Purpose – The purpose of this paper is to propose a conceptual approach to determining an optimal
strategy development process and controlling of the defence spending, by utilizing the decisionmaking
system adopted in the Republic of Estonia.
Design/methodology/approach – The author offers a part of the Balanced Scorecard model named
“Management and Control Perspective” as one of the improvement tools for the system of planning
military expenditures and effective utilization of budgetary funds.
Findings – The results show that the Balanced Scorecard application, using the “utility function”, will
allow the Estonian Defence Forces to overcome important barriers to strategy implementation by
interrelation of military planning and budgeting processes.
Research limitations/implications – One suggestion for further research might be established
as a way of improvement and development of methods directed to application of the utility function in
the decision-making process. This approach will improve calculations of strategic perspective plans
and will reveal the essence of the budgetary policy on the whole by taking into consideration expenses
features of the business and non-profit organizations.
Practical implications – By using the Balanced Scorecard the paper offers a new strategic method
of planning and controlling the military expenditure in the Estonian Defence Forces.
Originality/value – The present paper provides direct evidence of the alternative methods forecast
measures and the possibility of using mathematical models in the strategic planning process.
Keywords Estonia, National economy, Public finance, Expenditure, Armed forces, Utility function,
Balanced Scorecard, Military expenditure, Budgeting, Strategy
Paper type Case study
To cite this document: Maritana Sedysheva, (2012),”Strategic management system and methods of controlling as key elements of
military expenditure policy-making process”, Journal of Strategy and Management, Vol. 5 Iss: 3 pp. 353 – 368
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