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Emerging Modes of Business – Class 11 Business Studies notes, important questions and MCQs

NCERT Class 11 Business Studies, chapter 5. Notes, key terms, important questions with answers and MCQs.

Chapter overview

Technology has created new ways of doing business. E-business uses the internet and computer networks to conduct business activities, and e-commerce refers to buying and selling online. Outsourcing lets firms contract out non-core activities to specialists. These modes offer convenience and lower costs but raise concerns about security, privacy and the digital divide.

E-business and e-commerce

E-business covers all business activities done electronically, including production, finance, marketing, human resources and customer service; e-commerce is the buying and selling part.
Types of e-business: B2B (business to business), B2C (business to consumer), C2C (consumer to consumer, as on resale sites), intra-B (within a firm) and B2E (business to employees).
Benefits: easy formation, low investment, convenience, speed, global reach and paperless working.

Online transactions and security

Online buying involves registration, placing the order and payment through cards, net banking, UPI, wallets or cash on delivery.
Risks include transaction risks (wrong delivery or default), data storage risks (hacking, viruses) and threats to intellectual property and privacy.
Security measures include encryption, digital signatures, passwords, OTPs and secure payment gateways.

Outsourcing

Outsourcing means contracting out non-core activities to outside agencies, such as cleaning, security, payroll or customer support.
Business process outsourcing (BPO) handles routine processes such as call centres; knowledge process outsourcing (KPO) handles knowledge-based work such as research and analytics.
It lets a firm focus on its core activities, gain expertise and reduce costs, but may cause loss of confidentiality and dependence on outsiders.

Key terms

E-business: conducting business activities using the internet and computer networks
E-commerce: buying and selling goods and services online
B2C: e-business transactions between a business and consumers
Outsourcing: contracting out non-core activities to outside specialists
Encryption: converting data into a secret code so that only authorised people can read it

Important questions with answers

Distinguish between e-business and e-commerce.2 marks

E-business is wider and includes all business activities carried out electronically, such as production, finance, human resources, supply chain and customer service. E-commerce is a part of e-business and refers only to buying and selling goods and services over the internet.

What security measures are used in online transactions?3 marks

Online transactions are protected by encryption, which codes data; digital signatures and certificates, which verify identity; strong passwords and one-time passwords (OTPs); secure payment gateways; firewalls and anti-virus software; and regular monitoring to detect fraud.

Explain the meaning, types, benefits and limitations of e-business.5 marks

E-business means conducting business activities using the internet and computer networks. It covers buying and selling (e-commerce), as well as production, finance, marketing, human resources and customer service. Its types include B2B, such as a car maker ordering parts online from suppliers; B2C, such as online shopping, banking and ticket booking; C2C, such as consumers selling used goods on resale websites; intra-B, such as communication between departments of a firm; and B2E, such as online services for employees. E-business has many benefits: it is easy to start with low investment, it is convenient and available 24×7, it is fast, it reaches customers across the world, it reduces paperwork and costs, and it gives customers wider choice and lower prices. It also has limitations: there is no personal touch and customers cannot inspect goods; delivery may be delayed; it requires technology skills and internet access, so the digital divide excludes some people; and it faces risks such as fraud, hacking, data theft and privacy breaches. Security measures such as encryption, digital signatures and OTPs help reduce these risks.

Quick revision

E-business wider than e-commerce.
B2B, B2C, C2C, intra-B, B2E.
Security: encryption, digital signature, OTP.
BPO and KPO; focus on core activities.

Exam tips

Learn each e-business type with a familiar example, such as online shopping for B2C.
For outsourcing, write benefits and limitations in two columns.

Practice MCQs

Buying and selling goods online is called
1. outsourcing
2. e-commerce
3. franchising
4. barter
Show answer
Answer: (b) e-commerce. It is part of e-business.
A person selling an old phone to another person on a website is
1. B2B
2. C2C
3. B2C
4. intra-B
Show answer
Answer: (b) C2C. Consumer to consumer.
Contracting out non-core activities to outside agencies is
1. insourcing
2. franchising
3. outsourcing
4. merger
Show answer
Answer: (c) outsourcing. Firms focus on core work.
Transactions between a manufacturer and its suppliers online are
1. B2C
2. B2B
3. C2C
4. B2E
Show answer
Answer: (b) B2B. Business to business.
Converting data into a secret code to protect it is
1. spamming
2. hacking
3. phishing
4. encryption
Show answer
Answer: (d) encryption. Only authorised users can decode it.
Research and data analytics done by an outside firm is an example of
1. BPO
2. KPO
3. franchising
4. joint venture
Show answer
Answer: (b) KPO. It is knowledge-based.
Which is a limitation of e-business
1. lower costs
2. lack of personal touch and security risks
3. global reach
4. 24×7 availability
Show answer
Answer: (b) lack of personal touch and security risks. Customers cannot inspect goods physically.
Why do firms outsource non-core activities
1. to focus on core competencies and reduce costs
2. to lose control
3. to increase paperwork
4. to avoid technology
Show answer
Answer: (a) to focus on core competencies and reduce costs. Specialists can do these tasks better.

All chapters of Class 11 Business Studies

Written by Kundali IQ from standard, well-established facts to help with revision. This is not an official NCERT publication; always read your textbook too.