The general imagination envisions governance as the processes that set policies that define what the organization will do, and management as the processes that set the policies of how the organization will do its activities. It is not uncommon for the general imagination to comingle this organizational what and how, i.e. governance and management are synonymous. Adopting a systems imagination, this paper posits a distinct meaning for governance and management. Focusing a systems lens on the Virginia Department of Transportation (VDOT), a state agency with over 7,500 employees and a budget of over $5 billion, it was observed that the characteristics of a system - differentiation, teleology (goal-seeking or purposeful), hierarchy, holism, interrelationship, regulation, and transformation - apply to the organization. Having observed that an organization satisfices the characteristics of a system, it is posited that the whole of VDOT is composed of three components: governance, management, and operations. Further, it is posited that the distinct meaning of governance and management (i.e., what to do and how to do it) is derived from the systems characteristics of the respective component, especially differentiation, holism, interrelationship, and teleology. A systems imagination casts governance as the organization's component that produces the policies and authorization that stipulate what to do with the organization's key assets. Using these governance products, management is cast as the component that stipulate how an organization uses its key assets, and operations uses these management products to use the organization's key assets. Importantly, the organization's auditing (internal and external) and monitoring functions provide feedback to the management and governance components.
Farkas, Bernie and Papp, Raymond, "Governance and Management: Understanding with a Systems Imagination" (2019). SAIS 2019 Proceedings. 11.