The purpose of this study was to examine the interaction between firm and environment. The problem addressed was the paucity of information concerning interaction at the environmental interfaces. The sample included 46 U.S. subsidiary and Danish firms in a paired-comparison design. A total of 17 industries was represented. The unit of study was the firm. The approach taken viewed the firm as a total system which interacts with its environment. Environmental interaction was described in terms of four systems flows across seven environmental interfaces. The four flows were the movement of men, money, material, and information. The environmental interfaces represented government, customers, suppliers, competitors, labor, stockholders, and other institutions. Data was collected through interviews with top managers and through questionnaires completed by top managers and other key personnel. When U.S. and Danish firms were compared, several significant differences were noted. Danish firms reported a greater amount of interaction across the interfaces with government, suppliers, competitors, and other institutions. Danish firms provided more support for schools and trade associations and were more receptive to management innovations from outside the firm. U.S. firms reported more new products, a greater percentage of sales in new products, and more new product expertise. Firm strategies were concentrated on service, quality, and new product development. U. S. firms also tended to rely heavily on parent companies. The emergent picture for Danish firms showed that interaction with the environment was increased, sociability was increased, tradition was more important, and conditions were generally more relaxed. In some ways, Danish firms may be.described as more socially- oriented citizens. The picture for U. S. firms was one of increased self-sufficiency, increased product competence, increased selectivity in environmental contacts, and, perhaps, a superior strategy concerning sales and profits.