Students can access the CBSE Sample Papers for Class 11 Business Studies with Solutions and marking scheme Set 2 will help students in understanding the difficulty level of the exam.
CBSE Sample Papers for Class 11 Business Studies Set 2 with Solutions
Time : 3 Hours
Maximum Marks : 80
General Instructions:
- This question paper contains 34 questions.
- Answers should be brief and to the point.
- Answers to the questions carrying 3 marks may be from 50 to 75 words.
- Answers to the questions carrying 4 marks may be about 150 words.
- Answers to the questions carrying 6 marks may be about 200 words.
- Attempt all parts of the questions together.
Question 1.
Shipra is a software professional working in TKJndustries Ltd. at Kerela. Her parents are residing in Agra. Due to family emergency, her father asked her to send ₹4 lakhs in his saving bank account in SBI at the earliest. Shipra is having her bank account with Bank of Baroda but she has not opted for digital payment system or e-banking services. She approached her bank manager Mr. Vivek Mishra, for remittance of the amount to her father’s account. He told her that she can adopt Electronic Fund Transfer options: RTGS or NEFT. He advised her to apply for virtual banking services enlisting its benefits and started her mobile banking services from the same day. Shipra successfully transferred the amount to her father using RTGS.
The reason why Shipra chose RTGS, not NEFT is:
(A) Minimum transaction value of NEFT is ₹5 lakhs
(B) In RTGS, payment is not subjected to any waiting period
(C) RTGS operates on deferred Net Settlement
(D) In NEFT, payment is not subjected to any waiting period [1]
Answer:
Option (C) is correct.
Explanation: RTGS operates on a deferred Net Settlement basis, where transactions are settled individually and in real-time. On the other hand, NEFT operates on a batch processing system, where transactions are grouped and settled in batches at specific intervals. Since Shipra needed to transfer a specific amount of ₹4 lakhs, RTGS was the appropriate choice as it allows for immediate and individual settlement of high-value transactions. NEFT, on the other hand, may have limitations in terms of transaction value and could involve some waiting period for settlement.
Question 2.
The industries can be divided as Primary, secondary and tertiary. Transport, banking, insurance, warehousing, communication, packaging and advertising are included under which industry? [1]
(A) Primary
(B) Secondary
(C) Tertiary
(D) None of these
Answer:
Option (C) is correct.
Explanation: These are concerned with providing support services to primary and secondary industries as well as activities relating to trade. These industries provide service facilities. As business activities, these may be considered part of commerce because as auxiliaries to trade these activities assist trade. Included in this category are transport, banking, insurance, warehousing, communication, packaging and advertising.
Question 3.
If a company aims at fulfilling the social obligations, then it has to compromise with its goal of profit maximization.
Thus, social responsibility and profit maximization cannot go hand-in-hand. [1]
(A) True
(B) False
(C) Depends on the nature of business
(D) Depends on the social obligation to be fulfilled
Answer:
Option (B) is correct.
Explanation: Contrary to the statement, social responsibility and profit maximization can go hand-in-hand. Many companies recognize that fulfilling social obligations and engaging in responsible business practices can contribute to long-term profitability and sustainable success. By considering the interests of various stakeholders, such as customers, employees, communities, and the environment, companies can build a positive reputation, enhance brand value, attract loyal customers, and foster a supportive business environment. Balancing social responsibility and profit maximization is often seen as a strategic approach that can lead to mutual benefits for the company and society as a whole.
Question 4.
The rate of dividend on preference shares is generally ………………. than the rate of interest on debentures. [1]
(A) Lower
(B) Higher
(C) Depends on the amount of preference shares issued
(D) Depends on the amount of debentures
Answer:
Option (B) is correct.
Explanation: The rate of dividend on preference shares is generally higher than the rate of interest on debentures. Preference shares are a form of equity investment and represent ownership in the company. Therefore, companies usually offer a higher rate of dividend on preference shares to attract investors and compensate them for the additional risk they assume compared to debenture holders. On the other hand, debentures are a form of debt investment, and the rate of interest on debentures is typically lower than the rate of dividend on preference shares.
Question 5.
Which of the following constitute the ‘modem’ small industries under ‘Village and Small Industries Sector’: [1]
(A) Hand looms
(B) Handicrafts
(C) Power looms
(D) KhadiR
Answer:
Option (C) is correct.
Question 6.
The picture given above is an example of: [1]
(A) Consumer cooperative store
(B) Mail Order House
(C) Departmental Store
(D) Multiple Shops
Answer:
Option (C) is correct.
Explanation: A Departmental store is a large establishment, which sells a wide variety of products and aims to satisfy all needs of the customers under one roof.
Question 7.
TRIPS is one of the WTO agreements that deals with ………………. . [1]
(A) Trade in agriculture
(B) Trade in services
(C) Trade related investment measures
(D) None of these
Answer:
Option (D) is correct.
Question 8.
Kalakrati Industries is a company manufacturing stationery item. The company has set its objective of increasing revenue from ₹50 crores to 100 crores within 2 years. Unfortunately, with the saturating domestic demand, underutilization of production capacity, etc. their objectives could not be achieved even after 3 years. In a long discussion in the meeting with all the managers, the company discussed the scope of international business and reached the decision to extend its market territory beyond the nation’s boundaries by selling goods to foreign countries. For this, the company decided to import exclusive stationery items from Japan. After identifying a suitable exporter, Kalakrati Industries sent a written request to the exporter to provide information regarding price, terms and conditions, etc. on which basis the exporter will be able to supply goods.
How Will an increase in the production capacity of Kalakrati Industries benefit it? [1]
(A) Economies of scale
(B) Reduction in production cost
(C) Improve profit margin
(D) All of these
Answer:
Option (D) is correct.
Explanation: The increase in production capacity will provide the benefit of economies of scale which in turn will reduce the production cost and increase the profit margins.
Question 9.
Noise is not merely a source of annoyance but it also possesses some serious health hazards. In the light of this
statement which of the following is incorrect? [1]
(A) It is caused by the running of factories.
(B) It is caused by vehicles.
(C) It cannot be controlled in order to protect the environment.
(D) It can be responsible for many diseases like loss of hearing etc.
Answer:
Option (C) is correct.
Explanation: Noise can be controlled by human efforts which in turn can protect the environment.
Question 10.
Read the following statements: Assertion (A) and Reason(R). Choose the correct alternative from those given
below: [1]
Assertion (A): Payment of dividend on the equity shareholders of the company is compulsory.
Reasoning (R): Equity shareholders are the owners of the company and they have the voting rights. They participate in the affairs of the company.
Alternatives:
(A) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
(C) Assertion (A) is true but Reason (R) is False
(D) Assertion (A) is False but Reason (R) is True
Answer:
Option (D) is correct.
Explanation: Equity shareholders are the residual owners of the company. Dividend is paid to them only if amount is left after the payment of all the liabilities of the company.
Question 11.
Small businesses in India take ……………….. decisions as compared to large-sized organizations. [1]
(A) Quick
(B) Slow
(C) Delayed
(D) None of these
Answer:
Option (A) is correct.
Explanation: In small organisations, the decision making is quick.
Question 12.
The business assets of a firm amount to ₹22,000 but the liabilities stand at ₹47,000. What course of action can the
creditors take if it is a sole proprietorship firm? [1]
(A) Creditors can settle their account only to the extent of business assets available i.e., ₹22,000
(B) Besides using business assets of ₹22,000, creditors can use the personal property of the owner to the extent of ₹25,000
(C) Creditors can settle their account only to the extent of owner’s personal assets available
(D) None of these
Answer:
Option (B) is correct.
Explanation: Sole proprietor has unlimited liability. If due to some reasons there are losses in business, his personal property can be utilised to pay the business debts. This discourages him to expand his business.
Question 13.
Statement I: GATT was transformed into World Trade Organisation (WTO) with effect from 1st January 1995
Statement II: One of the objectives of WTO is to engage in such activities which improve the standards of living, create employment, increase income and effective demand and facilitate higher production and trade;
Choose the correct option from the following: [1]
(A) Statement I is true and II is false
(B) Statement II is true and I is false
(C) Both the statements are true
(D) Both the statements are false
Answer:
Option (C) is correct.
Question 14.
Sensing the business opportunities in Food industry, Sagar Bagada after completing his graduation in Agriculture engineering, decided to open his own enterprise. His dream turned into reality when his enterprise, “Swaad Food Industries” set up its food and beverages processing plant in ‘Mitrapura”, one of the rural areas of Rajasthan, under Start-up India Scheme launched on 16th January, 2016.
The enterprise opted for labour intensive technique, due to easy availability of labour at lower cost. Within no time, he came in the list of successful entrepreneurs.
“The enterprise opted for labour intensive technique, due to easy availability of labour at lower cost.” Identify the need for entrepreneurship satisfied in the given statement. [1]
(A) Organisation of production
(B) Generation of employment
(C) Economic efficiency
(D) Generation of business opportunities for others
Answer:
Option (C) is correct.
Question 15.
Which of the following forms supplied by the customs office is filled by the importer for assessment of customs import duty? [1]
(A) Bill of lading
(B) Bill of entry
(C) Commercial invoice
(D) DockChallan
Answer:
Option (B) is correct.
Explanation: Bill of entry is a form supplied by the customs office to the importer. It is to be filled in by the importer at the time of receiving the goods. It has to be in triplicate and is to be submitted to the customs office. The bill of entry contains information such as name and address of the importer, name of the ship, number of packages, marks on the package, description of goods, quantity and value of goods, name and address of the exporter, port of destination, and customs duty payable.
Question 16.
Statement I: The Rural Small Business Development Centre (RSBDC) is a government centre sponsored by state government for micro, small and medium businesses which is set up by world organization.
Statement II: The primary purpose of RSBDC is to work for socially and financially disadvantaged people and groups.
Choose the correct option from the following: [1]
(A) Statement I is true and II is false
(B) Statement II is true and I is false
(C) Both the statements are true
(D) Both the statements are false
Answer:
Option (B) is correct.
Explanation: RSBDC is a government centre sponsored by NABARD for micro, small and medium businesses which is set up by world organization. The primary purpose of RSBDC is to work for socially and financially disadvantaged people and groups. RSBDC does many programmes on skill up gradation, entrepreneurship, awareness, counselling and training.
Question 17.
Of- the following forms of business organizations, which one is best suited in case where direct personal contact is required with the customers ? [1]
(A) Private Company
(B) Sole Proprietorship
(C) Public Company
(D) None of the above
Answer:
Option (B) is correct.
Explanation: Sole proprietorship is best suited in cases where direct personal contact is required with customers. In a sole proprietorship, the business is owned and operated by a single individual. This allows the owner to have direct and personal interactions with customers, understanding their needs, and providing personalized services. Sole proprietors have full control over their business operations and can establish close relationships with customers, which can be crucial in businesses where personalized attention and direct communication play a significant role. Private and public companies, on the other hand, may have a more complex organizational structure and may not provide the same level of direct personal contact with customers.
Question 18.
Match the examples of different types of enterprises given in column I with the appropriate type given in column II
| Column I | Column II |
| 1. Bharat Heavy Electricals Ltd. | (i) Departmental Undertaking |
| 2. Toyota Motors | (ii) Statutory Corporation |
| 3. Reserve Bank of India | (iii) Government Company |
| 4. Indian Railways | (iv) Global Enterprise |
(A) 1. (ii), 2. (iv), 3. (iii), 4. (i)
(B) 1. (iv), 2. (ii), 3. (iii), 4. (i)
(C) 1. (iii), 2. (iv), 3. (ii), 4. (i)
(D) 1. (iii), 2. (iv), 3. (i), 4. (ii)
Answer:
Option (C) is correct
| Column I | Column II |
| 1. Bharat Heavy Electricals Ltd. | (iii) Government Company |
| 2. Toyota Motors | (iv) Global Enterprise |
| 3. Reserve Bank of India | (ii) Statutory Corporation |
| 4. Indian Railways | (i) Departmental Undertaking |
Question 19.
Which among the following is not a feature of Global Enterprises? [1]
(A) Support huge finance
(B) Enter into foreign collaborations
(C) Decentralized control
(D) Possess technological superiorities
Answer:
Option (C) is correct.
Explanation: MNCs have a centralised control system. All the decisions for subsidiaries or branches are taken by the headquarters of MNCs. Headquarter of MNCs exercise control over their foreign subsidiaries.
Question 20.
Retained earnings also known as ‘ploughing back of profits’ are a source of financing. [1]
(A) External
(B) Internal
(C) Temporary
(D) Borrowed
Answer:
Option (B) is correct.
Explanation: A company generally does not distribute all its earnings amongst the shareholders as dividends. A portion of the net earnings may be retained in the business for use in the future. This is known as retained earnings. It is a source of internal financing or self-financing or ‘ploughing back of profits’. The profit available for ploughing back in an organisation depends on many factors like net profits, dividend policy and age of the organisation.
Question 21.
Kiran is a sole proprietor. Over the past decade, her business has grown from operating a neighbourhood corner shop selling gift items, such as artificial jewellery, purses, small bamboo plants, mobile covers, showpieces, photo frames, etc. to a retail chain with three branches in the city. Although she looks after the varied functions in all the branches, she is wondering whether she should form a company to better manage the business. She also has plans to open branches countrywide. On the basis of above information answer the following questions :
(i) State two benefits of remaining a sole proprietor.
(ii) State one benefits of converting to a joint stock company. [1]
Answer:
(i)
(a) Sole beneficiary of profits: All the profits earned by the sole proprietorship firm belong solely to the proprietor.
(b) Secrecy : The sole proprietor is not expected to share his secrets with others.
(ii)
(a) Scope for expansion: A company can arrange for large financial resources as compared to other forms of business organisations i.e., sole proprietorship, partnership, etc. It can raise additional capital from the public by issuing shares or debentures, through loans from banks and financial institutions, etc.
(b) Professional management: A company has huge financial resources, therefore, it is able to employ people who are experts in their respective areas of specialisation. (Any one)
Question 22.
Why e-commerce has become so important in recent days of demonetisation and replacement of currency? Explain in short. [3]
OR
Define B2B commerce. [3]
Answer:
E-commerce has become so important in recent days of demonetisation because of following benefits:
- No physical currency is required to make payment for commerce transaction made. e-money or online payments are made which becomes convenient for buyers and sellers.
- E-commerce creates a wide market because of wide use of internet globally, e-commerce has covered almost the entire world, so demonetisation has hardly affected business profits/operations.
- E-commerce not only gives facility of online payment through debit card, credit card, EFT etc, but also inculcates a sense of financial discipline as well as security of transactions, proving very economical in the times of demonetisation.
OR
B2B commerce i.e. business to business involves e-commerce transactions between business firms using Electronic Data Interchange (EDI) technology.
It involves the following transactions:
- Placing orders.
- Monitoring production.
- Delivery of components.
- Movement of information, money transfer, etc.
- Creation of utilities.
- Sending and receiving documents like purchase order or invoices.
Question 23.
A Company should have an ideal capital structure striking a balance between the owned funds and the borrowed funds. The finance manager should be efficient enough to do effective financial planning and take all the financial decisions – Investment decision, financing decision and dividend decision in such a way that the shareholders wealth is maximised. Excess of owned funds may reduce earnings per share and excess of borrowed funds may increase financial risks for the company.
Enlist the different sources of owned capital and borrowed capital used by a company. [3]
Answer:
Sources of Owner’s funds:
(a) Equity shares,
(b) Preference Shares,
(c) Retained Earnings
Sources of Borrowed funds:
(a) Trade Credits,
(b) Loans from Banks,
(c) Loans from Financial Institutions,
(d) Debentures,
(e) Public Deposits,
(f) Commercial Paper,
(g) Inter-corporate Deposits. (Any three)
Question 24.
What do you mean by ‘Inconsistency’ of services? [3]
OR
Give the important features of Recurring Deposit Account. [3]
Answer:
Inconsistency of services means that homogeneous and standardized services can’t be provided each time by the service provider. Services have to be performed exclusively each time according to the different demands and different expectations of various customers. E.g., Cable operators offering channels as per customer viewership requirements is an example of the feature ‘consistency’.
OR
- In such account, money is deposited in regular instalment for a specified time period.
- The rate of interest on it is higher than that on saving account.
- In financial urgency the account can be terminated.
Question 25.
Explain the following objectives of export trade: [4]
(i) Sale of surplus production
(ii) Optimum utilization of resources
OR
Write a note on the following organisations which help in the promotion of export trade: [4]
(i) Export Promotion Councils
(ii) Commodity Boards
Answer:
(i) Sale of surplus production: A country may produce more than it requires. Then in that case, surplus may be sold to foreign countries.
(ii) Optimum utilization of domestic resources: Every country has some natural resources in plenty. These resources can be utilized to increase the production and sell to those countries where these are in shortage.
OR
(i) Export Promotion Councils (EPCs): These are non-profit organisations registered under the Companies Act or the Societies Registration Act. The basic objective of the export promotion councils is to promote and develop the country’s exports of particular products falling under their jurisdiction.
(ii) Commodity Boards: These are the boards which have been specially established by the Government of India for the development of production of traditional commodities and their exports. These boards are supplementary to the EPCs and functions are also similar.
Question 26.
Do you think small business units can survive in a competitive market ? Explain any three factors which make
way for the scope of small business enterprises. [4]
OR
Why is there scope for SSI in developing countries like India ? [4]
Answer:
Yes, small business units can survive in a competitive market. Factors which make way for the scope of small business enterprises are as follows:
- Limited resources: Individuals with entrepreneurial spirit but with limited economic means and resources always have an option of starting a small business.
- Flexibility: Small firms are usually owner- operated and this allows them to expand or reduce the scale of operation, try new products, new ideas without requiring lengthy approval procedures.
- Personal touch: Small enterprises are more likely to succeed in areas requiring personal touch in handling customers.
OR
Developing countries face the problem of massive unemployment, shortage of finance, unutilized idle resources, regional disparities, lack of industrialisation, dependence on agriculture for livelihood etc. SSIs prefer techniques of production which require less capital and more labour, uses simple technology, can be widely spread without locational constraints, depends on locally available resources, can broaden the industrial base thus addressing the major problems of developing countries. Thus, SSI have immense scope in developing countries.
Question 27.
Neerja Craft Ltd. wants to diversify its business by opening two new divisions to deal in leather items as well as garments. For this, Finance Manager estimated the fund requirement of ₹5 crores. The company has two options to meet the fund requirement: shares or debentures. The Directors of the company found debentures as the better option to raise the capital.
Explain any four merits of raising funds through debentures to support directors’ decision. [4]
Answer:
Following are the merits of debentures:
- Fixed income at lesser risk: Investors who want fixed income at lesser risk prefer debentures. Debentures are fixed charge funds. They do not participate in profits of the company.
- Stability: Debentures are suitable to a company when the sales and earnings of the company are stable.
- Less costly source of finance: The cost of raising funds through debentures is less costly in comparison to cost of raising funds through preference shares or equity shares. This is because interest given on the debenture is tax- deductible.
- No dilution of control: There is no dilution of the managerial control of the company due to the issue of debentures.
Question 28.
Vishal buys goods in large quantities and sells them to customers.
(i) Which type of trader is Vishal?
(ii) State services to customers by this type of trade. [4]
Answer:
(i) Retailer
(ii) Services provided by the retailer to the customers are as follows:
(a) Regular availability of the goods: Retailers maintain regular availability of variety of product from different manufacturers. This helps the customers to buy the products of their choice as and when they require.
(b) Information about the goods: By effectively displaying the goods and through personal selling efforts; retailers provide important information about the arrival of the new goods, their special features etc. thus helps them in making their purchase decision.
(c) Convenience in buying: Firstly, retailers are situated very nearer to the residential areas and remain open for long hours. Secondly, retailers sell the goods of desired variety in small quantity according to customers requirement therefore, providing convenience to customers.
Question 29.
Name the following: [4]
(i) The economic activity showing a risk element and carried on profit.
(ii) The trade in which two countries are involved.
(iii) The trade in which goods are imported from one country for the purpose of exporting to other country.
(iv) The industry which involves breeding and reproduction of plant and animals.
Answer:
(i) Business: it refers to an enterprising entity or organization that carries out professional activities. They can be commercial, industrial, or others.
(ii) International trade: International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services.
(iii) Entrepot trade: It is basically a trade in which imported goods are re-exported with or without any additional processing or repackaging. Entrepotis mainly used to refer to duty-free ports with the high volume or re-export trade.
(iv) Genetic Industries: These are the industries, which are primarily concerned with multiplying or breeding certain species of animals or plants to earn profits from their sale
Question 30.
Uma is a village girl comes to Delhi to visit her relatives. She goes with her cousin to a shop, which is centrally located. She becomes astonished by the varieties of goods which are sold there.
(i) Identify the type of shop.
(ii) Describe two characteristics of the shop. [4]
Answer:
(i) Departmental Store
(ii) The main features of departmental store are as follows:
- Large size: A departmental store is a large retail room requiring large capital investment.
- Wide range: A departmental store deals with a wide range of products from low priced to very expensive goods. Different varieties of goods are available in different departments
- Departmentally organised: The store is departmentally organised. Goods offered for sale are classified and each department specialises in one line of product.
- Central purchases: Purchase of all the departments are made centrally. The departmental managers give a list of their requirements to the general manager who makes purchases for all the departments.
- Central location: A departmental store is located at a central place or in shopping centres, so that people from different parts of the city can easily reach there. (Any three)
Question 31.
(a) Explain the objective behind:
(i) NABARD
(ii) NSIC
(b) How would you differentiate between an ancillary unit and a tiny unit ? [3 + 3 = 6]
OR
1. Explain the following:
(i) Trademark
(ii) Patent
(iii) Copyright
2. Differentiate between Micro, Small and Medium enterprises on the basis of investment in plant and
machinery and turnover. [3 + 3 = 6]
Answer:
(a) (i) NABARD :
- Providing refinance to SSIs, cottage industries, tiny industries and other village industries by lending to commercial banks.
- Promoting rural industries, cottage industries tiny sectors by lending loans to commercial banks and cooperative banks
(ii) NSIC:
- Providing machinery on hire purchase system to SSIs.
- Help in providing training for skill up gradation of employees of SSIs.
- Enhance overall growth of SME’s. (Any two)
(b) Difference between ancillary unit and tiny unit
| Sr. No. | Ancillary unit | Tiny unit |
| (i) | It is that type in which it supplies 50% production to the parent unit. | It is that type in which machinery and investment of plant is not more than 25 Lakhs. |
| (ii) | Its investment limit is one crore. | Its investment limit is 25 Lakhs. |
| (iii) | There is assistance required from parent unit by providing technical and financial support. | There is no assistance required. |
| (iv) | It can do its business by itself. | It cannot do its business by itself. |
OR
1. (i) Trademark: A trademark is any word, name, or symbol or a combination of both of them, that tells about the identity of the goods made by an individual, company, organization, etc. It differentiates the goods of one company from another.
(ii) Patent: A ‘patent is an exclusive right granted by the Government that provides the exclusive ‘right to exclude’ all others and prevent them from making, using, offering for sale, selling or importing the invention. It is provided for scientific inventions.
(iii) Copyright: Copyright is the right to ‘not copy’ when the original idea is being expressed or presented by the author or creator. It is given to creators of literary, music, art, songs and films. It prohibits the unauthorised use of content.
2.
| Type of Unit | Investment in Plant and Machinery | Turnover |
| Micro | ₹1 Crore | Does not exceed ₹5 Crore |
| Medium | ₹0 Crore | Does not exceed ₹50 Crore |
| Small | ₹0₹ Crore | Does not exceed ₹2500 Crore |
Question 32.
Discuss the limitations of electronic mode of doing business. Are these limitations severe enough to restrict its
scope? Give reasons for your answer. [6]
OR
Why are e-business and outsourcing referred to as the emerging modes of business? Discuss the following factors responsible for the growing importance of these trends: [6]
(i) Speeding up the business process
(ii) Innovation and technology development
(iii) Good quality products at lower prices
Answer:
The various limitations of electronic mode of business are:
(i) Low personal touch: The e-business lacks personal touch compared to traditional business. Thus, it is relatively less suitable mode of business in respect of product categories requiring high personal touch such as garments etc.
(ii) Incongruence between order taking/giving and order fulfilment speed: Information can flow at the click of a mouse, but the physical delivery of the product takes time. This incongruence may play on the patience of the customers.
(iii) Need for technology capability and competence of parties to e-business: e-business requires basic knowledge of computers and Internet familiarity. This limits the use of e-business in few hands.
(iv) Increased risk due to anonymity and non-traceability of parties: Internet transactions occur between cyber personalities. As such, it becomes difficult to establish the identity of the parties and their location. Therefore, it is risky to transact through internet. e-business is more risky also in the sense that there are additional hazards of impersonation and leakage of confidential information such as credit card details etc.
(v) People resistance: The process of adjustment to new technology and new way of doing things causes stress and a sense of insecurity. As a result, people may resist an organisational plan of entry into e-business.
(vi) Ethical Fallouts: Companies use an ‘electronic eye’ to keep track of the computer files, e-mail account and the websites visited by their employees or others who use their network systems which is not considered right on ethical grounds.
Despite the limitations, the scope of e-business remains wide, mainly owing to the continuous implementation of new technology and new updates that help in overcoming the limitations. Websites are becoming more and more interactive to overcome the problem of ‘low touch.’ Communication technology is continually evolving to increase the speed and quality of communication through internet. Efforts are on to overcome the digital divide, for example, by resorting to such strategies as setting up of community tele-centres in villages and rural areas in India.
OR
The rapid globalisation and continuous innovations of products made changes in the modes of business. e-business and outsourcing are latest trends and more likely to continue. Hence, these are referred to as the emerging modes of business.
The factors responsible for the growing importance of these trends are:
(i) They speed up the business process: The demands of consumers are growing, and it has become necessary to facilitate trade from anywhere and also round the clock. e-business and outsourcing help speed up the process of buying and selling around the clock.
(ii) They facilitate innovation and technology development: To sustain in the market, every business needs to innovate and develop new ideas and products. In this scenario, e-business and outsourcing have emerged as a boon for producers as they facilitate continuous development of business strategies and new technologies.
(iii) They help make available quality products at lower costs: The demand for high quality and customised products has increased, and e-business and outsourcing play a major role in providing consumers with the required products at a reasonable cost. By facilitating the production and supply of quality products, e-business and outsourcing help to attain the objective of excellence.
Question 33.
(a) “The relationship between a bank and a customer begins when the customer opens an account with the
bank.”
(i) In context to this statement, discuss some of the accounts that can be opened by a customer in banks.
(ii) Describe the various services offered by e-banking.
(b) ” Now it is not necessary to carry your wallet everywhere to make payment”
(i) How can you pay money without physical notes and coins?
(ii) Explain any two modes of e-payment. [3 + 3 = 6]
Answer:
(a) e-banking means any user with a PC and a browser can get connected to the banks website to perform any of the virtual banking functions and avail of any of the banks services. There is no human operator to respond to the needs of the customer.
Types of Bank Accounts are:
(i) Saving Deposit Account: A person can open a savings deposit account by depositing a small sum of money. He can deposit money and withdraw money from his account whenever required.
(ii) Current Deposit Account: The account holder can deposit and withdraw money whenever desired. This account is generally opened by the businessman.
The services offered by e-banking are as follows:
(i) ATM (Automated Teller Machine): It is a self-service terminal which can be operated at any time i.e. 24 hours a day. To use an ATM, a client has to insert a plastic card in the machine and enter his identification code. If the code is appropriate, the machine would respond by providing cash, accepting deposits, etc.
(ii) Debit card: Debit card facility is offered to the account holders to make payment up to the amount of credit balance available in their account. It is generally located in sale terminals (shop/store) which are tied up electronically to the bank computer. When the customer presents the debit card, the amount is automatically transferred from the customer’s bank account to the seller’s account.
(b) (i) The customers can make digital payments.
(ii) e-wallets / Mobile Wallets: These are the digital version of physical wallet with more functionality. These are used to keep money and use it when needed. One needs to have a smartphone and a stable internet connection to use e-wallets. However, these can be used to send money from e-wallet to another e-wallet and not to bank account.
Unified Payment Interface (UPI): A payment mode used to make fund transfers through the mobile app using UPI Apps like BHIM, iMo-bile, PhonePe, Paytm, etc.
Question 34.
Ruchit and Saransh, two ITT ians joined together and started a company named Durable Plastic Ltd., engaged in manufacturing plastic bags for packaging. Their enterprise is outsourced a large order of such bags from Chinese firm, Marisha Machineries. Getting such business orders from local as well as from foreign firms, the company has
expanded the scale of its operations. They were aware of the fact that their factory is polluting the environment but no necessary equipment to control air pollution and for waste disposal were installed by them. It was argued by the Finance Manager of the company that such decision will involve a cash outlay of ₹ 80 lakhs which would decrease the working capital of the company by this amount. After a long discussion finally, the management of the company decided that the benefits of pollution control are more than the cost of pollution control. The business must follow the laws and regulations enacted by the government for protecting the environment instead of ignoring social responsibility of the business. [6]
(a) What was the dilemma faced by Ruchit and Saransh regarding their company’s environmental impact?
(b) How did the management of Durable Plastic Ltd. resolve the dilemma regarding pollution control?
Answer:
(a) Ruchit and Saransh, the founders of Durable Plastic Ltd., were aware that their factory was polluting the environment. However, they had not installed the necessary equipment to control air pollution and waste disposal. This posed a dilemma as they had to consider the cost of implementing pollution control
measures versus the potential negative impact on the environment.
(b) After a lengthy discussion, the management of Durable Plastic Ltd. decided that the benefits of pollution control outweighed the cost. They recognized that their business had a social responsibility to protect the environment and comply with laws and regulations enacted by the government. Despite the cash outlay of ’80 lakhs and the potential decrease in working capital, the management prioritized environmental protection over short-term financial considerations. This decision showcased their commitment to social responsibility and sustainable business practices.