Question

Distinguish Between.

Departmental Organisation and Multinational Corporation.

Answer 1

Points	Statutory Corporation	Multinational Corporation
1. Meaning	The company which is formed under 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
2. Capital	Capital for the statutory company comes from Central or State Government.	The capital is contributed by the shareholders or financial institutions in several countries.
3. Management	It is managed by a board of directors nominated by the government.	A multinational corporation is managed by a parent company. It manages affairs of the subsidiary from the respective home country.
4. control	It is controlled by the government by the Act of Parliament or State Legislature.	Multinational corporations are controlled by respective parent companies.
5. Establishment	It is established by passing a Special Act in the Parliament or in the State Legislature.	Multinational corporations have to seek permission from the government and host countries.
6. Borrowing power	Statutory Companies can borrow from the public by issue of shares and debentures.	Multinational corporations use resources of different countries.
7. Area of operation	The 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.
8. Motive	Statutory corporations are service-oriented and hence take an interest in the social welfare activities of the country.	MNCs are profit motivated rather than service oriented.
9. Accountability	The 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 has 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.
10. Currency	They have to deal with single currency.	They have to deal with multiple currencies and exchange rates.