NCERT solutions class 11 Business Studies Chapter 4 Business Services

NCERT Solutions: Business Services

Part I: Short Answer Questions

1. Define services and goods. Understanding Services

Services are referred to as any intangible activity that involves interaction between the service provider and the consumer. Purchasing the service does not result in the ownership of any physical item.

Understanding Goods

Goods refer to objects that are tangible and have a physical appearance. The ownership of a good is transferred as soon as it is purchased.

2. What is e-banking? What are the advantages of e-banking? Concept of E-Banking

Electronic banking or e-banking is the application of electronic mediums for conducting different types of banking transactions. This includes money transfers, account balance checking, applying for a chequebook, and applying for loans. These services help customers access banking facilities anywhere, anytime.

Advantages of E-Banking:

• Round-the-Clock Availability: It ensures the 24/7 availability of most banking services, which helps make life comfortable for the customers.
• Ultimate Convenience: Banking transactions can be conducted anytime, either through a mobile or computer/laptop.
• Reduced Operational Load: It reduces the load on physical bank branches by facilitating transactions online.

3. Write a note on various telecom services available for enhancing business. Telecom Services for Business Enhancement

Various types of telecom services help in enhancing business operations. These include:

• Cellular Mobile Service: This includes all types of voice, non-voice, and data transmission services.
• Radio Paging Service: This service helps transmit information in the form of a tone, numeric, or alphanumeric message.
• Fixed-Line Service: Services that include voice, non-voice, and data services establishing links for long-distance traffic using network connectivity through fibre optic cables.
• Cable Service: Media information is transmitted in a defined area. A license needs to be acquired for transmitting such information. The flow of information is one-sided.
• VSAT Service: VSAT stands for Very Small Aperture Terminal. It is a type of satellite-based communication system that can be used to provide information to remote areas.
• DTH Service: DTH stands for Direct-to-Home services. These are satellite-based media services in which media channels are transmitted through a satellite and received through a small dish and antenna.

4. Explain the principles of insurance briefly with suitable examples. Fundamental Principles of Insurance

• Utmost Good Faith: Both the insurer and insured must have faith in each other and in the signed contract. For e.g., if a person is suffering from cancer and does not inform the insurance company, the insurer can reject the claim.
• Insurable Interest: The owner of an insurance policy must have an ownership interest in the insured subject matter. Absence of this makes the policy void. For e.g., a truck driver has an insurable interest in his truck as it is his source of income; if he sells it, he can no longer earn from it.
• Indemnity: This principle ensures the contract protects and compensates the insured for actual loss, not to make a profit. For e.g., if a car insured for ₹2 lakhs suffers damage worth ₹1 lakh, the company will compensate only ₹1 lakh.
• Proximate Cause: Used to determine the exact cause of loss and if it is covered by the insured policy. For e.g., if a house burns down, the exact cause of the fire will be checked to ensure it falls under the fire insurance coverage.
• Subrogation: Once compensation is paid, the ownership of the damaged property transfers to the insurer so the insured cannot sell it for profit. For e.g., after receiving ₹1 lakh for total car damage, the insured cannot sell the scrap car for additional profit.
• Contribution: If insurance is taken from two insurers, both will contribute to filling up the loss. For e.g., if a person takes a loan from two banks, both banks should equally contribute in case of repayment claims.
• Mitigation: The insured must take care of the insured object just as they would without insurance. For e.g., a car owner should take proper care and maintain the car, minimizing the chance of preventable damage.

5. Explain warehousing and its functions. The Concept of Warehousing

Warehousing was initially thought of as an arrangement for storing goods scientifically to preserve their quality, value, and usefulness. In modern times, it acts as a logistical service provider emphasizing cost-effective, timely delivery while preserving value.

Key Functions of a Warehouse:

1. Storage Facility: Goods not needed immediately can be stored and supplied as and when required by customers.
2. Consolidation: Helps consolidate goods that are produced in small quantities but sold to customers in bulk.
3. Breaking the Bulk: Stocks goods in bulk and dispatches items in smaller quantities as per consumer requirements.
4. Value-Added Services: Provides additional services like packaging, labelling, and sorting of goods.
5. Price Stabilisation: Adjusts the supply of goods as per market demand to prevent sudden price fluctuations.

Part II: Long Answer Questions

1. What are services? Explain their distinct characteristics. Understanding Services

Services are referred to as any intangible activity that involves interaction between the service provider and the consumer. Purchasing the service does not result in the ownership of any physical item.

Distinct Characteristics of Services (The 5 I's):

• Intangibility: The foremost characteristic is that it lacks a physical form. It can only be experienced, not touched or seen before purchase.
• Inseparability: Unlike goods (produced at one time, consumed later), services are inseparable. A service must be consumed as soon as it is presented.
• Inconsistency: Services need to be performed each time according to specific customer requirements, making them inherently inconsistent or variable in nature.
• Involvement: Accurate delivery requires the direct involvement and participation of the user availing the service at the time of delivery.
• Inventory (Perishability): Services cannot be stored for later use. They must be provided as soon as asked for, or they lose their value entirely.

2. Explain the functions of commercial banks with an example of each. Core Functions of Commercial Banks

1. Accepting Deposits: Banks accept customer deposits in the form of savings accounts, recurring deposits, fixed deposits, and current accounts, paying interest on a regular basis.
2. Lending: Banks act as lenders by granting loans through overdrafts, cash credit, trade bills, etc., earning profit by charging interest.
3. Fund Remittance: Banks provide facilities to transfer customer funds to different places using payment orders and bank drafts for a transaction charge.
4. Check Extension Facility: Banks act as a clearinghouse by collecting cheques from other banks (including bearer and crossed cheques).
5. Other Value-Added Services: Banks offer additional utilities like locker facilities, bill payments, and the buying/selling of shares.

3. Write a detailed note on various facilities offered by the Indian Postal Department. Facilities Offered by the Indian Postal Department A. Savings Schemes:

• Kisan Vikas Patra
• National Savings Certificate
• Fixed Deposit Scheme
• Public Provident Fund
• Recurring Deposit
• Money Order

B. Mail Services:

• Parcel Facility: Providing parcel service from one destination to another.
• Registration: Securing parcels to provide security during transit.
• Insurance: Providing a safety cushion against loss or damage of mail.

C. Other Facilities:

• Passport Service: Assisting citizens in applying for a Passport.
• Direct Post: Handling the delivery of unaddressed mail like brochures, questionnaires, and pamphlets.
• Speed Post: Facilitating the rapid and time-bound transfer of articles to intended addresses.

4. Describe various types of insurance and examine the nature of risks protected by each type of insurance. Types of Insurance and Risk Protection 1. Life Insurance

It is a type of insurance where there is a contract between the insurer and the insured in which the insurer agrees to pay a pre-specified amount in the event of the death of the insured or on the maturity of the insurance policy.
Nature of Risk Protected: Life insurance policies protect the insured and their family members from the financial risk of dying early or uncertainties of life.

2. Fire Insurance

This type of insurance protects the insured from damage to property caused by fire. The insurer accepts a premium from the insured with the assurance of compensating the insured in the event of loss or damage to the property caused due to fire.
Nature of Risk Protected: Fire insurance strictly protects against the financial risk of property damage directly resulting from fire.

3. Marine Insurance

In marine insurance, the owner of a ship or cargo is protected against the loss or damage of a ship or cargo in the sea. The insured needs to pay a certain amount of premium based on the amount protected.
Nature of Risk Protected: It provides protection against the risks faced at sea in forms of high tides, pirates, storms, hidden rocks, or damages caused by fire while at sea.

5. Explain in detail the warehousing services. The Evolution of Warehousing

Warehousing was initially thought of as an arrangement for storing goods in a scientific manner in order to preserve their quality, value, and usefulness. In modern times, it has become more relevant as a logistical service provider with an emphasis on providing goods at the right time and in a cost-effective manner while preserving value and quality.

Key Functions of a Warehouse:

• Storage: Goods that are not needed on an immediate basis can be stored in warehouses. The goods can be supplied as and when required by the customers.
• Consolidation: Consolidating is necessary for goods that are produced in small quantities but sold to customers in bulk. Warehouses help in the consolidation of the goods.
• Breaking the Bulk: A warehouse also stocks goods in bulk and then dispatches the items in small quantities as per the requirements of consumers.
• Value-Added Services: The functions of packaging, labelling, and sorting of goods are some of the value-added services that a warehouse provides.
• Price Stabilisation: It also helps in price stabilisation by adjusting the supply of goods as per demand in the market.