Explaining Cybermediation: An Organizational Analysis of Electronic Retailing

One of the most common early forecasts for commerce in the information age was the removal of wholesalers, distributors, and other intermediaries in a firm’s value chain. This "disintermediation” offered the prospect of greater efficiency in supply and marketing channels. More recent evidence suggests that such forecasts were shortsighted, and today new “cybermediaries” have lodged themselves in the value chain between goods manufacturers and customers. This paper explains the phenomenon of cybermediation by looking beyond transaction cost economics toward newer theories of consumer economics and several theories drawn from the organization sciences: institutional theory, social exchange theory, social network theory, and theories of organizational knowledge creation. By acknowledging the potential contributions of these diverse theoretical perspectives, researchers may gain greater leverage in their attempts to explain the emergence of cybermediaries in electronic commerce.