INTERACTFDN NETWORKS AND ENDUSTRSAL EFFECEENCY IN PIPELENE CONSTRUCUON Thesis for the Degree of Ph. D. MiCHIGAN STATE UNWERSITY BENNIE DWANE GRAVES 1968 . -1 1...“: ..Mc~.fil-J--.-a .ni‘ 'xa‘j .- ‘ It“. 2"" T r . e ,‘. a! k . h£i\.ri.;:i- tam (. Unitrem ty This is to certify that the thesis entitled INTERACTION NETWORKS AND INDUSTRIAL EFFICIENCY IN PIPELINE CONSTRUCTION presented by Bennie Dwane Graves has been accepted towards fulfillment of the requirements for Ph.D. dqpagfil Social Science Date July 22, 1968 0-169 g amamo av 2‘ HUAE & SUNS’ mm INC. LIBRARY BINDERS ”MIMI". IICIIBII E ABSTRACT INTERACTION NETWORKS AND INDUSTRIAL EFFICIENCY IN PIPELINE CONSTRUCTION By Bennie Dwane Graves This thesis reports an observational study of re- cruiting and skill training in the pipeline construction industry. The study attempted to determine the extent to which the particularism of kinship and friendship and the universalism of industrial efficiency reinforce or disrupt one another. The writer collected data through participant obser- vation.and interviews. He worked for eleven months as a skilled and unskilled laborer for two construction companies in Texas. He interviewed workers and officials of three companies at offices and construction sites in Ohio, Michi- gan, and Ontario. .Wbrkers were interviewed at all skill and authority levels. The interviews were designed to discover good informants rather than to get a cross section of pipe- liner opinion. The organization of the industry encourages unof— ficial recruiting. Few contracted jobs last longer than three or four weeks. Rarely can a company hold a crew from Bennie Dwane Graves one project to the next. The company would lose most of its crew even if it lost no time between projects because it can— not make use of a full crew throughout a Single project. Great distances between jobs usually prevents the company's beginning one job before ending another. The construction season creates a curvilinear need for workers from a constant labor force. At the beginning and end of the season fewer jobs are available than workers. In mid-season there are more jobs than workers to fill them. Personnel offices, labor unions, and employment agencies have been unable to distribute workers from such a fluid labor force with the necessary speed and efficiency. The small contracting firm which operates with little capital is especially dependent upon a ready labor force. These companies often rent expensive equipment. Consequently, once the job is started the contractor must be able to muster a crew within a very short time. The foregoing conditions act to encourage unofficial recruiting practices. The pipeline labor force seems to be organized around kinship and friendship groups which act as very efficient occupational contact networks. It is these networks that distribute and redistribute the labor force throughout the season. The networks originate in kinship obligations and friendship relations but their persistence seems to be due Bennie Dwane Graves neither to institutional kinship norms nor to continued friendship. Rather, they seem to persist, because of their functional significance to companies seeking crews and to workers seeking jobs. Once the networks become established, they seem to become more and more organized around the ex— change of favors related to employment and less and less around sentiment. Established networks are able to function despite interpersonal indifference and even antipathy. The worker's ability to get what he wants from the industry depends upon his participation in the networks. WOrkers use the networks to get jobs which are not far apart, jobs of the longest duration possible, as much overtime as possible, and to stretch the season as much as possible. The construction supervisor's involvement in the net- works inSures him a ready crew during mid-season when he may have to ask workers to work as a favor to him. His involve- ment in the networks also underpins his authority by giving him the ability to reward and punish beyond a particular project. The supervisor also is able to use loyalty to him- self in the service of his company. He needs these loyalties in his competition with other companies for workers, his dis— putes with unions, and his occasional work related illegal acts. Despite kinship and friendship based recruiting, ob- jective work standards seem to be maintained. The shipping Bennie Dwane Graves company, through its inspectors insist upon minimum quality standards of workmanship, and construction company officials guard against costly ineptitude. Nepotistic placements are channeled into particular tasks which do not require much skill. The relatively inept kinsman or friend can be kept employed as a laborer while he learns a skill. INTERACTION NETWORKS AND INDUSTRIAL EFFICIENCY IN PIPELINE CONSTRUCTION BY Bennie Dwane Graves A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY College of Social Science 1968 I ,' .l' A} I .’ " 07- ~ .a‘ P ACKNOWLEDGMENT S I should like to thank the members of my doctoral committee: Professors Donald W. Olmsted, John D. Donoghue, James B. McKee, Clarence W. Minkel, Milton Rokeach, and Joseph Spielberg. I feel sure that the gentlement who served on my committee did not thereby have their departmental re- sponsibilities reduced. Consequently, I used a good deal of the little free time that otherwise they might have had. rMany pipeliners, students, and colleagues acted as critics as well as sources of information. They deserve my thanks. My wife, Peggy, contributed criticism, encouragement, and endless patience to the project. She has my gratitude. ii TABLE OF CONTENTS ACKNOWLEDGMENTS LIST OF TABLES Chapter I. INTRODUCTION . Primary Groups and Pipeline Construction Pipeline Ownership and Construction . The Labor Force . . . . . . . . . Research Procedures . . . . . . . Conceptualization . Relevant Trends in Contemporary Social Science . . . . . . . . . . . . . II. SOCIAL STRUCTURE AND INTERPERSONAL RE- LATIONS: ‘A VIEW OF ORGANIZATION Informal Organization . . . Role Set and Status Set worker Motivation Norms and Relationships KinShip and Occupation . \Kinship in Pipeline Construction III. RESEARCH PROCEDURES Data Collection Observation and Observer Effect . Advantages and Disadvantages of Quali- tative Research . . . . . . . . . IV. PIPELINE INDUSTRY AND CONSTRUCTION INDUSTRY Shipping Companies and Construction Companies Petroleum and Pipelines Technology and the Organization of WOrk iii Page ii ll 14 18 25 31 34 37 39 4O 44 47 51 51 58 63 67 67 7O 74 Chapter Page V. THE PIPELINERS . . . . . . . . . . . . . . . . 95 Origins and Characteristics . . . . . . . 96 Organization and movement . . .‘. . . . . 98 Bidding, Contracting, Recruiting, and Job Finding . . . . . . . . . . . . . . 105 VI. .LABOR FORCE DYNAMICS . . . . . . . . . . . . . 115 The Labor Supply—Demand Cycle . . . . . . 116 Occupational Contact NetwOrks . . . . . . 121 Kinship Organization in the Pipeline Industry . . . . . . . . . . . . . 122 Labor Force Allocation: The Dynamic Problem . . . . . . . . . . . . . . . . 126 Exchange . . . . . . . . . . . . . 132 Schism and Coalition . . . . . . . . . . . 136 VII. yAPPRENTICESHIP: A LONG RANGE CONSEQUENCE OF THE EXCHANGE NETWORKS . . . . . . . . . . 147 Breaking Out . . . . . . . . . . . . . . . 150 The First Stage . . . . . . . . . . . . . 151 The Second Stage . . . . . . . . . . . . . 156 The Third Stage . . . . . 160 Integrative Functions of the System . . . 165 VIII. _AUTHORITY JUDGMENT AND TECHNICAL COMPETENCE . 168 Competition and WOrker Evaluation . . . . 168 Supervisor's Role Set . . . . 170 Particularism and WOrk Quality Standards . 171 IX. SUMMARY . . . . . . . . . . . . . . . . . . . 181 Pipelines and Pipelining . . . . . . . . . 181 Technology, Time, and Distance . . . . . . 183 Bunches, Cliques, and Networks . . . . . . 184 Kinship-Friendship Relations and Conflict . . . . . . . . 194 Latent Functions of the Networks . . . . . 198 Networks in Other Industries . . . . . . . 200 A NOte on Procedure . . . . . . . . . . . 203 WORKS CONSULTED . . . . . . . . . . . . . . . . . . . 207 GLOSSARY OF PIPELINE TERMS . . . . . . . . . . . . . . 217 iv LIST OF TABLES Table 1. Time and distance during mid-season for one medium sized company, Amarillo, Texas. Summer, 1955 . . . . 2. Estimate of the number of days each gang can expect to be employed on a 12 work- ing day job . . . . . 3. wages for five skill groups for forty, sixty, and seventy hour weeks. Based on wages paid by one Michigan company in Southern Michigan during the summer of 1966. Data furnished by accounting office . . . . . . . . . . . . . Page 109 111 133 CHAPTER I INTRODUCTION This thesis reports an observational study of the role of informal recruiting and training in adjusting the pipeline labor force to the needs of the pipeline con- struction industry. The study has sought to discover the patterns whereby the members of the pipeline construction labor force are distributed and redistributed throughout the season among the several construction companies. A second, and related, concern derives from the fact that the informal recruiting and training in the industry are organized around kin ties and friendships, and as such, they are characterized by particularistic relations among workers. The work itself, on the other hand, is governed by universalistic standards of competence. The second question, then, is how do the construction companies get the degree of technical compe- tence they need when they are dependent for a labor force upon the particularism of kin ties and friendship? Prim ry Groups and Pipeline Construction The pipeline construction industry seems to provide an ideal setting for an investigation of the functional re- lationship between the universalistic demands of a modern industry and the particularism of kin ties, friendships, and other unofficial relationships. Groups of workers con- sisting of from two to twenty individuals who are kin to one another often work for the same contracting company. More- over, the industry can make little use of formal recruiting agencies. The shortness of contracts and discontinuous needs for skilled workers present construction firms with the re- curring problem of bringing men and equipment together within a matter of hours, to work for a few days or a few weeks. Correct timing of recruitment is necessarily precise. Con- tracting companies often use rented equipment at high hourly and daily rates, and transmission companies exact penalties for lost time. Crews, about half of which are highly skilled, must be recruited within a few hours-—a few days at the most. Neither public and private employment agencies nor unions can supply crews from such a fluid labor force.' Groups of kinsmen and friends, however, amass crews rapidly and ef- fectively. Steady employment requires much movement among companies. Kinship and friendship based communication net— works, unofficially organized into what Katz called "occu- pational contact networks," keeps workers informed about opportunities.1 Thus, the networks serve the double function of furnishing crews to contracting companies, and furnishing workers with a maximum number of job opportunities during the construction season. Theoretically we may expect that kin ties, together with less apparent primary relationships, and the require— ments of industrial efficiency may conflict with each other. But, two general conclusions have been drawn regarding pri— mary relations and production needs of contracting companies: (1) companies and the primary groups contribute to, rather than detract from, each other‘s survival, and (2) particular— istic threat to industrial efficiency is reduced by patterns of recruiting and apprenticeship which permit the "boss" (the person at the center of possible conflict) to fulfill all of his obligations with a minimum of "role strain" and “role conflict."2 Role strain, for the construction supervisor, is his awareness that his official duties are difficult to perform because relatives and friends expect special work related favors from him, or his feeling that being a good friend or a proper relative are comprised by his job. Role conflict, a similar concept, applies when the supervisor views both the kinship—friendship expectations and the official expec- tations as legitimate but in conflict with one another. The supervisor's obligations to kinsmen and to friends are a variety of particularism. That is, the obligations derive from the relationships themselves. His official obligations are a variety of universalism in which he is expected to treat workers in terms of objective criteria of competence. Pipeline Ownership and Construction The pipeline industry is at present one of the larger but less visible industries in the United States.3 And, it is becoming increasingly important throughout the world.4 Pipelines now transport 30 percent of the total tonnage of land freight shipped within the United States. The United States is the leader in pipeline mileage, with slightly over 1,000,000 miles, followed in order by western Europe, the Soviet Union, and the Middle East.*5 In the United States, pipelines are almost every- where, but the greatest concentration of lines is found in a broad belt which runs diagonally from the American Southwest into the Midwest and to the NOrtheastern Seaboard. The southern boundaries of the belt are marked roughly by Albuquerque, New Mexico, and the easternmost part of Louisiana. The northern boundaries are marked by Chicago and New York City.6 Pipelines have proven to be an inexpensive means of transportation. Their initial cost and their maintenance are considerably less than the costs of railroads. The average cost of transporting liquids by pipeline is about *The Middle East actually produces more petroleum than do western Europe and the Soviet Union. However, most of the Middle Eastern petroleum is exported and consequently the area lacks the spiderwebbing of "spurs" and "loops" which characterize the pipeline systems of petroleum cone Suming nations such as the United States. one half that of transporting the same liquid by rail. Pipe— lines transport a variety of products, the largest of which is natural gas. The natural gas industry itself is the 7 Crude oil and sixth largest industry in the United States. its products--gasoline, diesel, and other fuel oils make up a large portion of the total freight shipped by the pipe- lines. Numerous pipelines, called products lines, carry a variety of liquids on a contract basis. They ship one liquid or gas behind another.8 Of lesser but growing importance are recent technical innovations which permit pipelines to ship a variety of products other than gas and petroleum. A Colorado company ships asphalt over a distance of more than two hundred miles. Another Colorado company ships coal simply by mixing it with water. WOOd chips for pulp factories, and even automobile parts, are shipped through pipelines in southern Canada. The automobile parts and other solids are put into cylindrical or spherical con- tainers, and the containers are then put into some kind of liquid medium. Molten sulfur is transported from offshore ‘wells to the Louisiana coast in pipelines which are built on the principle of the vacuum bottle.9 Most of the pipelines are owned by petroleum, public utility, and independent pipeline companies. Pipeline con- Struction is done by some of the companies which own the lines, by companies which are semi-independent parts of pipe— line owning companies, and by independent contracting companies. The greatest number of construction companies are independently owned. These range in size from very large corporations to one owner subcontracting companies. Pipeline shipping companies that own their own construction equipment actually do a very small part of their own con- struction. The industry is organized in such a way that construction contracts ordinarily can be awarded to outside construction companies more cheaply than the construction can be done by the pipeline company itself. The semi- independent companies are financed by parent petroleum companies, but they have their own boards of directors and accept contracts from other companies.10 The actual size of construction companies is diffi- cult to determine. The largest companies ordinarily do several kinds of construction work. They may drill and re- pair oil wells, build roads, highways, dams, hotels, and a variety of other structures. Often they operate heavy equip- ment rental services for smaller companies. Even if a Company just builds pipelines the flexible size of its staff and crews makes the definition of size uncertain. The Smaller companies that build only pipelines may start each Season with only the owner, a bookkeeper (who often is the