Design driven strategic renewal: Development of strategic design and design management capabilities in the Turkish ceramic sanitary ware industry

In the face of major dynamics such as globalization, increasing pace of technology, increased product and service offerings, and heightened customer knowledge and expectations, organizations are continuously looking for ways to generate differentiated and innovative offerings that are of greater value and that can catch up with evolving user contexts, needs and desires. Inside these complex and ever more demanding conditions that characterize today's competitive landscape, companies are turning their attention towards design as an important capability that can help them generate innovation and improve business outcomes. When these dynamics are combined with mounting evidence regarding the role of design in increasing innovation, competitiveness and business performance, we are witnessing an increasing integration of design into business strategies and new product development processes of businesses from various scales and industries. However, a very critical point that must be underlined is that solely investing in design or engaging in design activities is not sufficient to ensure that design contributes to organizational goals and generates the desired business outcomes. In order to attain the contributions that design can offer to a business, organizations need to carry out effective design management practices. Theoretical and empirical studies reveal design management to be the mediating factor that determines the effectiveness of design projects and how design plays a role in improving business performance. Additionally, scholars underline that effective design management must begin with connecting design to corporate objectives, business strategy and the overall business context. A review of design management literature portrays that these strategic level responsibilities under design management are increasingly taking the lead, as necessary steps that must be successfully carried out, before the identification and administration of design resources, projects or processes. Based on these major premises, this thesis examines design management capabilities with a special attention on strategic level capabilities in managing design. It focuses on the management of design inside organizational contexts; examines systems, processes and resources used for managing design; and places a particular attention on understanding how design is linked to corporate goals and strategy through existing design management capabilities. The research was carried out in two main phases. The first phase involved an extensive theoretical review of existing literature in design, design management and strategic management, in order to develop the conceptual frameworks to be employed in the empirical part of the study. On account of this theoretical phase, a new design management audit tool named Design Management Audit Framework was developed as a systematic instrument to enable a detailed examination and assessment of an organization's design management capabilities. The tool allows not only the analysis of more traditional capabilities and responsibilities under design management, but also the appraisal of strategic level design management capabilities that are necessary for aligning a company's design efforts with its business strategy and organizational objectives. Design Management Audit Framework provides major improvements to present design and design management audit tools, by incorporating critical capabilities, which have been omitted in existing tools and frameworks and by updating them in the light of recent perspectives that emerged in design management literature. In the second, empirical phase of the research, design management capabilities were explored in three large scale manufacturers from the Turkish ceramic sanitary ware industry, based on case study research methodology that utilized the new Design Management Audit Framework to form the main analytical structure. In addition to assessing design management capabilities residing inside these organizations, the case studies specifically focused on understanding how these organizations developed design management capabilities relating to the strategic level, how they connected their design efforts to business strategies through existing systems and routines and major enablers and barriers influencing the development of strategic level capabilities in managing design. The empirical context was based on firms from the ceramic sanitary ware industry for several decisive reasons. Ceramic sanitary ware is one of the first sectors in Turkey to start utilizing design and design management capabilities. It is one of the oldest and most powerful sectors of the Turkish economy, having a major place in national industrial development strategies. More importantly, after the mid 2000s, several firms from this industry were noted to initiate important strategic renewal activities that involved the inclusion of design in corporate and brand strategies, improvement of design management skills and increase in the amount of design investments. Additionally, reports detailing the nature of the sector and the prevailing competitive conditions of the world ceramic sanitary ware industry reveal design and design-driven innovation as extremely critical capabilities to boost competitiveness. Altogether, these factors render this sector a significant ground to explore design management capabilities. The findings of the case studies revealed that although the reasons for the initial acquisition and development of design management capabilities can be varied, the development of strategic level capabilities in managing design and an increased integration of design into business strategies have taken place as a result of major strategic renewal and organizational transformation efforts. These organizations focused on developing their strategic level design management capabilities to support major changes in business strategies, such as changes in market focus, transfer to a brand development strategy targeting global markets, and restructuring of brand architecture and product management strategy. The study identified that the assignment of management responsibility for design at the senior level, inclusion of design managers in strategy formulation and business planning processes and establishment of an independent design department serve as major means for ensuring the alignment between design efforts and business strategies. Major enablers in this process appear as design's identification as a vital tool to achieve a long-term strategic objective, continuous support and commitment coming from top management, as well as programs focusing on the development of an organization wide awareness and culture for design. In terms of barriers, the study identifies that finding the right place for design function in the organizational structure, formal assignment of strategic level design management capabilities, underdeveloped marketing capabilities, as well as organizational culture present major barriers for these organizations, in the process of advancing their strategic design management capabilities.