Understanding and Managing Public Organizations, 6th Edition

CHAPTER EIGHTORGANIZATIONAL STRUCTURE, DESIGN, TECHNOLOGY, INFORMATION TECHNOLOGY, AND SOCIAL MEDIA

The US Internal Revenue Reform and Restructuring Act of 1998 (known as RRA98) directed the IRS to redesign its structure. The IRS had operated for about half a century with the same geography-based structure; that is, the agency was organized on the basis of geographic regions and further subdivided into districts. Most of the important auditing, enforcement, and tax collection work occurred in the 33 geographic districts. The directors of these 33 districts had a lot of authority over what happened in their districts and often had considerable prestige and presence there as well. Most of the tax returns they received were sent to be processed at one of ten major service centers located around the nation.

As part of the set of reforms that RRA98 mandated, IRS executives led a major transformation in the agency's structure to a customer-focused design. The new commissioner of the IRS, Charles Rossotti, proposed the design as a version of similar approaches used by major banks. Large banks face a variety of demands from different clusters of their customers. Individual retail customers want checking accounts and small loans. Small businesses and self-employed persons have additional needs for business loans and payroll services. Very large corporations have further needs for support of their larger loans and payroll services, pension plans, and stock and bond offerings. The large ...