Chapter 5: Emerging Modes of Business – CBSE NCERT Class 11 Business Studies Notes

Class 11 Business Studies Notes for Chapter 5: Emerging Modes of Business

Get Class 11 Business Studies Notes, Questions and Practice Papers for Chapter 5: Emerging Modes of Business. Candidates who want to pass Class 11 with a good grade can use this article for Notes, Questions, and Practice Papers.

We have provided access to the Class 11 Business Studies Notes, Important Questions and Practice Paper on Chapter 5: Emerging Modes of Business. You can practise the questions and check your answers using the solutions provided after each question.

Chapter Definitions and Short Notes

Chapter 5: Emerging Modes of Business – Short Notes and Definitions

Emerging Trends in Business

Emerging trends reflect fundamental business changes to meet consumer demands and competitive pressures. Technological advances, consumer expectations, and the global economy shape business practices, making trends important. Digitisation, outsourcing, and globalisation dominate business today. E-business involves electronic transactions, communications, and operations.
External providers perform business functions for cost savings or expertise. Internationalisation and globalisation allow businesses to reach global markets and benefit from international trade.
These trends are driven by business needs for efficiency, quality, customer satisfaction, and global reach.

Short Pointers:

  • Digitisation/E-Business: Transition of business processes to digital platforms for enhanced efficiency and reach.
  • Outsourcing: Delegating business functions to external entities to reduce costs and focus on core competencies.
  • Internationalisation/Globalisation: Expanding business operations globally to access new markets and customers.
  • Consumer Expectations: Shift from customer exploitation to customer care, with a focus on quality and competitive pricing.
  • Technological Advancements: Utilisation of emerging technologies to innovate and evolve business practices.
  • Competitive Pressure: Need for businesses to adapt and evolve to stay competitive and meet growing consumer demands.


Electronic business (e-business) involves conducting business via computer networks, especially the internet. It covers industry, trade, and commerce, including production, inventory management, product development, accounting, finance, and human resource management conducted electronically.
E-commerce focuses on online transactions with customers and suppliers, but e-business covers all electronic aspects of a firm’s operations, including internal and external activities. E-business uses digital platforms to improve efficiency, communication, and management in modern organisations.

Short Pointers:

  • E-Business vs. E-Commerce: E-business is a broader concept, including all electronic business activities, while e-commerce specifically deals with buying and selling online.
  • Scope of E-Business: Includes industry, trade, commerce, and internal functions like production and HR management conducted electronically.
  • Digital Platforms: Utilises the internet and private networks for business operations.
  • Enhanced Efficiency: Offers improved management of business functions through digital means.
  • Comprehensive Operations: E-business encompasses a wide array of electronic transactions beyond e-commerce, affecting various sectors of a business.

Scope of E-Business

E-business includes various electronic transactions based on parties and computer network business functions. It falls into three main categories: B2B (Business-to-Business), B2C (Business-to-Customer), and intra-B (Intra-firm Business). E-business includes production, finance, marketing, personnel administration, and managerial tasks like planning, organising, and controlling. Digital platforms help businesses operate more efficiently, reach more markets, and improve internal communication and processes.

Short Pointers:

  • B2B Transactions: Interactions between two business firms, often involving suppliers.
  • B2C Transactions: Direct interactions between a business and its customers, focusing on the delivery of goods and services.
  • Intra-B Transactions: Internal processes within a business, enhancing operational efficiency.
  • Business Functions via E-Business: Includes production, finance, marketing, personnel administration, and managerial tasks.
  • Digital Platforms: Facilitates various types of transactions and business operations, promoting efficiency and global reach.

B2B Transactions:

B2B (Business-to-Business) transactions are electronic commerce between businesses. This includes sourcing inputs from suppliers and vendors and distributing products to consumers. B2B commerce uses computer networks for ordering, production monitoring, component delivery, and payments, improving manufacturing and distribution. An assembly factory in the auto industry may work with multiple component vendors, some of whom are overseas.
The factory uses electronic systems to place orders, track deliveries, and manage inventory, including dealer-taken custom orders for personalised manufacturing. E-commerce, especially B2B, began by exchanging commercial documents like purchase orders and invoices using Electronic Data Interchange (EDI) technology to speed up information flow, document transfer, and financial transactions.

Short Pointers:

  • Definition: B2B transactions involve electronic business dealings between two companies.
  • Purpose: Facilitates sourcing of inputs, monitoring of production and delivery, and management of distribution channels.
  • Technology: Utilises computer networks, including the internet and EDI, for efficient communication and operations.
  • Example: Automobile manufacturing, where a factory interacts with multiple vendors for components and manages distribution electronically.
  • Evolution: Originated from the use of EDI for commercial document exchanges, expanding to comprehensive electronic commerce activities.

B2C Transactions:

B2C transactions are electronic interactions between businesses and consumers. Mostly electronic retailing, this aspect of e-business allows businesses to communicate with customers. B2C transactions include selling, distributing, surveying consumers, providing after-sales service, promoting, and delivering goods.
ATMs, where banks (the business) meet customers’ cash withdrawal needs, are B2C transactions. B2C commerce includes product customisation, customer service, and other marketing activities facilitated by e-commerce at lower costs and faster speeds. Modern consumers want personalised service and 24/7 customer engagement, so this type of e-commerce meets their needs.

Short Pointers:

  • Definition: B2C transactions involve direct electronic dealings between businesses and consumers.
  • Activities: Include selling, surveys, service, promotions, and delivery.
  • Continuous Communication: Enables 24/7 interaction with customers.
  • Beyond Selling: Encompasses all marketing activities, from product identification to post-sale satisfaction.
  • Customer Personalization: Facilitates tailor-made products and services for individual consumer needs.
  • ATM Use: A visible example of B2C transactions.
  • E-Commerce Efficiency: Offers cost-effective and speedy execution of marketing and sales activities.

Intra-B Transactions:

Intra-B (Intra-Business) transactions enable departmental communication and operations within a company. This internal commerce uses intranets to improve organisation-wide coordination and efficiency. Intra-B transactions streamline inventory, cash, plant and machinery use, customer orders, and human resource management.
B2E (Business-to-Employee) commerce—recruitment, training, and inventory access—is also part of Intra-B commerce. Intra-B commerce enables flexible manufacturing, customer customisation, and better decision-making through multimedia and graphic communication between organisational units. VPN technology enables online meetings and real-time information sharing for remote workers.

Short Pointers:

  • Definition: Electronic interactions within a business organisation to improve internal operations.
  • Technologies Used: Intranets and VPNs facilitate internal communication and remote work.
  • Benefits: Includes efficient inventory management, improved plant utilisation, effective order handling, and HR management.
  • B2E Commerce: Interaction between a business and its employees for recruitment, training, and operational support.
  • Enhanced Coordination: Facilitates better coordination and decision-making within the organisation.
  • Remote Work Support: Enables employees to work from anywhere, enhancing flexibility and efficiency.

C2C Commerce:

C2C (Consumer-to-Consumer) e-commerce involves direct consumer transactions via an online platform. This model is ideal for trading used books or clothing without a formal market, allowing people worldwide to find buyers and sellers.
In addition to transaction security, eBay’s rating system for buyers and sellers promotes transparency and trust. Payment intermediaries like PayPal protect both parties by holding funds until transaction terms are met. C2C commerce also encourages consumer forums and pressure groups to share experiences and influence business practices or solve problems. This shows the versatility and breadth of e-business applications and how digital platforms enable direct consumer interactions and community building.

Short Pointers:

  • Definition: Direct transactions between consumers via digital platforms.
  • Ideal For: Trading goods without established markets.
  • Security Mechanisms: Rating systems and payment intermediaries like eBay and PayPal.
  • Community Building: Formation of consumer forums and pressure groups.
  • Transparency and Trust: Rating systems allow insight into sellers’ reliability.
  • Problem Resolution: Community pressure can lead to issue resolution.
  • Versatility of E-Business: C2C commerce showcases the diverse applications of e-business.

Business to Employee (B2E) Commerce

B2E (Business to Employee) commerce involves companies using electronic platforms to manage employee processes. This includes digital hiring, interviewing, selection, training, development, and education. B2E commerce gives employees electronic catalogues, ordering forms, and inventory information to better serve customers. This approach simplifies HR processes and empowers employees with tools and information to improve customer service and operational efficiency.

Short Pointers:

  • Definition: Digital interactions between businesses and their employees.
  • HR Processes: Includes recruitment, training, and development activities conducted online.
  • Employee Empowerment: Access to electronic catalogues and inventory information for better customer interaction.
  • Efficiency: Streamlines HR processes and enhances operational effectiveness.

E-Business versus Traditional Business

E-enabling technologies have transformed business practices into e-business. Traditional business uses paper records, physical transactions, and retail spaces. E-business uses digital platforms for transactions, electronic records, and virtual spaces to operate 24/7 worldwide without physical location or business hours.
Comparative analysis shows that e-business has advantages like wider reach, efficiency, and better customer service, but it also has drawbacks like security issues and digital lack of personal touch.

Short Pointers:

  • Traditional Business: Involves physical interactions, paper records, and physical retail spaces.
  • E-Business: Uses digital platforms for transactions, electronic records, and operates virtually.
  • Advantages of E-Business: Wider reach, operational efficiency, and 24/7 global access.
  • Limitations of E-Business: Security concerns and lack of personal interaction.

Benefits of E-Business

E-business, enabled by internet technology, offers many advantages over traditional business models, including ease of formation with lower investment, 24/7 operation, faster transactions, global reach for sellers and buyers, and a significant move towards a paperless society. The internet has democratised business operations, allowing large and small businesses to network without a large net worth.
E-business allows 24/7/365 transactions with a click, reducing demand fulfilment cycle times. It opens global markets for businesses and gives consumers a wide range of global products. E-business practices reduce paperwork, simplifying processes like filing returns, obtaining permissions, and making and receiving payments, creating a more efficient, environmentally friendly paperless society.

Short Pointers:

  • Lower Investment & Ease of Formation: E-business can be started with minimal investment and a simpler setup compared to traditional businesses.
  • 24/7/365 Convenience: Allows businesses and consumers to engage in transactions at any time.
  • Increased Speed: Facilitates instant transactions and information exchange, reducing cycle times.
  • Global Reach: Opens up worldwide markets for businesses and provides consumers with a broader selection of products.
  • Paperless Society: Reduces reliance on paper, streamlining administrative processes and contributing to environmental conservation.

Limitations of E-Business

While e-business offers numerous advantages, it also faces certain limitations that impact its effectiveness and acceptance. These limitations include a low personal touch, as e-business lacks the warmth of face-to-face interactions, making it less suitable for products that require personal engagement. There’s an incongruence between the speed of order placement and the physical delivery of products, leading to potential customer impatience.
The need for technological capability and competence among all parties involved introduces a digital divide, segregating society into those familiar and those unfamiliar with digital technology.
There’s an increased risk due to the anonymity and non-traceability of parties, making transactions susceptible to fraud and identity theft. Resistance from people towards adopting new technologies due to a sense of insecurity and stress is another significant challenge.
Ethical concerns arise from the surveillance over employees, questioning the morality of monitoring their online activities. Despite these limitations, ongoing efforts aim to address and mitigate these challenges, making e-business an increasingly viable and integral mode of conducting business.

Short Pointers:

  • Low Personal Touch: E-business lacks the interpersonal interaction found in traditional business.
  • Order Fulfilment Speed: Mismatch between instant online transactions and slower physical delivery.
  • Technological Competence: Necessitates familiarity with digital technology, contributing to the digital divide.
  • Anonymity and Risk: Increases susceptibility to fraud, impersonation, and leakage of confidential information.
  • Resistance to Change: Individuals may resist transitioning to e-business due to insecurity and stress.
  • Ethical Concerns: Monitoring employee activities online raises ethical questions.
  • Efforts to Overcome: Ongoing improvements in technology and strategies aim to address these limitations.

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NCERT Solutions

NCERT Solutions for Class 11 Business Studies – Chapter 5: Emerging Modes of Business

Short Answer Questions

  1. Define services and goods.

Answer: Services and goods are two fundamental concepts in business and economics. Services refer to intangible activities that are identifiable and meet the wants or needs of consumers. For instance, when you visit a doctor or a teacher, you are receiving a service. These services are characterised by their inability to be stored or owned physically. They require an interaction between the provider and the consumer to be realised.

On the other hand, goods are tangible items that are physically delivered to a purchaser. Ownership of these items is transferred from the seller to the buyer. Examples of goods include books and toys. These items can be stored and kept in inventory, unlike services.

While services are intangible activities that involve interaction and provide satisfaction by fulfilling needs or wants, goods are tangible items that can be stored and owned.

Mindmap to remember this answer:

  • Services: Intangible, No physical ownership, Interaction required (e.g., doctor, teacher), Cannot be stored
  • Goods: Tangible, Physical ownership transferred, Can be stored and kept in stock, Examples: books, toys
  1. What is e-banking? What are the advantages of e-banking?

Answer: E-banking, or electronic banking, refers to the process where customers can perform banking transactions using electronic means, such as the internet, via personal computers, mobile phones, or other handheld devices. The essence of e-banking is to provide convenience and efficiency in managing financial transactions without physically visiting a bank branch.

There are several advantages to e-banking which include:

  • Accessibility: E-banking provides services 24/7, all year round, allowing customers to perform banking activities anytime and anywhere.
  • Cost-Effectiveness: It reduces the transaction costs for both banks and customers due to the automated nature of the services.
  • Efficiency: E-banking promotes financial discipline and transparency as all transactions are recorded electronically.
  • Reduced Workload: It helps in decreasing the congestion in bank branches by centralising the database, making it easier and faster to handle customer needs.

These benefits not only enhance customer satisfaction but also streamline banking operations, making them more user-friendly and accessible to everyone.

Mindmap to remember this answer:

  • Definition of E-banking: Electronic banking, Uses internet, PCs, mobile phones
  • Advantages of E-banking: 24/7 Access, Anytime, anywhere banking, Cost-effective, Lowers transaction costs, Efficiency, Financial discipline, Promotes transparency, Reduces Workload, Less crowded bank branches, Centralised database
  • Key Words: Accessibility, Efficiency, Cost-effectiveness, Reduced Workload
  1. Write a note on various telecom services available for enhancing business.

Answer: Various telecommunications services play a crucial role in enhancing business by facilitating better communication and efficient information dissemination.

These services include:

  • Cellular Mobile Services: These services cover all forms of mobile telecommunications, such as voice and data services, and Public Call Office (PCO) services, using any network equipment within the service area.
  • Radio Paging Services: This service provides a one-way transmission of information through tones, numeric, or alphanumeric messages to individuals, even while they are moving.
  • Fixed Line Services: These encompass all types of fixed telecommunication services including voice and data communication, typically through a network connected by fibre optic cables.
  • Cable Services: Focused mainly on media services within a licensed area, cable services primarily offer one-way entertainment-related broadcasts.
  • VSAT Services: Very Small Aperture Terminal services are satellite-based and provide flexible, reliable communication for various applications like online newspapers and tele-education, across both urban and rural areas.
  • DTH Services: Direct to Home services are also satellite-based and allow consumers to receive media services directly through a satellite with the aid of a small dish antenna and a set-top box.

These telecom services not only enhance the operational capabilities of businesses but also ensure reliable and efficient communication necessary for modern business operations.

Mindmap to remember this answer:

  • Cellular Mobile Services: Mobile voice and data, PCO services, Network equipment
  • Radio Paging Services: One-way information, Tone, numeric, alpha/numeric
  • Fixed Line Services: Voice and data, Fibre optic network
  • Cable Services: Media services, One-way entertainment
  • VSAT Services: Satellite communication, Flexible and reliable, Online newspapers, tele-education
  • DTH Services: Satellite media, Dish antenna and set-top box
  1. Explain briefly the principles of insurance with suitable examples.

Answer: The principles of insurance are fundamental rules that govern the relationship between the insurer and the insured, ensuring that the insurance contract is valid and reliable.

These principles include:

  1. Utmost Good Faith: Both parties in an insurance contract must uphold utmost good faith, meaning that the insured must disclose all relevant facts truthfully, and the insurer must clearly explain the terms and conditions of the policy.
  2. Insurable Interest: The insured must have a financial interest in the object of the insurance, ensuring they suffer a financial loss if the insured event occurs. For example, a homeowner has an insurable interest in their home and would face financial loss if it were damaged.
  3. Indemnity: This principle states that insurance policies should restore the financial position of the insured to where it was before the loss occurred, applicable mainly in property and casualty insurances but not in life insurance.
  4. Contribution: If multiple policies cover the same risk, this principle allows insurers who pay a claim to seek a proportional contribution from other insurers.

By adhering to these principles, insurance contracts protect against financial losses by sharing risks among people with similar exposure to loss.

Mindmap to remember this answer:

  • Utmost Good Faith: Full disclosure by insured, Clear terms by insurer
  • Insurable Interest: Financial interest in insured item, Examples: homeowners, car owners
  • Indemnity: Compensation for pre-loss condition, Not applicable to life insurance
  • Contribution: Shared risk in multiple policies, Proportional payment by insurers


  1. Explain warehousing and its functions.

Answer: Warehousing plays a critical role in the business and logistics sectors by acting as storage centres that maintain the quality, value, and usefulness of goods. The transition of warehouses from mere storage spaces to active logistical service providers has significantly enhanced their function, emphasising efficient service delivery—ensuring goods are available at the right place and time, in the right condition, and cost-effectively.

The functions of warehousing include:

  • Consolidation: Warehouses consolidate goods from various production plants and organise delivery to customers, optimising transport efficiency.
  • Break the Bulk: Upon receiving large quantities of goods, warehouses break them into smaller, manageable amounts as required by clients.
  • Stock Piling: Warehouses store goods that aren’t immediately needed, releasing them based on market demand which aids in managing the supply chain effectively.
  • Value Added Services: Modern warehouses also offer services like mixing, packaging, and labelling, which enhance the value of the stored goods.
  • Price Stabilisation: By controlling the supply of goods based on demand, warehouses help in stabilising prices in the market.
  • Financing: Warehouses provide financial support by offering advances to owners based on the security of the goods and can supply goods on credit to customers.

These functions highlight the importance of warehousing in supporting and stabilising business operations and supply chains.

Mindmap to remember this answer:

  • Role of Warehousing: Storage and maintenance of goods, Logistical service provision

Functions: Consolidation: Efficient transport management, Break the Bulk: Smaller quantities for client needs, Stock Piling: Managing supply through storage, Value Added Services: Enhancing product value, Price Stabilisation: Regulating market prices, Financing: Financial services based on stored goods

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MCQ Questions

Chapter 5: Emerging Modes of Business – MCQ Questions

MCQ Questions

  1. Which of the following is not a feature of services as discussed in the textbook?
A) IntangibilityB) Inconsistency
C) InventoryD) Inheritance

Answer: D) Inheritance

  1. What distinguishes a good from a service?
A) Goods are always less expensive than services.B) Goods can be stored for future use, unlike services.
C) Services are always provided by governmental agencies.D) Services are not quantifiable.

Answer: B) Goods can be stored for future use, unlike services.

  1. What type of services are typically provided to assist businesses in their operations?
A) Personal servicesB) Business services
C) Social servicesD) Governmental services

Answer: B) Business services

  1. Which of the following services is classified as a social service?
A) BankingB) Insurance
C) Education services provided by NGOsD) Tourism

Answer: C) Education services provided by NGOs

  1. What is the primary function of commercial banks?
A) To provide employment to the publicB) To manage national defence funds
C) To transact the business of banking including lending and depositsD) To act solely as government advisors

Answer: C) To transact the business of banking including lending and deposits

  1. Which type of bank is primarily formed to provide cheap credit to its members?
A) Commercial banksB) Central banks
C) Cooperative banksD) Specialised banks

Answer: C) Cooperative banks

  1. What principle of insurance asserts that the insured should not profit from the insurance policy?
A) Principle of IndemnityB) Insurable Interest
C) ContributionD) Subrogation

Answer: A) Principle of Indemnity

  1. In which type of insurance is the insured amount paid upon death or after a certain period, whichever comes first?
A) Whole Life PolicyB) Endowment Life Assurance Policy
C) Term Life PolicyD) Annuity Policy

Answer: B) Endowment Life Assurance Policy

  1. Which of the following is a benefit of e-banking for customers?
A) 24/7 access to banking servicesB) Higher interest rates on savings
C) Personalised customer service interactionsD) Access to physical bank branches

Answer: A) 24/7 access to banking services

  1. What does NEFT stand for in e-banking?
A) Non-Electronic Fund TransferB) National Electronic Fund Transfer
C) New Electronic Finance TransitionD) None of the above

Answer: B) National Electronic Fund Transfer

  1. What type of insurance would cover losses due to burglary at a home?
A) Life InsuranceB) Fire Insurance
C) Burglary InsuranceD) Marine Insurance

Answer: C) Burglary Insurance

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Very Short Answer Type Questions

Chapter 5: Emerging Modes of Business – Very Short Answer Type Questions

  1. Define the term “services” in the context of economics.

Answer: Services are economic activities where nothing physical is transferred from seller to buyer.

  1. What are the five Is of services?

Answer: Five Is: Intangibility, Inconsistency, Inseparability, Inventory (less), and Involvement.

  1. List two examples of intangible business services.

Answer: Examples include financial advisory and online marketing services.

  1. What is the primary difference between goods and services in terms of ownership transfer?

Answer: Ownership of goods transfers, services’ effects transfer, not the service itself.

  1. Describe the term “inseparability” in service management.

Answer: Inseparability in services means simultaneous production and consumption.

  1. Why is the inconsistency a significant feature of services?

Answer: Inconsistency in services arises as they are human performance and vary each time.

  1. Explain the concept of inventory in services with an example.

Answer: Inventory in services is minimal.
Example: a live concert performance.

  1. How does customer involvement enhance service delivery?

Answer: Customer involvement modifies the service to meet their specific needs.

  1. What types of services are used by business enterprises?

Answer: Business enterprises use services like banking, insurance, and telecommunications.

  1. Identify two social services and their common goals.

Answer: Social services examples: education and healthcare, aiming to improve living standards.

  1. What are personal services, and how do they vary?

Answer: Personal services are experiential, differing by provider and customer’s demand.

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Short Answer Type Questions

Chapter 5: Emerging Modes of Business – Short Answer Type Questions

  1. Define services in the context of business.
    Answer: Services in business refer to activities that deliver value to customers without providing them with a physical product. These are intangible and often involve an interaction between the service provider and the consumer.
  2. List three types of services and provide a brief example of each.
    Answer: Business services include banking and insurance, helping businesses operate smoothly. Social services, such as education and healthcare, aim to improve societal welfare. Personal services like tourism offer individualised experiences.
  3. What percentage of GDP does the service sector account for in OECD countries?
    Answer: The service sector is a significant component of GDP in OECD countries, often accounting for around 70% to 80% of the total GDP, indicating its crucial role in economic development.
  4. Describe the primary functions of commercial banks.
    Answer: Commercial banks primarily accept deposits, offer loans, and provide other financial services like overdraft facilities and electronic fund transfers, facilitating monetary transactions in the economy.

5. What is the difference between debit and credit cards in modern banking?
Answer: Debit cards allow you to spend money by drawing on funds you have deposited at the bank. Credit cards, on the other hand, provide you with access to a line of credit issued by the bank.

  1. Explain the type of insurance where insurable interest is not required at the time the policy is taken.
    Answer: Life insurance is unique as it does not require the policyholder to have an insurable interest at the time of the policy’s issuance, unlike property insurance where insurable interest is needed both at the policy’s inception and at the time of the claim.
  2. List the economic functions of insurance.
    Answer: Insurance provides economic protection by pooling risks and providing financial compensation for losses. It stabilises the economy by managing the accumulation of funds and their redistribution during losses, thus facilitating economic growth.
  3. Describe what courier services are and name two courier companies.
    Answer: Courier services are specialised delivery services that transport documents and packages for individual and business clients. Examples include FedEx and DHL, which operate internationally.

9. Why is a cellular phone also called a mobile phone?
Answer: A cellular phone is called a mobile phone because it operates through a network of cell areas, allowing it to be used while moving across different regions, making it mobile.

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Case Based Questions

Chapter 5: Emerging Modes of Business – Case Based Questions

Case Scenario: Ravi, a budding entrepreneur, is exploring options to enhance the operational efficiency of his newly launched e-commerce platform. He realizes the importance of integrating high-quality business services to handle various aspects of his business, from logistics to customer care. Ravi is particularly interested in how these services can help him scale his business while maintaining service quality.

  1. What are business services, and why are they crucial for Ravi’s e-commerce platform? Ans: Business services refer to essential activities utilized by companies to support the production or sale of goods and services, ensuring smooth operations within enterprises. For Ravi’s e-commerce platform, these services can include logistics, customer support, and IT services, which are integral to handling large volumes of transactions, providing customer satisfaction, and ensuring efficient operation in today’s competitive business environment.

Case Scenario: Dr. Anjali runs a successful dermatology clinic that relies heavily on various service features like consultation bookings, patient records management, and personalized treatment plans. She is considering upgrading her service delivery model to enhance patient experience and streamline operations.

  1. Discuss the five fundamental features of services and how Dr. Anjali can utilize these features to improve her clinic’s operations. Ans: The five fundamental features of services, which include Intangibility, Inconsistency, Inseparability, Inventory (Less), and Involvement, are crucial for understanding service delivery in a clinical setting. Dr. Anjali can enhance patient experience by focusing on:
  • Intangibility: Offering detailed consultations that help patients understand treatment effects even though they are not immediately visible.
  • Inconsistency: Customizing treatments to individual patient needs, enhancing satisfaction.
  • Inseparability: Ensuring that services are delivered in an interactive environment with direct patient involvement.
  • Inventory: Managing appointments effectively since services cannot be stored.
  • Involvement: Encouraging patients to participate in choosing their treatment plans.

Case Scenario: Amrita heads a non-profit organization that provides various social services, including education and healthcare to underprivileged communities. She seeks to understand different types of services to better categorize the organization’s offerings and communicate them to potential donors.

  1. Explain the different types of services mentioned in the business world and how they apply to Amrita’s non-profit organization. Ans: In the context of the service sector, services are broadly categorized into Business Services, Social Services, and Personal Services. For Amrita’s non-profit organization:
  • Business Services could involve administrative and logistical support that helps the organization run efficiently.
  • Social Services are directly aligned with her organization’s goals, focusing on improving living standards and providing essential services like education and healthcare.
  • Personal Services could be tailored to the individual needs of beneficiaries, such as personalized educational support or healthcare.

Case Scenario: Sanjay, a small business owner, has just opened a new retail store and is exploring banking options to manage his finances effectively. He wants to understand the roles of different types of banks and their services that can benefit his business.

  1. Describe the types of commercial banks and the specific banking services that could assist Sanjay in managing his retail store’s finances. Ans: Commercial banks are divided into Public Sector Banks and Private Sector Banks. For Sanjay’s retail store:
  • Public Sector Banks might offer him lower interest rates and supportive schemes for small businesses.
  • Private Sector Banks could provide him with faster service and personalized banking solutions.
  • Specific services like business accounts, credit facilities, and electronic banking services would help Sanjay manage daily transactions, handle deposits, and facilitate easy access to funding for business expansion.

Case Scenario: Meena is exploring ways to integrate e-banking into her freelance graphic design business to enhance her payment options and streamline her financial operations. She is particularly interested in understanding the core services of e-banking.

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Value Based Questions

Chapter 3 – Private, Public and Global Enterprises – Value Based Questions

Business Services – An Overview

Question: “Arjun runs a small retail business. He finds it challenging to manage various support functions such as banking, insurance, and warehousing while focusing on his core activities. How can business services help Arjun? Identify the value provided by these services.”

Answer: Business services can help Arjun by supporting the production or sale of goods and services, ensuring smooth operations within his business.

(i) Banking Services: Facilitate financial transactions and provide credit. (ii) Insurance Services: Offer protection against risks and uncertainties. (iii) Warehousing Services: Ensure the safe storage of goods and manage inventory.

The value provided by these services includes operational efficiency, risk management, and enhanced focus on core business activities, contributing to overall business success.

The Five Fundamental Features of Services

Question: “Ritu owns a salon and often faces challenges in maintaining consistent service quality and managing customer expectations. Explain how the five fundamental features of services apply to her business. Identify the value these features bring.”

Answer: The five fundamental features of services are Intangibility, Inconsistency, Inseparability, Inventory (Less), and Involvement.

(i) Intangibility: Services cannot be seen or touched before consumption, making customer experience crucial.

(ii) Inconsistency: Service quality can vary, requiring adaptability to customer needs.

(iii) Inseparability: Services are produced and consumed simultaneously, highlighting the importance of customer interaction.

(iv) Inventory (Less): Services cannot be stored, making demand management essential.

(v) Involvement: Customers participate in the service process, allowing personalization.

The value these features bring includes enhanced customer satisfaction, personalized services, and the need for flexibility, all contributing to better service delivery.

Fundamentals of Transportation in Business

Question: “Arvind’s business requires efficient transportation of goods. Explain the importance of transportation in business. Identify the values provided by transportation services.”

Answer: Transportation is crucial for the systematic movement of goods from production to consumption sites.

Modes of Transportation: (i) Rail: Efficient for long-distance transportation of bulk goods. (ii) Road: Flexible and accessible for local and regional transport. (iii) Air: Fast and efficient for high-value or time-sensitive goods. (iv) Sea: Cost-effective for international shipping of large quantities.

Values Provided: (i) Operational Efficiency: Ensures timely delivery of goods. (ii) Market Accessibility: Facilitates access to broader markets.

These values help businesses like Arvind’s overcome distance barriers and maintain efficient supply chains.

Evolution and Function of Warehousing

Question: “Kavita’s business requires safe and efficient storage of goods. Explain the evolution and function of warehousing. Identify the values provided by modern warehouses.”

Answer: Warehousing has evolved from static storage units to dynamic logistical service centers.

Traditional Role: Safe storage of goods to preserve their value. Modern Capabilities: Integration of automation and technology for efficient inventory management and distribution.

Functions: (i) Consolidation: Gathers goods from multiple production sites for shipment. (ii) Break the Bulk: Divides large shipments into smaller quantities. (iii) Stockpiling: Provides seasonal storage for goods. (iv) Value Added Services: Offers services like packaging, labeling, and grading. (v) Price Stabilization: Adjusts supply to match demand. (vi) Financing: Provides loans secured against stored goods.

Values Provided: (i) Supply Chain Efficiency: Ensures timely and accurate delivery of goods. (ii) Financial Support: Offers credit facilities based on stored goods.

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Long Answer Type Questions

Chapter 5: Emerging Modes of Business – Long Answer Type Questions

Long Answer Type Questions

  1. Explain the concept of business services and their significance to modern enterprises. Discuss the role of these services in facilitating the operations of a business with examples such as banking, insurance, and warehousing.

Answer: Business services are essential support services that help modern enterprises operate efficiently. These services include banking, insurance, and warehousing, among others. For instance, banking services help businesses manage financial transactions, providing loans for growth or managing day-to-day monetary operations. Insurance services protect businesses from potential losses due to unforeseen circumstances, ensuring financial stability. Warehousing, on the other hand, supports businesses in storing and managing inventory, which is crucial for maintaining supply chains and meeting customer demands. The significance of business services lies in their ability to facilitate various operations within a business, making them indispensable in the modern economic landscape.

Mindmap to remember this answer:

  • Business Services: Supportive, essential
  • Examples: Banking: Financial transactions, loans, Insurance: Protection, financial stability, Warehousing: Inventory management, supply chain
  • Significance: Facilitate operations, indispensable
  1. Discuss the nature and types of services, distinguishing them from goods. Highlight the five basic characteristics of services known as the five Is and explain how these features impact service delivery and consumer experience.

Answer: Services are intangible activities that fulfil the needs of consumers, distinct from tangible goods. The nature of services can be described using five key characteristics known as the five Is: Intangibility, Inconsistency, Inseparability, Inventory, and Involvement. Intangibility means services cannot be touched or seen before the purchase, making it challenging to evaluate them beforehand. Inconsistency refers to the variation in performance from one service to the next. Inseparability indicates that services are often produced and consumed simultaneously. Inventory issues arise as services cannot be stored for future use. Lastly, involvement pertains to the level of customer participation in the service delivery, which can significantly influence their experience. These characteristics shape how services are delivered and experienced by consumers, impacting their overall satisfaction.

Mindmap to remember this answer:

  • Nature of Services: Intangible, varying
  • Five Is: Intangibility: Cannot touch/see, hard to evaluate, Inconsistency: Varies each time, Inseparability: Produced and consumed together, Inventory: Cannot store, Involvement: Customer participation

Impact: Delivery, consumer experience

  1. Elaborate on the different types of insurance and their fundamental principles. How do these principles ensure fairness and efficacy in the insurance business? Discuss with examples from life, fire, and marine insurance.

Answer: Insurance is a crucial financial service that includes various types, such as life, fire, and marine insurance, each serving different needs. The fundamental principles of insurance include utmost good faith, insurable interest, indemnity, contribution, and subrogation. These principles ensure that both the insurer and the insured adhere to fairness and efficacy. For example, the principle of utmost good faith requires both parties to be completely honest in disclosing all relevant facts. In life insurance, this means accurately reporting health conditions. The principle of indemnity ensures that policyholders receive compensation only up to the extent of their loss, as seen in fire insurance where the payout reflects the value of the lost property. Marine insurance uses the principle of contribution, where multiple insurers pay a portion of the claim if more than one policy covers the asset.

Mindmap to remember this answer:

  • Types of Insurance: Life, Fire, Marine
  • Principles: Utmost Good Faith: Honesty in facts, Insurable Interest: Financial interest in safety, Indemnity: Compensation equals loss, Contribution: Multiple insurers share cost, Subrogation: Claim rights after payout

Examples: Life (health conditions), Fire (property value), Marine (shared claims)

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Sample Questions Paper

Chapter 5: Emerging Modes of Business – Sample Questions Paper

Sample Questions: 1

Time allowed: 2 hours Maximum Marks: 40

General Instructions:

  1. The question paper contains 14 questions.
  2. All questions are compulsory.
  3. Section A Questions 1 and 2 are 1 mark source-based questions. Answers should not exceed 10-15 words.
  4. Section B Questions 3 to 9 are 2 marks questions. Answers should not exceed 30 words.
  5. Section C Questions 10 to 12 are 4 marks questions. Answers should not exceed 80 words. Or Distinguish between services and goods on the basis of nature, type, intangibility and inseparability.
  6. Section D Questions 13 and 14 are 6 marks questions. Answers should not exceed 200 words. Or Discuss the fundamental principles of insurance.

Section A

  1. Define services.
  2. What are the two main differentiating characteristics of services and goods?

Section B

  1. What is meant by inconsistency as a characteristic of services?
  2. Mention two functions of commercial banks.
  3. State two benefits of e-banking to customers.
  4. Define insurance.
  5. What is life insurance?
  6. Name two types of marine insurance policies.
  7. Give two examples of social services.

Section C

  1. Explain the concept of insurable interest in life insurance and fire insurance contracts.


Distinguish between life insurance and fire insurance on the basis of the principle of indemnity and insurable interest.

  1. What is meant by the principle of ‘utmost good faith’ in insurance contracts?
  2. Briefly explain the nature and types of postal services provided in India.

Section D

  1. Discuss the principles governing a valid life insurance contract.


Explain the different types of life insurance policies in detail.

  1. Distinguish between life insurance, fire insurance and marine insurance on the basis of the given points: a) Subject matter b) Element c) Insurable interest d) Duration e) Indemnity

Sample Questions: 2

Time allowed: 2 hours Maximum Marks: 40

General Instructions:

  1. The question paper contains 14 questions.
  2. All questions are compulsory.
  3. Section A Questions 1 and 2 are 1 mark source-based questions. Answers should not exceed 10-15 words.
  4. Section B Questions 3 to 9 are 2 marks questions. These are very short answers. Answers should not exceed 30 words.
  5. Section C Questions 10 to 12 are 4 marks questions. These are short answer types. Answers should not exceed 80 words.
  6. Section D Questions 13 and 14 are 6 marks questions. These are long answer types. Answers should not exceed 200 words.

Section A

  1. Define services and distinguish them from goods. (1 mark)


Explain the concept of intangibility as a characteristic of services. (1 mark)

  1. State any one fundamental principle of insurance. (1 mark)


What is the principle of ‘insurable interest’ with respect to life insurance? (1 mark)

Section B

  1. What is the basic principle underlying insurance? (2 marks)
  2. Briefly explain the principle of ‘utmost good faith’ in insurance contracts. (2 marks)
  3. Differentiate between whole life and endowment life insurance policies. (2 marks)


What is an annuity policy? When is it useful? (2 marks)

  1. What are the two elements that make fire insurance a contract of strict indemnity? (2 marks)
  2. Give two points of distinction between life insurance and fire insurance. (2 marks)
  3. Mention any two types of business services. (2 marks)
  4. State any two benefits of e-banking services. (2 marks)

Section C

  1. Explain the following principles of insurance with examples: (i) Indemnity (ii) Proximate cause (4 marks)


Compare and contrast life insurance and marine insurance on the basis of: (i) Subject matter (ii) Insurable interest (4 marks)

  1. What is marine insurance? Briefly explain the three types of marine insurance policies. (4 marks)


Distinguish between private warehouses and public warehouses. State two functions of warehousing. (4 marks)

  1. State the role and importance of transportation services for business. How are transportation services classified? (4 marks)

Section D

  1. Discuss the meaning, nature and characteristics of services. Explain the basis for differentiation between goods and services. (6 marks)


Explain the meaning and types of postal services provided in India. What are the allied facilities offered by the postal department? (6 marks)

  1. Define insurance. Discuss the fundamental principles underlying a valid insurance contract. (6 marks)


What is e-banking? State its benefits from the customer’s perspective as well as the banker’s perspective. (6 marks)



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