Organizational Culture, Inclusion and Behavioral Change

Introduction and context

Organizational culture is the pattern of shared assumptions, meanings, values and practices through which members interpret events and coordinate action. It is not simply an organization’s stated values, employee-relations climate or collection of visible symbols. Culture is produced and reproduced through leadership decisions, work routines, incentives, stories, technologies, informal networks and everyday interactions.

For HR professionals, culture matters because it shapes who is heard, whose knowledge is trusted, how risk is handled, how conflict is expressed and which behaviours are rewarded. It influences recruitment, socialization, performance management, promotion and exit. Culture can therefore support strategy and inclusion, but it can also preserve exclusion while formal policies appear progressive.

Culture change is consequently more than communicating new values. It involves examining underlying assumptions, redistributing voice and opportunity, redesigning systems and helping people form new habits without treating difference as a defect to be corrected. Effective change is culturally sensitive: it recognizes national, professional, occupational, generational, racial, gendered, linguistic, disability-related and other identities, while avoiding the assumption that any group is internally uniform.

Learning objectives

By the end of this chapter, learners should be able to:

1. Explain culture as a multilevel and socially constructed phenomenon.
2. Diagnose culture using Schein’s three levels, the cultural web and the Competing Values Framework.
3. Analyse organizational subcultures, identity, norms and power.
4. Distinguish diversity, equity, inclusion and belonging and connect them to HR systems.
5. Design culturally sensitive programmes for behavioural change and habit formation.
6. Evaluate measurement, ethical risks and limitations in culture-change interventions.

Culture: concepts, levels and mechanisms

Culture has both integrative and political dimensions. The integrative view emphasizes shared meaning and coordination; the critical view asks whose meanings become dominant and who benefits from “normal” practices. Both are necessary. An organization may possess a strong culture in one department, a weak culture across the enterprise, or several competing cultures that are productive in some contexts and harmful in others.

Culture differs from related concepts:

Culture operates through social learning. New employees observe what is rewarded, ignored or punished. They learn how to obtain resources, disagree with senior staff, request flexibility and gain credibility. These lessons may contradict official policies. Thus, an organization can formally value inclusion while informally rewarding uninterrupted availability, similarity to senior leaders or silence about inequity.

Schein’s cultural framework

Edgar Schein conceptualizes culture at three levels:

1. Artifacts are visible but often ambiguous: office design, language, rituals, dress, meeting patterns, technology, stories and organizational structures. An open-plan office may indicate collaboration, surveillance or cost reduction; observation alone cannot establish its meaning.
2. Espoused beliefs and values are what the organization says it values, such as customer focus, integrity, innovation or inclusion. They guide formal decisions but may not match practice.
3. Basic underlying assumptions are taken-for-granted beliefs about reality, human nature, time, authority, relationships and success. Examples include “the best ideas come from experts,” “commitment means being constantly available” or “conflict is dangerous.” These assumptions are difficult to see because they are experienced as common sense.

Culture develops when a group solves problems repeatedly and discovers that particular approaches work. Leaders influence it through what they pay attention to, measure and control; how they respond to crises; how they allocate status and rewards; and whom they recruit, promote and dismiss. Culture can be changed when existing assumptions no longer solve important problems, but change is emotionally demanding because assumptions are connected to identity and psychological safety.

A Schein-based diagnosis should move from observation to inquiry. HR should ask: What behaviour is visible? What value is claimed? What assumption would make this behaviour sensible? Who experiences the practice as beneficial or harmful? What evidence could confirm or challenge the interpretation?

The cultural web

The cultural web, associated with Johnson and Scholes, provides a practical map of reinforcing elements:

• Stories: accounts of heroes, failures, founders and “how things are done.”
• Rituals and routines: repeated meetings, onboarding practices, celebrations and decision processes.
• Symbols: titles, workspace, clothing, branding, language and status markers.
• Organizational structures: formal reporting lines and informal networks.
• Control systems: targets, budgets, rewards, sanctions and performance measures.
• Power structures: individuals, groups or professions able to define priorities and acceptable behaviour.

The web is useful because it links culture to systems. If leaders tell stories about courage but punish dissent, the control system defeats the espoused value. If inclusion training is introduced while promotion depends on informal sponsorship available mainly to insiders, the structure and power elements reproduce exclusion.

A cultural-web diagnosis should identify the current paradigm—the underlying “way we do things”—and compare it with a strategically and ethically desirable future paradigm. The purpose is not to impose a uniform culture, but to determine which practices must be preserved, modified or discontinued.

The Competing Values Framework

The Competing Values Framework (CVF) classifies organizational orientations along two dimensions: flexibility versus stability, and internal focus versus external focus. Their intersection produces four ideal types:

The CVF is not a ranking system. Every organization requires some combination of flexibility, control, internal cohesion and external responsiveness. A hospital needs hierarchy for safety but also clan-like learning and adhocratic innovation. A technology firm may require experimentation while introducing controls for privacy and fairness. Culture diagnosis should therefore ask what balance is appropriate for the strategy and stakeholder obligations, rather than labelling one quadrant universally superior.

Subcultures, identity, norms and power

Subcultures form around occupations, locations, functions, projects, demographic identities and levels of hierarchy. A finance team may value control, a design team experimentation and a frontline team practical reliability. Subcultures can provide expertise and belonging; they can also create silos, status hierarchies and competing definitions of professionalism.

A mature diagnosis does not average away difference. It compares experiences across groups and examines intersections. For example, women of colour, disabled men, older migrants and junior parents may encounter different combinations of visibility, stereotype and access. Categories should be used carefully: they can reveal patterns of inequality, but they do not define individual capability or experience.

Identity is shaped by both self-understanding and social recognition. Organizational identities such as “leader,” “technical expert,” “care worker” or “professional” carry norms about speech, appearance, availability and emotion. The concept of identity regulation highlights how organizations encourage employees to understand themselves in ways that support managerial goals. Such regulation becomes problematic when it demands assimilation, suppresses legitimate identities or makes advancement conditional on adopting a dominant style.

Norms are enforced socially through approval, ridicule, exclusion, silence and access to opportunities. Psychological safety—the perceived ability to speak up, ask questions and admit mistakes without interpersonal punishment—is therefore related to, but not identical with, inclusion. A team may feel safe for insiders while excluding outsiders. HR must examine both voice and membership.

Power is central. Culture is not only shared agreement; it is also the outcome of unequal authority over resources, narratives and career opportunities. A change programme that asks marginalized employees to educate others without compensation, or to disclose personal experiences for organizational learning, may reproduce rather than reduce inequity.

Diversity, equity, inclusion and belonging

These terms are connected but distinct:

• Diversity concerns the composition and variety of people, perspectives and identities.
• Equity concerns fairness in access, processes, outcomes and the correction of structural disadvantage. Equal treatment is not always equitable treatment.
• Inclusion concerns meaningful participation, influence, respect and access to information and opportunity.
• Belonging concerns the experienced sense that one can be authentic, valued and accepted without surrendering legitimate identity.

Inclusion requires more than numerical representation. A diverse workforce with homogeneous leadership, unequal assignments and silence around bias is not an inclusive culture. Equity analysis should examine the employee lifecycle: attraction, selection, pay, work allocation, performance evaluation, development, promotion, flexible work, discipline and exit.

Useful evidence includes disaggregated workforce data, pay-equity analysis, promotion and attrition patterns, accessibility audits, employee listening and qualitative interviews. Quantitative patterns are signals, not explanations. A lower promotion rate for a group may reflect bias, unequal access to high-visibility work, caregiving constraints, organizational location or measurement error. Confidentiality, data protection and legal requirements must govern collection and reporting.

Bias operates at several levels. Individual bias includes stereotypes and implicit associations. Interpersonal bias appears in interruptions, attribution of competence, exclusion from networks and differential feedback. Institutional bias is embedded in criteria, procedures and technologies. Intersectional disadvantage occurs when combined identities produce experiences not captured by examining each category separately.

Common interventions include structured selection criteria, diverse panels, accessible work design, transparent promotion standards, sponsorship, calibrated performance reviews, pay audits, reasonable accommodations, employee resource groups and accountability for leaders. Training may increase awareness, but training alone rarely changes systems or behaviour.

Diagnosing culture systematically

A robust diagnosis uses mixed methods and triangulation. A practical sequence is:

1. Clarify the purpose. Define the strategic, ethical or operational problem without assuming that culture is the sole cause.
2. Map stakeholders and power. Include senior leaders, managers, frontline workers, contractors, employee representatives and groups likely to be unheard.
3. Collect multiple forms of evidence. Review policies, HR data, meeting observations, network patterns, stories, interviews, focus groups and surveys.
4. Compare espoused and enacted culture. Identify gaps between values, decisions and lived experience.
5. Disaggregate results. Examine function, level, location, employment status and relevant identity dimensions while protecting privacy.
6. Test interpretations. Return emerging findings to participants; invite disagreement and alternative explanations.
7. Prioritize leverage points. Select a small number of behaviours and systems where change can be observed and sustained.

Culture surveys should avoid treating a single score as the culture. Reliability, validity, response bias and cultural translation require attention. Anonymous surveys may encourage candour but can reduce contextual understanding. Interviews produce depth but may be influenced by interviewer status. Observation reveals practice but may alter behaviour. Participatory methods improve legitimacy while requiring careful facilitation.

A useful diagnostic matrix links evidence to action:

Behavioural change and habit formation

Culture changes when repeated behaviours, meanings and systems change together. Behaviour is influenced by capability, opportunity and motivation. This principle is often represented by the COM-B model: a behaviour is more likely when people have the capability to perform it, the opportunity to perform it and sufficient motivation. The model is diagnostic rather than a guarantee of change.

Habit formation involves a cue, a response and a reinforcing consequence. In organizations, a meeting invitation can cue a routine of agenda circulation, inclusive turn-taking and documented decisions. Reinforcement may include better decisions, recognition or reduced rework. A new habit becomes fragile when workloads, incentives or leaders contradict it.

Effective interventions operate at several levels:

• Individual: coaching, skill practice, reflection and feedback.
• Interpersonal: inclusive meeting protocols, bystander action, sponsorship and conflict norms.
• Team: working agreements, retrospectives, role rotation and shared accountability.
• System: recruitment, reward, workflow, technology, accessibility and leadership governance.

Behavioural goals should be specific and observable. “Be inclusive” is less actionable than “Before closing a decision, the chair asks for views from people who have not spoken, records the rationale and identifies dissenting evidence.” However, protocols must not become mechanical performances. They should create genuine influence, not merely the appearance of participation.

A change architecture commonly includes: a compelling case; coalition and role modelling; participation in design; pilot testing; feedback; reinforcement; and institutionalization in systems. Leaders must make trade-offs visible. If inclusion is announced but delivery deadlines always override accessibility or voice, employees correctly infer the real priority.

Cultural sensitivity in change

Culturally sensitive change does not mean avoiding standards or allowing harmful conduct in the name of difference. It means distinguishing universal principles—dignity, safety, non-discrimination and lawful treatment—from locally adaptable practices such as communication style, celebrations or decision rituals. Global organizations should avoid exporting a headquarters model without examining local histories, law, language and power.

Consultation should occur before design, not merely after decisions are made. Translation must address meaning, not just words. Managers need guidance on religious observance, disability inclusion, gender identity, caregiving and culturally variable communication. At the same time, cultural explanations must not excuse harassment, coercion or unequal opportunity.

Applied case: Meridian Health Systems (illustrative)

Background

Meridian Health Systems, a fictional regional healthcare provider, employed nurses, physicians, administrators, technicians and outsourced support staff across five sites. Its formal values were compassion, safety and teamwork. A staff survey showed that employees from minority ethnic groups and internationally trained professionals reported lower belonging and lower confidence in speaking up. Incident data also showed that near misses were underreported in two departments.

Problem

Executives initially proposed mandatory cultural-competence training. HR’s diagnosis found a wider pattern. Senior clinicians dominated meetings; internationally trained nurses were frequently assigned routine work; promotion depended on informal sponsorship; and a story circulated that “strong professionals do not need help.” The organization’s hierarchy supported patient safety in some contexts but had become a barrier to voice in others.

Analysis

Using Schein’s framework, visible artifacts included formal safety posters and multidisciplinary meetings. Espoused values emphasized teamwork, but the enacted norm was that junior staff should not challenge specialists. The underlying assumption was that status signalled competence. The cultural web showed that stories celebrated heroic individual action, control systems emphasized speed and incident-free statistics, and power structures concentrated decision authority among senior clinicians. A CVF analysis suggested strong hierarchy and market orientations, with insufficient clan learning and adhocratic experimentation.

Approach

Meridian established a representative design group with paid participation and protected time. It introduced structured safety huddles, rotating meeting facilitators, a “concern before closure” protocol and anonymous escalation routes. Promotion criteria were published and reviewed for accessibility and bias. Managers received coaching on responding to challenge, while senior clinicians modelled admitting uncertainty. Departments piloted the changes for twelve weeks, reviewed qualitative feedback and revised the protocols. HR monitored speaking-up experiences, assignment distribution, promotion shortlists and near-miss reporting, disaggregated where privacy permitted.

The organization avoided framing minority employees as the problem. Training addressed communication and bias, but system redesign carried the main responsibility. Employee representatives were involved in interpreting data, and no individual was required to disclose identity or personal experience publicly.

Outcome

After six months, participation in safety huddles broadened, near-miss reporting increased and staff reported greater confidence that concerns would be heard. The rise in reporting was interpreted cautiously: it could indicate improved safety voice rather than deteriorating clinical performance. Promotion patterns required longer observation, and the organization continued to examine workload allocation and sponsorship.

Learning points

1. A visible value statement does not establish an enacted value.
2. Culture diagnosis should connect stories, power, controls and behaviour.
3. Inclusion requires changes in opportunity and influence, not only awareness.
4. Increased reporting can be a positive leading indicator when psychological safety improves.
5. Sustainable change requires measurement, iteration and accountability.

Evaluation, ethics and governance

Culture initiatives can create unintended harms. “Culture fit” may become a justification for homogeneity. Personality tests and algorithmic tools may encode historical bias or infer sensitive characteristics without valid consent. Employee listening can become surveillance if confidentiality is overstated or data are used for retaliation. Belonging programmes may pressure people to disclose identity. Leaders may also manipulate culture language to secure emotional commitment while intensifying work demands.

Governance should therefore specify purpose limitation, data minimization, access controls, retention periods and reporting thresholds. HR must comply with applicable employment, equality, accessibility, labour and data-protection law; requirements vary across jurisdictions. Employee representatives and, where relevant, unions should be involved. Investigations of discrimination or harassment require procedural fairness, protection from retaliation and competent independent handling.

Evaluation should combine process, behavioural, outcome and equity measures. Leading indicators may include participation, speaking-up confidence, manager response quality, accessibility completion and distribution of developmental assignments. Lagging indicators may include promotion, pay, retention, complaints, safety outcomes and representation. Metrics need baselines, comparison groups where appropriate and recognition of confounding factors. A dashboard is not evidence of causality. HR should ask whether observed change plausibly resulted from the intervention, what else changed and who may be missing from the data.

Contemporary developments and professional implications

Hybrid work makes culture less visible and may privilege employees who attend informal office networks. Inclusive hybrid design requires equitable access to information, intentional meeting practices and evaluation based on outcomes rather than physical presence. Digital collaboration platforms can widen participation but can also intensify monitoring and availability expectations.

Generative AI is increasingly used in recruitment, employee listening and personalized learning. It may help identify patterns in text or recommend development resources, but it can reproduce biased historical data, obscure reasoning and expose confidential information. Human oversight, impact assessment, auditability, accessibility and the right to challenge automated decisions are essential. AI should support—not replace—dialogue and accountable judgement.

For HR professionals, the central implication is that culture is a strategic and ethical system. HR cannot delegate culture to communications or treat inclusion as a campaign. It must align leadership practice, work design, talent systems, voice mechanisms, technology and governance. It must also recognize limits: HR rarely controls all structural conditions, and employees are not passive recipients of culture. Change is negotiated, contested and shaped by wider social institutions.

Best-practice principles

1. Diagnose before prescribing; distinguish culture problems from capability, structure or resource problems.
2. Examine enacted behaviour, not only statements.
3. Treat power and history as central to culture.
4. Involve affected groups in design and interpretation.
5. Combine universal dignity standards with contextual flexibility.
6. Change systems and incentives alongside individual capability.
7. Make behavioural expectations observable and practicable.
8. Protect confidentiality, consent and non-retaliation.
9. Use disaggregated evidence without stereotyping or exposing individuals.
10. Pilot, learn and adapt rather than claiming instant transformation.
11. Hold leaders accountable for consequences, not merely intentions.
12. Preserve productive subcultural diversity while establishing non-negotiable standards of safety, fairness and respect.

Chapter Summary

Organizational culture consists of learned patterns of meaning and action operating through visible artifacts, espoused values and underlying assumptions. Schein’s framework helps reveal the depth of culture; the cultural web connects stories, routines, symbols, structures, controls and power; and the Competing Values Framework helps analyse tensions between flexibility, control, internal cohesion and external focus. Subcultures and identities provide expertise and belonging but may also reproduce silos and hierarchy.

Diversity concerns variety, equity concerns fairness and structural correction, inclusion concerns participation and influence, and belonging concerns valued authenticity. Culture diagnosis should use mixed methods, compare espoused with enacted practices, disaggregate evidence responsibly and test interpretations with affected stakeholders. Behavioural change becomes sustainable when capability, opportunity, motivation, cues, reinforcement and organizational systems are aligned. Culturally sensitive change respects difference while maintaining clear standards of dignity, safety and non-discrimination. Ethical governance, privacy, accessibility and accountability are indispensable, particularly when digital tools and AI are used.

Key Terms

Culture: Shared learned patterns of meaning, values and behaviour.

Organizational climate: Members’ perceptions of current practices and conditions.

Artifact: A visible expression of organizational culture.

Espoused value: A value the organization formally claims.

Underlying assumption: A taken-for-granted belief shaping interpretation and action.

Subculture: A distinct cultural pattern within a larger organization.

Cultural web: A framework linking stories, routines, symbols, structures, controls and power.

Competing Values Framework: A model contrasting flexibility, control, internal focus and external focus.

Norm: An informal expectation about acceptable conduct.

Identity regulation: Organizational influence over how members understand themselves.

Psychological safety: Confidence that speaking up will not lead to interpersonal punishment.

Diversity: The presence of varied identities, experiences and perspectives.

Equity: Fairness in access, processes and outcomes, including correction of disadvantage.

Inclusion: Meaningful participation, respect and influence.

Belonging: The experience of being accepted and valued without forced assimilation.

Intersectionality: The interaction of multiple identities and systems of disadvantage.

Habit: A learned behaviour triggered by cues and reinforced by consequences.

Sponsorship: Active use of power to advocate for another person’s advancement.

Culture change: Deliberate transformation of shared meanings, behaviours and systems.

Cultural sensitivity: Adaptation to meaningful differences while upholding dignity and fairness.

Review Questions

Short Answer Questions

1. Distinguish artifacts, espoused values and underlying assumptions in Schein’s framework.
2. What are the six elements of the cultural web?
3. Explain one difference between diversity and inclusion.
4. Why are subcultures important in organizational diagnosis?
5. What is psychological safety, and why is it relevant to inclusion?

Long Answer Questions

1. Critically evaluate the usefulness and limitations of Schein’s three-level model for diagnosing culture.
2. Compare the cultural web and the Competing Values Framework as tools for culture analysis.
3. Explain how HR systems can reproduce or reduce inequity across the employee lifecycle.
4. Discuss why training alone is usually insufficient for sustainable behavioural change.
5. Design an ethical culture-change architecture for a large hybrid organization.

Analytical / Application Questions

1. An organization publicly values innovation, but employees avoid proposing ideas because failed experiments damage promotion prospects. Diagnose this situation using Schein’s framework and the cultural web, then propose two system-level interventions.
2. A global firm finds that employees in one region report low belonging despite equal representation and pay. Develop a mixed-method diagnostic plan that avoids stereotyping and identifies actionable causes.
3. A company introduces an AI tool to analyse employee comments for inclusion risks. Evaluate the potential benefits, validity problems, privacy risks and governance safeguards before deployment.

Multiple Choice Questions with Answers

Question 1

Which level of Schein’s framework consists of taken-for-granted beliefs about reality and appropriate behaviour?

A. Artifacts

B. Espoused values

C. Basic underlying assumptions

D. Performance indicators

Correct Answer: C. Basic underlying assumptions

Question 2

Which cultural-web element most directly includes targets, budgets, rewards and sanctions?

A. Stories

B. Control systems

C. Symbols

D. Rituals and routines

Correct Answer: B. Control systems

Question 3

In the Competing Values Framework, the clan orientation is primarily associated with:

A. Internal focus and flexibility

B. External focus and stability

C. Internal focus and stability

D. External focus and flexibility

Correct Answer: A. Internal focus and flexibility

Question 4

Which statement best distinguishes equity from equality?

A. Equity means treating everyone identically

B. Equity concerns fair access and correction of structural disadvantage

C. Equity refers only to workforce representation

D. Equity is another term for employee engagement

Correct Answer: B. Equity concerns fair access and correction of structural disadvantage

Question 5

A junior employee can raise concerns without fear of interpersonal punishment. This most directly illustrates:

A. Market orientation

B. Psychological safety

C. Identity regulation

D. Assimilation

Correct Answer: B. Psychological safety

Question 6

Why should culture diagnosis use both quantitative and qualitative evidence?

A. To guarantee that the diagnosis is free from bias

B. To replace stakeholder participation with statistical evidence

C. To combine pattern identification with contextual understanding

D. To avoid examining organizational systems

Correct Answer: C. To combine pattern identification with contextual understanding

Question 7

Which intervention is most likely to change an exclusionary promotion culture?

A. A single mandatory awareness lecture

B. Publishing slogans about inclusion

C. Combining transparent criteria, calibrated reviews and sponsorship accountability

D. Asking minority employees to adapt their communication style

Correct Answer: C. Combining transparent criteria, calibrated reviews and sponsorship accountability

Question 8

In habit formation, a cue primarily functions as:

A. A trigger for a repeated response

B. A legal requirement for employment

C. A measure of demographic diversity

D. A replacement for organizational leadership

Correct Answer: A. A trigger for a repeated response

Question 9

Why might increased near-miss reporting be interpreted positively after a psychological-safety intervention?

A. It proves that clinical performance has deteriorated

B. It may indicate greater willingness to voice concerns

C. It shows that reporting systems are unnecessary

D. It eliminates the need for qualitative evidence

Correct Answer: B. It may indicate greater willingness to voice concerns

Question 10

Which is an important governance safeguard when using AI to analyse employee comments?

A. Removing all human review

B. Using historical data without examination

C. Ensuring purpose limitation, privacy protection and the ability to challenge decisions

D. Requiring employees to disclose sensitive identities

Correct Answer: C. Ensuring purpose limitation, privacy protection and the ability to challenge decisions