Ch-5 - CHAPTER 5 EMERGING MODES OF BUSINESS LEARNING...

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C HAPTER 5 E MERGING M ODES OF B USINESS LEARNING OBJECTIVES After studying this chapter, you should be able to: state the meaning of e-business; explain the process of online buying and selling as a part of e-business; distinguish e-business from traditional business; state benefits of switching over to electronic mode; explain requirements for a firm’s initiation into e-business; identify major security concerns of electronic mode of doing business; discuss the need for business process outsourcing; and appreciate the scope of business process outsourcing.
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111 EMERGING MODES OF BUSINESS 5.1 I NTRODUCTION The way business is done has undergone fundamental changes during the last decade or so. The manner of conducting business is referred to as the ‘mode of business,’ and, the prefix ‘emerging’ underlines the fact, that these changes are happening here and now, and, that these trends are likely to continue. In fact, if one were to list the three strongest trends that are shaping business, these would be: (i) digitisation — the conversion of text, sound, images, video, and other content into a series of ones and zeroes that can be transmitted electronically, (ii) outsourcing, and, (iii) inter- nationalisation and globalisation. You will read about international business in Chapter 11. In this chapter, we will be familiarising you with the first two developments, i.e., digitisation (a term from electronics) of business — also referred to as electronic business (e-business), and Business Process Outsourcing (BPO). Before we do so, a brief discussion about the factors responsible for these two new modes of business would be in order. The newer modes of business are not new business. These are rather simply the new ways of doing business attributable to a number of factors. You are aware that business as an activity is aimed at creating utilities or value in the form of goods and services which the household and industrial buyers purchase for meeting their needs and wants. In an effort to improve the business processes — be it purchase and production, marketing, finance or human resources business managers and business thinkers keep evolving newer and better ways of doing things. Business firms have to strengthen their capabilities of creating utilities and delivering value to successfully meet the competitive pressures and ever-growing demands of consumers for better quality, lower prices, speedier deliveries and better customer care. Besides, the quest for benefitting from emerging technologies means that business as an activity keeps evolving. “Let us do some shopping,” Rita woke up Rekha, her friend from the home- village who had come to Delhi during the vacations. “At this hour well past midnight,” said Rekha rubbing her eyes, “Who would be sitting with his shop open for you?” “Oh! Perhaps I could not convey it properly. We are not going anywhere! I am talking about online shopping over the internet!” told Rita. “Oh yes! I have heard of online shopping, but have never done any,” Rekha
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This note was uploaded on 01/19/2012 for the course BUSINESS 3BU taught by Professor Andrewclarke during the Fall '09 term at Central European University.

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Ch-5 - CHAPTER 5 EMERGING MODES OF BUSINESS LEARNING...

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