An Exploratory, Longitudinal Study of Factors Influencing Development of a Networked Company

In 1901 the Gulf Refining Company was chartered to provide refining and sales support to the Spindletop oil field in southeast Texas (Gulf Oil History, 2003). A refinery was built immediately after on a 4,000 acre site. The facility was acquired in 1985 by Chevron as a part of a merger with Gulf (‘Congratulations Premcor 100 Years,’ 2001). In February 1995, Chevron sold the Port Arthur plant with an important proviso. Chevron agreed to perform any environmental remediation required by the United States Environmental Protection agency (U.S.-EPA) or the Texas Natural Resource Conservation Commission (TNRCC) after sale was complete. Chevron assumed responsibility for contamination associated with the site since 1901. A total of US$500 million was placed in reserve. Chevron was ultimately required to “make good” on the agreement, and Chevron established a networked company to fulfill the obligation. This longitudinal study of that networked company reports the factors found to have positive, negative, and neutral effects on the project. An explorAtory, lonGItudInAl study of fActors InfluencInG deVelopment of A networked compAny In 1901, following the discovery of oil at Spindletop, the Gulf Refining Company was chartered to provide refining and sales support to the southeast Texas field (Gulf Oil History, 2003). Construction of a refinery in Port Arthur was begun within months. The facility experienced a general expansion during World Wars I and II. 1297 Copyright © 2010, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 1298 An Exploratory, Longitudinal Study of Factors Influencing Development of a Networked Company The 4,000 acre site and refinery were acquired in 1985 by Chevron as a part of the Gulf merger (“Congratulations Premcor 100 Years,” 2001). In February 1995, Chevron sold the Port Arthur plant with an important proviso. Chevron agreed to perform any environmental remediation required by the United States Environmental Protection agency (U.S.-EPA) or the Texas Natural Resource Conservation Commission (TNRCC) after sale was complete. Chevron assumed responsibility for contamination associated with the site since 1901. A total of US$500 million was placed in reserve. Chevron was ultimately required to “make good” on the agreement. The literature suggests that businesses are seeking competitive advantage by teaming more closely with suppliers (Galbraith, 1998). Many have explored the challenges of forming selfdirected work teams across geographic boundaries (Duarte & Synder, 2001; Galbraith, 1998, 2000; Galbraith, Lawler, & Associates, 1993; Hedberg, Dahlgren, Hansson, & Nils-Goran, 1994/2000; Lawler, 2000; Porter, 1985). Organization design experts, including Drucker, Miles, Naisbitt, and Savage, have anticipated that networked companies are the wave of the future (as cited in Cohen, 1993). Chevron is a well-established, integrated oil company focusing on capital asset project development. The task facing the company now, however, was liability reduction. To meet the challenge, Chevron assumed the role of network integrator or initiator of a networked organization. The “Port Arthur Remediation Team,” nicknamed PART, was formed in 1996 and ultimately became the networked organization responsible for the remediation effort. The purpose of this case study is to uncover the emergent factors that had positive, negative, and neutral effects on the development of PART over the first 5 years of operation from inception in 1996 through 2000.