The allocation of military resources is a complicated and diversified process with many stakeholders and which encompasses a complex network of practical measures and techniques. This requires a well-built management system to both identify and balance the logistical, political, and managerial requirements of multiple stakeholders.
The primary aim of this study was to investigate the role of military expenditure, which plays a vital role in the national defence of a country. Another purpose was to determine objectives and measures that describe the management strategy of the military resources via four Balanced Scorecard perspectives. Finally, implementation in the IT area concerning new methods and techniques (e-Budget platform) was examined in the study.
The background for the dissertation was an inductive study and review of existing management systems. On the basis of the literature review and “real life” data collection, a new strategic management system (model) was established. The originality of the proposed innovation lies in its scientific approach, based upon a mathematical model built using the Utility Function principles.
The results showed that this model can be used as a process for identifying the most appropriate variables required for effective monetary allocations with an emphasis on perspective development for planning defence spending.
In addition, several new contributions to management theory were highlighted:
(1) A template that describes the basic components of value, which are formed by mathematical models integrated into the Balanced Scorecard.
(2) A model based upon strategy creation processes that articulate the dynamics of new management systems.
The principal conclusion is that this thesis synthesizes the divergent strands of the research which have the potential to transform the proposed model into a powerful strategy planning tool.
Keywords: Balanced Scorecard, Utility Function, Strategy Maps, e-Budget application, optimization tools, Estonian Defence Forces.