Organizational Culture is the set of shared values and beliefs that underlie a company’s identity.
You might, for example, describe an organizational culture you’ve worked in as competitive, laid
back, stressful, or bureaucratic.
When you think about the indicators of the organization’s culture, you might identify traditions,
rituals, mascots, or a host of other indicators.
Figure 3-1 shows the importance of organizational culture on individual, group and organizational
behavior. The roots of an organization’s culture are driven by the founder’s and senior leaders’
values, the culture of the nation, and the particular industry and business environment.
Now, let’s look at the organizational culture box of the figure to understand its three components:
observable artifacts, espoused values, and basic assumptions.
Layers of Organizational Culture
Organizational Culture can be described as having three layers. Examples of observable artifacts
include dress, awards, myths and stories, published lists of values, observable rituals and
ceremonies, and visible behavior exhibited by people and groups.
Values are the enduring beliefs in a mode or conduct or end-state. The two types of values are
espoused— those that are the organization’s stated values that define the expectations of its
employees—and enacted— the values and norms exhibited by employees. Organizational
cynicism and low morale may occur when an organization acts counter to its espoused values.
For example, a company that states that they value work/family balance and then calls a weekend
meeting for managers.
One value more companies are espousing today is "sustainability" - meeting humanity’s needs
without harming future generations. Companies like Toyota, Nokia, ING, SONY, Hewlett-Packard,
and GSK are highly committed to sustainability whereas Wal-Mart, General Motors are lagging
Basic assumptions represent the core of the organizational culture that are ingrained and
understood by everyone. To act counter to them would be inconceivable. For example, Southwest
Airlines assumption is that employees’ welfare and providing high quality service is paramount to