Business and Technology · Organisational culture

Meaning and Levels of Organisational Culture Explained

Updated 11 October 2026 · Fact-checked

Organisational culture is the set of shared values, beliefs and assumptions that shape how people in a business think and behave. Schein describes three levels: artefacts (visible), espoused values (stated) and basic underlying assumptions (hidden). To answer BT questions, name the level, then link it to a clear example.

Understand Meaning and Levels of Organisational Culture

Organisational culture is the 'way we do things here'. It is the shared values, beliefs, assumptions and habits that a group of people in a business hold in common. Nobody has to write them down. New staff pick them up by watching others.

Culture shows up in everyday things: how people dress, how decisions are made, whether staff challenge their boss, how mistakes are treated, and how customers are spoken to. Two firms in the same industry can feel completely different because their cultures differ.

Edgar Schein explained that culture has three levels, like an iceberg. The top level is easy to see. The deeper levels are harder to see but have more influence on behaviour.

Artefacts: the visible things. Office layout, dress code, logos, ceremonies, language and stories.
Espoused values: what the organisation says it believes. Mission statements, codes of conduct and stated strategies.
Basic underlying assumptions: deep, taken-for-granted beliefs that people no longer question. They drive behaviour without anyone noticing.

A gap can exist between levels. A firm may state 'we value teamwork' (espoused value) while rewarding only individual sales and promoting people who compete (the real assumption). In BT, spotting that gap is often the point of the question.

Key formulas to remember

Definition of culture: Culture = shared values + beliefs + assumptions + visible behaviour; Use this wording to open any definition answer.
Schein's three levels: Artefacts (visible) → Espoused values (stated) → Basic underlying assumptions (hidden); Go from surface to deep. Assumptions are the hardest to see and to change.

How to solve Meaning and Levels of Organisational Culture questions

Use this method for any question on the meaning or levels of culture.

1Read the question and decide what is asked: a definition, an example, or a level.
2State the idea in one line: culture is shared values, beliefs and assumptions that shape behaviour.
3If the question describes a feature of the business, ask: can I see it, was it stated, or is it an unspoken belief?
4Match it to the level: visible means artefact, stated means espoused value, taken for granted means basic assumption.
5Check the scenario for a mismatch between what is said and what is done.
6Choose the option that fits the exact wording. Ignore options that describe structure or strategy instead of culture.

Quickest way: See, Say, Assume

When to use it: Use when a multiple choice question asks you to identify the level of culture in a short scenario.

See: if you could photograph or observe it, it is an artefact.
Say: if it appears in a mission statement or policy document, it is an espoused value.
Assume: if it is an unwritten belief that people act on without thinking, it is a basic underlying assumption.
Pick the option that matches and eliminate the other two levels.

Common mistakes in Meaning and Levels of Organisational Culture

Treating a mission statement as the real culture.
Students assume what a firm says is what it does.
Fix: A mission statement is an espoused value. Real culture is shown by behaviour and the assumptions behind it.
Placing dress code or office layout at the assumptions level.
Students think anything important must be deep.
Fix: Anything visible is an artefact, however important it seems.
Confusing culture with structure.
Both appear in the same chapter and both affect how people work.
Fix: Structure is formal reporting lines. Culture is shared beliefs and behaviour. Use the right word.
Saying a business has only one culture.
Textbook examples describe a single culture.
Fix: Large firms often have subcultures in departments or countries. Mention this when the scenario hints at it.
Giving a definition with no example.
Students rush and memorise only the wording.
Fix: Add one short example, such as how staff treat mistakes or customers.

Worked examples

Example 1

A company's mission statement says 'We put customers first'. Staff, however, routinely ignore complaints because managers only reward sales volume. Which level of Schein's model does the mission statement represent, and what does the staff behaviour suggest?

Show the solution

The mission statement is written and stated publicly.
Stated beliefs are espoused values.
Staff ignore complaints and managers reward sales volume only.
That behaviour shows the real, unspoken belief: sales matter more than customers.
This is the basic underlying assumption, and it conflicts with the espoused value.

Answer: The mission statement is an espoused value. The behaviour suggests a different basic underlying assumption, so there is a gap between stated and actual culture.

Example 2

Explain what is meant by organisational culture and give one example of an artefact.

Show the solution

Define culture: the shared values, beliefs and assumptions that shape how people in a business behave.
Add the plain meaning: 'the way we do things here'.
Define an artefact: a visible sign of culture.
Give an example: an open-plan office where managers sit with staff, which signals a culture of openness.
Link back: the artefact is the top level of Schein's model, and it reflects deeper values.

Answer: Organisational culture is the shared values, beliefs and assumptions that shape behaviour in a business. An open-plan office with managers sitting among staff is an artefact, showing a culture of openness.

Exam tips

Know the three Schein levels in order and be able to give one example of each in a few words.
In multiple choice, look for key words: 'visible' or 'observable' points to artefacts, 'stated' points to espoused values, 'taken for granted' points to assumptions.
Watch for scenarios where words and actions disagree. The deeper level is the real culture.
In multi-task questions, define culture first, then apply it to the scenario. Do not just list the levels.
Do not mix up this topic with Handy's types or Hofstede's dimensions. Answer only what the question asks.

Practice questions from Organisational culture

Meaning and Levels of Organisational Culture in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Meaning and Levels of Organisational Culture: frequently asked questions

What is organisational culture in simple terms?

It is the shared values, beliefs and ways of behaving in a business. It is often described as 'the way we do things here'. It affects how people make decisions, treat customers and respond to change.

What are the three levels of culture in Schein's model?

They are artefacts, espoused values and basic underlying assumptions. Artefacts are visible, espoused values are stated, and assumptions are deep and taken for granted. Together they explain why people behave as they do.

Why are basic assumptions the hardest level to change?

People no longer question them and often are not aware of them. They sit beneath behaviour, so changing a policy or logo does not alter them. Change usually takes time and consistent leadership action.

How should I explain culture in a BT exam answer?

Give a short definition, name the relevant level or feature, and tie it to the scenario. Add one example from the business described. Keep the answer focused on what the question asks.