The purpose of the course ’Costing and Design Business’ is to address skills to students with interest of design and innovation in business regarding the costing and management accounting side of the companies design activities and processes.

Though design oriented and – led companies have a major focus on ex. design processes, the functionality of different design alternatives, marketing competitiveness of design elements, often these companies have a lack of focus on the costing side of these design activities, projects and processes. For the survival of these companies it is crucial that employees are able to connect the design side of the company with the costing and management accounting side processes of product design/development as well as the production and price calculation processes.

In this course the students are intended to acquire specific knowledge on how companies use costing and accounting information for decision-making and control. The accounting information is used ex. to allocate costs to products and projects, to inform and calculate on prices, to estimate profit and utility in departments and at the same time the companies have to deal with organizational matters like who has the decision rights regarding making optimal decisions on behalf of the company.

Also, it is crucial in this course to give the students an understanding of the evolution of design, e.g. from signs to objects to systems, in order for them to be able to comprehend design on different content levels in the business (e.g. product design versus strategic design). The students will acquire ‘designerly’ knowledge about design ability: understanding and thinking about what designers do. There will be a focus on design processes and methods used in order to solve design problems in various business contexts; how design can be used to differentiate, transform, and contribute to business results. In addition, there will be an emphasis on ‘wicked problems’ and the inherent contradictions between the balance of business and ‘art’, intuition and logic, control and creativity. Further, aesthetic dimensions of design, especially in the context of the so-called Soft Innovation, that is, changes in products and processes of an aesthetic or intellectual nature, are presented and discussed. Together with academic disciplines for analyzing design content and objects, e.g. design semantics, the students will encounter various theories of value in order to be better equipped when assessing design from different perspectives.

Finally, the intention is to integrate issues like the specific planning and organization of companies, calculation practices and performance measures with design activities and processes to help understand how companies can cope with strategic decision making on design issues and the practical and operational implementation of these strategic, design decisions in financial dimensions; budgeting and the choice of transfer price practices in firms are concrete examples on this.

Subjects and central issues in the course:

• Introduction of management accounting as a way of organizing companies regarding how to deal with costs, the allocation of costs to products and projects and regarding who has decision rights on how to deal with costs.
• The subjective value theory, use-value versus exchange-value, value as experience. Psychological, economical and sociological perspectives of value.
• Introduction to the expanded concept of design as well as the evolution of the designer.
• The term Design Thinking.
• The distinction between management accounting for decision making and control purposes.
• Product design and innovation, research methods, making and testing ideas, manufacturing processes. Product design and its relation to globalization, technology, and the media.
• The coordinating and motivating implications of management accounting.
• The function and design choice of transfer prices.
• Responsibility accounting; how to design departments; how to decentralize the allocation of decision rights and how to measure the performance of the units.
• Design process, from the linear to the modular and situated. Idea generation, decision-making, balance.
• Wicked problems and Integrative thinking, how to face different opposing ideas, reliability versus validity.
• Aesthetics and design, aesthesis, aesthetics and aestheticization.
• Costing and pricing calculations; when to use what kind of calculation.
• Allocation of costs to customers, products, projects, departments, processes, activities etc.

Literature:

• Berhausen, N. & Thrane, S. (corresponding author): Control and Coordination of Design Driven Innovation Processes: Case Evidence from the Automotive Industry (Working paper/work in process, Dep. of Operations Management, Copenhagen Business School).
• Bisgaard, Ulrik & Friberg, Carsten (2006). Indledning. In: Bisgaard, Ulrik & Friberg, Carsten (red.). Det æstetiske aktualitet. København: Multivers. (pp 9-29).
• Buchanan, Richard (1995). Rhetoric, Humanism, and Design. In Buchanan, R. and Margolin, V. (eds) Discovering Design: Explorations in design studies. Chicago: University of Chicago Press. (pp. 23-66).
• Buchanan, R. (1995): Wicked Problems in Design Thinking. (pp 2-32).
• Cross, Nigel (2011): Design Thinking: Understanding How Designers Think and Work. Oxford: Berg. (pp 2-32).
• Dorst, Kees (2006). Design Problems and Design Paradoxes. In Design Issues, vol. 22, no. 3. (pp 4-17).
• Hall, Stuart (1980). Encoding/Decoding. In: Hall, Stuart et al (Ed.). Culture, Media. Language. London: Hutchinson. (pp128-138).
• Heskett, John (2003). Toothpicks & Logos: Design in Everyday Life. Oxford: Oxford University Press. (pp. 2-11). Zimmerman, J: Accounting for Decision Making and Control. 8^th. ed. McGraw Hill. Chap. 1, 2, 4, 5, 7, 8, 9 & 11.
• Holbrook, Morris B. (1999). Introduction to consumer value. In Holbrook, Morris B. (ed) Consumer value: A framework for analysis and research. London: Routledge (pp 1 - 28).
• Krippendorff, Klaus (1995). On the essential Contexts of Artifacts or on the Proposition That  ”Design is Making Sense (of Things)”. In: Buchanan, Richard & Margolin, Victor. (Ed.). The idea of Design. London: MIT Press. (pp 156-184).
• Lawson (2006). How designers think: The design process demystified (4th edition.), Oxford: Architectual Press. (pp 3 – 110).
• Menger, Carl (1976). Principles of economics. Auburn, AL: Institute for Humane Studies; Chapter III The theory of value (pp 114 - 148) and Chapter VI Use Value and Exchange Value (pp 226 - 235).
• Milton, Alex and Rodgers, Paul (2013). Research Methods for Product Design. Laurence King. Chap. 2.
• Ouden, Elke den (2012). Value from Different Perspectives. In Innovation Design: Creating Value (pp 21-60).
• Parsons, Tim (2009). Thinking: Objects - Contemporary Approaches to Product Design. AVA Publishing. Chap 2.
• Rittel, Horst Willhelm Jakob, & Webber, Melvin M. (1973). Dilemmas in a general theory of planning. Policy Sciences, 4(2), 155-169.
• Stoneman, P. (2010) Soft Innovation: Economics, Product Aesthetics, and the Creative Industries. Oxford: Oxford University Press.  (pp 1-20).
• Trott, Paul (2011). Innovation Management and New Product Development. 5th edition. Financial Times/ Prentice Hall. Chap. 12.
• Zimmerman, J.: Accounting for Decision Making and Control (2014), 9^th. ed. McGrawHill.