1st PUC Business Studies Question Bank Chapter 5 Emerging Modes of Business

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Karnataka 1st PUC Business Studies Question Bank Chapter 5 Emerging Modes of Business

1st PUC Business Studies Emerging Modes of Business Text Book Questions and Answers

Multiple Choice Questions

Question 1.
e-commerce does not include
(a) A business’s interactions with its suppliers
(b) A business’s interactions with its customers
(c) Interactions among the various departments within the business
(d) Interactions among the geographically dispersed units of the business
Answer:
(c) Interactions among the various departments within the business

1st PUC Business Studies Question Bank Chapter 5 Emerging Modes of Business

Question 2.
Outsourcing
(a) Restricts only to the contracting out of Information Technology Enabled Services (ITES)
(b) Restricts only to the contracting out of non-core business processes
(c) Includes contracting out of manufacturing and R&D as well as service processes— both core and non-core— but restricts only to domestic territory
(d) Includes off-shoring
Answer:
(d) Includes off-shoring

Question 3.
The payment mechanism typical to e-business
(a) Cash on Delivery (CoD)
(b) Cheques
(c) Credit and Debit Cards
(d) e-Cash
Answer:
(d) e-Cash

Question 4.
A Call Centre handles
(a) Only in-bound voice based business
(b) Only out-bound voice based business
(c) Both voice based and non-voice based business
(d) Both customer facing and back-end business
Answer:
(a) Only in-bound voice based business

Question 5.
It is not an application of e-business
(a) Online bidding
(b) Online procurement
(c) Online trading
(d) Contract R&D
Answer:
(d) Contract R&D

Short Answer Questions

Question 1.
State any three differences between e-business and traditional business.
Answer:
1st PUC Business Studies Question Bank Chapter 5 Emerging Modes of Business img1

1st PUC Business Studies Question Bank Chapter 5 Emerging Modes of Business

Question 2.
How does outsourcing represent a new mode of business?
Answer:
Outsourcing represents a new mode of business as it is a departure from the traditional thinking of self – sufficiency in business. It refers to a long-term contracting out of business activities to captive or third party specialists with a view to benefitting from their experience, expertise, efficiency and even investment.

Generally the non – core business activities are outsourced but of late even some of the core activities have started being outsourced. Outsourcing comprises four key segments: contract manufacturing, contract research, contract sales and informatics.

Global competitive pressures for higher quality products at lower costs, demanding customers and emerging technologies have induced a re-look at business processes and hence resulted in outsourcing as a new mode of business which is now being resorted to not out of compulsion but out of choice.

Question 3.
Describe briefly any two applications of e-business.
Answer:
e-Procurement:
It involves internet based sales transactions between business firms including both, reverse auction that facilitates online trade between a single business purchaser and many sellers, and digital marketplaces that facilitate online trading between multiple buyers and sellers.

e- Bidding / e- Auction:
Most shopping sites have quote your price whereby you can bid for the goods and services. It also includes e-tendering whereby one may submit tender quotations online.

e- Communication /e- Promotion:
Right from e-mail, it includes publication of online catalogues displaying images of goods, advertisement through banners, pop-ups, opinion polls and customer surveys, etc. meetings and conferences may be held by the means of video conferencing.

e- Delivery:
It includes electronic delivery of computer software, photographs, videos, books and journals and other multimedia content to the user’s computer. It also includes rendering of legal, accounting medical, and other consulting services electronically. In fact, internet provides the firms with the opportunities for outsourcing of a host of information Technology Enabled services that we will be discussing under business process outsourcing.

e- Trading:
It involves securities trading, that is online buying and selling of shares and other financial instruments. For example, Sharekhan.Com is India’s largest online trading firm

Question 4.
What are the ethical concerns involved in outsourcing?
Answer:
Outsourcing has raised certain ethical concerns which need to be considered. In search of cheap labour, manufacturing processes are being outsourced to developing countries where they use child labour/women in the factories and working conditions are unhygienic and even unsafe.

The companies cannot do so in their developed home countries due to stringent laws forbidding use of child labour. This raises the ethical concern whether this sort of cost cutting by using child labour justified. Similarly there is a concern over the ethical aspect of outsourcing the work to countries where gender based wage – discrimination is done and hence women are paid lower wages.

1st PUC Business Studies Question Bank Chapter 5 Emerging Modes of Business

Question 5.
Describe briefly the data storage and transmission risks in e-business.
Answer:
There are a number of risks to which data is exposed while it is stored or is en – route in a transaction. Vital information may be stolen or modified to pursue individual gains. There can be attacks of VIRUS and hacking. Virus means Vital Information Under Siege. It is a program which replicates itself on the other computer systems.

The effects of computer viruses can range from some annoying on – screen display (Level -1 virus) disruption of functioning (Level – 2 viruses) damage to target data files (Level -3 virus to complete destruction of the system (Level – 4 virus). Anti-virus programs need to be installed and updated on the system and files and disks should be scanned with them to provide protection from virus attacks.

Data may be intercepted in the course of transmission. Cryptography is used for protection against such risks. It refers to the art of protecting information by tmasforming it (encrypting it) into an unreadable format called ‘ciphertext’. Only those who possess a secret key can decipher (or decrypt) the message into‘plaintext’and thus others do not understand your conversation.

Long Answer Questions

Question 1.
Why are e-business and outsourcing referred to as the emerging modes of business?
Answer:
Discuss the factors responsible for the growing importance of these trends. During the last decade or so the way of doing business has undergone fundamental changes. The manner of conducting busines is referred to as the ‘mode of business’, e-business and outsourcing are referred to as ‘emerging modes of business’ as these have brought about new changes in the way or manner in which business is conducted and it is believed that these trends are likely to continue, e-business maybe defined as the conduct of industry, trade and commerce using the computer networks, e-business covers a firm’s interactions with its customers and suppliers over the internet and also other electronically conducted business functions such a production, inventory management, product development, accounting and finance and human resource management.

Outsourcing represents a new mode of business as it is a departure from the traditional thinking of self – sufficiency in business. It refers to a long – term contracting out of business activities to captive or third party specialists with a view to benefitting from their experience, expertise, efficiency and, even investment.

Generally the non – core business activities are outsourced bui of late even some of the core activities are being outsourced. Outsourcing comprises four key segments; contract manufacturing, contract research, contract sales and informatics.

The various factors responsible for the growing importance of these trends are:

  1. Business managers and thinkers keep evolving newer and better ways of doing things in an effort to improve the busines sprocesses.
  2. Business firms have to strengthen their capabilities of creating utilities and delivering Value successfully to meet the competitive pressures.
  3. Consumers have become far more demanding than ever in terms of higher quality, lower prices, speedier deliveries and better customer care,
  4. Business as an activity has to keep evolving by adopting new trends in order to benefit from emerging technologies.

1st PUC Business Studies Question Bank Chapter 5 Emerging Modes of Business

Question 2.
Elaborate the steps involved in online trading.
Answer:
1. Registration:
Before doing online shopping, one need to fill up a registration form with the online, which imbibes that you hold an ‘account’ with the online vendor. Amidst various details ‘password’ is one of the vital sections relating to your ‘account’, and ‘shopping cart’ and it is duly protected, foiling which, anyone can login using your name and shop in your name. This may prove to be troublesome.

2. Placing an Order:
Shopping cart would be provided for you to pick and drop the items into it. Shopping cart can be defined as an online record of what you have picked up while browsing the online shop similar to a physical shop wherein you can put in and take items out of your cart, that will help you to make sure what you want to buy and can ‘checkout’ and choose your payment options.

3. Payment Mechanism:
The above figure clearly states that payment for the purchases through online shopping may be done through several methods:

  • Cash-on Delivery (COD): As the name suggests, payment for the goods ordered online may be paid in cash at the time of physical delivery of goods.
  • Cheque: As an alternate option, the online vendor might arrange for the pickup ofthe cheque from the customer. On realization of the cheque, delivery of goods may be made.
  • Net-banking Transfer: Customers are provided with the facility of electronic transfer of funds over the internet. In this case, the buyer can transfer the amount towards the transaction to the goods to the account of the online vendor which will enable him to proceed to arrange for the delivery of goods.

Question 3.
Evaluate the need for outsourcing and discuss its limitations.
Answer:
(i) Focusing of attention:
Business firms are realizing the usefulness of focusing on just a few areas where out the rest of the activities to their outsourcing partners. In order to create utilities or value, a business engages in a number of processes, viz., purchase and production, marketing and sales, R&D, accounting and finance, HR and administration etc., firms need to define or redefine themselves.

They for example, need to consider as to whether they would like to be called a manufacturing or marketing the scope ofbusiness enables them to focus their attention and resources on select activities for better efficiency and effectiveness.

(ii) Quest for excellence:
Outsourcing enables the firms to pursue excellence in two ways. One they excel themselves in the activities that they can do the best by virtue of limited focus. And they excel by extending their capabilities through contracting out the remaining activities to those who excel in performing them In the quest for excellence, it is necessary not only to know what you would like to focus on but also what you would like others to do for you.

(iii) Cost reduction:
Global competitiveness necessitates not only global quality, but also global competitive pricing. As the prices turn southwards due to competitive pressures, the only way to survival and profitability is cost reduction. Division of labour and specialization, besides improving quality, reduces cost too. This happens due to the economies of large scale accruing to the outsourcing partners as they deliver the same service to a number of organizations.

(iv) Growth through alliance:
To the extend, you can avail of the services of others’, your investment requirements are reduced, other have invested in those activities for you. Even if you may like to have a stake in the business of your outsourcing partners, you profit from not only the low- cost and better quality services provided by them too you but also by virtue of a share in the profit from the overall business they do.

Therefore, you can expand rapidly as the same amount of invisible funds result in creation of a large number of businesses. Apart from financial returns, outsourcing facilities inter organizational knowledge sharing and collaborative learning. This may also explain the reasons why the firms today are outsourcing not only there routine. Non-core processes. But also seeking to benefit from outsourcing such strategic and core processes as Research and development.

(v) Fillip to economic development:
Outsourcing, more so offshore outsourcing, stimulates entrepreneurship, employment and exports in the host countries. In India in the IT sector alone, for example, here has been such a tremendous growth of entrepreneurship, employment and exports that today we are the undisputed leaders as far as global outsourcing in software development and IT-enabled services are concerned. Presently, we have 60 percent of the $ 150 billion global outsourcing share in the informatics sectors.

But there are certain limitations of outsourcing as given below:
(A) Confidentiality:
Outsourcing depends on sharing a lot of vital information and knowledge. If the outsourcing partner does not preserve the confidentiality, and, say, for example, passes it on to competitors, it can harm the interest of the party that outsources its processes. If outsourcing involves complete processes/products, there is a further risk of the outsourcing partner starting up a competitive business.

(B) Sweat-shopping:
As the firms that outsource seek to lower their costs, they try to get maximum benefit from the low-cost manpower of the host countries. Moreover, it is observed that whether in the manufacturing sector or the IT-sector, what is outsourced is the kind of components or work that does not much build the competency and capability of the outsourcing partner beyond the skills needed to comply with a rigidly prescribed procedure/ method. So, what the firm that go in for outsourcing look for is the ‘doing’ skills rather than development of the ‘thinking’ skills.

(C) Ethical concerns:
Think of a shoe company that, in order to cut costs, outsources manufacturing to a developing country where they use child labour/women in the factories. Back home, the company cannot do so due to stringent laws forbidding use of child labour. Is cost cutting by using child labour in countries where it is not outlawed or where the laws are ‘weak’, ethical? Similarly, is it ethical to outsource the work to countries where there exists wage-discrimination on the basis of sex of the worker?

(D) Resentment in the home countries:
In the course of contracting out manufacturing, marketing, Research and Development or IT-based services, what is ultimately contracted out is ‘employment’ or jobs. This may Cause resentment back in the home country (i.e., the country from which the job is being sourced out) particularly ifthe home country is suffering from the problem of unemployment.

1st PUC Business Studies Question Bank Chapter 5 Emerging Modes of Business

Question 4.
Discuss the salient aspects of B2C commerce.
Answer:
B2C (Business – to Customers) transactions have business firms at one end and its customers on the other end. The salient aspects of B2C Commerce are as folows:
(i) Online Selling:
B2C commerce involves selling the products online to customers who register for online shopping. However, it must be appreciated that ‘selling’ is the outcome of the marketing process.

(ii) Online Marketing:
B2C commerce includes a wide gamut of marketing activities such as promotion and sometimes even delivery of products (e.g., music or e-books) that are carried out online at a much lower cost but high speed.

(iii) Adaptation to Customer Requirements:
B2C commerce has made it possible for firms to manufacture the product with customized features to suit the requirements of the customers and also to provide the convenience of delivery and payment to the customers.

(iv) Customer feedback:
B2C variant of e-commerce enables a business to be in continuous touch with its customers through online surveys about demand trends and customer satisfaction.

(v) C2B Interactions:
B2C is not a one – way traffic, i.e., from business-to-customers. It also covers C2B interactions which provide the consumers with the freedom of shopping – at – will, Customers can also make use of call centers set up by companies to make toll free calls to make queries and lodge complaints round the clock at no extra cost. Outsourcing the call centers or help lines for B2C commerce interactions may be outsourced and are not necessary to be set up by the business itself.

Question 5.
Discuss the limitations of electronic mode of doing business. Are these limitations severe enough to restrict its scope? Give reasons for your answer.
Answer:
e-business has its own limitations as discussed below:
(i) Low Personal Touch:
e-business lacks the warmth of interpersonal interactions and personal touch for satisfaction of customer. Thus, it is relatively less suitable mode of business for product categories requiring personal touch for convincing the customers such as garments, etc.

(ii) Incongruence between Order Taking / Giving and Order Fulfillment Speed:
In e-business orders can be placed at the click of a mouse, but the physical delivery of the product takes time. Customers are sometimes not patient enought to bear with this incongruence. At times the users even get frustrated due to technical reasons when web sites take unusually long time to open.

(iii) Need for Technology:
Capability and Competence of Parties to e-business requires the parties to be fairly familiar with computers and internet. The digital divide has thus limited the use of e-business.

(iv) Increased Transaction:
Risk Internet transactions occur between cyber personalities and it is difficult to establish the identify of the parties or know the location from where the parties may be operating, e-business is also risky due to additional hazards of impersonation and leakage of confidential information such as credit card details. Problems of‘virus’ attacks and ‘hacking’ also pose security concerns in e-business.

(v) Resistance to Change:
The process of adjustment to new technology and new way of doing things causes stress and a sense of insecurity due to change. As a result, people may resist a change from traditional business to e-business.

(vi) Ethical Fallouts:
Companies use an ‘electronic eye’ to keep track of the computer files, e – mail account and the websites visited by their employees or others who use their network systems which is not considered right on ethical grounds.

1st PUC Business Studies Emerging Modes of Business Additional Questions and Answers

One Mark Questions

Question 1.
What is e-business?
Answer:
Electronic Commerce is sharing business information, maintaining business relationships and conducting business transactions by means of telecommunications networks.

1st PUC Business Studies Question Bank Chapter 5 Emerging Modes of Business

Question 2.
Expand B2B.
Answer:
Business to Business

Question 3.
What is Intra-B?
Answer:
This refers to transactions between the parties or persons who are the part of one firm only.

Question 4.
Expand C2C.
Answer:
Consumer to consumer

Question 5.
Write one benefit of the e-business.
Answer:
Global reach

Question 6.
Expand COD.
Answer:
Cash on Delivery.

Question 7.
Mention-one limitation of e-business.
Answer:
Low Personal touch

Question 8.
What are cookies?
Answer:
Cookies is a small piece of data sent from a website and stored on the user’s computer by the user’s web browser while the user is browsing.

Question 9.
Expand BPO.
Answer:
Business Process outsourcing

Question 10.
What is plastic money?
Answer:
Credit Card, Debit card, ATM card etc are, used as alternative to money such as cash or cheque, and are made of plastic, th% are also called as Plastic money.

Two Marks Questions

Question 1.
Mention two strongest trends in shaping the business.
Answer:

  1. Web Based Marketing
  2. Social Networking

1st PUC Business Studies Question Bank Chapter 5 Emerging Modes of Business

Question 2.
Write two benefits of e-business.
Answer:

  • Speed
  • 24/7

Question 3.
What do you mean pay-pal?
Answer:
Pay-pal is an electronic commerce (e-commerce) company that facilitates payments between parties through online funds transfers.

Question 4.
Write any two features of BPO.
Answer:

  1. Reallocation of Resources
  2. Increases Efficiency.

Five Marks Questions

Question 1.
Briefly explain the Scope of E-Business.
Answer:

  1. B2B (business-to-business), also known as e-biz, is the exchange of products, services or information (aka e-commerce) between businesses, rather than between businesses and consumers.
  2. B2C (Business to Consumer) is business or transactions conducted directly between a company and consumers who are the end-users of its products or services. The business-to-consumer as a business model differs significantly from the business-to-business model, which refers to commerce between two or more businesses.
  3. C2C (Consumer to Consumer), similar to the retail market, the direct object is the end-user shopping Example: eBay, Quikr.
  4. C2B (Consumer to Business), Consumer-to-business (C2B) is a business model in which consumers (individuals) create value and businesses consume that value.

1st PUC Business Studies Question Bank Chapter 5 Emerging Modes of Business

Question 2.
What are the benefits of E-Business.
Answer:

  1. Cost-Effective Marketing: Most of these online marketing efforts are very low cost Or free, so an e-business allows for highly cost-effective marketing strategies Since e-businesses mostly advertise on the internet the cost of advertising of marketing is less.
  2. Flexible Business Hours: E-business breaks down the time barriers that location-based businesses encounter. E-business are active 24/7 which means accessibility of products or services is greater.
  3. Eliminates Geographic Boundaries: As long as someone has anptemet connection, you may be able to reach and sell your product or service to these visitors to your business website.
  4. Reduces Transaction Cost: Running an online business reduces the cost per transaction because it takes less manpower to complete an online transaction. Once you get your website up and running, the customer places the order online, which removes the need for a salesperson.
  5. Low Overhead Costs: Running an e-business cut back or out most of the costs involved in running’ a physical location. E-businesses have less expensive phone, rent and utility bills than businesses with physical locations.

Question 3.
What are the Limitations of E-Business
Answer:
1. Less security:
The biggest obstacle in the growth of e-commerce is the issue of security, Internet is not a secured medium of communication. There are tools or options available to hackers whereby they can not only monitor but also control any data communicated over the internet

2. Less privacy:
The nature of internet technology is such that private information of the online customers can be easily collected and recorded on the server side. The buying pattern of a customer can be known to an e-shop with the help of certain sophisticated tools. You know that cookies can be used to track customers online.

3. No physical proximity with items purchased:
In certain cases the customers cannot decide about buying a thing before they can physically examine it. For example, a customer would ideally want to touch and feel the texture of a piece of cloth before buying.

Question 4.
What are the Features of BPO.
Answer:

  1. Business process outsourcing: (BPO) is the contracting of a specific business task, such as payroll, to a other party service provider. Usually, BPO is implemented as a cost-saving measure that a company requires to maintain its position in the marketplace.
  2. BPO is often divided into two categories: back office outsourcing which includes internal business functions such as billing or purchasing, and front office outsourcing which includes customer-related services such as marketing or technical support. BPO.
  3. It provides wide range of tactical, powerful, flexible tools which in turn helps in achieving the business objectives in a cost effective and efficient manner.
  4. A BPO (business process outsourcing) is aprocess in which a company delegates some of its business processes to a other party on payment of some fee by passing over total control of process to them This in turn cuts the operational costs considerably resulting into huge profits.

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