Emerging Modes of Business - Solutions

 CBSE Class 11 Business Studies

NCERT Solutions
Emerging Modes of Business


1. State any three differences between E-business and traditional business.


Basis of differenceTraditional businessE-business
1. Ease of formationIt is difficult to form.It is very simple to form.
2. Cost of setting upThe cost of setting up is high.The cost of setting up is low.
3. Physical presenceIt requires physical presence.It does not require physical presence.
4. Business processes and length of the cyclesThe business process cycle is long.The business process cycle is short.
5. Government patronageDeclining.Increasing.
6. Ease of global accessLessMuch, as cyber space is without boundary.
7. Nature of contact with the suppliers and the customersIt involves indirect contact with the suppliers and the customers through intermediaries.It involves direct contact with the suppliers and the customers.
8. Nature of internal communication.It involves hierarchical flow of communication i.e. from top level management to middle level management to lower level management to operatives.It involves non-hierarchical flow of communication.

2. How does outsourcing represent a new mode of business?

Ans.Outsourcing is yet another trend that is radically reshaping business. It refers to long-term contracting out of generally the non-core and of late even some of the core activities to captive or third party specialists with a view of benefiting from their experience, expertise, efficiency and even investment. This simple definition leads one to the salient features of the concept which are not peculiar to an industry/business or country, but have become a global phenomenon.

3. Describe briefly any two applications of E-business.

Ans.Two applications of E-business are discussed below:

(a) e-Procurement: It involves internet based sales transactions between business firms including both, "reverse auctions" that facilitate online trade between a single business purchaser and many sellers, and, digital market places that facilitate online trading between multiple buyers.

(b) e-Delivery: It includes electronic delivery of computer software, photographs, videos, books (e-journals) and other multimedia content to the other'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 (ITES).

4. What are the ethical concerns involved in outsourcing?

Ans.Following are the major ethical concerns involved in outsourcing:

(a) Confidentiality: When a company outsources any of its functions, it has to share a lot of information and knowledge with outsourcing partner. He may not preserve the confidentiality. If company adopts outsourcing of complete processes or products, there is further risk that outsourcing partner may start his own business which may increase competition.

(b) Sweat Shopping: The firms which opt for outsourcing aim at lowering their costs, try to get maximum benefit from the low-cost manpower of the host countries. Secondly, such works are outsourced which do not build much of competency and ability of outsourcing partners. So, they build blue collar workers by handing over doing skills rather than creating white collar workers by transferring thinking skills.

(c) Using Child Labour and not following Labour Laws: Outsourcing is engaging child labour and women in the factories. Moreover, there exists wage discrimination on the basis of sex of the worker. Workers are exploited by giving less than minimum wages.

(d) Resentment in the Countries: When MNCs contract out manufacturing, marketing, accounting, R and D etc. to developing countries, it may create resentment in home country. The people from developed countries may not like that the jobs which they could get have been transferred to developing nations for cost cutting.

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

Ans.Information is power indeed. But think for a moment if it goes into the wrong hands. Data stored and enrouted is exposed to a number of risks. Vital information may be stolen or modified to pursue some selfish motives or simply for fun/adventures. Data may be intercepted in the course of transmission. For this, one may use cryptography. It refers to the art of protecting information by transforming it into an unreadable format called ‘cypher text’.