Public Corporation Form of Public Enterprise

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The public corporation form of management of the public enterprise has been most widely used in England and in the commonwealth countries. There are very few state companies at all in Great Britain. Whereas state company forms are extremely popular in the continent of Europe, in France, in Germany, and in Italy in particular.

India, Cornwallis’s report advocated that the state company has advantages over the public corporation for most kinds of manufacturing enterprises as it is more flexible in nature. But the report of the estimate committee said that the public companies are more or less extension of the governmental department because of it possesses very little autonomy at all.

But in reality, the state company and the public corporation do not differ very much except their legal status. It has very little difference in the context of matters of operation. In practice, the company is mainly under state control as static is its major shareholder. Although it is subject not only to company law but through Articles of Association or terms of Agreement to special forms of governmental supervisor. These type of characteristics are not really very much different from those which are embodied in the legislative instruments which create the public corporation.

To institute the proper form of management is a vital problem obviously in all countries. There are several institutions for running public enterprises. Such as departmental form. Corporation form, joint stock companies etc. Each of them has relative merits and demerits. As for example, departmental form upholds centralization, whereas corporation adheres to maximum flexibility.

In underdeveloped countries, much attention is paid to do the form only. But it is less understood that everything depends on the conventions that are permitted to develop within the institutional framework in other words, on the informal relationships which can either realize the purposes of the institutions of killing them stone dead. These informal relationships, in turn, will be influenced by the current political style and by the characteristic way in which the country concerned goes about is the governmental business.

In the developed countries society is achievement oriented and comparatively high valuation is placed on the qualities of initiative and enterprise. Businessmen enjoy the adequate prestige and are expected to be independent-minded and adoptable irrespective of whether the private or the public sector is the scene of their operation. Minister bureaucrats and even parliamentarians are aware of their own limitations and prepared in various degree, to refrain from, meticulous interference in the matter of business policy and to protect the managers of the public enterprise against undesirable political pressure.

In the underdeveloped countries society:

  1. Tends to be status oriented rather achievement oriented
  2. Initiative and enterprises are under suspicion
  3. The prestige of businessman is low
  4. Political and administrative authorities regard themselves as omnipotent
  5. Centralization reaches almost pathological proportions
  6. Managers are scared and professional unfledged and
  7. Opportunities for prestigious employment outside the government service is efficient.

But public enterprises are public bodies created by the public with a great motive of people wellbeing. As the government is the representative of the public there must be a developmental role of public enterprises, in national development so that people’s interest is severed in the one hand and on the other, the very nature of the public enterprise is sustained. Only proper coordination with related prom ensures consistency with the overall developmental role of public enterprise.

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