From a System Governance perspective (Organization Cybernetics), Strategic Management is future oriented and externally focused. Strategic management with respect to Governance Model (VSM) is associated to System 4 and adopts an “outside and then” perspective that looks at the bigger picture and longer term.
- It is the intelligence gathering function.
- It collects and analyzes information about changing conditions from internal and external sources and assesses its impact on organizational strategy.
- It identifies opportunities and threats and ensures that the system can survive in a changing environment; it uses benchmarks to assess organizational performance relative to competitors; and it develops strategic options.
- Strategic management acts as an information clearing house for operational units. It has been described as “an interactive assemblage of managers” (from Beer, reported in Jackson, (1991)) evoking images of intensive management debate and discussion. The strategic management function receives and aggregates information from multiple operational units and redistributes it back to them when immediate action is required.
- Strategic management also liaises between operational and normative management. It shields the normative function from information irrelevant to major strategic decisions by filtering and aggregating information received from operational management (Jackson, 1991). Simons (2000) interactive controls contribute to the strategic management function.