During the early 1960s, the US Department of Defense, under Secretary Robert McNamara implemented for the first time in national government a Planning-Programming and Budgeting System (PPBS) in order to improve effectiveness and efficiency in defence program management. McNamara sought improved effectiveness through a formal five-year program designed to reduce costs. He also sought efficient methods of managing joint service strategy coordination, requirements' analysis and planning, and improved alignment between the choice of requirements and the size and nature of the acquisition program. The Australian Defence Organisation (ADO) and the UK Ministry of Defence later sought to implement their own forms of PPBS. Recently, both have introduced program management innovations that seek to achieve more reliably effective and efficient outcomes. The thesis has reviewed program management theory with a particular focus on its implementation challenges relating to strategic management, program review, personnel management and program coordination. It has sought to answer the research problem: Which specific management designs could offer better outcomes for Australian defence technological edge programs? The thesis' central proposition is that the greatest opportunities for improving defence program outcomes occur when classic PPBS concepts are implemented within a Program Management System that incorporates Zero- Base budgeting (ZBB), Management by Objectives (MBO), and Matrix structural systems. All of these systems, either alone or in combination seek to enhance program quality, scheduling, financial management and evaluation. The research used in-depth case study research based on qualitative data found within a selection of recent Australian National Audit Office reports, and other public records. The central proposition is subjected to dynamic reliabilityrelated contingency analysis and evaluation. The thesis concludes with the proposition that if managers were to implement a contingency based integrated mixture of the above-mentioned systems they could expect improved technological edge program outcomes.

The aim of my thesis was to clear up the issues of the program and performance budgeting on the level of municipal authorities. On the basis of available sources, I have gained findings and experience from abroad where these methods are used from the half of last century. Various changes and measures are assessed and realized to make a budget process better, economising more transparent and the allocation of sources more improved. The establishing of program-performance budgeting is quite a difficult process including several phases. Their realization is a necessary condition to be able to continue with the next phase and the whole process itself.