Organisation Of Commerce & Management Solutions (2014) Solutions for Class 12 Commerce Business studies Chapter 3 - Emerging Modes Of Business

Answer:

Correct option - c
In e-business, payments have to be made online.
Explanation:
Electronic business or e-business refers to the trading of goods and services through computer systems and online networks. In this type of business, there is no exchange of cash across the counter, as payment is made online through the web with the help of payment gateways.

Answer:

Correct option - a
The term “e-business” is derived from the terms e-mail and e-commerce.
Explanation:
The word e-business is derived from the terms “e-mail” and “e-commerce”. This is because it uses electronic medium (internet) not only for conducting online transactions and mails but also for carrying out other business functions such as production, inventory management, product development and accounting.

Answer:

Correct option - b
The transactions under B to C are between business firms and consumers.
Explanation:
B to C, i.e., business to consumer, refers to commercial transactions between business firms and consumers. Other types of transactions include, C to C, i.e., consumer to consumer, which refers to commercial transactions that take place between consumers. B to B, i.e., business to business, refers to business transactions that take place between two business firms.

Answer:

Correct option - b
The process of contracting a business function to someone else is called as outsourcing.
Explanation:
Outsourcing is the process of contracting out less important (i.e., non-core) business activities to external agencies. These external agencies are highly specialised and enjoy expertise in specific business activities, such as advertisement and promotion of products and post-sale services. By outsourcing less important business activities, firms can focus on important (i.e., core) activities.

Answer:

Correct option - b
For any online transaction, registration is required.
Explanation:
Registration is required for making an online transaction. If someone wants to buy goods from a particular website, then he/she needs to register with the online vendor by filling up a registration form. While registering, the buyer is required to key in details such as his or her name, address, unique user name and secret password.

Answer:

Correct option - b
The online shopper can pick and drop the things in the shopping cart.
Explanation:
After making an account on the website, an online shopper can select the products that he/she wishes to purchase and add them to the shopping cart. A shopping cart basically keeps an online record of what a customer wants to buy. It displays the products shortlisted by the customer so that the customer can take the final decision of purchasing or not purchasing the products.

Answer:

Correct option - b
An electronic facility of transferring funds through the internet is net banking transfer.
Explanation:
Net banking permits the customers to carry banking transactions on the internet. Under net banking, there is no physical movement; instead, money is transferred from one account to another through the internet.

Answer:

Correct option - b
Credit or debit cards are popularly known as plastic money.
Explanation:
Credit or debit cards are known as plastic money because of the following reasons:
1) They are made up of plastic.
2) They act as money; i.e., they can be used to make payments.

Answer:

Correct option - b
Shops in shopping malls and branded stores usually have POS terminals.
Explanation:
A point of sale (POS) terminal is an electronic device used to record a sales transaction. It scans the bar code printed on the product and records important details regarding the product on the computer, for example, the product code and the product price. Thus, it helps in maintaining a systematic record of the sales made.

Answer:

Correct option - b
Wedding planning is an example of outsourcing.
Explanation:
Wedding planning is an example of outsourcing, as the wedding planner outsources services such as decoration, lighting and catering to external agencies. These agencies are highly specialised in their respective areas of activity.

Answer:

The above columns can be correctly matched as:
 

Answer:

The term derived from the terms email and e-commerce​: E-business

Explanation:
E-business is derived from the terms “e-mail” and “e-commerce”. It basically refers to the use of internet to carry out online transactions and mails. Alongside, it is also used to perform various other business functions such as production, inventory management, product development and accounting.

Answer:

Name the term which is used by even common man effectively while collecting the needed information quickly: Internet

Explanation:
Internet is a very simple tool which is easy to understand and use in our daily lives. As no technical course is required to surf on the internet, even a layman can use it effectively to collect information about anything. Thus, we can say that it is user-friendly.

Answer:

Name the electronic facility of transferring funds through the internet: Net banking

Explanation:
Net banking permits the customers to undertake banking transactions on the internet. Through internet banking, the customers can transfer funds electronically from one account to another.

Answer:

Name the form of electronic currency that exists only in cyberspace: Digital cash

Explanation:
Digital cash has no physical existence; it exists in cyberspace. It is a system of purchasing cash in relatively small amounts and storing it in the computer system. The consumer can spend the cash later when making electronic purchases over the internet.

Answer:

Name the service provider which is used for payments through web: Payment gateway

Explanation:
A payment gateway is an e-commerce application service provider that is used for making payments through the web. It provides a secured zone through which retailers, manufacturers, dealers, buyers and sellers of goods can make payments online.

Answer:

Name the modern process of contracting a business function to someone else: Outsourcing

Explanation:
Nowadays, firms focus on core activities and contract out non-core activities to some external agencies. For example, activities like security, canteen, cleaning, sanitation, etc are generally outsourced to a third party. This process is known as outsourcing. Firms outsource those activities that are not so essential for them.

Answer:

Answer:

E-business refers to the business activities that take place online or through the web. It is primarily derived from the terms ‘email’ and ‘e-commerce’; however, it is a broader concept compared to e-commerce, as e-commerce deals with only the trading aspect of online business. E-business, on the other hand, includes various other business activities such as manufacturing, buying, selling and management of the whole business through the internet. Moreover, e-business offers many other advantages over traditional business like low set-up cost, easy formation and wider reach in the market.

Answer:

B to C or business to consumer refers to transactions that take place between a business firm and the customers. In other words, B to C includes transactions where a business firm sells to consumers, the goods and services fit for final consumption. B to C e-commerce transactions include not only activities such as sale or purchase of goods and services but also marketing activities that can be conducted online, for example, pre-sale activities (such as promoting products through advertisements), pre-sale services (such as providing product information and cash-on-delivery services) and post-sale services (such as customer care services).

Answer:

Online transactions enable customers to conduct trade from anywhere in the world and at anytime through the mode of internet. The following are the various steps involved in online trading:
Step 1: Find an appropriate and reliable shopping website and register with it so as to be able to conduct the trade activities.
Step 2: Browse through the various products available with the site, select the desired ones and place the final order.
Step 3: Proceed to the payment window and choose a suitable mode of payment out of the various options available such as cash on delivery, cheque, net banking, credit or debit cards and digital cash.

Answer:

The following are the different payment modes generally available to a trading website user.

i. Cash on Delivery (CoD) - Here, the payment is made in cash at the time of the delivery of the product.

ii. Cheque - The user makes the payment through a cheque. When the cheque is realised, the selected goods are then delivered by the seller.

iii. Net Banking - The user makes an electronic payment and transfers the correct amount to the bank account of the online vendor through the internet.

iv. Credit or Debit Card - The user can use a credit or debit card (also known as plastic money) to make an online payment.

v. Digital Cash or E-Cash - This type of currency has no physical existence. It is a system of purchasing cash in relatively small amounts and storing it in the computer system.

Answer:

Secure Socket Layer (SSL) is a method used for encrypting important and sensitive data such that it is protected from any kind of misuse. It was developed by the ‘Netscape’ company with the primary aim of transmitting confidential documents over the web. It is a protocol that uses logical reasoning and ensures security of transactions on the internet, thus creating a secured connection between the client and the server. For instance, sensitive user information on credit card numbers and social security numbers is obtained by the SSL protocol.

Answer:

Outsourcing is the process of contracting out non-core activities of a company to external agencies. It involves outsourcing activities that are not so essential and are less important to the company. The basic rationale behind outsourcing is that it allows the company to focus on its core functions, leaving less important activities to specialised agencies. These external agencies to which tasks are contracted out are highly specialised in their areas of activity and have expertise in performing the assigned tasks. This contributes to the overall efficiency and excellence of the company which is outsourcing work.

Answer:

True

Explanation:

Answer:

False

Explanation:

Answer:

True

Explanation:

Answer:

True

1) E-business is easy to start, as physical facilities are not required. For setting up e-business, all you need is one computer with the internet facility.

2) It does not require a host of procedures for the formation and working that are usually required in traditional forms of business.

Answer:

True

Explanation:

Answer:

E-business refers to the business activities that take place online or through the web. This enables the buyers and sellers to carry out trade anytime throughout the year. It saves time as well as efforts of the consumers as the trade can be conducted anywhere and anytime. It also eliminates the cost and time involved in reaching out to the seller. E-business is primarily derived from the terms ‘email’ and ‘e-commerce’; however, it is a broader concept compared to e-commerce, as e-commerce deals with only the trading aspect of online business. E-business, on the other hand, includes various other business activities such as manufacturing, buying, selling and management of the whole business through the internet. Moreover, e-business offers many other advantages over traditional business like low set-up cost, easy formation and wider reach in the market.

Answer:

The advantages of e-business are as follows:

i. Ease of Formation - The investment required to start up e-business is almost negligible as it does not require much capital or resources for the physical establishment of the business. Thus, it becomes a comparatively easier mode of trading than the traditional one.

ii. Global Access - E-business provides a worldwide access to the business. Businessmen are able to extend their sale of products to a large number of consumers across the world. Similarly, the consumers also get to choose from a variety of goods. Thus, it can be said that e-business provides a global access.

iii. Ease of Access - Unlike traditional modes of business, e-business provides easy accessibility to the consumers, as they can access products from anywhere and order them anytime.

iv. Consumer-Friendly - E-commerce saves time and effort of the consumers by providing a wide range of payment options to its customers such as debit cards, credit cards, cash on delivery and EMIs. All these options are quite safe and secure.

Answer:

A payment gateway is an e-commerce application that provides services which allows a direct connection between a website and a bank. In e-business, there is no exchange of cash or money over the counter; rather the payment is made through the web with the help of payment gateways. These gateways authorises the online payments made by the retailers, manufacturers, sellers or buyers and generally provide the option of making e-payments through credit card or debit card or through direct transfer from banks (through net banking). The payment gateways are also said to be the virtual equivalent of the physical Point of Sale as they allow transfer of payments through internet.

Answer:

Net banking can be defined as the facility of transferring funds electronically. It is a mode of online payment that enables direct transfer of funds from one bank account to another. Using this facility, a user can make an electronic payment to the bank account of the online vendor through the internet. In the whole process, the buyer first transfers the whole amount to the seller’s account through internet and later, it is only after the seller receives the agreed amount, he delivers the goods to the buyer.

Answer:

Outsourcing refers to the process of contracting out less important (i.e., non-core) business activities to external agencies. These external agencies are highly specialised and enjoy expertise in specific business activities such as advertisement and promotion of products and post-sale services. The basic rationale behind outsourcing is that it allows a company to focus on its core functions, leaving less important activities to specialised agencies. Thus, we can say that outsourcing increases a company’s efficiency in its important or core activities and reduces its overall cost of production.

Example: A company may outsource a number of activities such as customer services and the task of recruitment and training of employees to other companies in underdeveloped or developing countries.

Answer:

E-business refers to the business activities that take place online or through the web. This enables the buyers and sellers to carry out trade anytime throughout the year. E-business not only includes the trading aspect of online business, but also, includes various other business activities such as manufacturing, buying, selling and management of the whole business through the internet. The term “e-business” was primarily derived from the terms “e-mail” and “e-commerce”. The term originated in the late 1990s and was first used by IBM. The basic purpose of e-business was to provide a common platform to the buyers and sellers to conduct trade through web or internet. However, gradually with the growth of electronic commerce and e-business over the time, they became a global phenomenon and came out as a successful basis of trade for the people.

Answer:

The following are the various steps involved in online transactions:

i. Registration - The purchaser first needs to create an account on the shopping website. The account can be created by filling in required details like name, e-mail id and contact number. The process is known as registration.

ii. Placing an Order - After opening an account, the buyer can start browsing through the listed products, go through other customers’ reviews and compare products. The buyer may scan various items according to his or her preferences and put them in the shopping cart. The buyer can then place the final  order and proceed towards the payment window.

iii. Payment Mechanism - In this step, the buyer chooses his/her preferred mode of payment. The following are the different payment modes generally available on a trading website:

a. Cash on Delivery (CoD) - Here, the payment is made in cash at the time of the delivery of the product.

b. Cheque - The user makes the payment through a cheque. When the cheque is realised, the goods selected are delivered by the seller.

c. Net Banking - The user makes an electronic payment to the bank account of the online vendor through the internet.

d. Credit or Debit Card - The user can also use a credit or debit card (also known as plastic money) to make an online payment. The payment so made is linked to the bank account of the user.

e. Digital cash or e-cash - This type of currency has no physical existence. It is a system of purchasing cash in relatively small amounts and storing it in the computer system. The consumer can spend the cash when making electronic purchases over the internet.

Answer:

The following resources are required for the successful implementation of e-business:

i. Computer hardware with appropriate technology

ii. Proper telecommunication system (internet connection and telephone line) to ensure effective communication between the seller and the buyer

iii. Efficient payment mechanism with proper arrangements from commercial banks and credit card agencies

iv. Qualified workforce that is well versed with computer and internet and that can efficiently handle queries and orders from the customers

v. A well-designed, comprehensive website providing information to the customers regarding the types of products and their prices

vi. Support services such as consulting and certification services

Answer:

Business transactions should be secured because online transactions face a number of risks. Following are the type of risks involved in e-business:

i. Data Storage Risk - Data stored in a system is prone to misuse by hackers and fraudsters.

ii. Transaction Risk - The following are some of the transaction risks:

a) Default on order taking or giving: Either the seller denies that receipt of the order or the customer denies the placement of the order.

b) Default on delivery - In this case, either wrong goods are delivered or the goods are delivered at the wrong place. It can also happen that the goods are not delivered at all.

c) Default on payment - In this case, the seller denies the receipt of any payment, while the customer claims to have made the payment.

iii. Risk of Threat to Intellectual Property and Privacy - Information uploaded on the internet is prone to the risk of getting leaked and copied, as business transactions are highly prone to internet risks and online threats. Other examples include the leakage of credit/debit card details to the third parties, virus attacks and hacking and phishing activities. Thus, business transactions should be secured.

Answer:

Outsourcing refers to the process of contracting out less important (i.e., non-core) business activities to other agencies, while focusing on the more important areas.

The advantages of outsourcing are:
The following are the benefits or advantages of outsourcing.

i. Focus on core activities: Outsourcing allows a business enterprise to focus on the activities that are more important to it. This helps it to come up with more sophisticated and superior products, which builds goodwill for it in the market.

ii. Specialisation: The external agencies to which tasks are contracted out are highly specialised in their areas of activity and have expertise in performing the assigned tasks. This contributes to the overall efficiency and excellence of the company which is outsourcing work.

iii. Cost efficient: The larger the company, the higher are its constraints in minimising the cost of its back-office operations. In view of this, outsourcing enables companies, especially large-scale organisations, to perform these operations at reasonable costs (compared with the costs that they would have incurred by performing the operations themselves). Thus, outsourcing is regarded as cost efficient.

i. Confidentiality: Outsourcing involves sharing vital information and technological knowledge with the firms to which tasks are outsourced. As a result, there is always a risk that these firms might share vital information with the business rivals of the companies which have outsourced tasks to them. This lack of confidentiality can pose a serious threat to companies which rely on outsourcing.

ii. Quality concerns: Once the contract is given and the rates are fixed, it may happen that the firm to which tasks have been outsourced starts using cheap and inferior inputs in order to reduce their own costs and increase their profits. This adversely affects the quality of products and services of the companies outsourcing tasks.

iii. Resentment in home country: Global enterprises outsource their activities to firms located in countries where labour costs are much less. However, if the home countries of these enterprises are facing unemployment, then this may lead to resentment and disturbances.

Answer:

The advantages of e-business are:

i. Ease of Formation - The investment required to start up e-business is almost negligible. This is because it does not require much capital or resources for the physical establishment of the business. Thus, it becomes a comparatively easier mode of trading than the traditional mode of business.

ii. Global Access - E-business provides a worldwide access to the business. Businessmen are able to extend their sale of products to a large number of consumers. Similarly, the consumers also get to choose from a variety of goods. Thus, it can be said that e-business has shrunk the whole world where international boundaries do not matter anymore.

iii. Consumer-Friendly - E-commerce saves the time and efforts of the consumers. It provides a wide range of payment options to its customers such as debit cards, credit cards, cash on delivery and EMIs. All these options are quite safe and secure.

i. Lack of Personal Touch - Unlike traditional business methods, e-commerce lacks a personal touch, as both the consumer and the seller are not physically present when the deal is made. As a result, direct trading is preferred over e-commerce for products such as clothes, shoes and jewellery.

ii. Lack of Security - Online trading and transactions are highly prone to internet risks and online threats. The possible threats could be leakage of credit/debit card details to the third parties, anonymity of the trading people, virus attacks and hacking and phishing.

iii. Technical Drawbacks - Online trading requires basic computer knowledge and internet familiarity. This often creates distress for the people who do not know how to operate computer. Furthermore, this often divides the society (termed as ‘digital divide’) into computer literates and computer illiterates. Besides, sometimes due to technical problems or server downtime, websites stop functioning; this may add to the frustration of the consumers and may even discourage them to revisit the website.