This research examines the relation between participative budgeting and business performance mediate as well moderate by internal process performance. Two hypotheses in this research are that (1) the participative budgeting affects the business performance which is mediated by internal process performance and (2) the participative budgeting affects the business performance which is moderated by internal process performance. This research is a quantitative research in the explanatory level. The population of this research is all of the manufacturer companies in East Java with business unit as a unit analysis. The respondents are the manager of business unit in Manufacturing Company in East Java. The questionnaires was sent to 359 companies. But only 143 filled and sent back the questionnaires, it means the response rate is 39%. The research result shows that (1) the internal process performance fully mediates the relation between participative budgeting and business performance but (2) the internal process performance only behave as a pseudo moderating
for the relation between participative budgeting and business performance
Partisipative budgeting, internal process performance, business performance, mediating, moderating
