As trade has become international in scope, companies from diverse nations have begun conducting business with one another. During the twentieth century, advances in telecommunications and transportation technologies made it possible for even small companies to conduct business on an international level, but that progress also brought about cultural conflict as business professionals from one country and culture transacted business with professionals from other countries and cultures. Lacking an understanding of the differences in both national and corporate cultures, misunderstandings often arose.
The differences between Japanese and American companies can be particularly stark, in part because the cultural differences of the nations, let alone companies based in those nations, can be so different. Japan is an island nation which has preserved its ethnic heritage and which has a largely homogeneous society that is highly structured around a strict hierarchy. The United States, on the other hand, is a vast nation with considerable natural resources built by immigrants who believed that anyone could rise to a position of power within a company or within the country. The culture of the United States and its businesses stresses the individual; the culture of Japan and its businesses stresses the collective.
Such distinct differences do not mean that companies from these nations cannot work together, or that managers from one nation cannot be successful