Management Theory of Edgar Schein

What is the management theory of Edgar Schein?

Schein’s theory emphasizes that organizational culture acts as a significant barrier to change and understanding this aspect is crucial for effective leadership. His theory introduces three levels of culture: 

• Artifacts: Artifacts are visible but challenging to interpret. 
• Espoused values: Espoused values represent conscious goals and strategies. 
• Basic assumptions: Usually, basic assumptions are unconscious beliefs and values that shape the essence of culture and impact all actions taken within the business. 

“By categorizing organizational culture into artifacts, espoused values and basic assumptions, Schein equips leaders with a behavioral psychology-based framework to understand the visible and invisible drivers of team dynamics,” explained Beth Hood, CEO and founder at Verosa Leadership.

At the foundation, assumptions are inherent beliefs, while values are felt and often heard as statements put forth by an organization. These elements influence artifacts, which are external expressions or manifestations of culture. Employees build upon past experiences every day, crafting a culture based on assumptions, values and artifacts bit by bit. Work culture is never complete as long as employees continue to learn and grow. [Read more about The Management Theory of Henry Mintzberg]

“Schein’s management theory is a powerful tool for understanding the multilayered complexity of organizational culture, emphasizing that culture extends beyond visible elements like office design or slogans — artifacts — to deeper layers like espoused values and unconscious basic assumptions,” noted Cindy Kravitz, an executive coach and business strategist. “In today’s global, decentralized organizations, where subcultures often arise, leaders who fail to embrace this model risk creating misalignment, disengagement and mistrust.”

Here’s a deeper look at these three levels.

Artifacts

Artifacts represent the tactile parts of a work environment — things you can touch, see and hear. Aligning artifacts with your business values goes a long way toward creating a consistent and employee-centric company culture. 

For example, a workplace that permits employees to dress casually often communicates a more laid-back environment where employees feel comfortable pulling each other into side conversations. Conversely, a workplace with a strict dress code may communicate a professional environment but fail to allow employees to enjoy their roles or show their personalities.

Espoused values

Employees’ values directly impact a company’s culture, so each new hire can change a company’s environment. As such, hiring for a cultural fit is essential to preserve and support the established workplace culture. Espoused values are not written policies — they are demonstrated through actions and decisions, often shaping how employees perceive and align with the company culture.

For example, how a leader responds to a situation in which an employee takes an unconventional or unexpected action will communicate more to an employee than a line in a handbook about how to act at work.

Basic assumptions

Team members’ foundational beliefs are the final ingredient to a successful, organized and healthy culture. These beliefs aren’t often mentioned in workplace settings. Instead, they’re evident in how employees, managers and decision-makers act and interact within the organization. Leaders can foster the culture they want to build by reinforcing positive behavior and discouraging negative reactions. [Read more about The Management Theory of Mary Parker Follett] 

Kravitz noted that misaligned basic assumptions and espoused values can block an organization from achieving its most ambitious goals. “A company that promotes innovation (espoused value) — but punishes risk-taking (basic assumption) — fosters cynicism and resistance to change,” Kravitz explained.

Hood stressed that a misalignment between basic assumptions and espoused values can become a starting point for much-needed changes. “In larger organizations, Schein’s theory can guide systemic change by identifying where misalignments in values and actions erode trust or stall innovation,” Hood noted.

Schein analyzed organizational culture further to encompass group dynamics, drawing parallels between the functioning of groups and businesses within their respective cultures. In his model, informal groups are categorized into three types: 

1. Horizontal cliques are composed of individuals of similar organizational ranks working close together.
2. Vertical cliques consist of members from various ranks within the same department. 
3. Mixed cliques include individuals from diverse ranks, departments and locations.

What are tips for implementing Schein’s management theory?

Schein’s management theory of organizational culture focuses first on understanding culture before making changes. Then, leaders must educate themselves on the theory, work collaboratively to make lasting changes and invest in resources to continually analyze and improve organizational culture.

Consider the following tips and best practices for implementing Schein’s management theory:

>> Learn More: The Management Theory of Frank and Lillian Gilbreth 

Acquire background information.

Many websites offer valuable resources on Schein’s theory, including diagrams, summaries and instructional materials to help you gain a theoretical understanding and a practical application of Schein’s principles within your business. These online sources can equip you with the necessary background knowledge and insights to implement Schein’s theory for the benefit of your company.

Hire professional help.

Experienced consultants well versed in Schein’s management theory can help you maximize the application of his principles within your company’s unique environment.

Consultants have the unique advantage of viewing a team through an outsider’s lens. They can see how individuals work together and autonomously — a skill that comes in handy when evaluating a group’s culture. 

Culture organically develops through people’s behaviors, thoughts and actions. A consultant can help leaders identify blind spots, spot opportunities to enhance workplace collaboration and unlearn harmful patterns to build a stronger foundation.

Leaders can also hire professional culture builders familiar with Schein’s theory to hold a presentation or webinar and then work with their team to apply the principles in daily work routines.

Invest in resources and tools.

Online tools and resources can help you implement Schein’s management theories more easily. Activities, games, exercises and other Schein theory-based products, information and services can help you learn and apply the principles most valuable to your business.

Give it time.

Cultures develop over time as a result of overcoming challenges together, sharing hardships and building rapport through actions, behaviors and shared tasks. As employees learn how to work together, culture forms and evolves. 

Your employee turnover rate is also a factor. Groups with high turnover rates will have a more volatile culture than a team that has worked together for a long time and knows each other well. Have patience with your team and yourself. A strong culture isn’t built overnight and shouldn’t be forced to conform to one person’s ideal vision.

Look at subcultures and cultural hotspots.

Teams and departments within a company likely have their own cultures. Hood and Kravitz both recommend exploring these cultures, which Hood calls “cultural hotspots,” and Kravitz calls “subcultures,” to find ways to align artifacts, espoused values and basic assumptions. Kravitz pointed out that mergers and acquisitions can also create various corporate subcultures. 

“One strategy would be to conduct a ‘culture mapping’ exercise — identifying areas where values are visibly thriving or under strain,” Hood suggested. “For example, a high-performing sales team may embody collaborative values, while back-office functions [may] struggle with silos. This targeted approach allows for tailored interventions and maximizes impact.”

Kravitz also emphasized the importance of gaining a deeper understanding of where corporate subculture priorities differ. “Leaders should first map subcultures using qualitative tools like focus groups or interviews to understand their unique artifacts, values and assumptions,” Kravitz advised. “For example, a team in one region might prioritize innovation while another values stability or a newly acquired company might have a culture of agility that clashes with the parent organization’s preference for structured processes.”

Kravitz explained that integrating subcultures doesn’t mean forcing conformity. “Instead, it involves finding shared values to unify efforts while allowing flexibility for local expression,” Kravitz shared. “By thoughtfully addressing cultural integration during M&A [mergers and acquisitions] (or within a company), organizations can reduce friction, retain top talent and create a cohesive, high-performing environment.”

Lean into storytelling and narrative-building.

Hood and Kravitz agree that telling stories of instances in which employees or leadership took actions that accurately reflected the company culture can help businesses leverage Schein’s theory.

“Culture thrives on shared stories,” Hood explained. “Leaders should consciously craft and amplify narratives that illustrate desired behaviors in action. For example, celebrate how a team embraced agility during a crisis or how an employee’s values-led decision strengthened client trust. These stories create emotional anchors, reinforcing the culture you wish to build.”

Hood also pointed out that Schein’s principles can be enhanced by encouraging reflective practices such as journaling or structured peer feedback for leaders. “[I] recommend using prompts that explore the gap between espoused values and actions: ‘How did my decisions today reflect the organization’s values?’ This builds self-awareness and fosters a more authentic cultural alignment,” Hood shared.

Kravitz noted that culture can also be reinforced by the visible actions of senior executives who set the tone for the entire organization. “Leaders can use storytelling to connect artifacts, values and assumptions meaningfully, but these stories must be backed by consistent role modeling,” Kravitz advised. “For instance, when senior executives demonstrate behaviors aligned with company values — such as prioritizing collaboration in high-pressure situations — they signal to employees that these values are not just aspirational but actionable.”

Kravitz concluded with a powerful insight: “When leaders ‘walk the talk,’ they inspire employees to internalize these values, fostering a culture that is authentic, cohesive and enduring.”

Train leaders on cultural interpretation.

Kravitz noted that cultural change is a top-down affair, stemming from leaders who know how to identify and shape culture.

“Beyond simply reading the room, leaders must develop the ability to read the environment, understanding how cultural dynamics influence behaviors and decisions across the organization,” Kravitz explained. “Training leaders in cultural interpretation involves teaching them to recognize how culture manifests in daily actions, whether in the unspoken norms of meetings, the way decisions are made or even casual workplace interactions.”

Kravitz elaborated with an example: “A leader who notices employees hesitating to challenge ideas might uncover a deeper misalignment between an espoused value of innovation and an unspoken assumption that dissent is risky,” Kravitz said. “Addressing these gaps requires intentional leadership behaviors, such as modeling vulnerability, openly inviting differing perspectives and publicly rewarding constructive disagreement. These actions not only realign cultural signals but also foster a sense of psychological safety, empowering employees to engage fully and contribute meaningfully to organizational goals.”

Alternatives to Schein’s management theory

While well-regarded and relatively simple to implement, Schein’s theory isn’t the only approach to management. Consider the following options to supplement or even replace Schein’s theory in your workplace.

Equity Complex

Hood suggested this alternative to Schein’s approach, noting that it’s more of a conceptual framework than a business management theory in the traditional sense.

“[Equity Complex] reframes how individuals perceive themselves and others in the workplace,” Hood explained. “Many of us unconsciously think in terms of ‘more than’ or ‘less than,’ creating unhelpful inferiority or superiority dynamics that can harm relationships, teams and systems. The Equity Complex is the antidote: It reminds us that while we may differ in circumstances, such as experience, role or background, we are equal in value.” 

Hood noted that keeping this mindset can help leaders and teams neutralize ego-driven behaviors, foster psychological safety and level out imposter syndrome. “It’s an approach that works especially well in diverse, fast-paced organizations where equity and inclusion are key to success,” Hood shared. “While Schein provides a robust framework for understanding culture, the Equity Complex adds a human-centered layer that enhances empathy and equity in day-to-day interactions.”

Hofstede’s cultural dimensions

In the 1970s, the psychologist Dr. Geert Hofstede studied IBM employees in over 50 countries. In doing so, he theorized that six dimensions distinguish all company cultures from each other (Dr. Michael H. Bond and Dr. Michael Minkov contributed to the fifth and sixth dimensions):

1. Power distance index (high vs. low)
2. Masculine vs. feminine
3. Individualist vs. collective
4. Uncertainty avoidance index (high vs. low)
5. Long-term vs. short-term orientation
6. Indulgence vs. restraint

Kravitz suggested that companies with global operations use Hofstede’s cultural dimensions to complement, rather than replace, Schein’s theory.

“Hofstede provides a framework for understanding how national cultures influence workplace behaviors and expectations, such as decision-making styles, communication preferences and attitudes toward hierarchy,” Kravitz explained. “Combining Schein’s internal focus on organizational culture with Hofstede’s cross-cultural insights allows leaders to navigate the complexities of a global workforce more effectively.”

Kotter’s 8 Steps for Leading Change

Over four decades, Dr. John Kotter of the Harvard Business School studied how leaders transform or execute strategy. Kotter pinpointed eight success factors and named them The 8 Steps for Leading Change. The steps are:

1. Create a sense of urgency.
2. Build a guiding coalition.
3. Form a strategic vision.
4. Enlist a volunteer army.
5. Enable action by removing barriers.
6. Generate short-term wins.
7. Sustain acceleration.
8. Institute change.

Kravitz said that, like Hofstede’s cultural dimensions, Kotter’s theory complements Schein’s rather than replacing it. “[Kotter’s theory] offers a structured pathway for embedding cultural shifts within broader change efforts,” Kravitz explained. “Schein’s theory helps diagnose the cultural landscape, but Kotter’s framework focuses on taking action — mobilizing stakeholders, creating momentum and embedding cultural changes in organizational processes. Together, these theories provide a holistic approach to understanding and transforming culture.”

Additional alternatives to Schein’s theory

Beyond the Schein alternatives our experts suggested, consider the following resources that explain well-respected management theories: 

• The management theory of Frederick Taylor summarizes tools for encouraging and rewarding productivity. 
• Peter Drucker’s management theory is best explained in Drucker’s own words, “Management is doing things right; leadership is doing the right things.”
• The management theory of Henri Fayol focuses on how leaders set the tone and outlines tools for fostering a positive environment for the whole team. 
• The management theory of Max Weber uplifts bureaucracy as the most efficient way to do business. 
• Human relations management theory hypothesizes that when employees know their work is making an impact, they’re more incentivized to be productive. 
• The management theory of Elton Mayo takes a scientific approach to proving that workers are motivated to be productive by more than just a paycheck. 
• The management theory of Rosabeth Moss Kanter emphasizes positive change and empowers managers to create a supportive environment for their team. 
• The management theory of Michael Porter details principles that are designed to help leaders make smart decisions, recognize competitive advantages and support long-term growth.
• The management theory of Joseph Juran explains that quality work starts from the moment an idea for a product or service is born — and outlines steps for maintaining quality from start to finish. 
• Modern project management remains heavily influenced by the management theory of Henry Gantt, creator of the famous Gantt chart, today. 
• The management theory of Frederick Herzberg focuses on motivational factors or the positive influences that make your team want to produce high-quality work. 
• The management theory of Charles Handy defines different organizational cultures and explains how they either motivate or demotivate productivity and efficiency. 
• The management theory of Stephen Covey notes that change begins at the individual level and describes which habits to cultivate if you want to foster a positive team environment. 
• The management theory of Robert Waterman lays out eight attributes of successful, innovative teams. 

Culture is everything

As Schein’s theory posits, visual indicators, daily actions and unspoken beliefs dictate a company’s culture — and alignment among the three leads to a positive culture. Operate in ways that reflect your core values and put those values into both words and actions. With your expectations and desires outlined in writing and embodied in your everyday actions, your employees are all but certain to follow along.

Sean Peek contributed to this article.