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NIOS Class 12 Business Studies Chapter 4 Modern Modes of Business
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Modern Modes of Business
Chapter: 4
Module – 1 : BUSINESS AROUND US
INTEXT QUESTIONS 4.1
Q. I Define the term Internet.
Ans: Internet is a worldwide system of computer network through which the users at any computer can access the information from other computers.
Q. 2. State the full form of the following.
(a) www
Ans: www: World Wide Web.
(b) B2B
Ans: B2B: Business to Business.
(c) B2C
Ans: B2C: Business to Customer
(d) C2C
Ans: C2C: Consumer to Consumer
INTEXT QUESTIONS 4.2
Q. 1. What is meant by Intra-B Commerce?
Ans. Intra-B Commerce refers to interaction and dealings among various departments and persons within the firm with the help of computer and interconnected telecommunication network.
Q. 2. Enumerate the limitations of B2C e-Commerce.
Ans: (a) Lack of adequate infrastructure.
(b) Delivery and payment related problems.
(c) Absence of cyber laws.
Q. 3. Identify the merits and limitations of e-business from the following statements:
(a) It lacks personal touch in business transactions.
(b) It takes less time to give order for desired goods and services.
(c) The customers have access to a large number of suppliers and they enjoy a wider choice.
(d) It helps the business houses to expand the business and earn more profit.
(e) The privacy of personal details and security of financial transactions are a concern for many users.
Ans: Merits:
(b) It takes less time to give order for desired goods and services.
(c) The customers have access to a large number of suppliers and they enjoy a wider choice.
(d) It helps the business houses to expand the business and earn more profit and Limitations:
(a) It lacks personal touch in business transactions.
(e) The privacy of personal details and security of financial transactions are a concern for many users.
INTEXT QUESTIONS 4.3
Q. 1. Mention the various ways of making payment in on-line transactions.
Ans. (a) Credit card.
(b) Debit card.
(c) Store’s value card.
(d) Cheque.
Q. 2. Arrange the following stages of on-line transactions in proper sequence:
(a) Order.
(b) Delivery.
(c) Payment.
(d) Search.
(e) After sales services.
Ans. The proper sequence are:
(d) Search.
(a) Order.
(c) Payment.
(b) Delivery.
(e) After sales services.
INTEXT QUESTIONS 4.4
Q. 1. Mention the benefits of ATM for the customers of the bank.
Ans: (a) Withdrawals and deposits of money.
(b) Balance inquiry.
(c) Mini-statement of transactions.
Q. 2. Identify the following in e-banking transactions:
(a) A card that allows the holder to spend money without having any balance in his/her deposit account.
(b) A machine using which we can withdraw money from our deposit accounts at our convenience.
(c) A system that allows the account holder to avail the banking facility over telephone.
(d) A convenient way of accessing the account any time, any where and any number of times.
Ans: (a) Credit card.
(b) ATM.
(c) Telebanking.
(d) Internet banking.
INTEXT QUESTIONS 4.5
Q. 1. What is meant by e-Post?
Ans: e-post is a service offered by post office through which printed or hand written messages are transmitted as e-mail on internet.
Q. 2. Identify the linkage of the following terms in different e-Commerce applications:
(a) Demat Account.
(b) Unified Message Service.
(c) Getting e-mail facility without direct access to Internet.
(d) On-line booking of air ticket.
Ans. (a) e-Trading at stock exchanges.
(b) Computerisation of mail transmission and Processing.
(c) e-Post.
(d) e-Ticketing.
INTEXT QUESTIONS 4.6
Q. 1. Define the term ‘Outsourcing of services’.
Ans: Outsourcing of services is a management strategy by which an organization contracts out its major non-core functions to outside specialised service providers.
Q. 2. Identify the merits and limitations of Outsourcing of Services.
(a) It facilitates inter-organisational knowledge sharing and collaborative learning.
(b) It reduces confidentiality of information.
(c) It helps in concentrating on the core competency of the organisation.
(d) The management finds it difficult to handle the outside staff.
(e) It provides expert and specialised service at competitive prices.
Ans: Merits:
(a) It facilitates inter-organisational knowledge sharing and collaborative learning.
(c) It helps in concentrating on the core competency of the organisation.
(e) It provides expert and specialised service at competitive prices.
and Limitations:
(b) It reduces confidentiality of information.
(d) The management finds it difficult to handle the outside staff.
Q. 3. Multiple Choice Questions:
(i) Name the act of protecting information by transforming into an unreadable format:
(a) VIRUS.
(b) Hacking.
(c) Cryptography.
(d) None of the above.
Ans: (c) Cryptography.
(ii) In online buying the buyer drops the items selected in a _______________.
(a) Shopping cart.
(b) Shopping box.
(c) Net card.
(d) None of the above.
Ans. (a) Shopping cart.
(iii) Plastic Card is the popular name for:
(a) Debit/Credit card.
(b) Cheque.
(c) Digital Cash.
(d) None of the above.
Ans. (a) Debit/Credit card.
TERMINAL EXERCISE
Very Short Answer Type Questions:
Q. 1. Define the term ‘e-commerce’.
Ans: e-Commerce refers to the process of conducting business with the help of electronic devices using the computer and interconnected telecommunication network. Here, offer for sale and its acceptance are made electronically through Internet. It is also known as ‘on-line trading’, ‘on-line shopping’ and ‘e-shopping’. e-Commerce takes place between companies i.e., business to business (B2B), between companies and their customers (B2C), and customer to customer (C2C).
Q.2. State any two precautions one should take while making on-line transactions.
Ans: (a) Passwords: In on-line shopping, one has to register with the on-line vendor to have an account with him. This provides for a password to avoid login by an unauthorised person.
(b) Authentication: Sender of the message must be identified precisely using the off-line validation, if necessary. This avoids any possibility of fraud or misuse of the password.
Q. 3. Mention any two advantages of outsourcing of services.
Ans: Merits or advantages of Outsourcing of Services are:
(a) It provides an opportunity to the organisation to concentrate on areas in which it has core competency or strength. It keeps the organisation free from repetitive and mundane functions.
(b) It helps better utilisation of its resources as the management can focus its attention on selected activities and attain higher efficiency.
Q. 4. What is meant by ‘Internet banking’?
Ans: Internet Banking: This is another way a customer can have access to his account and give instructions. It makes the task of the customer easy as he can access his account any where, any time and any number of times. The customer simply uses a password number and gets the details of transactions sitting at home.
Q. 5. Give the meaning of ‘B2C e-commerce’.
Ans: B2C, as the name implies, have business firms (manufacturer or retailers) at one end and its consumers on the other. It enables a business firm to be in touch with its customers on round the clock basis. It involves a wide range of marketing activities including promotion, seeking orders, intimating supply and so on.
Q. 6. Give the full form of the BPO and KPO.
Ans: The full form of the BPO and KPO is Business Process Outsourcing and knowledge Process Outsourcing respectively.
Q. 7. Name the electronic currency that exists in cyberspace.
Ans: Digital cash.
Short Answer Type Questions:
Q. 8. State any four uses of Internet in our daily life.
Ans: It provides information regarding science and technology, history, politics, sports, business, current events, music, entertainment, news and many more topics.
It helps the users in the following ways:
(a) Browse the information on any topic through the World Wide Web (www).
(b) Read news available from leading newspapers and television channels.
(c) Exchange messages using e-mail.
(d) Search databases of government, individuals and private organisations.
(e) Transfer files, pictures, animations etc.
(f) Communicate with others by chatting or talking to them personally when both of them are connected to the Internet.
Q. 9. Distinguish between ‘e-Business’ and ‘e-Commerce’.
Ans: e-Commerce refers to the process of conducting business with the help of electronic devices using the computer and interconnected telecommunication network. Here, offer for sale and its acceptance are made electronically through Internet. It is also known as ‘on-line trading’, ‘on-line shopping’ and ‘e-shopping”.
e-Commerce takes place between companies i.c., business to business (B2B), between companies and their customers (B2C), and customer to customer (C2C). e-Business covers not only the interaction with its customers and suppliers but also interactions and dealings among various departments and persons within the firm. e-Business includes not only B2B, B2C, and C2C but also Intra-B Commerce i.e., interaction and dealings among various departments and persons within the firm.
Q. 10. Mention any four limitations of ‘e-Commerce’.
Ans: Limitations of e-Commerce/e-Business as:
(a) It lacks personal touch with customers.
(b) The customer cannot actually see, feel or try on the goods he/she is buying.
(c) The physical delivery of goods often takes long time.
(d) Return of faulty goods bought on-line may often be more problematic and a time consuming exercise.
(e) Shopping through Internet is not the same experience as a shopping expedition with family or friends.
(f) Online transactions are prone to a number of risks that can result into financial, reputational or psychological losses to the parties involved in a transaction.
Q. 11. Distinguish between ‘Debit Card’ and ‘Credit Card’.
Ans: Debit Card: A debit card is an electronic card that can be used conveniently while making payments. This card is issued to the customers of the bank having current or savings deposit account. The holder of this card can use this card at several outlets for purchase of goods and services. This card allows the holder to spend upto the balance available in his/her bank account. It can also be used at ATMs just like ATM cards.
Credit Card: Some banks issue credit cards to individuals who may or may not have an account with them. The cards are issued to individuals after verifying their credit worthiness. The individual can use those cards at various outlets to make payments. The issuing bank fixes a credit limit upto which the card holder can purchase goods and services. The bank issues a statement of transactions periodically and the individuals have to pay back the amount to the bank by a due date. Thus, the customers get a credit period ranging from 10 to 55 days which varies from bank to bank and the nature of transactions made. No interest is charged if the payment is made within the due date. If the customers fails to pay back by due date, the bank charges interest at a high rate on the amount due. Most banks give bonus points for transactions and insurance coverage for the products purchased through credit card as well as to the cardholders. The cardholder can also use his/her card to withdraw cash from ATMs.
Q. 12. Explain the usefulness of ‘e-Post’ facility for the general public.
Ans: e-Post: e-mail which is the fastest means of communication. To send and receive any information through e-mail, we need to have a computer with Internet connectivity and the e-mail account of the sender and receiver. However, this technology has not yet reached the rural and other remote areas of our country. To bridge this gap and extend the benefit of the e-mail facility to the people of rural India, the Department of Post has introduced e-Post facility. It enables people to send and receive e-mail at the post offices. e-Post is a service under which printed or even handwritten messages are transmitted as email on internet. At the destination post offices, these messages are printed, enveloped and delivered through the postman like other letters. For this purpose, e-Post centres have been set up in the post offices in all districts and major towns.
The post offices where this facility is not available can receive the e-Post message from the customers and forward the same to the nearest e-Post centre for dispatch. Similarly e-Post messages received for areas beyond the delivery jurisdiction are printed and sent to concerned post office for delivery. Besides availing e-Post services through post officeit can also be accessed from a customer’s house or office or from any other places if he has Internet access. The customer can make payment through a prepaid card that is available in the head post office and other outlets. The customer has to register as a user and access the service at the e-Post portal http://indiapost nic in. The present tariff for sending the message in A4 size page is Rs 10 per addressee.
Q. 13. State any two requirements for successful implementation of e-business.
Ans: Following resources are required for successful e-business implementation:
1. A Website: A business must develop a website to effectively communicate with its customers. Detailed information of the enterprise should be provided on the website. Necessary pictures should also be posted on the website.
2. Technically Qualified Workforce: E-business can be successful only with a well trained workforce. The workers should be capable to handle easily the new trends in computers. Sales Department staff should be trained to handle sales inquiries, processing orders and ensuring prompt delivery.
3. Adequate Computer: The business enterprise must own computers with adequate speed and memory to handle the expected volume of business. Business concerns must have the necessary Internet Service Provider (ISP) and Application Service Provider (ASP), Server and Portals, and e-mail facilities.
4. Effective Telecommunication System: Good telephone lines with high quality voice calls must be there to make e-business effective. Business firms will be badly affected if the telephone lines get disconnected frequently
5. Payment Mechanism: Adequate information must be provided on the website so that customers will have idea of the exact amount to be paid. If extra amount is received, inbuilt systems should be created to refund the extra money received. Business concerns must make arrangements with banks and credit card agencies to enable electronic receipts and payments of money.
Q. 14. What is meant by Knowledge Process Outsourcing?
Ans: KPO means outsourcing services that require expertise of a higher order. i.e, high end Knowledge Work is done by an outside organisation. KPO is mainly done to improve the efficiency and quality and to reduce costs of doing business. KPO requires professional with right skills, attitude and experience.
Long Answer Type Questions:
Q. 15. Explain the merits of ‘e-Commerce’.
Ans: The merits of e-Commerce/e-Business can be summarised as follows:
(a) Wider Accessibility: With the help of a well-developed computerised networking system, the business units can operate at the national as well as the global level. The buyers and sellers from any part of the world can interact with each other. This helps in gaining exposure to new markets.
(b) Improved Customers Service: E-Commerce enables a company to be open for business whenever a customer needs it. Up-to-date information about products can be offered on the web, making it easier and convenient for customers to select the best product. It also enables suppliers of goods and services to offer a wide range of services to the customers, before as well as after sale, and respond to customers’ queries without any delay.
(c) Shortened Transaction Time: An e-Business transaction takes much less time as compared to the normal process of buying and selling because the producers are able to cut short the distribution channels and establish direct contact with the consumers. It also enables a company to introduce a new product into the market, gain customers’ reaction quickly, implement the necessary changes without incurring heavy cost and loss of time.
(d) Cost Saving and Low Prices: There is a substantial cost saving in business transactions through e-Commerce as there is hardly any display of goods involved and need for large stocks in godowns. The number of employees required is also limited. For example, as the orders as directly put into the system there is no need for any sales persons or order entry clerk. This helps in substantial savings in operational costs and offers products at lower prices to customers.
(e) Enlarge Business and Profits: With e-Commerce, the companies are able to approach a larger number and variety of customers and gain exposure to new markets. This enables them to enlarge their business volume and earn more profits.
(f) Convenience to Customers: The customers also stand to gain by e-Commerce in various ways. They have access to a large number of suppliers, enjoy a wider choice, and acquire quality products and services at competitive prices. They also receive prompt and efficient service and gain information about new products easily.
Q. 16. Describe the transaction process of ‘e-Commerce’,
Ans: As with any trading processes, the on-line transactions involve the following stages:
(a) Search: For making a purchase, the prospective customer has to find an appropriate vendor by using various web sites, either directly or through a search engine.
(b) Order: Once the vendor has been found and goods are identified, the customer makes contact and negotiates the terms. When satisfied, the customer proceeds to the checkout that involves filling up a registration form to have an account with a password. Thereafter, he can place the order for the items put by him in his virtual shopping cart, an on-line record of what has been picked up while browsing the on-line store.
(c) Payment: The normal way for paying on-line purchases is by the credit card. The customer enters the credit card numbers, expiry date and billing address on the order form, and the vendor can verify the details. Debit cards, or store’s value cards can also be used for the purpose. Alternatively, payments can be made by cheques sent by post.
(d) Delivery: Once the payment is made or is assured, the vendor arranges for delivery of goods as per instructions of the buyer.
(e) After Sales Service: In any transaction, there can be problems like damaged or faulty goods. For items such as machinery or consumer durables, there can be a provision of warranty or maintenance. The e-Vendors have to make the necessary arrangements for attending to such complaints and services.
Q. 17. Explain any four new trends of banking services under the e-Banking mode.
Ans: Some of the new trends in banking sector are as follows:
(a) Telebanking: A customer is given a password number (known as T-PIN i.e., Telephonic personal identification number) through which he can have access to his/her account over telephone and give instruction regarding withdrawal, issue of demand draft etc. The customer can also access his account and give instructions by using the mobile phone. Similarly, the bank can also keep on informing the customer regarding the various schemes, opportunities, last dates, etc. and attend to balance enquiries by the customers.
(b) Internet Banking: This is another way a customer can have access to his account and give instructions. It makes the task of the customer easy as he can access his account anywhere, any time and any number of times. The customer simply uses a password number and gets the details of transactions sitting at home.
(c) ATM: ATM, the acronym for Automated Teller Machine, is increasingly becoming popular in banking industry. ATM is a computerised machine used for most of the routine jobs of a bank. It is operated by a magnetic plastic card popularly known as ATM card. By inserting the ATM card in the machine and entering the PIN (Personal Identification Number) the customer can use it for withdrawals and deposits of money. The customer can also get the information about the balance available in his/her account, get the mini-statement of last 5/10 transactions from the ATM. Earlier the customers only had the option to access the ATM of the bank in which they had an account. But now-a-days some banks have tied-up with other banks for use of their ATM by the customers. So customers can use the ATM facility even of a bank they do not have an account in, but with whom their bank has a tie-up.
(d) Debit Card: A debit card is an electronic card that can be used conveniently while making payments. This card is issued to the customers of the bank having current or savings deposit account. The holder of this card can use this card at several outlets for purchase of goods and services. This card allows the holder to spend upto the balance available in his/her bank account. It can also be used at ATMs just like ATM cards.
(e) Credit Card: Some banks issue credit cards to individuals who may or may not have an account with them. The cards are issued to individuals after verifying their credit worthiness. The individual can use those cards at various outlets to make payments. The issuing bank fixes a credit limit upto which the cardholder can purchase goods and services. The bank issues a statement of transaction speriodically and the individuals have to pay back the amount to the bank by a due date. Thus, the customers get a credit period ranging from 10 to 55 days which varies from bank to bank and the nature of transactions made. No interest is charged if the payment is made within the due date. If the customers fails to payback by due date, the bank charges interest at a high rate on the amount due. Most banks give bonus points for transactions and insurance coverage for the products purchased through credit card as well as to the cardholders. The cardholder can also use his/her card to withdraw cash from ATMs.
Q. 18. What is meant by outsourcing of services? Explain its features.
Ans: Outsourcing of services: Another important trend in business, of late, has been ‘outsourcing’ of some of its activities i.e., use of outside sources to perform activities traditionally handled by internal staff and resources. For example, most companies have so far had their own staff for cleaning and security activities in their organisations. But, of late many companies have started entrusting these tasks to outside agencies on contractual basis. Infact, outsourcing is a management strategy by which an organisation contracts out its major non-core functions to specialised service providers with a view to benefit from their expertise,efficiency and cost effectiveness, and allow managers to concentrate on their core activities. The Information Technology (IT) is one area in which this
approach is growing fast, and in recent years, outsourcing the operation of IT systems has been supplemented by a move to outsourcing the whole business processes such as payroll processing, cheque processing, etc. This is known as BPO (Business Process Outsourcing). It May be noted that Indian IT-BPO sector, both in domestic business and exports, has registered a growth of 28% in 2006-07 and revenues have exceeded $ 48 billion, nearly 10 fold increase over the aggregate revenue in 1998.
Need for BPO:
1. Improvement in productivity.
2. Reduction in cost.
3. Opportunity to focus on core business.
4. Updation of technology.
5. Stimulates entrepreneurship, employment and export.
Features of Outsourcing of Services: The basic features of outsourcing of services are:
(a) It involves contracting out an activity to an outside specialised agency which takes complete responsibility to handle it effectively using its own manpower.
(b) Normally outsourcing is done in case of non-core activities, such as housekeeping, security, etc. But, of late, it has been extended even to some of the core activities. For example, a school may engage a Computer Training Institute to handle computer education to its students or a bank may outsource its cheque processing.
(c) There are two main forms of outsourcing the business processes:
(i) outsourcing to a third party. and
(ii) outsourcing to its own subsidiary company specially formed to handle a specificactivity.
