One of the most commonly repeated business maxims of the last two decades or so is one that goes something along the lines of 'Focus on our core competencies', i.e., that tying to do too much, to expand into lines of business that don't really leverage the key strengths and value-add capability of the firm are simply not worth doing, or at least if they are necessary to provide the finished product or service, should be outsourced or offshored. Whether it is the high-tech, mass-production supply chain of Apple, or other popular manufacturers, the outsourcing of common and non-differentiating administrative functions like employee benefits, or even simply the offshoring of customer support and service call centers by financial, insurance, or other consumer companies, there definitely continues to be an almost relentless drive towards this kind of 'core competency' structure.
As Apple has recently and famously seen, sometimes the tension that arises from these kind of arrangements, and reconciling and rationalizing how much responsibility the firm has for the business practices, processes, and even ethics of its sub-contractors and value chain partners can be incredibly complex to navigate. How much, if at all, should Apple, or any other firm that engages in these kinds of widespread and high volume outsourcing of its operations, be held to task for the kinds of problems, some dramatic, others more routine, that inevitably arise in the course of the manufacture of products or the delivery of services?
While the Apple story and its relationship with one of its prime manufacturing partners Foxconn is widely known, last week the PBS Frontline series ran a segment about a similar set of problems in the Unites States wireless communications industry, while less well known, are no less troubling and illustrative of the moral and ethical dilemmas that sometimes arise in these arms length outsourcing and contracting arrangements.
The segment, titled 'Cell Tower Deaths', investigates the dramatic rise in the number of deaths associated with the wireless industry in the United States since 2003. Since that time, nearly 100 workers have been killed on the job, and on the towers that allow wireless service to function.
(The first segment of the Frontline report is embedded below, email and RSS subscribers may need to click through)
According to the Bureau of Labor Statistics, the death ratio for cellphone tower workers is 184 out of 100,000, putting the job at the top of the “Fatal Job” list. For example in 2006 alone, 18 people were killed on the job.
Some of the reasons are kind of obvious - the rapid expansion of wireless devices and smart phone use, the creation of an entire new class of devices (tablets), that connect wirelessly to the internet, cutthroat competition between carriers to build out the most complete coverage networks the fastest, and lastly, the ability and common business practice of providers to hire sub-contractors, (who often hire their own sub-contractors), to do the dangerous work for which they never have to take full responsibility.
We see in the Frontline piece, that often the workers at these small, local, very loosely supervised and managed sub-contractors receive less than adequate screening, training, and even safety equipment before they are thrust into an incredibly dangerous, tense, and demanding environment. We also learn that the major service providers are able, due to the fact that their contracts are three or even four steps removed from the firms that actually build and maintain the towers, to generally hide from responsibility for these business practices that, all too often, have led to injury and even death of usually low-paid, inexperienced workers.
Should the carriers, (AT&T specifically gets talked about quite a bit in the Frontline piece), have to own more of the process, if not directly in the form of actually employing the tower workers, at least in having more oversight for training and safety practices of those firms it hires to do work on its behalf?
While the Apple story is familiar, it has that other characteristic of being distant - the workers in China, are well, workers in China. We don't know any of them and we're likely never to meet any of them. We can still keep a comfortable separation, at least in our minds.
As the Frontline piece so poignantly describes, the workers that have perished working on cell towers are quite a bit closer - Indiana, Iowa, Tennessee. Whether that does or should make a difference to how we feel about this, I will leave up to you to decide.