Important Questions for CBSE Class 11 Business Studies Chapter 5 - Emerging Modes of Business

Very Short Answer Questions (1 or 2 marks)

1. What does 'e' stand for in e-business?

Ans: 'E' stands for electronic in e-business. E-Business is described as the use of computer networks to conduct business, trade, and commerce. E-business is a more comprehensive phrase that encompasses a wide range of electronic business transactions and services, including the well-known e-commerce transactions.

2. What is "e' commerce?

Ans: E-commerce refers to a company's online interactions with its customers and suppliers. Other electronically conducted company tasks such as production, inventory management, product development, accounting, finance, and human resource management are included in e-business.

E-commerce (electronic commerce) refers to the purchasing and selling of goods and services, as well as the transmission of payments and data, over an electronic network, most commonly the internet. Business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer, and consumer-to-business transactions are all a part of e-commerce. Examples of E-commerce are Amazon, Flipkart etc.

E-business is a more comprehensive phrase that encompasses a wide range of electronic business transactions and services, including 'e-commerce' operations. 

3. Jyoti wanted to sell her mobile phone but did not get any buyer. On her friend's suggestion she posted the mobile on sale on wwrw.olx.com and found a buyer within two days. Name the type of e-business.

Ans: It is a form of C2C commerce. Consumers are the source of the business, and consumers are the ultimate destination. This form of business is best for dealing with items for which no recognized market mechanism exists. 

For example eBay, Quikr, etc where consumers sell their goods and services to other consumers are a form of C2C. The payment intermediary is another technology that has arisen to facilitate C2C activity.

4. What is outsourcing?

Ans: It refers to a long-term contracting out of non-essential but core activities to captive or third-party specialists in order to benefit from their knowledge, competence, efficiency, and, in some cases investment. 

5. Ram stays in a hostel in the USA and his parents stay in Mumbai. Ram's birthday is in five days and his parents wish to give him a pair of branded shoes. How can they give gifts?

Ans: They can use E-commerce for this situation. Companies like Amazon, Flipkart are examples of B2C type of E-commerce. 

In the above case, Ram’s parents can order the shoes for him, and in the address column, they can fill in the details of Ram’s USA address. For payment, Ecommerce sites provide various payment options such as online payment, cash on delivery etc. So in this case, as the shoes are a gift from Ram’s parents to him, they can make the online payment, and add Ram’s address in the address column. E-commerce websites provide diverse varieties of goods, and ordering from them is much faster, convenient and easier as against traditional methods of buying. 

Though his parents could also courier the gift, but due to time limitations, practicing this option is not possible.

6. What do you mean by Intra-B Commerce?

Ans: Intra-B Commerce refers to the type of e-commerce, where parties involved in the electronic transactions are from within a given business firm. It is partly owing to the usage of intra-B commerce that today's businesses are able to engage in flexible manufacturing. The use of computer networks allows the marketing department to communicate with the production department on a continuous basis, allowing for the creation of personalized products according to the needs of each unique customer. 

For example Virtual Private Network (VPN) technology would mean that employees do not have to come to the office. Instead, the office comes to them, and they can work from anywhere they want, at their own pace and on their own schedule. Tweetings can be held online via tele/ video conferencing

7. State an important feature of outsourcing?

Ans: The important feature is outsourcing of interchangeable or fungible Activities, that is the activities which are undifferentiated can be outsourced but unique and distinct activities can't be outsourced to a third party.

8. Briefly state the scope of e-business on the basis of business function?

Ans: E-business has a wide scope. 

Scope on the basis of business Function:

In this, the scope includes the electronic execution of the following activities, but is not only limited to:

• Management Functions such as 

• Planning, 

• Organizing, 

• Staffing, 

• Directing

• Controlling

• Production,

• Marketing and Sales,

• Inventory Management, 

• Product Development, 

• Human Resource Management, 

• Accounting And Finance,

• Procurement,

• Research And Development,

• Customer Relationship Management,

• Business Intelligence.

• Information System

• Training And Development

9. Briefly state the scope of e-business on the basis of parties involved in electronic transactions?

Ans: The scope of business on the basis of parties involved can be bifurcated in three aspects:

• B2B (Business-to-Business): In this the transactions are conducted between two businesses, 

• B2C (Business-to-Customers): In this, the interaction of transactions takes place between the business and its customers. For example, Amazon.

• Intra-B: In this the interaction of transactions are within  a firm's internal processes.

Short Answer Questions (3 or 4 Marks)

10. Distinguish between e-commerce and e-business.

Ans: The Differences between E-business and E-commerce are:

11. What do you mean by -

(i) B2B Commerce 

Ans: B2B Commerce

• In this, both parties involved in e-commerce transactions are businesses, hence the term B2B (business-to-business) was coined.

• A business must engage with a number of other businesses in order to create utility or deliver value. These businesses may be suppliers or vendors of various inputs, or they may be part of the distribution channel through which a company distributes its items to clients.

• For example turtle.com

(ii) B2C Commerce

Ans: B2C Commerce

• Commercial-to-customer (B2C) interactions involve business organizations on one hand and their customers on the other.

• It encompasses a wide range of internet marketing operations such as identifying activities, promoting them, and occasionally even delivering items.

• It enables a business to be in touch with its customers on a round-the-clock basis which helps in knowing the customer satisfaction level.

• For example Amazon, Nykaa etc.

(iii) Intra-B Commerce

Ans: Intra-B Commerce

• The parties participating in electronic transactions are all from the same company.

• Today's businesses are able to engage in flexible manufacturing in great part due to the use of intra-B commerce. The use of computer networks allows the marketing department to communicate with the production department on a continuous basis, allowing for the creation of personalized products according to the needs of each unique customer.

• For example customized manufacture of mobiles and laptops requires interactions of varied departments of a firm. 

 (iv) C2C Commerce

Ans: C2C Commerce

• The consumer is the source of the business, and consumers are the ultimate destination.

• This form of business is best for dealing with items for which no recognized market mechanism exists.

• For example ebay, Etsy etc.

12. Explain briefly points in opposition with outsourcing?

OR

Explain any four limitations of electronic mode of doing business. Are these limitations severe enough to restrict its scope? Give reasons for your answer.

Ans:  The limitations of outsourcing are given below:

1. Confidentiality:

• Outsourcing necessitates the exchange of a great deal of critical information and knowledge.

• It can harm the interest of the party that outsourcers its processes and even has a risk of competitive firms getting started.

2. Sweat Shopping:

• in order to save money the outsourcing companies seek help of low cost, low quality manpower in order to reap the maximum benefits. 

• Hence instead of developing thinking skills to perform a work on its own, the firm prefers the doing skills, that is making the other firm do the task for them.

3. Ethical Concerns:

• In order to cut the cost of outsourcing the work to some other country where the work is done in an unethical way.

• For example work is accomplished by doing child labor.

4. Resentment in the Home Countries:

• Employment or jobs are ultimately contracted out when manufacturing, marketing, research and development, or IT-based services are contracted out.

• This may cause resentment back in the home country if the home country suffers from the problem of unemployment.

13. State three benefits of e-business?

Ans: The three benefits of e-business are as follows:

• No geographical boundaries: Anyone, from anywhere, can order anything at any time. On the one hand, it allows the seller access to the global market, while on the other hand, it gives the buyer the option to select products from virtually any area of the globe.

• Flexible Business Hours: Because the internet is constantly available, you may set your own business hours. The time limitations that location-based firms face are broken down by e-business.

• Speed And Efficiency: Online ordering systems can process payments and orders in real-time, usually faster, more accurately and cheaper than human workers.

14. State three limitations of e-business?

Ans: The three limitations of e-business are:

1. Online Security Concerns: Many scammers prey on those who conduct business online. Additionally, hackers have an easier time obtaining someone’s financial information. It has a few concerns with security and integrity. This creates skepticism among potential clients.

2. Product Delivery Time: Product delivery takes time. This lag time often discourages customers. Though efforts are made by the companies to lessen the delivery time. For example, Amazon now assures one-day delivery.

3. Lack of Personal Touch: As a person cannot touch or feel the product, there are always doubts regarding the quality, size, design, etc. Hence, the sense of humanity and trustworthiness is absent from an e-business paradigm.

15. In detail explain the features of outsourcing?

Ans: Features of Outsourcing are:

1. Interchangeable Activities: Common or undifferentiated activities can be outsourced whereas unique and distinct activities cannot be outsourced as it needs personal efforts and touch of the management.

2. Explicit, formal, and codifiable knowledge is required: Although an IT programmer's job can be outsourced, a CEO's position requires management, technical, and human relations skills.

3. Measurable Activity: You can't outsource something you can't quantify.

4. Activity is not interconnected to other jobs: A fungible, specialized, and measurable job may not be outsourced if it is linked to other key operations within the company.

Long Answer Questions (5 or 6 marks)

16. Elaborate the steps involved in online trading.

Ans: The process of online trading is explained below:

Step 1 - Registration:  

• When you register with an online retailer, you create an 'account.'

• A "password" must be entered among the numerous details since the areas relating to one’s "account" and "shopping basket" are password protected.

Step 2 - Placing an order: 

• You can add products to the shopping cart by dragging and dropping them.

• A shopping cart is an online record of what one has added to his cart while visiting an online store. 

• Once you've decided what you want to buy, you may 'checkout.'

Step 3 - Payment Mechanism:

Online purchases can be made in a variety of ways.

• Cash-on Delivery: Payment for the goods ordered online may be made in cash at the time of physical delivery of goods.

• Cheque: The online vendor may arrange for the customer's cheque to be picked up. The delivery of products may be undertaken after realization of the amount paid. 

• Net-Banking Transfer: The funds can be transferred electronically through facilities such as NEFT, RTGS etc.

• Credit or Debit Cards: Credit cards allow its holder to make purchases on credit. The amount owed by the cardholder to the online seller is assumed by the card-issuing bank, which then transfers the transaction's amount to the seller's credit. A debit card permits the holder to make purchases up to the amount of money in the linked account. The moment a transaction is made, the amount due as payment is deducted electronically from the card.

• Digital Cash: This type of currency has no physical qualities, but it allows you to utilize real money in an electronic format, such as through e-wallets or PayTm.

17. Explain Nature and the need for outsourcing services.

Ans: The nature of outsourcing is:

• Activities that are interchangeable or fungible: They can be outsourced, whereas activities that are unique cannot be outsourced.

• Explicit, formal, and codifiable knowledge is required: Although an IT programmer's job can be outsourced, a CEO's position requires management, technical, and human relations skills.

• Measurable Activity: You can't outsource something you can't quantify.

• Activity is not interconnected to other jobs: If a fungible, specialized, and measurable position is linked to other key operations within the organization, it cannot be outsourced. 

Need for outsourcing:

1. Delimiting the Scope of Business:

• Business firms are realizing the usefulness of focusing on just a few areas where they have distinct capabilities or core competence, and contracting out the rest of the activities to their outsourcing partners.

• Delimiting  the scope of business enables them to focus their attention and resources on select activities for better efficiency and effectiveness.

2. Quest of Excellence:

• In two ways, outsourcing allows the company to strive for excellence. One, due to their narrow focus, individuals excel in the activities that they can do best.

• They also succeed by increasing their capabilities by outsourcing out the remaining tasks to people who excel at them.

3. Cost Reduction:

• Division of labour and specialisation improve quality while also lowering costs.

• This occurs when outsourcing partners benefit from economies of scale by providing the same service to multiple organisations.

• Cost reduction is also aided by differences in the prices of various production inputs across countries.

4. Growth through Alliance:

• To the extent one can avail of the services of the others, the investment requirements are reduced.

• As a result, a company can grow quickly because the same quantity of investible funds creates a big number of firms.

• Inter-organizational information sharing and collaborative learning are facilitated by outsourcing.

5. Economic Development:

• Outsourcing, more offshore outsourcing stimulates entrepreneurship, employment and exports in the host counties (i.e., the countries from where outsourcing is done).

OR

Why are e-business and outsourcing referred to as the emerging modes of business? Discuss the factors responsible for the growing importance of these trends?

Ans: E-business and outsourcing have changed the way businesses were done traditionally, these are growing each day, and have a great future ahead as well. E-businesses and outsourcing are innovative concepts which have raised the value of the businesses, facilitated more convenience, and added more efficiency in business activities such as procurement, production, marketing etc. This is why they are called as emerging modes of businesses:

The factors responsible for the growing importance of outsourcing and e business:

• They assist in making high-quality products more affordable: The demand for high-quality, custom-made products has risen, and e-commerce and outsourcing are playing an increasingly important role in supplying consumers with what they want at a fair price. E-business and outsourcing assist in achieving the goal of excellence by enabling the manufacture and supply of high-quality products.

• Facilitate innovation and technology development: Every firm needs to innovate and develop new ideas and products in order to stay competitive. E-business and outsourcing have emerged as a boon for producers in this setting, as they allow for the ongoing development of company strategies and new technology.

• They accelerate the business process: As customer demands expand, it has become important to facilitate trade from anywhere and at any time. E-commerce and outsourcing help to speed up the purchasing and selling procedure around the clock.

• They lay the path for efficient after-sales support: It is critical for any firm to cater to its clients' demands. Customers benefit from e-commerce and outsourcing because they can get rapid and effective post-sale services.

18. Www.oLX.in, www.quicker.com etc are examples of websites used to conduct business. Dipti's sofa set got spoiled in the rain. Her friend suggested that she should change the fabric so that it looks new and put it for sale on www.olx.com Dipti followed her friend's advice and got her sofa repaired so that it looks better and uploaded nicely clicked pictures on www.olx.com in without disclosing the fact that it was damaged from inside. She found a customer and sold it for Rs.9,000. After one week the buyer found the real state of the sofa set and called Dipti but she did not answer any of the calls.

(i) Name the type of business in the above case.

Ans: C2C business. 

(ii) Which values did Dipti ignore while selling her sofa set?

Ans: Dipti gave false information about the product. Due to a lack of personal touch, one cannot feel the product before buying. Hence values of honesty and transparency was ignored by Dipti.

(iii) Explain two advantages and disadvantages of e-commerce

Ans:  The advantages and disadvantages are:

Advantages of E-Commerce

• No Geographical Boundaries: Anyone, at any moment, can order anything from anywhere. On the one hand, it provides access to the worldwide market for the seller, while on the other side, it allows the buyer to select products from nearly any area of the globe.

• Workable Business Hours: Since the internet is always available. E-business eliminates the time constraints that local enterprises face.

Disadvantages of e-commerce

• Online Security Concerns: There are many scammers who prey on those who conduct business online. Additionally, hackers have an easier time obtaining a person’s financial information. It has a few concerns with security and integrity. This instills skepticism in the minds of certain potential clients.

• Product delivery time: Product delivery takes time. This lag time often discourages customers. On the other hand, businesses are attempting to address these difficulties by offering extremely short delivery times. 

19. Explain briefly the benefits of e-business.

Ans: The benefits of e-business are:

• Easy to Set Up: We can set up an online business even by sitting at home if we have the required software, a device, and the internet.

• Cheaper than Traditional Business: It is less expensive to start an e-company than it is to start a traditional firm. Furthermore, transaction expenses are significantly reduced.

• There are no Geographical Limitations: Anyone can order anything from anywhere at any time. On the one hand, it provides access to the worldwide market for the seller, while on the other side, it allows the buyer to select products from nearly any area of the globe.

• Workable Business Hours: Since the internet is always available. E-business eliminates the time constraints that local enterprises face.

• Speed and Efficiency: Online ordering systems can process payments and orders in real-time, usually faster, more accurately, and cheaper than human workers.

• Transition to a Paperless Society: The internet has significantly reduced reliance on paperwork. Administrative reforms aimed at speeding up the process of giving permissions, approvals, and licenses are being implemented using e-commerce platforms.

20. Difference Between e-Business and Traditional Business.

Ans: The differences Between e-Business and Traditional Business:

21. Explain risks involved in e-business in detail?

Ans: There are various types of risks involved in e-business:

1. Transaction Risks:

• Either the seller or the buyer refuses to have taken or placed the order. This is also known as 'default on order taking/giving.'

• It is possible that the planned delivery does not occur, that items are delivered to the incorrect address, or that goods other than those requested are delivered. This could be referred to as "default on delivery."

• The seller does not get payment for the items provided, despite the fact that the consumer states that payment was made. This may be referred to as 'default on payment'.

• As a result, in e-business, the seller or the buyer may be exposed to risk as a result of order taking/giving failure. 

2. Data Storage and Transmission Risks:

• Data in the systems and on the way is vulnerable to a variety of threats. For nefarious motives or simply for fun/adventure, important data may be stolen or manipulated.

• Antivirus software  installed and updated on a regular basis, scans files and discs, and proves helpful in protecting data files, folders, and systems against virus attacks.

• During transmission, data could be intercepted. For this, one may use cryptography. Data in the systems and on the way is vulnerable to a variety of threats. 

• For nefarious motives or simply for fun/adventure, important data may be stolen or manipulated. The communication can only be deciphered (or decrypted) into 'plaintext' by those who have a secret key.

3. Risks of Threats to Intellectual Property and Privacy Include:

• Once the material is available on the internet, it is no longer considered private. It got more difficult to protect it from being copied after that.

• Data provided during online transactions may be shared with others, who may begin flooding one’s inbox with advertising and promotional materials.