HOTS Questions: Emerging Modes of Business | Business Studies (BST) Class 11 - Commerce PDF Download

Q1: ‘Outsourcing results in cost reduction’. How? Explain with an example.  
Ans. Due to global competition, not only a firm needs to ensure global quality but also global competitive pricing. For this, the company needs to reduce its cost of operation by contracting out the work to specialists who are cost-efficient.  

Q2: Mr. X placed an online order with Mr. Y, a vendor of a vacuum cleaner but even after ten days the product was not delivered. On inquiry, he comes to know that it was delivered to the wrong address. Identify the risk involved in it and briefly explain other such possible risks.  
Ans. 

• The seller may deny that the customer ever placed the order or the customer may deny that he ever placed the order. It is called “Default on Order taking/ Giving”.  
• Goods may be delivered at the wrong address or wrong goods may be delivered which is referred to as “Default on Delivery”.  
• The seller may claim/complain that he didn’t receive payment while the customer may claim that payment was over. This is referred to as “Default on Payment”.  

Q3: Your friend is of the opinion that ‘Traditional business involves handling and carrying more cash by both buyers and sellers which was highly risky but online payment mechanism is safer’. Is he correct? Explain any four such online payment mechanisms.  
Ans. a. Cash on Delivery(COD)  Pay cash at the time of physical delivery of goods  
b. Cheque  Vendor arranges the pick up of the buyer’s cheque(s) – Upon realization, the delivery is made
c. Net-Banking Transfer  Electronic transfer of funds from the buyer to the seller, after which the  seller makes the delivery  
d. Credit/Debit Cards  These are also called ‘Plastic Money’, the buyer enters the respective card’s details and the transaction is made. Credit cards allow the buyer to make purchases on credit, whereas Debit cards make use of the buyer’s existing money.  
e. Digital Cash This form of currency exists only in cyberspace. The buyer deposits money into the Digital Cash account and this money is utilized for making purchases online.