The Conservative government announced the Financial Management Initiative in 1982. This article is based on research into the genesis, development and impact of the FMI. The findings suggest that the FMI has contributed significantly to the institutionalization of resource management in general and cost awareness in particular. Implementation has been influenced, however, by the differentiation of departmental tasks and contexts, the inevitable tension between management and politics, and the difficulty of meeting the conditions for the successful engineering of cultural change.