The problem of managing product development engineers: Can the balanced scorecard be an answer?

Abstract Traditionally, product development and design have been considered difficult areas to manage. Especially, connecting development and design engineers to the economic objectives of the company is a challenging task. This difficulty is partly caused by a lack of management tools. Product development and design have traditionally been managed only with project budgets and schedules. This has meant that the development and design engineers are not familiar with the overall profitability goals of the company, and they do not recognize the cause and effect relationships that their decisions have in the company. In addition to the issues above, development and design engineers do not receive enough structured and motivating feedback about their work. In this paper, product development and design are connected to the management system of the company. Special emphasis is put on helping the product designers do their work cost consciously and according to the company strategy. The performance analysis is based on the balanced scorecard (BSC) concept and advanced cost accounting techniques. The theoretical part developed in the paper has been applied in the case of a company which specializes in the manufacture of soapstone fireplaces and building stone. On the basis of our study, it can be concluded that if the implementation of BSC is done properly, the idea of BSC is helpful in managing design engineers.

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