chapter  6
17 Pages

Hungary: CSR between socialism and export- oriented MNCs

ByMATTHEW LLOYD - CAPE

Hungarian trade unions have an ambivalent and somewhat paradoxical attitude towards corporate social responsibility (CSR). While most respondents considered it as ‘window dressing’ for foreign MNCs, interviewees often referred to socially responsible behaviour as something more closely related to the social role that enterprises played in workers’ lives before the end of socialism. CSR is thus linked to both a history of state control over aspects of social life through the workplace and to foreign MNCs as the new dominant actors in the Hungarian economy. Regardless of how CSR is perceived, however, there is very little action taken by unions, or other civil society organizations, to engage with CSR. No union has a specific policy on CSR, and neither is there much of a domestic debate over the term more generally. CSR is most evident at the enterprise level, specifically within large foreign MNCs, but practices there are considered to be externally imposed rather than negotiated with domestic stakeholders. In contrast to previous research (FIDH 2006), very little adaptation of CSR to the local context was identified. In this chapter the development of a national business system dependent on foreign direct investment (FDI) post-1989, as well as socialist legacies prior to this period, are shown to present limitations for union engagement with CSR. Prior to 1989, enterprises controlled a significant proportion of workers’ social as well as economic lives, such as organizing housing, holidays and leisure activities. This legacy strongly influences Hungarian unionists’ conception of what social ‘responsibilities’ firms should engage in, and

to a certain degree this defines the parameters of social responsibility quite differently from the Western European understanding of CSR. Domestic channels for engaging with the CSR debate are extremely limited, and so these views are hardly ever expressed. After 1989 a major part of the planning for the transition to a capitalist economy was to attract FDI, with exports realigning from eastern to western European markets. Consequently the Hungarian economy is highly reliant on FDI. The majority of FDI comes from co-ordinated market economies (CMEs), such as Austria, Germany and the Netherlands, followed by France, the United States and Japan. This pattern provides an interesting opportunity to assess whether home country CSR practices are transmitted to host country subsidiaries. This chapter shows, first, that the concept of social responsibility holds different meanings within and between unions. Few NGOs or other societal organizations actively engage with CSR campaigns or policies, which has led to CSR discourse and practice being largely an internal discussion of the business elite with little engagement of wider society. No clear ‘Hungarian’ conception (or even translation) of CSR exists. Where CSR debate and practice do manifest themselves, they remain mostly at the enterprise level and emerge in an ad hoc manner only. While one union federation experimented with using breaches of company CSR policy as a campaign tool to ‘name and shame’ companies, in general unions do not engage with CSR through policy, training or discussion with other societal actors. Civil society and unions do not act as societal watchdogs for CSR; hence CSR is top down, discretionary and paternalistic, and mainly conducted by large foreign MNCs.