Research and development activities (R&D), involved in various stages in the innovation process, have become more complex in view of the current uncertain and dynamic environments. Thus, managers as decision-makers faced the problems of finding the right performance measures for R&D. Hence, the purpose of this paper is to conduct a review on the literature pertaining to designing and implementing a performance measurement and management system of R&D activities with the focus of identify possible research gap. In so doing, the paper discusses and analyse both of normative and empirical research on performance management system and management control of R&D activities. The nature of R&D activities, the need of appropriate system to measure and manage their performance together with the research issues that were examined in this areas and also the insights gained from the research were discussed in this paper. How performance measurement and management system work at R&D were also discussed.Consequently, this paper identifies the research gap and proposed possible research issues to be investigates.
Keywords: Performance measurement, Performance management system, Management control system, Innovation, Research and development