Changeable Defense Management - performance, budgets and leadership

Authors:

  • Joakim Netz

Publish date: 2015-06-26

Report number: FOI-R--4092--SE

Pages: 47

Written in: Swedish

Keywords:

  • Defence economy
  • new public management
  • product management
  • governance
  • strategy

Abstract

The Swedish government uses performance management to control authorities. In the Armed Forces performance is conceptualized by the term product. By reporting product information, the government intends to control the Armed Forces' adaptation towards environmental changes, so-called product management. However, the introduction of product management has rendered difficulties such as needless administration, divergent reporting and, as a consequence, problematic relationships between the Ministry of Defence, Headquarters', and operational units, who jointly are responsible for the economy. This study report aims at clarifying the problem of product management and proposes an action agenda. FOIs operation research work has provided a solid base to study the problem. Data include document studies, participant observations, and interviews throughout the headquarters', and the interaction with the Ministry of Defence have been observed. In recent years, the organization of Swedish Armed Forces has shifted its focus - from international operations towards more domestic capability-building while the organization has been exposed to market forces. Despite this, the Armed Forces' control strategy has not been adjusted. The empirical analysis demonstrates how the problem of product management is related to the absence of product budget accounting of real benefit and flaws in change leadership. In conclusion, there is a lack of knowledge about the cost-effectiveness of the Armed Forces' core activities i.e. war troops. A number of recommendations is provided. The product concept should be refined to address economy of war units and the definition of the Armed Forces performance ought to be revised, in particular how real benefits of products can be described and addressed, as well as analyzed based on cost data upon product budgets. Thus, the product concept should be used to make visible whether the Swedish Armed Forces' organization is doing the right things, at the same time there is a need to better control whether major change projects contribute to (a) the right things are done and (b) adaptation of production.