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Statutory Corporation |
Multinational Corporation |
| Meaning |
The company which is formed under a Special Act of Parliament or State Legislature is known as Statutory Corporation. |
Multinational corporation is a company which is incorporated in one country and has business units in several countries. |
| Capital |
Capital for the statutory corporation comes from Central or State government. |
The capital is contributed by the shareholders or financial institutions in several countries. |
| Management |
Statutory Corporation is managed by Board of Directors nominated by government. |
Multinational Corporation is managed by parent company and it manages affairs of the subsidiary from the respective home country. |
| Control |
Statutory Corporations are controlled by government by the Act of Parliament or State Legislature. |
Multinational Corporations are controlled by respective parent companies. |
| Establishment |
The Statutory Corporation is established by Special Act of the parliament or State Legislature. |
Multinational Corporations have to seek permission from the Government and host countries. |
| Borrowing power |
Statutory company can borrow from public by issue of shares and debentures. |
Multinational Corporation use resources of different countries. |
| Area of Operations |
Statutory corporation operates within the local boundaries of a nation. Hence, the area of operations is not large. |
MNC operates in several countries, having headquarters in one country. Hence, the area of operations is large. |
| Motive |
Statutory Corporation are service oriented and hence take interest in the social welfare activities of the country. |
MNCs are profit motivated rather than service oriented. They render service in those areas where the opportunities for profit maximisation are more. |
| Accountability |
Statutory corporation has to take its annual reports in the Parliament where its working is discussed and debated. |
MNC is accountable to the taxation authorities in host countries and have to follow procedures such as Income Tax law procedure, FEMA, EXIM Policy etc. and as such will have to obey the laws of the host countries. |
| Currency |
They have to deal with single currency. |
They have to deal with multiple currencies and exchange rates. |
| Resource availability |
Employees can be recruited independently. They are not civil servants. The corporation can have its own rule of recruitment and scale of remuneration. |
MNC’s use resources of different countries and their employees are on contract basis. |
| Trust and Public Confidence |
Statutory corporation enjoy more public confidence as they have government backing and support. |
MNC’s do not have government backing and support in host countries. |
| Example |
UTI, LIC, RBI, ONGC, Air India, etc. |
Hindustan Lever Ltd., Colgate Palmolive India Ltd; Coca Cola, IBM Computers, Sony, etc. |
