Risk, reform and organizational culture: The case of IRS tax systems modernization

The public management reform literature admonishes public managers to take risks. As is so often the case with prescriptions for public management reform, there is much more advice about risk-taking, its merits and demerits, than there is research on the incidence, causes, and effects of public management risk-taking. In an attempt to understand the role of risk culture in public management reform, the Internal Revenue Service's (IRS) experience implementing the largest information technology (IT) reform ever undertaken by a U.S. civilian agency is examined. IRS work in IT reform has been ongoing at least since 1989, but we focus specifically on the period 1990-1996 under the phase known as Tax Systems Modernization (TSM). This period is especially interesting inasmuch as it involved one of the greatest investments in federal agency IT ever undertaken, because it was generally viewed as a signal failure, and because one of the chief factors in this failed reform was the agencys risk culture.