Drawing on empirical data from two studies of 119 Japanese affiliates located in the United States and Europe, this paper focuses on three fundamental questions: 1. What organizational factors influence performance of the overseas affiliates of Japanese MNCs? 2. What impact does expatriate staffing have on the affiliate's performance? and 3. What factors influence expatriate staffing patterns in Japanese MNCs? While the empirical results lend some support to the assertion that MNCs characterized by global integration and local responsiveness will outperform less transnational competitors, there are significant differences between the American and European subsamples on the impact of expatriate presence on performance.