Final answer:
The term describing the shared ways of thinking, acting, and understanding work within an organization is known as organizational culture. It includes observable artifacts, espoused values, and basic assumptions that define employees' behavior and the internal workings of the organization.
Step-by-step explanation:
The term used to describe the ways of thinking, acting, and understanding work that are shared by members of an organization and reflect an organization's distinct identity is called organizational culture. This concept encompasses the values, visions, norms, and interactions among its employees, serving as a blueprint for how an organization is run, operates, and makes decisions. Organizational culture affects all aspects of workplace life, including employee behavior, decision-making processes, and the overall atmosphere of an organization.
Organizational culture can be broken down into three layers: observable artifacts, espoused values, and basic assumptions. Observable artifacts, such as symbols and language, are the visible elements of culture. Espoused values refer to the shared beliefs and rules endorsed by the management, guiding employee actions and decisions. Basic assumptions are the core perceptions so deeply engrained that they are taken for granted and often unnoticeable within an organization.
Different departments in the same company might develop their own subcultures, but these will be tied back to the overarching organizational culture. Moreover, understanding and fitting into the organizational culture is crucial for work success, as it influences employers' expectations and determines whether an employee will thrive in that environment.