Ethnography and Design? by Andy Crabtree and Tom Rodden is an insightful paper written in 2002 about the practical relationship between ethnography and design. The main problem they describe is how to link details accounts of situated activities (provided by ethnography) to the actual design of computer systems. Beyond "requirements engineering", the authors propose "a broader conception of design work" with three roles for ethnography:

"To identify general researchable topics for design through continued workplace study. (...) To develop abstract design concepts concretely by using workplace studies to sketch out and work up design-solutions. (...) Evaluations may be both summative, where ethnography is employed as a means of conducting a ‘sanity check’ on design, and formative, where prototyping sessions are treated as sites of work amenable to study and findings are used to drive iteration in design (...) To drive the development of novel technologies by evaluating the social application of innovative technological research. "

They also distinguish "product-oriented design" and a "process-oriented view":

""The product-oriented perspective places an emphasis on organizing the design of an end-product rather than on the nature of the production process itself (...) An alternate point of view - the process-oriented view – places emphasis on the role of learning and dialogue between the parties to design throughout the development process employed as a means of conducting a ‘sanity check’ on design, and formative, where prototyping sessions are treated as sites of work amenable to study and findings are.""

Why do I blog this? some good elements here to nurture methodological discussions and to go beyond current use of ethnography in design research.

Crabtree, A., Rodden, T. (2002). Ethnography and design? In Proceedings of the International Workshop on "Interpretive" Approaches to Information Systems and Computing Research. London. pp. 70-74.