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The modern New Zealand (NZ) Army faces a number of challenges and changes that will place increased demands on limited army resources, one of which is soldiers. The scope of this thesis was on whether morale was critical to the modern NZ Army's operational effectiveness, and if so, why. The author established definitions for morale in the modern NZ Army and for operational effectiveness as well as looked at morale's components or elements, factors that influence morale, and possible products of morale. In the final analysis, the author then analyzed whether morale would indeed be critical to the operational effectiveness of the modern NZ Army from a collective viewpoint and against the modern NZ Army environment. The author concluded that morale was critical to the modern NZ Army, as it will play a key role in overcoming some of the changes and challenges that face the army. It also noted that morale was the foundation upon which the Army of the future may rely upon. The analysis mandates that an increased focus on the morale of soldiers will be required to ensure that the Army can meet these challenges or a reduction in the operational effectiveness of the modern NZ Army may result.