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Investment in Design and Firm Performance: The Mediating Role of Design Management *
Author(s) -
Chiva Ricardo,
Alegre Joaquín
Publication year - 2009
Publication title -
journal of product innovation management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.646
H-Index - 144
eISSN - 1540-5885
pISSN - 0737-6782
DOI - 10.1111/j.1540-5885.2009.00669.x
Subject(s) - design management , empirical research , business , research design , investment (military) , engineering design process , structural equation modeling , process (computing) , empirical evidence , knowledge management , marketing , industrial organization , operations management , process management , computer science , economics , information management , social science , philosophy , epistemology , machine learning , sociology , politics , political science , law , operating system
Design management is an increasingly important concept, research into which is remarkably scarce. Although the literature suggests that design management has an effect on design effectiveness, there is no empirical support for the impact of design management on firm performance. Furthermore, few studies have quantified the contribution that design makes to company performance. The aim of this paper is to analyze the effect of design investment on company performance and how this relationship is mediated by design management skills. Structural equation modeling was used to test the research hypotheses on a data set from the Italian and Spanish ceramic tile industry. Results suggest, first, that design management enhances firm performance. Second, this research also provides empirical evidence that investing in design is positively related to design management. Third, design management plays a significant role in determining the effects of design investment on firm performance. Companies that manage design effectively and efficiently attain better performance than those that do not. Therefore, good design does not emerge by chance or by simply investing in design but rather as the result of a managed process. Additionally, a methodological contribution of the present study lies in the empirical validation of a scale to assess design management skills. Finally, some suggestions are put forward for future lines of research that would complement this study and would go beyond some of its limitations.