NCERT Solutions for Class 11 Business Studies Chapter 5: Emerging Modes of Business

Chapter at a glance

Exercises – Short Answer Questions

Question SA – Q1

State any three differences between e-business and traditional business.

Answer

Question SA – Q2

Describe briefly any two applications of e-business.

Answer

1. B2B (business-to-business) commerce — firms deal with other firms online. A manufacturer can source raw materials from suppliers through online portals, track inventory and place orders automatically, reducing cost and time. Example: a car maker’s online procurement from component suppliers.
2. B2C (business-to-customer) commerce — firms sell goods and services directly to consumers through websites and apps. Customers can browse catalogues, compare prices, order, pay online and track delivery; firms collect feedback and offer after-sales service. Example: online retailers and ticket booking sites.

(Other applications: C2C online marketplaces, intra-B communication through intranet, e-banking, online tax filing.)

Question SA – Q3

Describe briefly the data storage and transmission risks in e-business.

Answer

Data stored in computer systems and transmitted over networks is vulnerable to:

1. Hacking — unauthorised access to systems to steal or change data.
2. Viruses and malware — programs that damage data, files and hardware; they spread through e-mails and downloads.
3. Data theft and interception during transmission (e.g. capture of passwords and card details).
4. Data loss or corruption due to system crashes.

Safeguards: firewalls, encryption, antivirus software, strong passwords, regular backups and secure (https) connections.

Exercises – Long Answer Questions

Question LA – Q1

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.

Answer

They are called emerging modes because they are new ways of doing business that are changing how firms operate — not new types of business. E-business uses the internet for buying, selling and managing operations; outsourcing contracts out non-core activities to outside specialists.

Factors responsible for their growing importance

1. Technological advances — cheap computers, internet, mobile phones and digital payments.
2. Globalisation and competition — firms need to cut costs and reach global markets.
3. Need to focus on core competencies — outsourcing lets firms concentrate on what they do best.
4. Cost reduction — lower operating costs online; cheaper skilled labour in outsourcing destinations like India.
5. Speed and convenience demanded by customers.
6. Access to specialised knowledge through outsourcing (KPO, legal, research services).
7. Government support — Digital India, digital payments, IT parks.

Question LA – Q2

Elaborate the steps involved in on-line trading.

Answer

1. Pre-purchase / registration: The buyer visits the seller’s website or app, browses products and their details, and registers by providing name, address, contact details and a password to create an account.

2. Placing the order: The buyer selects items and adds them to the shopping cart, which keeps a record of the items, quantity and price. On checkout, the buyer confirms the order and delivery address.

Question LA – Q3

Evaluate the need for outsourcing and discuss its limitations.

Answer

Need for outsourcing

1. Focus on core activities — non-core functions (payroll, cleaning, customer support) are handed over to specialists.
2. Quest for excellence — specialists perform tasks better.
3. Cost reduction — economies of scale of the service provider and cheaper labour.
4. Growth through inter-organisational relationships — firms can expand without huge investment.
5. Fosters economic development in host countries through employment and exports.
6. Access to latest technology and expertise.

Limitations

1. Confidentiality — sensitive data shared with outsiders may leak.
2. Sweatshop exploitation — poor working conditions in low-cost locations.
3. Resistance from home country — loss of jobs in the outsourcing country.
4. Dependence and loss of control over quality and timelines.
5. Ethical concerns — child labour or unfair practices by vendors.

Question LA – Q4

Discuss the salient aspects of B2C commerce.

Answer

B2C (business-to-customer) commerce covers transactions between businesses and final consumers over the internet.

Salient aspects

1. Marketing — firms advertise and display catalogues online; customers can browse anytime.
2. Ordering and payment — customers place orders through websites/apps and pay by cards, net banking, UPI, wallets or COD.
3. Delivery — physical delivery by logistics partners or instant download of digital products.
4. Customer service and feedback — order tracking, return policies, online support and reviews.
5. Data collection — firms gather data on customer preferences to personalise offers (customer relationship management).
6. Low cost and wide reach — no physical store needed; 24 × 7 access across the country.
7. Two-way relationship — businesses can also receive information from customers (C2B) through surveys and suggestions.

Question LA – Q5

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

Answer

Limitations of e-business

1. Low personal touch — no face-to-face interaction; difficult to inspect goods like clothes.
2. Incongruence between order taking/giving and delivery speed — information flows instantly but physical delivery takes time.
3. Need for technology capability — requires computers, internet and digital literacy.
4. Increased risk — fraud, identity theft, hacking, fake websites.
5. People’s resistance — preference for traditional shopping, distrust of online payments.
6. Ethical issues — monitoring of employees, misuse of data.

Are they severe enough to restrict its scope? No. Most limitations are being overcome:

• Faster logistics networks and same-day delivery reduce the time gap.
• Easy return and exchange policies, product videos and reviews compensate for lack of personal touch.
• Rapid spread of smartphones, cheap data and Digital India improve technology access.
• Encryption, OTP-based payments and cyber laws (IT Act) reduce risks.

Hence e-business continues to grow rapidly; the limitations only call for caution, not avoidance.

Topic checklist

• Meaning and scope of e-business (B2B, B2C, C2C, intra-B)
• E-business vs traditional business
• Benefits and limitations of e-business
• Steps in online trading and payment mechanisms
• Security and safety of e-transactions
• Outsourcing: need, scope (BPO, KPO), limitations

Total questions answered: 8 of 8