Controlling for commanders: an established leadership tool within the German Armed Forces?

The post-Cold War era witnessed intense transformation in the German Armed Forces (the Bundeswehr). The changes were aimed at achieving the economic modernization of the Bundeswehr, using advanced managerial methods and tools. As part of that effort, business rationality criteria were introduced in the Bundeswehr to reduce operating and personnel costs. The two main managerial instruments that were used initially in 1992 were cost and benefit accounting (KLR) for transparency and continuous improvement (KVP) by micro innovations for institutionalized optimizations. Later, a comprehensive controlling concept was introduced based on the KLV principle. The objective here was to achieve efficient use of public money through cost transparency, target orientation and continuous reporting.

Controlling supplements the supervision of the cost-benefit analysis in the whole leadership process.

With this concept in play, the Bundeswehr’s leadership was granted access to all necessary information to lead each area of responsibility. The leadership process was supposed to follow the four classic phases of military command: identification of the state of affairs; planning; issuing orders; and control. But, in reality, the leadership made significant modifications of the concept of controlling following its introduction in the Bundeswehr in the early 1990s. Instead of viewing it as a reduced cost accounting information system, the concept was modified to reflect the diversified balanced scorecards which were aimed at breaking down the institution’s strategic goals into operational measures. The balanced scorecard figures were based on controlling data in measurable quantities. This enabled both the military and civil leadership to keep track of the progress made in attaining their strategic goals.

However, it has been suggested that the Bundeswehr has not fully achieved its objective to establish controlling as an official leadership tool. This view comes from the observation that there is a clear difference in the functionality of this tool in the military and civil economies. In the civil economy, controlling fulfills a constructive steering function. And, unlike in the Bundeswehr, it is not all about providing subordinate services for the management. As military and civil leaders are generally responsible for the allocation of only a small part of their resources, controlling creates a mere steering illusion in the Bundeswehr. In the prevailing conditions, the concept of controlling in the Bundeswehr, in all respects, represents virtual competencies and responsibilities without a real material basis.

The complete article was written by:

  • Dr. Gerd Portugall
    Former senior researcher at the Bundeswehr Institute of Social Sciences

Download the full article pdf (pdf, 346 kb)

EY refers to one or more of the member firms of Ernst & Young Global Limited (EYG), a UK private company limited by guarantee. EYG is the principal governance entity of the global EY organization and does not provide any service to clients. Services are provided by EYG member firms. Each of EYG and its member firms is a separate legal entity and has no liability for another such entity's acts or omissions. Certain content on this site may have been prepared by one or more EYG member firms