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The NCERT Class 11 Business Studies Chapter 5 discusses the meaning, scope, benefits, limitations, online transactions, security concerns, and resources required for emerging modes of business, with a focus on e-business and its comparison with traditional business. These solutions provide clear, concise, and CBSE-aligned answers for effective exam preparation. You can also download the free PDF for revision.
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NCERT Solutions Class 11 Business Studies Chapter 5: Emerging Modes of Business
This section provides detailed and student-friendly answers for the Class 11 Business Studies Chapter 5 exercise questions. Each answer is explained clearly to strengthen understanding and exam preparation.
Exercise
Short Answer Questions:
1. State any three differences between e-business and traditional business.
(i) Ease of formation: Traditional business requires many procedural formalities, while e-business is easy to start with lower investment.
(ii) Operating cost: Traditional business has high costs, whereas e-business has low operating costs.
(iii) Global reach: Traditional business has limited reach, but e-business provides access without boundaries.
2. Describe briefly any two applications of e-business.
(i) B2B Commerce: Both parties are business firms. A company uses computer networks to place orders with suppliers, monitor production and delivery of components, and make payments. For example, an automobile factory sources parts from multiple vendors worldwide.
(ii) B2C Commerce: Involves business firms and customers. It includes online marketing activities like promotion, customised products, 24×7 contact, and delivery of digital products like music. Customers can also use toll-free call centres for queries.
3. Describe briefly the data storage and transmission risks in e-business.
Data storage risks arise when vital information is stolen or modified for selfish motives. Computer viruses (Vital Information Under Siege) can replicate, cause annoyance, disrupt functioning, damage files, or destroy systems. Protection comes from installing and updating anti-virus programmes.
Transmission risks occur when data is intercepted en route. Cryptography protects it by converting data into unreadable ciphertext, which only the secret key holder can decrypt into plaintext.
Long Answer Questions:
1. 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.
e-Business and outsourcing are called emerging modes because they represent new ways of conducting traditional business activities, happening now and expected to continue. They are not new businesses but improved processes using modern trends.
The three strongest trends shaping business are:
(i) Digitisation – Converting content into digital form for electronic transmission.
(ii) Outsourcing – Delegating non-core processes to specialists.
(iii) Internationalisation and globalisation – Expanding beyond borders.
Factors responsible for their growing importance:
- Creating utilities and value: Businesses aim to meet customer needs with better quality, lower prices, speedier delivery, and improved care.
- Competition: Firms strengthen capabilities to survive competitive pressures.
- Evolving better ways: Managers and thinkers improve purchase, production, marketing, finance, and HR processes.
- Emerging technologies: Benefitting from digitisation and secure networks drives evolution in business activities.
2. Elaborate on the steps involved in online trading.
Online trading involves three stages:
(i) Pre-purchase/sale: Advertising and information-seeking.
(ii) Purchase/sale: Price negotiation, closing the deal, and payment.
(iii) Delivery: Physical delivery (or online for digital products).
Detailed steps from the customer’s perspective:
(a) Registration: Fill out a form on the vendor’s site to create an account with a password for protected access to the account and shopping cart.
(b) Placing an order: Browse the online store, add/remove items in the shopping cart (an online record), and check out when ready.
(c) Payment: Choose from:
- Cash-on-Delivery (CoD): Pay cash when goods arrive.
- Cheque: Vendor picks up the cheque; goods delivered after realisation.
- Net-banking Transfer: Transfer funds via IMPS, NEFT, or RTGS.
- Credit/Debit Cards: Credit allows buying on credit (95% of transactions); debit deducts instantly.
- Digital Cash: A Bank issues software to draw electronic currency from an account for web purchases.
3. Evaluate the need for outsourcing and discuss its limitations.
Businesses focus on core competencies and outsource non-core activities (e.g., call centres in B2C commerce) to specialised agencies for efficiency, cost reduction, and better service. It allows 24×7 customer support without setting up its own infrastructure.
Here are the limitations of outsourcing discussed below:
- Dependence on external parties: Loss of control over quality and timelines.
- Confidentiality risks: Sensitive data shared with outsiders.
- Hidden costs: Coordination and monitoring expenses.
- Service inconsistency: If the outsourcing partner fails to meet standards.
4. Discuss the salient aspects of B2C commerce.
Salient aspects of B2C commerce are:
- Wide marketing gamut: Includes identifying customer needs, promotion, online surveys, and sometimes delivery (e.g., films, music).
- Lower cost, higher speed: Activities conducted online are cheaper and faster than traditional methods.
- Customisation and convenience: Products tailored to individual requirements; payment and delivery at the customer’s pleasure.
- Round-the-clock access: Businesses stay in touch with customers 24×7.
- Customer empowerment: C2B corollary allows shopping-at-will and toll-free queries/complaints via outsourced call centres.
5. Discuss the limitations of the electronic mode of doing business. Are these limitations severe enough to restrict its scope? Give reasons for your answer.
Look at the limitations of e-business:
(i) Low personal touch: Lacks interpersonal warmth; unsuitable for high-touch products like garments.
(ii) Speed incongruence: Order placement is instant, but physical delivery takes time; websites may load slowly.
(iii) Technology requirement: Needs computer familiarity, creating a digital divide.
(iv) Higher risks: Anonymity leads to impersonation, viruses, hacking, and leakage of card details.
(v) People’s resistance: Causes stress and insecurity.
(vi) Ethical issues: Monitoring employee e-mails and web usage.
Are they severe enough to restrict the scope? No. Most limitations are being overcome:
- Interactive websites improve touch.
- Faster communication technology.
- Community telecentres bridge the digital divide (150+ projects in India).
- Better security tools and regulations.
Also Read: CBSE Class 10 Economics Chapter 3 NCERT Solutions
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