Management Information System (MIS) Practice Exam

The phenomenon of cutting out the "middleman" is known as what?

1. Gentrification.

2. Disintermediation.

3. Reintermediation.

4. Mutualization.

The correct answer is: Disintermediation.

The concept of cutting out the "middleman" refers to disintermediation. This practice involves removing intermediaries from a supply chain or transaction process, often enabled by technology. In various industries, businesses try to sell products or services directly to consumers, thus reducing costs and potentially increasing profit margins by not relying on intermediaries like wholesalers or retail distributors. Disintermediation has become particularly prominent with the rise of the internet, allowing consumers to interact directly with producers, whether through e-commerce platforms or direct sales models. This approach not only streamlines operations but can also enhance customer engagement and provide better prices for consumers. The other terms are related but focus on different aspects. Gentrification typically describes a process where urban neighborhoods undergo transformation due to an influx of more affluent residents, affecting local demographics and cultural dynamics. Reintermediation refers to the process of creating new intermediaries or new roles within a supply chain after disintermediation has occurred, indicating a shift rather than a removal. Mutualization typically pertains to an organizational structure where ownership and governance often lie with the members, frequently seen in cooperative business models, and does not directly convey the concept of eliminating intermediaries.