International business has changed profoundly over the last three decades. The radical strengthening of foreign subsidiaries within multinational corporations (MNCs) is arguably a key feature of the new competitive landscape since the 1990s. A second and related trend is the rising importance of technological innovation generated outside the corporate home base. This study addresses both issues by analyzing how multinational corporations coordinate R&D units located outside their home location. More specifically, the coordination structures employed towards Japanese expatriate R&D units are examined and the effect of R&D mandate and country-of-origin on coordination structures analyzed. The empirical research is based on an extensive questionnaire and interview study. Questionnaire data on 69 Japanese R&D units were collected and 16 interviews were conducted with R&D managers in executive positions of Japanese MNCs.