## **Learning Outcomes**

After reading this article, you will be able to explain Schein’s model of organisational culture, including its three levels: artefacts, espoused values, and basic assumptions. You will be able to identify practical examples of each level, describe why culture is often difficult to change, and apply Schein’s framework to analyse real-world business scenarios. You will also understand why recognising different levels of culture is important for business effectiveness and change management.

## **ACCA Business and Technology (BT) Syllabus**

For ACCA Business and Technology (BT), you are required to understand different models of organisational culture and how they apply to business operations and management. In particular, this article addresses the following syllabus points:

- Define organisational culture and explain its significance in business.
- Describe factors that shape the culture within organisations.
- Explain Schein’s three levels of culture: artefacts, espoused values, and basic foundational assumptions.
- Illustrate the practical implications of culture for staff behaviour, communication, and resistance to change.
- Identify challenges in changing organisational culture and common issues faced by new employees.
- Apply Schein’s model to analyse cultural problems in business case scenarios.

## **Test Your Knowledge**

_Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision._

1. According to Schein, which of the following is an example of an artefact?
   a) A published company mission statement  
   b) The organisation’s official logo  
   c) Employees’ core beliefs about customer service  
   d) Unspoken workplace attitudes

2. Which level of Schein’s model is usually hardest for new employees to understand and accept?

3. Schein argued organisational culture is strongly shaped by:
   a) Technology  
   b) Leadership  
   c) Products  
   d) Office location

4. True or false? Espoused values are always the same as the real values held by an organisation’s staff.

## **Introduction**

Organisational culture refers to shared rules, beliefs, and behaviours that influence how members of an organisation interact. Schein’s model helps us to understand culture as a multilayered phenomenon that shapes staff behaviour, expectations, and responses to change.

A clear understanding of these layers is essential when managing people, onboarding new staff, or implementing organisational change. Schein’s approach is frequently examined and provides a basis for analysing real-world business problems.

> **Key Term: organisational culture**
> The collection of shared values, beliefs, and practices that influence how people within an organisation act and interact.

## Schein’s Three Levels of Organisational Culture

Edgar Schein identified that culture exists at three separate levels, each differing in visibility, awareness, and difficulty of change.

### 1. Artefacts (Visible Organisational Features)

Artefacts are the observable elements of an organisation’s culture. These are the aspects you can see, hear, or touch as soon as you enter the business. Artefacts may include physical layout, dress codes, office design, language and jargon, rituals, ceremonies, and organisational stories.

> **Key Term: artefacts**
> The visible and tangible elements of an organisation’s culture, such as dress codes, symbols, office layout, and observable daily behaviours.

### 2. Espoused Values (Stated Values and Beliefs)

Espoused values are the formal values and rules that the organisation says it believes in. These are typically captured in vision statements, internal policies, slogans, and official codes of conduct. Espoused values provide direction and can guide staff in making decisions, but in practice these values are not always consistently followed.

> **Key Term: espoused values**
> The explicitly stated rules, values, and beliefs publicised by an organisation through official statements, policies, and public communication.

### 3. Basic Foundational Assumptions (Unconscious Beliefs)

Basic assumptions are the deeply-held convictions that are taken for granted and are often so ingrained that they are difficult to explain to outsiders. They represent the “real” beliefs that guide employee behaviour, often without conscious thought. Basic assumptions operate at the subconscious level and can concern areas such as how to treat customers, the purpose of the organisation, or the value placed on innovation or teamwork.

> **Key Term: basic foundational assumptions**
> Unconscious, taken-for-granted beliefs that are ingrained within an organisation and guide behaviour without explicit awareness.

## The Relationship Between the Levels

While artefacts are easy to see, they are the most superficial indicators of culture. Espoused values give clues about what the organisation claims to value. However, only by understanding the basic assumptions can we fully explain why staff behave in a certain way—even when that differs from written rules.

New staff often find it easy to follow policies but struggle to fit in until they understand the unspoken expectations and tacit rules. Large culture changes are difficult because basic assumptions may conflict with what leaders want to encourage.

> **Exam Warning**
> Do not assume that written mission statements always reflect actual behaviour within the business. Schein’s model shows there can be differences between what is stated (espoused values) and what happens in practice (basic assumptions).

## Application of Schein’s Model

### Analysis of Business Behaviour

Schein’s model is particularly useful in analysing why organisational change is accepted or resisted. For example, a company may encourage risk-taking (espoused value) but if the fundamental assumption is that mistakes are punished, employees may avoid innovation.

### **Worked Example 1.1**

**A multinational company’s policy says “customer satisfaction is our top priority.” However, frontline staff take longer breaks and rarely respond quickly to customer complaints. To understand the disconnect, which of Schein’s levels should be examined?**

> **Answer:** The gap between espoused values (“customer satisfaction is our top priority”) and basic foundational assumptions (staff may believe their own convenience takes priority, or that management does not really care about service) explains the observed behaviour.

### **Worked Example 1.2**

**A new employee is surprised to discover that although there is a formal dress code, most colleagues wear casual clothes unless clients visit. Why might this occur?**

> **Answer:** The physical dress code is an artefact. The true day-to-day expectation (an informal norm) is defined by basic assumptions held by existing staff, rather than the written policy.

## Why Schein’s Model Matters to Businesses

- Identifies mismatches between official policies and real behaviour.
- Highlights why some staff resist change.
- Assists new employees in understanding how to fit in.
- Provides a tool for analysing cultural unification post-merger or restructuring.

## Changing Organisational Culture

Basic assumptions are hardest to change. Leadership commitment, clear role modelling, and gradual reinforcement are required for meaningful cultural change. Surface changes (artefacts or policies) alone rarely alter behaviour if basic assumptions remain unexamined.

### **Revision Tip**

To answer scenario questions, always explain which of Schein’s three levels each example relates to and give a practical indication of why mismatches matter.

## **Summary**

Schein’s model offers a structured way of examining the visible and invisible parts of organisational culture. Recognising the distinction between artefacts, espoused values, and basic assumptions enables managers—and ACCA exam candidates—to analyse why staff act the way they do, predict resistance to change, and target effective business solutions.

## **Key Point Checklist**

_This article has covered the following key knowledge points:_

- Define Schein’s three levels of culture: artefacts, espoused values, and basic foundational assumptions
- Give practical examples of each level within a business
- Explain how differences between levels can cause problems for new staff or during change
- Discuss why changing basic assumptions is slow and difficult
- Use Schein’s model to analyse real organisational behaviour and exam scenarios

## **Key Terms and Concepts**

- organisational culture
- artefacts
- espoused values
- basic foundational assumptions

Organisational culture models - Schein levels of culture