This paper seeks to elucidate the process through which a kimono cloth store transformed into a modern department store. Additionally, I will analyze the influence of the popularization that occurred as part of that transformation on department store management, and consider the relation between the formation of a mass-consumption society and department-store management. I shall assess the transformation from three viewpoints: (1) expansion of stores, (2) diversification of merchandise sold, and (3) the development of various functions of the department system.
Matsuzakaya's transformation from kimono dealer to department store occurred during the 1910s. At that time another Japanese department store, Mitsukoshi, had already been established. In order to compete with Mitsukoshi, Matsuzakaya assembled a line of highgrade products, pioneered modern equipment and fixtures, and thus contributed to the formation of the “department store culture.” However, due to price surges during the final stage of World War I, as well as the economic downturn, which followed the war, there arose a desire among consumers for discount sales which outpaced the anticipation of Matsuzakaya.
In response to that desire, Matsuzakaya advanced lines completely corresponding to the bargain sale expectation of consumers during the 1920s. Because of the intense competition among department stores during that period, Matsuzakaya adopted a completely different business strategy in which they purchased merchandise directly from the places of production, and advertised merchandise in cooperation with the places of production. As a result, from the second half of the 1920s, Matsuzakaya expanded their stores rapidly, and began to carry not only high-grade products, but also everyday items. Moreover, Matsuzakaya diversified and increased the kinds of products sold. As a result, not only the highgrade articles but also these everyday articles gradually proved to be an important profit source for Matsuzakaya.
Finally, as a result of Matsuzakaya's pursuit of efficiencies based on cost consciousness during the Showa Depression at the beginning of the 1930s, the functioning of the merchandise department system helped Matsuzakaya to undertake an all-inclusive transformation into a department store. In light of that, I argue that the transformation into a department store and the popularization of Matsuzakaya's product line progressed in a parallel fashion, in which the two functioned in a reciprocal relationship.

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management with a special reference to the FDI (i.e. foreign direct investment) from a historical perspective, especially from postwar period. The previous studies regarding the FDI for Japanese market has not fully captured in what ways the multinational enterprises strengthened the ties with Japanese market. It is also unclear how the enterprises have utilized the Social Capital in Japan.
In pharmaceutical industry, for example, examining the relationship with Japanese medical practitioners is an extremely interesting question, especially if we view this under the management systems. The multinational pharmaceutical enterprises was urged to build up relation with Japanese medical practitioners and therefore made a good use of their network in order for the growth of their own business. Taking the above problems into consideration, the paper sheds a light on Schering AG of Germany as a case study and clarifies its management method in Japan between the 1950s and 1990s.
Schering has strengthened the ties with Japanese subsidiary company since the late 1970s. The corporation tried to strengthen the functional capability of Japanese subsidiary by building up its R&D division as well as educating their employee. The Japanese subsidiary built up good relations with Japanese medical doctors who are supposed to contribute to acting as opinion leaders among Japanese medical circles. The subsidiary, in return, provides cutting edge scientific information to them.
By utilizing Social Capital in contrast medium area, Schering had successfully expanded its Japanese market from 1980s. Then, it entered therapeutic medicine area in order to increase the profit. However, this was unsuccessful. This is because there had existed many related network of medical doctors in therapeutic medicine area already. It is also because that Schering has heavily relied on contrast medium business, which made it hard to make use of Social Capital and not succeed in this area.

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