In late 2002, the New York state legislature granted Mayor Michael Bloomberg sole governing authority of the city’s schools based on his promise to overhaul the system. It did not take long for him to fulfill that promise. Together with his top appointee, Chancellor Joel Klein, Bloomberg dramatically reorganized the New York City School System along performance management principles. In place of a traditional centralized school district, Bloomberg and Klein created a “Portfolio School District”, characterized by school-level discretion and high-stakes accountability. While virtually unprecedented in education, Bloomberg and Klein’s reforms mirror those found in other sectors of government, from human services and public corrections to national defense. These reforms seek to improve organizational performance by reducing goal ambiguity, aligning workers’ incentives, and providing information to foster organizational learning. While straightforward in theory, they have proved harder to implement in practice, especially in policy domains with a tradition of front-line discretion and/or difficult-to-measure practice. In some cases, implementation is symbolic: organizations collect and report data as required but do not substantively change their decision-making. In others, implementation is superficial or counterproductive - implementers focus on measured indicators without regard for overall performance. And in virtually all contexts, performance management regimes have been uneven: some sites respond actively, some partially, and some, perhaps, not at all. The problem of performance management reform is itself the problem of cultural change. The norms and values that underlie a performance management system are different from those of a hierarchical bureaucracy. Thus, without shifts in organizational culture, performance management reforms are unlikely to have their desired effect. Cultural change in turn requires changes in espoused values - the stated beliefs and norms of an organization - and changes in values-in-use - the often-tacit norms and values that are revealed through organizations’ patterns of behavior. Understanding the conditions under which these changes occur is critical to understanding both performance management reform and administrative reform more generally.Using mixed methods, I examine New York City’s performance management reform as a process of cultural change. I use survey data and a comparative case study of schools to answer two questions:Under what conditions does the introduction of a formal performance management regime lead to the espousal of a performance management culture and the development of performance management values-in-use?What is the specific role of organizational climate and survival anxiety (perceptions of risks to organizational integrity or success) in fostering changes in culture?Following prior research and theory, I argue that front-line behavior is a product not just of deep-rooted norms and beliefs or of formal incentive systems but instead the result of interactions between these two forces. By examining this interaction - and its relationship to strategic management practice - my work contributes to our understanding of administrative reform and organizational culture.