Investment in Design and Firm Performance: The Mediating Role of Design Management

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.