This research proposes to examine the transformation to quality in local government agencies. The research is based on an on-going partnership between a research team from the Center for Quality and Productivity Improvement at the University of Wisconsin - Madison, and the City of Madison. For over ten years, the City of Madison has been recognized as a pioneer in implementing total quality concepts and principles in government. A conceptual framework is proposed by which the degree of institutionalization of quality principles is a function of the implementation process, the organizational structure and culture. In turn, the degree of institutionalization is believed to influence the perceived impact of quality initiatives. Feedback loops are an integral part of the model whereby positive impact increases degree of institutionalization and institutionalization contributes to a change in organizational structure and culture. The objective of the project is to collect employee level data to test the hypothesized relationships among these constructs. Implementation will focus on employee development, while structure will include employee participation and labor/management relations, and culture will include leadership and management style. The study is designed around the department/agency as a second unit of analysis, providing variability in quality implementation, structure and culture. An action research paradigm will be used to guide the design and conduct of research. A variety of data collection methodologies will be utilized, including surveys of employees and citizens, and an analysis of archival material. Regression and path analyses will be performed to test relationships specified in the model.