MIS 5241 Intermediation

MIS 5242 The Market Space BUYER SELLER MARKET SPACE Traditionally, buyer and seller come together in market space where they can confidently transact. BUYER SELLER SIMPLE INTERMEDIATION Threats Owners of the market space get a fee for this intermediation service.

MIS 5243 Multiplication of Intermediaries In the traditional marketspace, the owners provide safety, security, standards, replicability, recording, transportation, etc. to increase the confidence of buyers and sellers. BUYER SELLER As interaction becomes more complex, more possibilities for intermediation arise Each of these represents a business opportunity COMPLEX INTERMEDIATION These complex interactions result in a hierarchy made possible by layers of intermediation

MIS 5244 Growth of Hierarchies HIERARCHY BUYER SELLER A more complex form of intermediation is being a navigator among brokerages One possibility for intermediation is brokerage COMPLEX INTERMEDIATION GIVES RISE TO HIERARCHIES An even more complex form of intermediation is trraining or consulting in how to use navigators

MIS 5245 Breaking Down of Hierarchies MARKET SPACE The user can take over many of the intermediation functions, resulting in “dis- intermediation”; hierarchies are broken down and the market space is recreated As Internet replaces the Hierarchies of the Marketspace, the user becomes “empowered” DISINTERMEDIATION BUYER SELLER Assuming the user has the tools and the skills and the opportunities

MIS 5246 Reinstalling Hierarchies MARKET SPACE Providers can find niches within the interstices and “reintermediate” the market space, reintroducing hierarchical structures. However, the complexity of the Internet creates more interstices. REINTERMEDIATION BUYER SELLER

MIS 5247 The Tension The market space is the essential place for transactions As transactions become complex, the need for intermediaries arises because of human skill and time limitations, the growth of expectations, etc. As skills of users of intermediaries increase and if the technology of intermediation allows it, users take over intermediary functions and disintermediate. However, transactions become increasingly complex under pressure from business and technology and hence reintermediation takes place. This tension induces an oscillation.

MIS 5248 The Dynamics Bus. Env’t. Human Char’s Tech’y Char’s Complexity Inter- mediation Ignorance, lack of time, lack of interaction skills or technologies DisInter- mediation Learning, free time, acquisition of skills and technology ? Long-term exposure to complex environments might change human characteristics of select for specific ones IM DIM