A women looking through virtual reality glasses

Hello AI, Welcome to My Organisational...Culture?

Published 23rd May 2019
Goh Wee Kwong

HCLI Contributor

Published 23rd May 2019

Leaders understand the importance of workplace culture and why it matters. With the widespread adoption of artificial intelligence into workplaces, how will this influence organisational culture?

Globally renowned organisational culture and leadership expert, Professor Edgar Schein, from the MIT Sloan School of Management, defines organisational culture as: “A pattern of shared basic assumptions that a group has learned 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.”[i]

Professor Schein describes organisational culture (refer to Fig.1) as a series of assumptions that exist at three levels of an organisation:

  1. Assumptions about external adaption – viewed through the lens of artefacts
  2. Assumptions about managing internal integration – espoused through values and beliefs
  3. Deeper cultural or basic underlying assumptions – that are often unconscious or perceptions.


Schein's Cultural Model Adapted for AI
Figure 1 - Schein's Cultural Model Adapted for Artificial Intelligence

The Impact of AI on Organisational Culture

Fast forward twenty-seven years since Professor Schein introduced his concepts in ‘Organisational Culture and Leadership’. In the era of digital business solutions, business leaders must look at the invisible links and impact digital solutions create in their interaction with the external and internal organisational environment.

At the external adaption or artefact level, it is increasingly common to find businesses and organisations adopting digital solutions such as chatbots, virtual reality experiences, analytics and Internet of Things (IoT) as their first line of a business contact or consumer experience. In their deployment, these digital solutions often retain the basic design from the developer and interact as a standard off-the-shelf product.

There is also a second group of organisations which choose to customise and contextualise their user experience. This decision helps these organisations close potential experiential gaps that digital solutions may create.

These organisations may find reassurance in knowing that to some degree, their company identity and cultural characteristics will continue to be connected to their organisation’s external ecosystem and community through customising reply responses. One example is the array of different voice options that Alexa offers to its users. Users may select either a male or female voice interface, with voice tones that also range from heavy to light.

Where organisations may be at risk is when an oversight results in organisational cultures having feedback loops cut off in those areas and functions where AI and digital solutions have taken over from humans. This phenomenon will impact the next level of organisation culture at the internal integration phase. 

Solutions such as chatbots and IoT are vehicles and channel instruments that carry messages or facilitate simple services remotely. The technological engines that power them often involve machine learning, artificial intelligence and other sophisticated technologies. These may include predictive analytics, facial or image recognition systems. 

In layman’s terms, the feedback, messages and contact received by the organisation through exchanges with an external human stakeholder, now exist within the organisation in what Professor Schein proposed in his second level of organisation culture, in the form of binaries (1s and 0s). 

For leaders, what this means is that there is now a break introduced into their enterprise and systems’ feedback loop. 

Where organisational cultures used to be influenced solely by human interactions, the age of digitalisation has introduced machine language into this complex equation.

The Implications and Challenge for Leaders

When planning for digital transformation involving artificial intelligence, leaders should be mindful of this phenomenon and prepare solutions that bridge and integrate digital data and information back into the cultural loop, in addition to focusing on such elements as the organisation’s enterprise systems and institutional knowledge repositories. 

The risk of overlooking this area could potentially introduce organisations to an unexpected and closed-loop spiral. The organisational beliefs and values in these companies may eventually disconnect and lose touch with those automated parts of the organisation that are digitally interacting (autonomously) with external stakeholders, the community and ecosystem overall.

Without the link to the next level of cultural assumptions and collective identity, organisations risk creating a split where humans within the organisation become unaware of what is being managed autonomously by artificial intelligence, automation and other digital technologies.

This may dull the perceptions and awareness of organisations when it comes to important business areas such as market relevance, consumer sentiments (especially when feelings and emotions are involved), or strategic relevance. As such, digitalisation and AI contribute to a new genre of leadership challenges along with the benefits, efficiencies and growth they often contribute.

To understand this new leadership challenge better, Mr Michael Jenkins, Chief Executive Officer of the Human Capital Leadership Institute (HCLI) is researching ‘The Expert Human’. This research looks at the balance between being digital savvy and being human, and the leadership insights on human capital and technological transformation.[ii] 

With the increasing prevalence of Industry 4.0 technology, the successful integration of AI, human and organisational culture into organisations’ strategies will be a critical aspect that senior business leaders need to be aware of and consider for their continued growth and success.


[i] Edgar H. Schein Organizational Culture and Leadership Third Edition, The Jossey-Bass Business & Management Series. ISBN 0-7879-6845-5 by John Wiley & Sons.

[ii] Michael Jenkins (2019) 'A Great Work Place: The Intersection of EI and AI'. HQ Asia. Published 7 Feb. 

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