In this study we contend that the conceptual foundations of conventional construction design and design management are obsolete, and these need to be substituted by a more comprehensive theoretical basis. As the first paper in the series of three, the main objective of this study is to justify the research by determining the significant problems and challenges related to the design management in a case study organization. Design science research methodology is chosen to develop a scientifically grounded solution with practical relevance. Based on surveys, interviews, database analysis and observations, we conclude that there are significant problems with the design management practice. The major issue with design management is related to the poor and simplistic conceptualization of the design task. The problems summarized in this study facilitate the quest for the proper theoretical understanding and developing a knowledge base for designing a new process model.