

The bottom line for leaders is that if they do not be scious of the cultures in which they are embedded, thos will manage them. Cultural understanding is desirable fo but it is essential to leaders if they are to lead.

A final note: from this point on I will use the term gro to social units of all sizesincluding organizations and s organizationsexcept when it is necessary to distinguis of social unit because of subgroups that exist within larg

T H E L E V E L S O F C U LT U R E

The purpose of this chapter is to show that culture can b at several different levels, with the term level meaning th which the cultural phenomenon is visible to the observe the confusion surrounding the definition of what cultu results from not differentiating the levels at which it mani These levels range from the very tangible overt manifest one can see and feel to the deeply embedded, unconsc assumptions that I am defining as the essence of culture. I these layers are various espoused beliefs, values, norms, a behavior that members of the culture use as a way of dep culture to themselves and others.

Many other culture researchers prefer the term basi describe the concept of the deepest levels. I prefer basic a because these tend to be taken for granted by group me are treated as nonnegotiable. Values are open to discussio ple can agree to disagree about them. Basic assumpti taken for granted that someone who does not hold them as a foreigner or as crazy and is automatically dismissThe major levels of cultural analysis are shown in Fi

Artifacts

At the surface is the level of artifacts, which includes al nomena that one sees, hears, and feels when one encoun group with an unfamiliar culture. Artifacts include t products of the group, such as the architecture of it

Espoused Beliefs

and Values

Underlying

Assumptions

(hard to decipher)

Strategies, goals, philosophies

(espoused justifications)

Unconscious, taken-for-granted beliefs, perceptions, thoughts, and feelings. . .

(ultimate source of values and action)

Copyright E. H. Schein. Not to be reproduced without permission of author.

environment; its language; its technology and products; its ar creations; its style, as embodied in clothing, manners of ad emotional displays, and myths and stories told about the orga tion; its published lists of values; its observable rituals and monies; and so on.

The climate of the group is an artifact of the deeper cul levels, as is the visible behavior of its members. Artifacts include, for purposes of cultural analysis, the organizational cesses by which such behavior is made routine, and structura ments such as charters, formal descriptions of how the organiz works, and organization charts.

The most important point to be made about this level of th ture is that it is both easy to observe and very difficult to deci The Egyptians and the Mayans both built highly visible pyra but the meaning of pyramids in each culture was very differe tombs in one, temples as well as tombs in the other. In other w observers can describe what they see and feel, but cannot re

response to physical artifacts such as buildings and office l lead to the identification of major images and root meta reflect the deepest level of the culture (Gagliardi, 1990). of immediate insight would be especially relevant if the tion one is experiencing is in the same larger culture searcher. The problem is that symbols are ambiguous, an only test ones insight into what something may mean also experienced the culture at the deeper levels of v assumptions.

It is especially dangerous to try to infer the deeper as from artifacts alone, because ones interpretations will ine projections of ones own feelings and reactions. For exam one sees a very informal, loose organization, one may int as inefficient if ones own background is based on the a that informality means playing around and not working. natively, if one sees a very formal organization, one ma that to be a sign of lack of innovative capacity, if ones o ence is based on the assumption that formality means bu and formalization.

Every facet of a groups life produces artifacts, creating lem of classification. In reading cultural descriptions, notes that different observers choose to report on differe artifacts, leading to noncomparable descriptions. Anthr have developed classification systems, but these tend to and detailed that cultural essence becomes difficult to di

If the observer lives in the group long enough, the m artifacts gradually become clear. If, however, one wants this level of understanding more quickly, one can attem lyze the espoused values, norms, and rules that provide t day operating principles by which the members of the gr their behavior. This kind of inquiry takes us to the next le tural analysis.

values, their sense of what ought to be, as distinct from wh When a group is first created or when it faces a new task, issu problem, the first solution proposed to deal with it reflects some viduals own assumptions about what is right or wrong, wha work or not work. Those individuals who prevail, who can influ the group to adopt a certain approach to the problem, will lat identified as leaders or founders, but the group does not yet hav shared knowledge as a group because it has not yet taken a com action in reference to whatever it is supposed to do. Whatever i posed will only be perceived as what the leader wants. Unti group has taken some joint action and together observed the come of that action, there is not as yet a shared basis for deter ing whether what the leader wants will turn out to be valid.

For example, in a young business, if sales begin to decline a ager may say We must increase advertising because of her that advertising always increases sales. The group, never h experienced this situation before, will hear that assertion as a ment of that managers beliefs and values: She believes that one is in trouble it is a good thing to increase advertising. Wha leader initially proposes, therefore, cannot have any status than a value to be questioned, debated, challenged, and tested

If the manager convinces the group to act on her belief, a the solution works, and if the group has a shared perception o success, then the perceived value that advertising is good grad becomes transformed: first into a shared value or belief, and mately into a shared assumption (if actions based on it contin be successful). If this transformation process occurs, group me will tend to forget that originally they were not sure and tha proposed course of action was at an earlier time just a proposal debated and confronted.

Not all beliefs and values undergo such transformation. Fi all, the solution based on a given value may not work reliably. those beliefs and values that can be empirically tested and that

ment or with aesthetic or moral mattersmay not be test In such cases, consensus through social validation is stil but it is not automatic.

By social validation I mean that certain values are confi by the shared social experience of a group. For example, culture cannot prove that its religion and moral system a to another cultures religion and moral system, but if the reinforce each others beliefs and values, they come to b granted. Those who fail to accept such beliefs and valu risk of excommunicationof being thrown out of t Such beliefs and values typically involve the groups int tions; the test of whether they work or not is how comfo anxiety-free members are when they abide by them. Soc tion also applies to those broader values that are not test as ethics and aesthetics.

In these realms the group learns that certain beliefs a as initially promulgated by prophets, founders, and leade in the sense of reducing uncertainty in critical areas of t functioning. And, as they continue to work, they gradual transformed into nondiscussible assumptions supported lated sets of beliefs, norms, and operational rules of beh derived beliefs and moral and ethical rules remain conscio explicitly articulated because they serve the normativ function of guiding members of the group in how to dea tain key situations, and in training new members how to set of beliefs and values that become embodied in an i organizational philosophy thus can serve as a guide and dealing with the uncertainty of intrinsically uncontrollab cult events. An example of such an ideology is Hewlett The HP Way (Packard, 1995).

Beliefs and values at this conscious level will predic the behavior that can be observed at the artifacts level. B beliefs and values are not based on prior learning, they

actually do in situations in which those beliefs and values shou fact, be operating. Thus, a company may say that it values p and that it has high quality standards for its products, but its r in that regard may contradict what it says.

If the espoused beliefs and values are reasonably congruent the underlying assumptions, then the articulation of those v into a philosophy of operating can be helpful in bringing the g together, serving as a source of identity and core mission. B analyzing beliefs and values one must discriminate carefull tween those that are congruent with underlying assumption those that are, in effect, either rationalizations or only aspira for the future. Often such lists of beliefs and values are so abs that they can be mutually contradictory, as when a company c to be equally concerned about stockholders, employees, and tomers, or when it claims both highest quality and lowest Espoused beliefs and values often leave large areas of beh unexplained, leaving us with a feeling that we understand a of the culture but still do not have the culture as such in han get at that deeper level of understanding, to decipher the pat and to predict future behavior correctly, we have to unders more fully the category of basic underlying assumptions.

Basic Underlying Assumptions

When a solution to a problem works repeatedly, it comes taken for granted. What was once a hypothesis, supported on a hunch or a value, gradually comes to be treated as a reality come to believe that nature really works this way. Basic ass tions, in this sense, are different from what some anthropol called dominant value orientations in that such dominant o tations reflect the preferred solution among several basic alt tives, but all the alternatives are still visible in the culture, an

Basic assumptions, in the sense in which I want to d concept, have become so taken for granted that one finds ation within a social unit. This degree of consensus re repeated success in implementing certain beliefs and valu viously described. In fact, if a basic assumption comes to b held in a group, members will find behavior based on premise inconceivable. For example, a group whose basi tion is that the individuals rights supersede those of the gr bers would find it inconceivable that members would com or in some other way sacrifice themselves to the group e had dishonored the group. In a capitalist country, it is inc that one might design a company to operate consistently cial loss, or that it does not matter whether or not a prod In an occupation such as engineering, it would be inconc deliberately design something that is unsafe; it is a taken-f assumption that things should be safe. Basic assumptio sense, are similar to what Argyris has identified as th usethe implicit assumptions that actually guide beh tell group members how to perceive, think about, and things (Argyris, 1976; Argyris and Schn, 1974).

Basic assumptions, like theories-in-use, tend to be frontable and nondebatable, and hence are extremely change. To learn something new in this realm requires u rect, reexamine, and possibly change some of the more s tions of our cognitive structurea process that Argyris have called double-loop learning, or frame breaking ( al., 1985; Bartunek, 1984). Such learning is intrinsical because the reexamination of basic assumptions tempora bilizes our cognitive and interpersonal world, releasing l tities of basic anxiety.

Rather than tolerating such anxiety levels, we tend perceive the events around us as congruent with our ass

a set of basic assumptions defines for us what to pay attentio what things mean, how to react emotionally to what is goin and what actions to take in various kinds of situations. Onc have developed an integrated set of such assumptionsa tho world or mental mapwe will be maximally comfortable others who share the same set of assumptions and very uncom able and vulnerable in situations where different assumptions ate, because either we will not understand what is going o worse, we will misperceive and misinterpret the actions of o (Douglas, 1986).

The human mind needs cognitive stability; therefore, any lenge or questioning of a basic assumption will release anxiet defensiveness. In this sense, the shared basic assumptions that up the culture of a group can be thought of at both the indiv and the group level as psychological cognitive defense mecha that permit the group to continue to function. Recognizing this nection is important when one thinks about changing aspect groups culture, for it is no easier to do that than to change an viduals pattern of defense mechanisms. As was pointed out in C ter One, we can also think of culture at this level as the gr DNA, so if new learning or growth is required, the genes have there to make such growth possible and the autoimmune syste to be neutralized to sustain new growth. In any case, the two to successful culture change are (1) the management of the amounts of anxiety that accompany any relearning at this leve

(2) the assessment of whether the genetic potential for the learning is even present.

To illustrate how unconscious assumptions can distort consider the following example. If we assume, on the basis o experience or education, that other people will take advanta us whenever they have an opportunity, we expect to be t advantage of and we then interpret the behavior of others in

We perceive absence from work as shirking rather th work at home.

If this is not only a personal assumption but also o shared and thus part of the culture of an organization, w cuss with others what to do about our lazy workforce an tight controls to ensure that people are at their desks a employees suggest that they do some of their work at hom be uncomfortable and probably deny the request because ure that at home they would loaf (Bailyn, 1992; Perin, 1

In contrast, if we assume that everyone is highly mot competent, we will act in accordance with that assu encouraging people to work at their own pace and in thei If someone is discovered to be unproductive in such an tion, we will make the assumption that there is a mismatc the person and the job assignment, not that the person incompetent. If the employee wants to work at home, w ceive that as evidence of his wanting to be productive e cumstances required him to be at home.

In both cases there is the potential for distortion, in th ical manager will not perceive how highly motivated so subordinates really are, and the idealistic manager will no that there are subordinates who are lazy and who are taki tage of the situation. As McGregor noted many decades assumptions about human nature become the basis o ment and control systems that perpetuate themselves beca ple are treated consistently in terms of certain basic ass they come eventually to behave according to those assu order to make their world stable and predictable (McGre

Unconscious assumptions sometimes lead to ridiculo situations, as illustrated by a common problem exper American supervisors in some Asian countries. A ma comes from an American pragmatic tradition assumes a

tecting the superiors face are assumed to have top priority, th lowing scenario has often resulted.

The manager proposes a solution to a given problem. The ordinate knows that the solution will not work, but his uncons assumption requires that he remain silent because to tell the that the proposed solution is wrong is a threat to the bosss fa would not even occur to the subordinate to do anything other remain silent or, if the boss were to inquire what the subord thought, to even reassure the boss that they should go ahead take the action.

The action is taken, the results are negative, and the somewhat surprised and puzzled, asks the subordinate wh would have done. When the subordinate reports that he w have done something different, the boss quite legitimately asks the subordinate did not speak up sooner. This question puts the ordinate into an impossible double bind because the answer it a threat to the bosss face. He cannot possibly explain his beh without committing the very sin he was trying to avoid in th placenamely, embarrassing the boss. He may even lie at this and argue that what the boss did was right and only bad luc uncontrollable circumstances prevented it from succeeding.

From the point of view of the subordinate, the bosss beh is incomprehensible because it shows lack of self-pride, pos causing the subordinate to lose respect for that boss. To the bos subordinates behavior is equally incomprehensible. He ca develop any sensible explanation of his subordinates behavior is not cynically colored by the assumption that the subordina some level just does not care about effective performance and t fore must be gotten rid of. It never occurs to the boss that an assumptionsuch as one never embarrasses a superioris ating, and that, to the subordinate, that assumption is even powerful than one gets the job done.

given assumption. The power of culture comes about th fact that the assumptions are shared and, therefore, mut forced. In these instances probably only a third party or s cultural education could help to find common ground wh parties could bring their implicit assumptions to the sur even after they have surfaced, such assumptions would sti forcing the boss and the subordinate to invent a whole munication mechanism that would permit each to rema ent with his or her culturefor example, agreeing that, decision is made and before the boss has stuck his neck ou ordinate will be asked for suggestions and for factual data t not be face threatening. Note that the solution has to cultural assumption intact. One cannot in these instan declare one or the other cultural assumption wrong. O find a third assumption to allow them both to retain thei

I have dwelled on this long example to illustrate the implicit, unconscious assumptions and to show that suc tions often deal with fundamental aspects of lifethe nat and space, human nature and human activities, the natu and how one discovers it, the correct way for the individu group to relate to each other, the relative importance of ily, and self-development, the proper role of men and w the nature of the family. These assumptions form the co content as will be discussed in Chapters Seven, Eight, an

We do not develop new assumptions about each of t in every group or organization we join. Members of any will bring their own cultural learning from prior groups, education, and from their socialization into occupationa nities, but as the new group develops its own shared hist develop modified or brand-new assumptions in critical experience. It is those new assumptions that make up the that particular group.

pher the pattern of basic assumptions that may be operating will not know how to interpret the artifacts correctly or how credence to give to the articulated values. In other words, th sence of a culture lies in the pattern of basic underlying ass tions, and once one understands those, one can easily under the other more surface levels and deal appropriately with the

Summary and Conclusions

Though the essence of a groups culture is its pattern of shared, taken-for-granted assumptions, the culture will manifest itself a level of observable artifacts and shared espoused beliefs and v In analyzing cultures, it is important to recognize that artifac easy to observe but difficult to decipher and that espoused belief values may only reflect rationalizations or aspirations. To under a groups culture, one must attempt to get at its shared basic ass tions and one must understand the learning process by which basic assumptions come to be.

Leadership is originally the source of the beliefs and values get a group moving in dealing with its internal and external lems. If what leaders propose works, and continues to work, once were only the leaders assumptions gradually come to be s assumptions. Once a set of shared basic assumptions is form this process, it can function as a cognitive defense mechanism for the individual members and for the group as a whole. In words, individuals and groups seek stability and meaning. achieved, it is easier to distort new data by denial, projectio tionalization, or various other defense mechanisms than to ch the basic assumption. As we will see, culture change, in the of changing basic assumptions is, therefore, difficult, time-suming, and highly anxiety-provokinga point that is espe

deeper levels of a culture, how to assess the functiona assumptions made at that level, and how to deal with t that is unleashed when those levels are challenged.

C U LT U R E S I N O R G A N I Z AT I O N

T W O C A S E E X A M P L E S

In the last chapter I indicated in a rather abstract manne should think about the complex concept of culture as it groups, occupations, and organizations. I emphasized the beyond the surface levels of artifacts and espoused belie ues to the deeper, taken-for-granted shared assumptions t the pattern of cognitions, perceptions, and feelings displa members of the group. Unless one understands what is g this deeper level, one cannot really decipher the mean more surface phenomena, and, worse, one might misinter because of the likelihood that one will be projecting one tural biases onto the observed phenomena.

In this chapter I would like to illustrate this multilevel describing two companies with whom I worked for some time, permitting me to begin to identify some key eleme cultures. I say elements because it is not really possible to d entire culture. But one can get at enough elements to ma the key phenomena in these companies comprehensible.

The Digital Equipment Corp.

Digital Equipment Corp. (DEC) will be a major cas throughout this book because it not only illustrates aspe one describes and analyzes organizational culture, but a some important cultural dynamics that explain both DE the position of number two computer company in the wo rapid decline in the 1990s (Schein, 2003). I was a consul

over a long period of time.

Artifacts: Encountering the Company

DEC was the first major company to introduce interactive com ing, and it became a very successful manufacturer, initially of came to be called mini computers and eventually of a whol of computer products. It was located primarily in the northea part of the United States, with headquarters in an old mill in nard, Massachusetts, but it had branches throughout the worl its peak it employed over 100,000 people, with sales of $14 bi in the mid-1980s it became the second largest computer man turer in the world after IBM. The company ran into major fina difficulties in the 1990s and was eventually sold to the Co Corp. in 1998. Compaq was in turn merged into Hewlett-Pa in 2001.

To gain entry into any of DECs many buildings, one had to in with a guard who sat behind a counter where there were us several people chatting, moving in and out, checking the bad employees who were coming into the building, accepting mail answering phone calls. Once one had signed in, one waited small, casually furnished lobby until the person one was vis came personally or sent a secretary to escort one to ones destina

What I recall most vividly from my first encounters with organization some thirty-eight years ago is the ubiquitous ope fice architecture, the extreme informality of dress and mann very dynamic environment in the sense of rapid pace, and a rate of interaction among employees, seemingly reflecting ent asm, intensity, energy, and impatience. As I would pass cubic conference rooms, I would get the impression of openness. T were very few doors. The company cafeteria spread out into open area where people sat at large tables, hopped from one

be part of most meetings.

The physical layout and patterns of interaction made ficult to decipher who had what rank, and I was told that no status perquisites such as private dining rooms, speci places, or offices with special views and the like. The fu the lobbies and offices was very inexpensive and function company was mostly headquartered in an old industria that had been converted for their use. The informal clot by most managers and employees reinforced this sense o and egalitarianism.

I had been brought into DEC to help the top manage improve communication and group effectiveness. As I b tend the regular staff meetings of the senior manageme was quite struck by the high level of interpersonal conf argumentativeness, and conflict. Group members beca emotional at the drop of a hat and seemed to get ang other, though it was also noticeable that such anger did over outside the meeting.

With the exception of the president and founder, K there were very few people who had visible status in ter people deferred to them. Olsen himself, through his inf havior, implied that he did not take his position of pow seriously. Group members argued as much with him as other and even interrupted him from time to time. His show up, however, in the occasional lectures he delive group when he felt that members were not understand thing or were wrong about something. At such times O become very emotionally excited in a way that other m the group never did.

My own reactions to the company and these meeting to be considered as artifacts to be documented. It was exc attending top management meetingsand surprising to

in Chapter One. I learned from further observation that this st running meetings was typical and that meetings were very com to the point where people would complain about all the time in committees. At the same time, they would argue that wit these committees they could not get their work done properly.

The company was organized in terms of functional unit product lines, but there was a sense of perpetual reorganizatio a search for a structure that would work better. Structure viewed as something to tinker with until one got it right. There many levels in the technical and managerial hierarchy, but I go sense that the hierarchy was just a convenience, not somethi be taken very seriously. On the other hand, the communic structure was taken very seriously. There were many commi already in existence and new ones were constantly being forme company had an extensive electronic mail network that functi worldwide, engineers and managers traveled frequently and we constant telephone communication with each other, and Olsen get upset if he observed any evidence of under- or miscommunica

Many other artifacts from this organization will be desc later but, for the present, this will suffice to give a flavor of w encountered at DEC. The question now is, what does any mean? I knew what my emotional reactions were, but I di really understand why these things were happening and wha nificance they had for members of the company. To gain understanding one has to get to the next level: the level of esp beliefs and values.

Espoused Beliefs and Values

As I talked to people at DEC about my observations, espe those things that puzzled and scared me, I began to elicit so the espoused beliefs and values by which the company ran.

made a proposal to do something and it was approved, clear obligation to do it or, if it was not possible to do, to and renegotiate. The phrase He who proposes, does quently heard around the organization.

Employees at all levels were responsible for thinking a they were doing and were enjoined at all times to do thing, which, in many instances, meant being insubordi boss asked you to do something that you considered wro pid, you were supposed to push back and attempt to c bosss mind. If the boss insisted, and you still felt that right, then you were supposed to not do it and take your c your own judgment. If you were wrong, you would get slapped but would gain respect for having stood up for convictions. Because bosses knew these rules they were, less likely to issue arbitrary orders, more likely to listen to pushed back, and more likely to renegotiate the decision insubordination was rarely necessary, but the principle o for yourself and doing the right thing was very strongly r

It was also a rule that you should not do things witho buy-in from others who had to implement the decision to provide needed services, or who would be influenced had to be very individualistic and, at the same time, very be a team player; hence the simultaneous feeling that c were a big drain on time but one could not do without reach a decision and to get buy-in, one had to convinc the validity of ones idea and be able to defend it against ceivable argument. This caused the high levels of con and fighting that I observed in groups, but once an idea up to this level of debate and survived, it could then be ward and implemented because everyone was now conv it was the right thing to do. This took longer to achieve achieved, led to more consistent and rapid action. If s

had to be convinced or the decision had to be renegotiated u hierarchy.

In asking people about their jobs, I discovered another st value: one should figure out for oneself what the essence of one was and get very clear about it. Asking the boss what was exp was considered a sign of weakness. If ones own job definitio out of line with what the group or department required, one w hear about it soon enough. The role of the boss was to set broa gets, but subordinates were expected to take initiative in fig out how best to achieve them. This value required a lot of di sion and negotiation, which often led to complaints about wasting, but, at the same time, everyone defended the val doing things in this way, and continued to defend it even thou created difficulties later at DECs life.

I also found out that people could fight bitterly in group ings, yet be very good friends. There was a feeling of being a t knit group, a kind of extended family under a strong father fi Ken Olsen, which led to the norm that fighting does not mean people dislike or disrespect each other. This norm seemed to ex even to bad-mouthing each other: people would call each stupid behind each others backs or say that someone was turkey or jerk, yet they would respect each other in work s tions. Olsen often criticized people in public, which made the embarrassed, but it was explained to me that this only meant the person should work on improving his area of operations that he was really in disfavor. Even if someone fell into disfav or she was viewed merely as being in the penalty box; stories told of managers or engineers who had been in this kind of dis for long periods of time and then rebounded to become hero some other context.

When managers talked about their products they empha quality and elegance. The company was founded by engineer

or test markets. In fact, customers were talked about in a paraging way, especially those who might not be technica ticated enough to appreciate the elegance of the produc been designed.

Olsen emphasized absolute integrity in designing, m ing, and selling. He viewed the company as highly ethi strongly emphasized the work values associated with the work ethichonesty, hard work, high standards of perso ity, professionalism, personal responsibility, integrity, an Especially important was being honest and truthful in tions with each other and with customers. As this com and matured it put many of these values into formal state taught them to new employees. They viewed their cultur asset and felt that the culture itself had to be taught employees (Kunda, 1992).

Basic Assumptions: The DEC Paradigm

To understand the implications of these values and to they relate to overt behavior, one must seek the underlyin tions and premises on which this organization was base ures 3.1 and 3.2).

The founding group, by virtue of their engineering ba was intensely individualistic and pragmatic in its orienta developed a problem solving and decision making sy rested on five interlocking assumptions:

1. The individual is ultimately the source of ideas and e neurial spirit.

2. Individuals are capable of taking responsibility and d right thing.

Entrepreneurial spirit Push back and get bu

Technical innovation

Work is fun

Do the right thing Paternalistic family

He who proposes, does Job security

Individual responsibility

Copyright E. H. Schein. DEC Is Dead; Long Live DEC. Berrett-Koehler, 2003.

3. No one individual is smart enough to evaluate his or her ideas, hence one should push back and get buy-in. (In effe the group was saying that truth cannot be found withou debate; that there is no arbitrary way of figuring out what true unless one subjects every idea to the crucible of deba among strong and intelligent individuals; therefore, one m get others to agree before taking action.)

4. The central assumption: the basic work of the company is technological innovation and such work is and always sh be fun.

Without understanding these first four assumptions, one ca decipher most of the behavior observed, particularly the see incongruity between intense individualism and intense com ment to group work and consensus. Similarly, one cannot u

hierarchical boundaries, without also understanding the locking assumption:

5. We are one family whose members will take care of e other (implying that no matter how much of a troub one was in the decision process, one was valued in th and could not be kicked out of it).

It is only when one grasps these first five assumption can understand, for example, why my initial intervention to get the group to be nicer to each other in the comm process were politely ignored. I was seeing the groups ness in terms of my values and assumptions of how a go should act. The DEC senior management committee wa reach truth and make valid decisions in the only way how and by a process that they believed in. The group w a means to an end; the real process going on in the gr basic, deep search for solutions in which they could h dence because they stood up even after intense debate.

Once I shifted my focus to helping them in this searc solutions, I figured out what kinds of interventions would b evant and I found that the group accepted them more r example, I began to emphasize agenda setting, time ma clarifying some of the debate, summarizing, consensus te debate was running dry, and in other ways focused more o process rather than the interpersonal process. The interru emotional conflicts, and the other behavior I observed ini tinued, but the group became more effective in its handlin mation and in reaching consensus. It was in this cont gradually developed the philosophy of being a process c instead of trying to be an expert on how groups should wor 1969, 1988, 1999a, 2003).

beliefs and values pertaining to customers and marketing:

6. The only valid way to sell a product is to find out what the customers problem is and to solve that problem, even if that means selling less or recommending another comp products.

7. People can and will take responsibility and continue to ac responsibly no matter what.

8. The market is the best decision maker if there are several product contenders (internal competition was viewed as desirable throughout DECs history).

Figure 3.2. DECs Cultural Paradigm: Part Two.

Moral commitmentInternal competitio

to solving the Let the market

customers problemdecide

Engineering arrogance

We know what is best

Idealism Keep central cont

Responsible people of good will can

solve the problem

Copyright E. H. Schein. DEC Is Dead; Long Live DEC. Berrett-Koehler, 2003.

10. DEC engineers know best what a good product is, on whether or not they personally like working with product.

These ten assumptions can be thought of as the DE paradigmits cultural DNA. What is important in sho interconnections is the fact that single elements of the could not explain how this organization was able to funct only by seeing the combination of assumptionsaround creativity, group conflict as the source of truth, individua bility, commitment to each other as a family, commitmen vation and to solving customer problems, and belief i competition and central controlthat one could explai to-day behavior one observed. It is this level of basic as and their interconnections that defines some of the esse culturethe key genes of the cultural DNA.

How general was this paradigm in Digital? That is, i to study workers in the plants, salesmen in geographica units, engineers in technical enclaves, and so on, woul the same assumptions operating? One of the interesting the DEC story is that at least for its first twenty or so yea adigm would have been observed in operation across all levels, functions, and geographies. But, as we will also some elements of the DEC culture began to change and digm no longer fitted in some parts of the company.

Ciba-Geigy

The Ciba-Geigy Company in the late 1970s and early 1 Swiss multidivisional, geographically decentralized chem pany with several divisions dealing with pharmaceuticals, a chemicals, industrial chemicals, dyestuffs, and some techni consumer products. It eventually merged with a former c

into a variety of consulting activities that lasted into the mid-1 Some of these are described in greater detail in Chapter Eigh

ArtifactsEncountering Ciba-Geigy

I learned during my initial briefings that the company was run board of directors and an internal executive committee of nine ple who were legally accountable as a group for company decis The chairman of this executive committee, Sam Koechlin, tioned as the chief executive officer, but the committee made decisions by consensus.

Each member of the committee had oversight responsibili a division, a function, and a geographic area, and these resp bilities rotated from time to time. The company had a long hi of growth and had merged with another similar company a de or more ago. The merger of Ciba and Geigy was considered to success, but there were still strong identifications with the ori companies, according to many managers.

My original clients were the director of management dev ment, Dr. Jurg Leupold, and his immediate boss, Sam Koec who was clearly the originator of the project I became involve Ciba-Geigy ran annual meetings of their top forty to fifty execu worldwide and had a tradition of inviting one or two outsid the three-day meetings held at a Swiss resort. The purpose w stimulate the group by having outside lecturers present on top interest to the company.

I was originally contacted by Dr. Leupold by phone; he a me to give lectures and do some structured exercises to improv groups understanding of creativity and to increase innova and leadership in the company. Prior to the annual meeting to visit the company headquarters to be briefed, to meet some key executivesespecially Koechlinand to review the ma

had encountered at DEC. I was immediately struck by t ity as symbolized by large gray stone buildings and stiff guards in the main lobby. This spacious, opulent lobby wa passageway for employees to enter the inner compoun buildings and plants. It had high ceilings, large heavy d few pieces of expensive modern furniture in one corner a waiting area.

(I should point out that I reacted differently to the C and DEC environments. I liked the DEC environmen doing a cultural analysis, ones reactions are themselves the culture that must be acknowledged and taken into a would be impossible and undesirable to present any cult sis with total objectivity because ones emotional reac biases are also primary data to be analyzed and understoo

Upon entering the Ciba-Geigy lobby, I was asked b forme