Emerging Modes Of Business Class 11 Notes Business Studies Chapter 5 - CBSE

Chapter : 5

What Are Emerging Modes of Business ?


It refers to conducting business activities over internet or any other computer network.

Scope Of E-Business

On the basis of parties involved in electronic transactions, e-business can be classified into 4 directions:

  • B2B Commerce: It involves transactions taking place between business firms.
  • B2C Commerce: It involves transactions taking place between business and customer.
  • C2C Commerce: It involves transactions taking place between two or more customers.
  • Intra-B Commerce: It involves interaction and dealings among various departments and persons within the firm.

E-Business Vs E-Commerce

e-Business is a wider term which includes e-commerce and other electronically conducted business functions like production, accounting, finance, personnel administration, etc.

Benefits of E-Business

  • Easy formation and lower investment requirements
  • Convenience
  • Speed
  • Global reach
  • Movement towards a paperless society

Limitations of e-Business

  • Lack of personal interaction.
  • Incongruence between order taking/giving and order fulfillment speed
  • Need for technology capability and competence of parties to e-business
  • Increased risk due to anonymity and non-traceability of parties; it includes risks like: (i) Difficult to establish identity and location (ii) Loss of Privacy (iii) Leakage of confidential information
  • People’s resistance
  • Ethical fallouts

Online Transactions

Online transactions refers to transactions taking place between buyers and sellers through internet.

Steps In Online Shopping

From the point of view of buyer, online shopping includes the following:

  • Registration • Placing an Order
  • Payment Mechanism: The payment may be done in any of the following ways: (i) Cash on Delivery (COD) (ii)Cheque (iii) Net-banking Transfer (iv) Credit or Debit Cards (v) Digital Cash

Risks In E-Business

The risks involved in e-business transactions can be classified in 3 categories:

  • Transactions risk can be of following types: (i) Default on Order taking (ii) Default on Delivery (iii) Default on Payment
  • Data Storage and Transmission Risks involves risk of loss of stored data and risk in transmission of data. Such risks may be due to (i) VIRUS, Vital Information Under Siege (ii) Hacking
  • Threat to Intellectual Property and Privacy Risks. It involves risk of data being copied and used for personal gain and risk of loss of privacy due to various junk e-mails.

Resources Required For Successful e-Business Implementation

  • Well designed website
  • Adequate computer hardware
  • Effective telecommunication facilities
  • Technically qualified manpower
  • Systems of receiving payment


It refers to contracting out some of businesses non-core activities to a third party which were earlier performed by the organisation.

Nature of Outsourcing

  • Outsourcing involves contracting out activities.
  • Generally, non-core business activities are outsourced.
  • Processes may be outsourced to a captive unit or a third party.

Need For Outsourcing

  • Focusing of Attention
  • Cost Reduction
  • Quest for Excellence
  • Growth through Alliance
  • Boost to Economic Development

Concerns over Outsourcing

  • Confidentiality
  • Ethical concern
  • Sweat-shopping
  • Resentment in Home Countries

Business Process Outsourcing (BPO)

BPO is a subset of outsourcing that involves the contracting of a specific business task, such as human resources and customer service, to a third-party service provider.

Knowledge Process Outsourcing (KPO)

KPO is form of outsourcing that involves the contract of knowledge intensive business processes that require specialized domain expertise to a third-party service provider.