Despite the fact that the most common arena in which people experience cross cultural interaction is the work organization, little is known about how culture evolves in complex cultural work settings, or what effects cross-cultural experiences have on home organizations and their respective national cultures. As Japanese and U.S. firms continue to internationalize, non-parochial theories are necessary to reflect the complexities of theirs and other industrialized societies' emerging multicultural work environments. My project will advance such theory by comparing and contrasting the internationalization experiences of two Japanese firms at disparate stages of internationalization with their U.S. counterparts. Effects of internationalization including cultural alienation, organizational learning, industrial regrouping, and cultural change will be examined. Outcomes of the project will include a theory of negotiated culture to help practitioners as well as scholars understand the process of culture formation in complex cultural work arenas. Implications for managing transnational firms, creating cross-cultural personnel policies, and monitoring U.S.-Japan relations will be addressed.