AC Milan have been blighted by reliance on president Silvio Berlusconi's "bad habits" in recent years, according to Alessandro Nesta.
The seven-time European champions have fallen well off the pace in Serie A since winning the title in 2011, having finished 10th last season and eighth in 2013-14, after a distinct lack of investment in the playing squad.
Under new head coach Sinisa Mihajlovic this term and following an increase in pre-season spending, Milan have begun to threaten the top three once again, but Nesta - who won both the league and the Champions League twice with the club - believes they have been damaged by Berlusconi's refusal to loosen the purse strings and has urged them to "change mentality" going forward.
"AC Milan got a bad habit from a very rich president who used to bankroll the team with his own money," he told Omnisport. "Now he can't anymore and I don't think AC Milan has got a structure and mentality for the transfer market with little money.
"They need to create a scouting network around the world to look for young talents. They need to change mentality as they can't spend as much as before."
Nesta has backed Mihajlovic as the right man to lead Milan back into the Champions League, however, and suggested a lack of patience has failed to resolve the team's problems in the past.
"I think so," he added when asked if the former Inter man should remain in his post. "Mihajlovic is a very good coach. In the last few years AC Milan changed four coaches, the coach can't be always the problem. Perhaps problems are elsewhere."
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