Schein's Three Levels of Culture: Artifacts, Espoused Values, and Deep Assumptions

"Culture is a pattern of shared basic assumptions learned by a group as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, and feel in relation to those problems." — Edgar H. Schein, Organizational Culture and Leadership (2010)

Executive Summary

Edgar Schein's framework for understanding organizational culture stands as one of the most influential contributions to organizational psychology in the past half-century. First articulated in his 1985 landmark book Organizational Culture and Leadership and refined through subsequent editions, Schein's model distinguishes between three levels of culture that differ in visibility, accessibility, and resistance to change.

By separating artifacts (what you can see), espoused values (what people say), and basic underlying assumptions (what people unconsciously believe), Schein provides leaders with a diagnostic framework for understanding why organizations behave the way they do—and why culture change is so notoriously difficult. The model's enduring value lies in its explanatory power: it helps leaders understand why surface-level interventions so often fail and what deeper work is required for genuine cultural transformation.

This article examines each level in depth, explores their interrelationships, reviews empirical validation of the framework, and provides practical guidance for culture diagnosis and change.

Level 1: Artifacts—The Visible Surface

Artifacts are the most readily observable manifestations of organizational culture—what you can see, hear, and feel when you enter an organization. They are the tangible, sensory evidence of culture, accessible to any visitor or new employee from their first day. Artifacts include:

• Physical artifacts: Office layout and design, dress codes, architecture, technology deployment, workspace organization, and physical symbols like logos and artwork

• Language and communication: Jargon, acronyms, communication patterns, email styles, and the vocabulary used to describe work, people, and challenges

• Organizational stories and myths: The stories told about founders, pivotal moments, heroes, and villains that encode cultural lessons

• Rituals and ceremonies: Meeting structures, celebration practices, recognition events, onboarding experiences, and recurring organizational rhythms

• Observable behaviors: How people interact, what behaviors are rewarded, how conflicts are handled, and how decisions are made

The Interpretation Challenge: The defining characteristic of artifacts is that they are highly visible but often ambiguous in meaning. An open office layout might reflect a genuine commitment to collaboration—or it might represent cost reduction, executive desire for surveillance, or simply architectural fashion. You cannot determine which interpretation is correct by observing the artifact alone.

This ambiguity creates a common trap for culture assessment: leaders observe artifacts and infer cultural meaning without testing their interpretations. The visitor who sees casual dress and concludes "this is an egalitarian culture" may be entirely wrong—the casual dress might coexist with rigid hierarchy. Accurate culture diagnosis requires moving beyond artifacts to understand the values and assumptions that give them meaning.

Level 2: Espoused Values—The Stated Beliefs

Espoused values are the explicitly articulated values, norms, and beliefs that leadership promotes and the organization officially endorses. They represent what the organization says it stands for, typically formalized in:

• Mission statements, vision documents, and corporate values declarations

• Codes of conduct, ethics policies, and behavioral guidelines

• Management philosophies and leadership principles

• Strategic priorities, stated goals, and publicly announced commitments

• Training content, performance evaluation criteria, and promotion standards

The Values-Action Gap: Research consistently documents that espoused values frequently diverge from actual organizational behavior—what scholars call the "values-action gap" or "rhetoric-reality gap." An organization might proclaim that "employees are our greatest asset" while maintaining policies that treat people as interchangeable costs. A company might espouse "innovation" while punishing the risk-taking that innovation requires.

Survey data suggests that approximately 90% of organizations have written value statements, but alignment between espoused values and actual behavior varies dramatically. In some organizations, stated values accurately predict behavior; in others, they function as aspirational marketing disconnected from operational reality.

Key Insight: Espoused values represent what the organization says it values, not necessarily what it actually values in practice. The gap between espoused and enacted values is one of the most important diagnostic signals in culture assessment—it reveals where cultural work is needed.

Level 3: Basic Underlying Assumptions—The Invisible Foundation

The deepest level of culture consists of unconscious, taken-for-granted beliefs that members hold without awareness or reflection. These basic assumptions are so deeply embedded that they feel like reality rather than beliefs—they are "the way things are" rather than "what we believe about how things are."

Schein identifies several domains where basic assumptions operate:

• Assumptions about human nature: Are people inherently trustworthy or must they be controlled? Are they motivated by intrinsic satisfaction or external rewards? Are they capable of growth or fundamentally fixed?

• Assumptions about relationships: Should relationships be hierarchical or egalitarian? Should work be collaborative or competitive? How much personal connection belongs in professional settings?

• Assumptions about time: Is the organization oriented toward past traditions, present realities, or future possibilities? What time horizons matter for planning and evaluation?

• Assumptions about truth and reality: How do we determine what is true? Through data, authority, tradition, or consensus? What counts as evidence?

• Assumptions about power and authority: How should decisions be made? Who has legitimate authority? How should power be distributed?

The Invisibility of Assumptions: The defining characteristic of basic assumptions is their unconscious, invisible nature. A team member operating with an assumption that "internal competition drives excellence" wouldn't articulate this as a belief—they would simply behave competitively because competition seems natural, obvious, and "how things should work." The assumption operates below conscious awareness.

This invisibility explains why culture change is so difficult. You cannot change beliefs that people don't know they hold. Surface-level interventions—new posters, revised mission statements, restructured org charts—leave basic assumptions untouched. And because assumptions drive interpretation of everything else, unchanged assumptions will eventually reassert traditional patterns.

The Iceberg Model: How the Levels Interact

Schein's framework is often visualized as an iceberg, with different proportions visible above and below the waterline:

• Artifacts sit at the waterline—fully visible to any observer, but representing only a small portion of cultural reality

• Espoused values sit just below the surface—partially visible through documents and statements, but requiring some investigation to uncover

• Basic assumptions form the massive underwater foundation—invisible from the surface, but determining the position and stability of everything above

The metaphor captures a crucial insight: what you can see directly tells an incomplete and potentially misleading story. The real drivers of organizational behavior lie beneath the surface, invisible to casual observation but determining everything that happens above.

The levels also interact dynamically. Basic assumptions shape which values get espoused (organizations don't espouse values inconsistent with deep beliefs). Espoused values guide artifact creation (office design reflects stated priorities). But the relationship isn't always consistent—gaps between levels create cultural tension and diagnostic opportunity.

Empirical Validation

Schein's framework has been extensively validated through both qualitative case studies and quantitative research. A comprehensive validation study conducted across four Ugandan universities (N = 231 managers) confirmed that all three dimensions—artifacts, espoused values, and basic assumptions—function as valid, distinct measures of organizational culture consistent with Schein's theory.

Structural equation modeling using PLS-SEM confirmed that the three constructs appropriately measure organizational culture as theorized, with acceptable reliability (Cronbach's α > 0.70 across all dimensions) and convergent validity. Factor analysis demonstrated that items clustered appropriately within their theoretical levels, supporting the distinctiveness of the three-level structure.

Why Culture Change Fails—And What Works

Schein's framework explains why most culture change efforts fail: they target only visible levels while leaving basic assumptions untouched. Leaders announce new values, redesign office spaces, launch training programs—all artifact and espoused value interventions—while the underlying assumptions that drove the old culture remain intact.

The result is what might be called "rhetoric without reality"—new posters on walls while behavior remains unchanged. Employees quickly learn that the new values are performative, creating cynicism that makes future change efforts even harder.

What actually works requires intervention at all three levels:

• Surface basic assumptions through dialogue: Facilitated conversations that help members articulate unconscious beliefs and examine whether those beliefs still serve the organization

• Align espoused values with desired assumptions: Ensure stated values reflect the new assumptions, not merely aspirational rhetoric

• Model new behaviors from leadership: Leaders must embody new assumptions in their own behavior, demonstrating that the change is real

• Design artifacts that reinforce new assumptions: Physical spaces, rituals, and symbols should embody the desired culture

• Create new stories and heroes: Identify and celebrate examples of the new culture in action, creating narrative proof that change is real

Practical Application: Diagnosing Your Organization's Culture

Step 1 — Surface Artifacts: Walk through your organization as if you were a visitor. What do you observe? Document physical design, language patterns, rituals, behavioral norms, and symbols. Note what artifacts seem consistent with each other and which seem contradictory.

Step 2 — Identify Espoused Values: Collect official value statements, mission documents, strategic priorities, and leadership communications. What does the organization say it values? What behaviors are officially encouraged and discouraged?

Step 3 — Surface Basic Assumptions: This is the hardest step—surfacing beliefs that members hold without awareness. Ask: "What assumptions about human nature, relationships, time, truth, and power would explain the patterns we observe?" This often requires external facilitation and deep, reflective dialogue.

Step 4 — Assess Alignment: Map the relationships between levels. Do artifacts reflect espoused values? Do espoused values reflect actual assumptions? Where are the gaps? Gaps reveal where cultural work is needed—and where change efforts are likely to encounter resistance.

Ready to Diagnose Your Organization's Culture?

Organization Learning Labs offers comprehensive culture assessments using Schein's three-level framework, including diagnostic interviews to surface basic assumptions, artifact analysis, values-behavior gap assessment, and strategic guidance on culture change initiatives. Contact us at research@organizationlearninglabs.com.

References

Chatman, J. A., & O'Reilly, C. A. (2016). Paradigm lost: Reinvigorating the study of organizational culture. Research in Organizational Behavior, 36, 199-224.

Hatch, M. J. (1993). The dynamics of organizational culture. Academy of Management Review, 18(4), 657-693.

Schein, E. H. (1985). Organizational culture and leadership. Jossey-Bass.

Schein, E. H. (2010). Organizational culture and leadership (4th ed.). Jossey-Bass.

Schein, E. H., & Schein, P. A. (2017). Organizational culture and leadership (5th ed.). Wiley.