21COE, University of Tokyo

MMRC Discussion Paper No. 140

MMRC-F-140

Knowledge Introduction from Abroad into
Management of Department Stores:
Centering on Activities during the Period of
Postwar Recovery in the 1950s and the 1960s
Graduate School of Economics, The University of Tokyo
MIYAZOE, Kenshi
March 2007

21COE, University of Tokyo

MMRC Discussion Paper No. 140

Knowledge Introduction from Abroad into
Management of Department Stores:
Centering on Activities during the Period of
Postwar Recovery in the 1950s and the 1960s
Graduate School of Economics, The University of Tokyo
MIYAZOE, Kenshi
March 2007
Abstract: During the period of postwar recovery of department stores, knowledge
introduction from department stores overseas was positively carried out in a variety ofways to obtain practical know-how for the management of department stores, reflecting
an increase in newcomer department stores and enhancement of managerial
fundamentals in existing department stores to take advantage of expanding demand.
In these activities, however, some differences were seen due to the existence ofmanagerial resources taken over from the prewar era, and competitive positions.
Keyword: Knowledge transfer, introduction methods, existing knowledge andintroduced knowledge, department stores

1. Preface
The department store is a retail business format with a history of 100 years since its establishment
in Japan, but it is significant to look back at the 1950s and the 1960s when Japan was in the midst of
recovery in economy from the damage of World War II, and Japanese department stores were underreconstruction in the history of the management of the department store, and to analyze how they met
remarkable quantitative expansion of and qualitative changes in consumers’ demands, and how they1Miyazoe

modernized management approaches.1
Although the share occupied by the department store industry in personal consumption peaked in
the 1960s (Koyama 2005),2 this paper attempts to clarify the fact that there were a large number ofcases of knowledge introduction from abroad, methods of introduction and contents of knowledge
introduced to meet the consumers’ demands and modernize the management during the period fromthe 1950s to the 1960s when Japanese department stores were reconstructed and moved toward theirpeak in their share of personal consumption.3

1-1. Interpretation of the 1950s and the 1960s for Japanese department stores
Interpretation of the 1950s and the 1960s for Japanese department stores is significant from three
viewpoints. First, following postwar recovery of demand, department stores as the sole large-sized
retailers expanded stores and opened new stores, and entered another growth period (restoration)
together with newcomers. In this period, many department stores restarted operations on a full scale,
while newcomer department stores were established one after another. Specifically, Kansai-based
department stores branched out into Tokyo, e.g., the Tokyo Oimachi Store of Hankyu Department
Store (1953), the Daimaru Tokyo Store (1954) and the Sogo Tokyo Store (1957). In addition,
terminal-station-inclusive department stores expanded their store floors such as in the step-by-stepincreases in store areas by the Ikebukuro Store of Seibu Department Stores, and the Toyoko
Department Store (current Toyoko Store of Tokyu Department Store). In provincial regions as well,
new department stores appeared; conventional kimono shops and comprehensive clothing shops
transformed themselves into department stores; and local influential and emerging businesses entered
the department store industry.4
Second, with recovery of consumer demand, the western lifestyle rapidly penetrated among
general consumers, and new and different merchandise categories increased, including western
clothes (ready-to-wear clothes), which caused a decisive turning point in merchandising (MD).5
Concretely, until the first half of the 1950s, ladies’ clothes were usually made to order like kimonos,
but in the second half of the 1950s, so-called easy-order, i.e., semi-custom-made, clothes became themainstream, and in the 1960s, ready-to-wear products occupied the market. For example, Isetan
started selling semi-custom-made ladies’ clothes in 1953, and opened the ready-to-wear ladies’
clothes corner in 1957.
Third, in this period, modernization of management was required. General business organizations
were suffering gaps in the composition of employees caused by a ban on new employment and2Knowledge Introduction from Abroad into Management of Department Stores

military requisition during the World War II, while the patriarchy system in the prewar era stillaffected the relation ship between the management and the employees and the employment
relationships. Under these circumstances, it was a crucial challenge for the Japanese society to bridge
qualitative and quantitative gaps, build modern management fundamentals and raise productivity(Matsuda and Sakakura 1960). Moreover, department stores were seeking modern, practicalmanagement approaches and trying to introduce them to enhance management techniques for cornerdevelopment and merchandising to respond the needs. Newcomer department stores were also
comprehensively pursuing concrete know-how and management methods including those at the
paperwork level. In short, department stores were reorganizing their knowledge to operate their stores,
or seeking overseas for the operational knowledge they were lacking and learning by the knowledge,
and constructing modern management infrastructures.

1-2. Competitive conditions and management of knowledge for department stores inthis period
Against this historical background, department stores were urged to deal with new markets andreinforce their management fundamentals, but the effective measures varied with operating style, andit can be assumed that there were differences between major chains that had been operating multiple
stores since the prewar days with management knowledge of a certain level, and other department
stores and newcomers.
Here, let us look at the state of competition in the department store industry as of 1950 (Chart-1).
Mitsukoshi, Takashimaya, Matsuzakaya and Daimaru were leading the industry, and were far aheadof others. This status is different from today’s situation.
The fact that major department stores were already equipped with know-how about management
and store operation of a certain level immediately after the end of World War II is suggested by theexistence and contents of books discussing the management of department stores jointly written bypractical persons of various department stores and published shortly after the war.
The representative papers dealing with department stores in this period are Shimizu and Tsuchiya(edited) (1951) and Tsuchiya (edited) (1955). In both papers, researchers and practical persons
describe the significance of the commerce style of the department store, and concretely present issues
from management formats to slips in every operational field such as merchandise purchasing, sales,
corner management and accounting. In Shimizu and Tsuchiya (edited) (1951), for example, Daimaru
wrote about store development, store equipment and real estate management (6th Section).
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Fugire-1 Sales Ranking of Department Stores
1950

2000

Rank

Name

Share

1

Mitsukoshi－

1 Takashimaya－

2 Takashimaya

98.3

2

Mitsukoshi

67.9

3

Matsuzakaya

88.1

3

Seibu

61.3

4

Daimaru

78.0

4

Isetan41.7

5 Hankyu. Dept

31.4

5

Daimaru

40.9

6

Shirokiya

20.3

6

Matsuzakaya

35.7

7

Toyoko16.9

7

Hankyu30.5

8Isetan16.1

8

Kintetsu

30.4

9

Sogo

11.0

9

Tokyu

24.7

10

Marubutsu

11.0

10

Tobu

19.0

Rank

Name

Share

Share: Relative Share to the top company.
Source：Sales data of 1950 is based on Toshiaki Maeda（1999）, 2000 is based on Stores Annual report(2001)

Mitsukoshi described display and advertisement (8th Section) and operation of the householdarticles department (17th Section), Takashimaya described personnel affairs and employees’ unions(9th Section), Toyoko Department Store described labor conditions (11th Section), Matsuzakaya
described general affairs, and repairs and utilities (13th Section), Isetan described financing (14thSection), Matsuya described operation of the clothes, foods and housing goods departments (16thSection) and Shirokiya described management of the bargain floor and leased corners (18th Section).
This is evidence that each department store was holding management knowledge of a certain level ineach field.

1-3. Knowledge introduction through translation of literature on department storesoverseas
It is another fact that after the end of World War II, horizons were broadened again to foreigncountries, and studies of department stores overseas and exploitation and introduction of operational
knowledge of department stores overseas were positively carried out. Introduction of literature
concerning operational knowledge of department stores overseas includes Kataoka (1957) andShimizu (1961), (1962) and (1963). Kataoka (1957) introduced “Reconsideration of Functions and4Knowledge Introduction from Abroad into Management of Department Stores

Innovative Ability of Department Stores” (1954) by Pasdermadjian, Secretary General to theInternational Association of Department Stores, and a professor of Université de Genève, andpresented basic principles of management, and challenges from the analysis of major administrative
indices as a business style.6 In particular, he emphasized the importance of centralized management
functions that may be called “integrated management functions,” defining the characteristics of thebusiness style of the department store as functions that optimize their complex merchandise lines
according to changes in the market, and functions that adjust deployment of salespeople according tofluctuations in sales corners.
Shimizu (1961), (1962) and (1963) are the three volumes comprising the translation of the “Buyers
Manual” created by the National Retail Merchants Association (NRMA) that concretely introduced indetail the actual operation methods and key points in the broad domain of merchandising. This
Manual describes all the practical tasks from merchandise planning to purchasing, stock control,
numerical control, sales promotion and organizational requirements.

1-4. Consciousness in this study
Despite introduction and translation of materials abroad on management of department stores inforeign countries, it was more difficult than today to acquire information from abroad in the postwar
days. Tokyo-Haneda airport was opened in 1951, but most Japanese people traveled by ship, andpayments in yen abroad were restricted until liberalization in 1964, so related people were hardly
able to acquire overseas materials. Moreover, in this period, because neither apparel companies nor
general trading firms were operating satisfactory offshore bases and information networks,
department stores had to seek and get information for themselves.7
Under these circumstances, however, Japanese department stores were active in pursuinginformation and introducing knowledge from department stores in foreign countries. Without
passively waiting for translation of materials on department stores in the U.S. and Europe by
department store researchers or introduction of studies overseas about department stores, many
practical staff members were positively seeking knowledge on department store operations in foreigncountries, and introducing such knowledge for themselves. It has been recorded in corporate histories
and passed down from generation to generation that practical knowledge was needed, and many
practical materials (including slips and management sheets) were introduced.
The first intention of this study was to clarify actual situations by reviewing these activities fromthe viewpoint of knowledge transfer, and systematically analyzing behaviors to seek, introduce and5Miyazoe

transfer management knowledge toward managerial innovation of Japanese department stores in thisperiod.
The second intention was to find differences between major department stores and others inactivities to introduce knowledge concerning the managerial domain such as store operation andmanagement administration toward modernization of management. For this purpose, the author
analyzed their activities on the assumption that differences would be seen in corporate activities dueto the differences in management abilities in this period, and accumulation of managerial knowledge
from prewar days.

2. Research on preceding literature concerning introduction of management
knowledge from abroad
Japan’s department stores were born from knowledge studies by practical people who visited
department stores in foreign countries in the early days (Takahashi 1972). During the development
stage following the birth, knowledge was introduced from department stores abroad concerning store
construction. Shiraishi & Toba (2003) gave a full picture of the prewar process in which Takashimaya
positively made use of knowledge from department stores overseas mainly through study tours.
As for transfer of knowledge concerning the retailing business, there are many studies on thetransfer of knowledge on business styles and store operations that take place when retailers operatinginternational businesses advance from their homeland to developing countries from the viewpoint of
global marketing. Regarding the business style of the department store, Sekine & Go (2003) analyzed
the transfer of techniques for department operation from Japan to Korea as technical tie-ups for store
openings.
Not so many studies, however, have been made from the standpoint of receivers of knowledge who
develop management abilities and organizational capabilities by introducing knowledge.
Methods of knowledge transfer seem to be a subject for further research, because what methods
exist, and which methods are effective among them have not yet been clarified satisfactorily (Kim
2002). Suzuki (1980) divided into three types and organized the methods of transfer of retailer
management techniques. That is, when retailer management techniques are transferred from A to B,(i) staff members move from A to B, (ii) staff of B receives retailer management techniques from A,or (iii) any third party intermediates the transfer of retailer management techniques.
Kacker (1988) defined knowledge on retailing as the business concept, the operation policies andthe techniques of which the retailers adopted, and classified ways of transfer of knowledge into6

Knowledge Introduction from Abroad into Management of Department Stores“planned transfer” and “unplanned transfer.” The ways of “planned transfer” include direct
investment overseas, management contracts, joint ventures, and franchising. In contrast, the cases
where any knowledge on retailing is discovered by chance at an overseas study tour, a seminar or aconvention, and the knowledge is transferred without any official negotiations are regarded as“unplanned transfer.” Then, he emphasizes the importance of “planned transfer,” comparing it to“unplanned transfer,” where the intention of the organization concerned is not working and whether
the transfer is continued is uncertain. Leonard - Barton (1995) organized methods to introduce
knowledge from the outside, and categorized them into 8 steps such as “study tours,” “R&D
agreements,” “joint development” and “M&A” according to two criteria of the new techniquecapability and commitments. Then, they state that, to acquire any core capability, there are only two
methods, “joint ventures” and “M&A,” where there is the possibility of full transfer in the context.
How should this study categorize and position the measures and activities for introduction ofknowledge from department stores overseas during the period from the 1950s to the 1960s, thesubject of the study?

3. Methods of study
This study used the three methods to conduct research and analysis shown below to give a full
picture of the knowledge introduction activities carried out by Japanese department stores in the
1950s and the 1960s, especially exploitation of overseas information and knowledge, and actual
situations of introduction activities (such as who obtained what and how).
First, the author checked the corporate history and business-related literature issued by Isetan,
Seibu Department Store, Takashimaya, Daimaru and Mitsukoshi to study their actual businessactivities, i.e., introduction and transfer of knowledge and techniques from department stores inforeign countries.8
Second, he conducted interviews with experienced staff members (who joined in the 1950s or the
1960s) to hear directly from them about the collection and introduction of information andknowledge from department stores in the U.S. and Europe, and checked the actual situations.9 In
addition, he also intended to take advantage of the interviews to find practical materials buried at
actual business sites, and uncover subjects of department store study that had never been researched.
Third, he extracted information about learning activities and overseas information collection in thisperiod from reports on activities of the Japan Department Stores Association.

7

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4. Results of study: Summary by introduction method
Referring to categorization of knowledge introduction methods by Leonard - Barton and Kacker,
classified knowledge introduction methods other than literature reading according to criteria of
whether the activity could be made by a single company, and whether the activity required
intervention of the provider into (i) study tours to stores, (ii) knowledge transfer by a third party, (iii)
introduction of materials such as manuals other than research literature, (iv) admission to any
overseas organization such as a department store association, (v) acquisition through a tie-up with a
specific department store, (vi) dispatch of staff members, (vii) invitation of specialized persons withprofessional knowledge from abroad, and (viii) direct entry into any overseas market.

Fugire-2

Introduction Knowledge from Overseas

Activities were existing
IsetanSeibu

Daimaru

Takashi
maya

Mitsu
koshi

Association
Of
Department
store

Study tour
Transfer
by a third Party
Operational
Methodologies
Admission to
Association
Tie-up with
Foreign Dept. stores
Training abroad
Invitation of
specialized Persons
Direct Entry
Opening Stores4-1. Study tour to a department store in a foreign country
In the 1950s, Japanese people were hardly allowed to travel overseas, and only high-ranking
management people traveled during several postwar years. By actually visiting department stores in
the U.S. and Europe, younger managers were strongly inspired, and affected the management visionand their leadership over employees.
For example, President KOSUGE Tanji III of Isetan (in 1951 then, named Managing Director8Knowledge Introduction from Abroad into Management of Department Stores

KOSUGE Toshio) visited a lot of department stores in the U.S. and Europe from June to September
1951.10
At Daimaru, in 1953 then President KITAZAWA went to Paris, France, to attend the Annual
Convention of Rotary International, and visited some department stores in the U.S. and Europe. Then,
TANAKA Shosuke, the head of its Tokyo Store, made a study tour in the U.S. and Europe in 1955,
and other officers also went abroad as non-regular members of the Japan External Trade Organization(JETRO) or a student studying abroad, and tried to collect information there.
Takashimaya joined the Intercontinental Group of Department Stores (1956), an internationalorganization of the department store industry, and afterward, its management people such as thepresident and the senior managing director went to the U.S. and Europe, and visited many storesalmost every year. In addition, KURAHASHI Yoshio, a member of the Research Department, visited
departments stores in eight countries in the U.S. and Europe in 1962, and made significant
contributions to the Medium- and Long-Term Management Plan (the First Five-Year Plan) of
Takashimaya.

4-2. Knowledge transfer by a third party
In the case of the department store industry, the third party referred to in the categorization ofknowledge transfer methods by Suzuki (1980) will be the Japan Department Stores Association, theconsulting department of an information system company or a store designing company.
The Japan Department Stores Association invited specialists from the U.S. and held lecture
meetings earlier than the 1950s (in 1948, Mr. Philip L. Howard, Senior Manager of the Purchasing
Department of the Baroque Department Store in the U.S., and in 1949, Mr. G. A. Marshal, Vice
President and Senior Manager of the Overseas Department of NCR). In 1956, the Association invited
Chairman J. C. Penny of J. C. Penny in the U.S. for a lecture.
In the 1960s, the U.S. information system companies such as IBM and NCR were spreading
information systems beginning with cash registers, and broadly introducing ideas of advanced
information systems and system-based management approaches.

4-3. Introduction of operational methodologies (manuals)
As described above, during his visit to the department stores in the U.S. and Europe in 1951,
President KOSUGE Tanji III of Isetan found the “Buyers Manual” edited by the NRMA, wasimpressed with the operation methods described in the Manual, and is said to have brought it back9

Miyazoe

home.11 The concept of merchandise categorization standards presented in the Manual wasinterpreted in-house, and edited into Isetan’s own “Merchandising (MD) Notes” by adding target
categorization, usage categorization, and concern-level categorization to pricing categorization andseasonal categorization, and made full use of these notes in subsequent corner designing,
merchandising and management.
Depato Shimbun, a publisher for the department store industry, also paid attention to the “Buyers
Manual” by the NRMA. Then, the publisher asked Takashimaya to translate and review it, and
SHIMIZU Shigeru of the Research Department of Takashimaya took charge of this task through its
publication.12 In this way, merchandising knowledge of department stores in the U.S. was also
introduced independently of Isetan.

4-4. Admission to an international department store association
Takashimaya joined the NRMA in 1951 to secure a route to get information about U.S. department
stores. In addition, the company was admitted to the Intercontinental Group of Department Stores,
composed mainly of department stores in Europe, in 1956 to keep a channel to acquire informationfrom European department stores. Actually, Takashimaya took advantage of the friendship withmember department stores in this Group to develop events abroad and introduced European brands.
In 1962, Daimaru joined the International Association of Department Stores (IADS), which wasestablished for the purpose of exchanging materials and information among major European
department stores for the purpose of facilitating their mutual prosperity.13
Seibu Department Store was admitted to the Association Commerciale Internationale (ACI) in
1962. Seibu needed to join a group of European department stores to increase purchases of European
merchandise and prepare for events with merchandise from abroad, and chose the ACI, as it wasdifferent from the Group that admitted Takashimaya. Seibu tried to exchange merchandise with Les
Galeries Lafayette in France in particular, but their merchandise, centering on general consumer
goods, hardly fit the Japanese market, and did not produce satisfactory performance.14
By joining overseas organizations of department stores, Japanese department stores mainly
intended to establish tie-ups in merchandise in developing the events for overseas merchandise rather
than to introduce management knowledge. Takashimaya and Seibu, however, learned
headquarters-led purchasing systems from European department stores and introduced them in the
1960s toward subsequent multi-store operation, which should be regarded as significant in terms ofmanagement. Seibu Department Store learned the functions of merchandising organizations and10Knowledge Introduction from Abroad into Management of Department Storesknowledge to operate those organizations from ACI’s member department stores, renovated thestructure of the Merchandise Department, and started merchandise development and centralizedpurchasing of the standard merchandise (1962). Takashimaya reorganized its Merchandise
Department as the model of Karstadt Department Store in Germany, a member of the Intercontinental
Group of Department Stores (1963).

4-5. Tie-up with a specific department store
Management of Daimaru had had contacts with managers of Macy’s Department Store in the U.S.
in prewar days, and established a tie-up with Macy’s in services in 1962 to make joint advertisements
and provided customer-introduction support services. In the latter, both department stores issued an
introduction letter to travelers from the U.S. to Japan and from Japan to the U.S.
Taking advantage of the tie-up with La Rinascente in Italy, a member of the Intercontinental Groupof Department Stores, Takashimaya Takashimaya held an “Italian Fair” in 1956. Afterward,
Takashimaya established an association with Italian brands including Louis Vuitton, GUCCI and
Ferragamo.

4-6. Information collection and knowledge introduction through dispatch and trainingof staff members abroad
With the easing of restrictions on traveling abroad in 1964, opportunities increased for practicalstaff members to visit overseas department stores. At these opportunities, the staff members
dispatched abroad were enabled to gain practical know-how on the operation of department stores byobserving stores with their own eyes, listening to members of the overseas department stores, andbringing back materials, and these opportunities sharply expanded.
In 1964, Takashimaya started opening overseas representative offices in New York, Paris andEssen (Germany) to secure its own functions to collect information. In addition, from 1969,
Takashimaya sent employees to several overseas department stores for onsite training on practicaltasks.
Through its relationships with ACI via its Paris Representative Office, Seibu Department Store
dispatched young employees to European department stores as a short-term study abroad program. In
1966, SUGIMOTO Atsushi was sent to the Kaufhof Department Store in Germany for three monthsof practical training. WADA Shigeaki was dispatched to France for a half year to learn ACI’s
merchandise development methods in 1968.
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4-7. Invitation of specialized persons from abroad
In this period, Japanese department stores were actively inviting merchandise-related specialists
from abroad, e.g., fashion designers to hold fashion shows and trade conventions, and fitters to train
Japanese department stores’ staff in charge of customized clothes. Mitsukoshi conducted several
training courses for sales corners including technical training for customized men’s wear. No
corporate history of Japanese department stores, however, carries any description about the
introduction or training of management or operation strategies.

4-8. Direct entry to overseas markets
Although opening a store abroad can be regarded as an opportunity to acquire knowledge on tradewith suppliers in foreign countries, knowledge about merchandising and knowledge for operating
stores abroad, Takashimaya and Seibu Department Store, which opened overseas stores during theperiod from the 1950s and the 1960s, did not have such intentions at first, and actually could notacquire any particular knowledge from operation of stores abroad.
Takashimaya opened New York Takashimaya in the U.S. in 1958, earliest in any Japanese peers.
This action was part of its foreign currency acquisition policies, and the store was designed as a baseto sell Japanese products overseas. The foreign currency earned by the store was used to purchasemerchandise. It is unknown whether any knowledge was acquired about the operation of thedepartment store.
After taking the office of Chairman of the House of Representatives, TSUTSUMI Kojiro, thefounder of the Seibu Group, visited the U.S., and opened a store in Los Angeles in 1962 with theintention to build a bridge between Japan and the U.S., but the store did not thrive. Then, the store
was transformed to a showroom for apparel products, followed by other improvements, and finally it
was closed as a failure, and Seibu withdrew from the U.S. During the operation of the store, Seibu
neither learned nor introduced into Japan any know-how for operation of the U.S. department stores.
Examples of opening of a store overseas include Hawaii Shirokiya in 1959, Hong Kong Daimaru
in 1960 and Bangkok Daimaru in 1964.

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Knowledge Introduction from Abroad into Management of Department Stores

5. Summarization of knowledge introduction activities
5-1. Knowledge introduction from overseas department stores in the 1950s and the
1960sFirst, in the 1950s and the 1960s, knowledge on operation was actively introduced from overseas
department stores through methods of exploitation and introduction that were more diversified than
the form of literature introducing overseas department stores and its translation.
When closely looking at whether such knowledge exploited and introduced was deeply related to
management from the viewpoint of Kacker (1988), however, many of these activities were
“unplanned transfers,” where knowledge on retailing was incidentally found during study tours
abroad, seminars and conventions, and transferred without any official negotiations. Examples of“planned transfers” include only study and training abroad through business tie-ups carried out by
Takashimaya and Seibu Department Store. From the viewpoint of Leonard - Barton (1995), examplesof “joint ventures” and “M&A,” where management makes a strong commitment, include only thecases of Seibu and Sears, Roebuck (U.S.) in the 1970s, and Isetan and Barneys New York (U.S.) in
the 1990s, and no such activities were seen in the 1950s and the 1960s.
Subjects and contents of knowledge introduced were also centered mainly on the fields ofmerchandise and sales, such as clothes, sales techniques for customized merchandise andready-to-wear clothes in particular, and the corner concepts to meet new lifestyles. As for acquisitionof management knowledge, on the other hand, although a few cases were known from corporate
histories and interviews in this research. One case worthy of special mention will be the renovationof functions and structures of the headquarters’ merchandise department to the western formats
toward multi-store operation, separating sales and buying, and centralized purchasing in theheadquarters. Specifically, Seibu Department Store and Takashimaya separated functions of themerchandise department are separated from functions of sales at stores. In addition, they learned thewestern-style centralized buying system in the headquarters and the merchandise headquarters
system was introduced (by Seibu in 1962, and by Takashimaya in 1963).
Knowledge on merchandising operation given in the “Buyers Manual” introduced by Isetan wasconverted to knowledge called categorized merchandising and edited into the “Merchandising (MD)Notes,” which was used extensively in new corner designing. In the spring of 1954, for example,
consideration was started for the children’s wear and the baby goods corners, and extended to theteens and the household goods corners (1956). Based on the new categorized merchandising, modern
approaches to merchandise planning, assortment and corner control took root in Isetan.
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Miyazoe

5-2. Relations between the existing management resources and the activities tointroduce knowledge from abroad
In activities to introduce knowledge in the management domain such as store operation andmanagement administration toward modernization of management, some differences are thought toexist between major department stores and others. With regard to the assumption that differentials
existed in knowledge introduction activities due to management abilities in this period andmanagement knowledge accumulated since prewar eras, the following fact was confirmed:
It was found that the important existing resources depend on not only (i) whether management
approaches and management knowledge for store operation were already held, but also (ii) whether
contacts with overseas entities and information collection functions were secured to get knowledge
from abroad on an organizational basis. This is because wide differences due to these factors wereseen in the ease and activeness of activities to introduce knowledge.
According to the fields assigned to each department store to create a book describing thedepartment store business published shortly after the end of World War II, Mitsukoshi, Daimaru,
Takashimaya, and Matsuzakaya seem to have already been equipped with management knowledge,
and among them, Takashimaya and Daimaru had contacts with overseas entities, and secured
information collection functions such the Research Department, so they were more active than othersin the exploitation and introduction of knowledge on overseas department stores.
In contrast, Isetan and Seibu Department Store, with poor existing knowledge, were aggressively
introducing knowledge from abroad in the 1950s and the 1960s to catch up with the leading major
companies. As stated above, Isetan made the concepts presented by the “Buyers Manual” from the
U.S. take firm root in the company, and established management infrastructures so robust that later, it
became called “Isetan of merchandising.” Seibu Department Store rapidly built up networks in
Europe in the 1960s, and preceded others in the introduction of choice brands.
Thus, Japanese department stores can be classified into three groups as shown in Chart 2 whenorganizing their behaviors in postwar modernization of management, whether they relied on theexisting resources, or whether they were positive in introducing knowledge from abroad, from theviewpoint of differentials in competitive position in the industry and existing management resources(knowledge taken over from prewar days and information channels with overseas organizations at thetime).
As a challenge for today’s department store industry, will Japanese department stores be able to14Knowledge Introduction from Abroad into Management of Department Stores

restore their positive momentum to get knowledge from the outside as in the 1950s towards the peakof the industry? The current department store industry is suffering from structural problems so
serious that they could be fatal. So the industry needs to size up its managerial resources more
severely than in the postwar days, and to strive to build up channels for exploitation and introductionof knowledge. If Japanese department stores recognize their characteristics and essential management
functions, and carry out activities to introduce knowledge with clear objectives toward theestablishment of their organizational capabilities, they will succeed in properly acquiring thenecessary knowledge. I want to observe knowledge introduction and its fruits as my next subject ofstudy.

<Notes>1.

Despite some differences of specific organizational details between modernization of department storesfrom the 1920s to the 1930s and that from the 1950s to the 1960s dealt with in this study, if“modernization of management” is interpreted as corporate activities to enhance management approaches
and organizational operation to catch up with leading western peers at the time, this can be regarded as
activities of the same nature.

2.

The ratio of sales of department stores to personal consumption (values announced by the Japan
Department Stores Association) increased from 3.5% in 1952 to a peak at 5.0% in 1961 and 1962.
Afterward, the ratio continued declining to reach 2.9% in 2002. Koyama S. (2005) Where are department
stores going to?, Ito M. (edited) Japanese Industrial System (vi) New Distribution Industry, NTT
Publishing, p.254.

3.

This study positions knowledge introduction as one of the approaches for corporations to enhance their
management abilities, and interprets corporate activities to exploit and introduce (materialize in-house)knowledge. Therefore, the study does not discuss the stage where introduced knowledge takes root in theorganization and further contributes to business performance.

4.

Tottori Daimaru (with capital participation by a bus company, and opened in 1949), and Shimonoseki
Daimaru (with capital participation by a fishery company, and opened in 1950) were founded based on
know-how provided by a major department store. Many independently founded department stores like
Sasebo Toraya (with capital participation by a seed company, and opened in 1955 and closed in 1957)
failed.

5.

Regulations on fabric products were lifted including abolition of the clothing coupon in 1950, andcomplete lifting of the clothing ration regulation 1951, and liberalized distribution started after ten years.
15

Miyazoe
6.

Introduced in detail and its significance in Miyazoe (2004).

7.

According to Kashiyama (1976), KASHIYAMA Junzo, founder of Onward Kashiyama, traveled to the
U.S. and Europe for the first time in 1959 to see the mass production system in the U.S. fabric industry. At
the time, Daimaru started manufacturing and sales of men’s ready-to-wear suits under the private brand“Trojan” (1959). Takashimaya opened a store in New York (1958), and Seibu Department Storeestablished the Overseas Business Division (1959) to import products. Thus, department stores preceded
apparel companies in product development, and collection of information from abroad. It was in the 1970s
that Onward Kashiyama started establishing manufacturing and sales bases overseas, such as men’s
clothes (1972 in the U.S.) and ladies’ clothes (1973 in France, and 1974 in Italy).

8.

This study selected major corporations in the industry with officially compiled corporate histories toresearch such histories. Although Matsuzakaya has a corporate history, the history focuses more on the
introduction of stores and describes the history of each store and its equipment than on business activities,
the subject of this study, so this company is excluded.

9.

The author conducted interviews with employees of and retirees (10 persons) from Isetan, Seibu
Department Store, Takashimaya, Daimaru and Mitsukoshi (the interviewees are listed at the end of thispaper as an attachment).

10. It is said that, since Isetan was not doing overseas trade at that time, traveling abroad was difficult, but
thanks to help by the president of Mikimoto Pearl, this study tour was realized. At this point, Isetan was
far behind Takashimaya and Daimaru, which had been traveling overseas and collecting information
abroad since the prewar period.
11. Secretariat to Corporate History Editors, Public Relations, Isetan (1990), A Century of Isetan, Isetan, pp.
116-118.
12. Direct interview with SHIMIZU Shigeru (June 2004).
13. Daimaru 250-year History Editorial Committee (1967), Daimaru’s 250-year History, Daimaru,
pp.546-547.
14. Yui, T. (edited) (1991), History of Saison (I), Libroport, pp.211-213.

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<List of Interviewees>
Regarding knowledge introduction from abroad during the 1950s and 1960s, I collected precious
information and completed this paper thanks to interview surveys with the following people. I greatly
appreciate their cooperation to the survey.
The list indicates the corporate name, the title of the interviewee as of the interview, and date of
the interview.

Daimaru: Ex Director and the Head of Kyoto Store (June 4, 2005 and August 19, 2005), Ex Manager of
Women’s Dress Department (2005.2.1/2005.6.5)
Isetan: Director and Managing Executive Officer (November 19, 2004 and December 2, 2004, and May 23,2005), Ex staff in charge of edition of the corporate history (June 9, 2004)
Mitsukoshi: Staff of the Gift Sales Department of Nihombashi Head Store (March 9, 2004)
Staff of the Men’s Clothes and Accessories Department of Nihombashi Head Store (March 19, 2004)
Deputy Secretariat-General of the Headquarters of the Labor Union (February 10. 2004)
Seibu Department Store: Representative Director and Vice President of Millennium Retailing (March 8, 2004
and March 30, 2004)
Takashimaya: Ex Chief of New York Representative Office, and Deputy Senior Manager of the Personnel
Department of the Head Office (March 12, 2004)

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