Emerging Modes of Business

Written and reviewed by Rohit Singh, Computer Science & Commerce faculty at UniDrill (MCA, Osmania University · 6 years teaching). Based on NCERT Business Studies Class XI, Chapter 5.

What happens between your tap on Buy and the doorbell?

Ananya orders a pair of shoes on her phone at midnight. She registers, adds the shoes to a cart, pays by card and gets a message that they will arrive in three days. No shop was open, no shopkeeper spoke to her. Behind the screen, the seller's system has already told its warehouse, its accounts and its courier partner. When she calls a toll-free number the next day to ask about delivery, a call centre run by another company answers. Two of the biggest changes in modern business sit in this one story: e-business and outsourcing. This chapter explains both and the risks that come with them.

Why "emerging modes"?

A mode of business is the manner in which business is conducted. "Emerging" means the changes are happening now and will continue. The business itself is not new. Only the method is. Firms keep looking for better ways to deliver value because customers want better quality, lower prices, faster delivery and better care. Three trends drive this.

e-business and e-commerce: broader and narrower

e-business means conducting industry, trade and commerce using computer networks. The most familiar network is the internet, but firms also use private networks for internal work because they are more secure. e-commerce is the part that covers a firm's dealings with its customers and suppliers over the internet.

A simple memory line: just as business is broader than commerce, e-business is broader than e-commerce. CUET mixes this up in assertion-reason questions more than any other point in the chapter.

Beyond the textbook. For the exam: e-business is broader and e-commerce is the narrower part. In reality: many news reports and companies use the two words as if they meant the same thing. Why it matters: an exam answer must keep them separate. If an option says they are identical, it is wrong, even though everyday speech blurs them.

Who is talking to whom: the scope of e-business

Almost every function of a business, such as production, finance, marketing and personnel, and managerial work such as planning, organising and controlling, can run over computer networks. The most tested view is by the parties involved.

Four directions form the main scope: B2B, B2C, intra-B and C2C. C2B and B2E are the corollary and the variant. B2B originally meant sending purchase orders and invoices through Electronic Data Interchange (EDI). B2C covers marketing, promotion and sometimes even delivery, such as music or films downloaded online. In C2C, buyers and sellers rate each other, and a payment intermediary can hold money until the goods are shipped and accepted, which builds trust where no market mechanism exists.

Pause and predict: A mobile maker runs an e-learning course for its own staff over the company intranet. Which type is this?

Check your answer: B2E, business to employees. It also stays inside one firm, so it is not B2B, which is always between two different businesses.

Pause and predict: A bakery owner uses a toll-free line run by a machine seller to report a faulty oven. Which type is this?

Check your answer: C2B. The customer reaches out to the business with a complaint or a query.

Benefits and limitations

The digital divide is the division of society on the basis of familiarity with digital technology.

Beyond the textbook. For the exam: the digital divide arises because e-business needs technology capability. In reality: cheaper phones and mobile data have brought many more people online, but gaps remain in skills, language and reliable connectivity. Why it matters: the exam answer stays the same, but the idea helps you recognise a case question that describes villagers who cannot use an online service.

Traditional business vs e-business

This comparison table covers many of the features CUET lifts directly.

Placing an online order: three steps and five ways to pay

A transaction passes through three stages: before the sale (advertising, enquiry), the sale itself (negotiation, closing, payment) and delivery. Only the last stage involves the physical movement of goods. The first two are flows of information, which is why e-business can cut cycle time.

Staying safe: three kinds of risk

VIRUS stands for "Vital Information Under Siege". It is a program, a series of commands, that copies itself onto other computers. Its effects range from Level 1, a nuisance on the screen, to Level 4, complete destruction of the system.

Cryptography is the art of protecting information by turning ordinary text (plaintext) into unreadable text (ciphertext). Only someone with the secret key can read it. SSL (Secure Sockets Layer) encrypts card details as they travel to the seller. Cookies are small records, like a caller ID, that tell a seller the visitor's name, address and past purchases.

Beyond the textbook. For the exam: cookies are small records that provide a seller with a consumer's details and purchase record. In reality: a cookie is a small text file that a website stores in your browser to remember things such as your login or your cart, and it can also be used to track what you browse, which is why many sites now ask for your consent. Why it matters: it explains why you see the same shoes advertised after one visit, and it shows why privacy is listed as a separate risk.

The Information Technology Act, 2000 supports e-business: Section 4 recognises electronic records and Section 5 gives legal status to digital signatures. Section 6-1 covers government use of electronic records and Section 7-1 covers their retention.

A website is not a physical place. It is the online presence that holds all the content a firm wants to show. Beyond money, men and machines, a firm needs resources to build, run, maintain and improve its website.

Business Process Outsourcing

Outsourcing means handing over a business activity to an outside specialist instead of doing it in-house. Business Process Outsourcing (BPO) applies this to business processes such as customer care, accounts or HR. A firm does this to lower costs and to concentrate on what it does best.

India has gained from the growth of outsourcing through jobs, new skills, exports and a larger national income.

Mini case. Greenleaf Bank in Europe hands its customer care to a call centre in Hyderabad run by a separate firm. The call centre uses the bank's systems to answer queries about statements and cards. This is BPO. If the bank instead set up its own centre in Hyderabad, owned by the bank, it would be a captive BPO. The first is a banking vertical, because the service is built for one industry.

Exam traps

60-second revision

Where this chapter connects

• Previous: Business Services covers e-banking, EFT and communication services that make online transactions possible.
• Next: Formation of a Company turns to the company form that many e-businesses and BPOs use.
• Trade angle: International Business shows how globalisation, one of the three trends, works through trade, investment and outsourcing.