Damen Shipyards was established in 1927. In 1969, Mr Kommer Damen took over the company from his father and introduced a revolutionary concept of modular construction to build small boats and launches. This concept of standardization (known today as the Damen Standard) generated clear advantages: fast delivery times, reduced costs and proven designs. Today, with more than 9,000 employees, the Damen Shipyards Group has earned a leading position in the shipbuilding world. However, the concept of standardization and industrialization remains very much at the heart of the company. Partnerships have always formed a strategic cornerstone of Damen Shipyards. The company actively collaborates with its clients, research institutes and suppliers to continuously innovate its ship designs and associated products and service offerings and pursue state-of-the-art manufacturing capabilities. Being a family-owned company, partners tend to be engaged with high intensity and a long-term focus. This is especially true for shipyards, with which Damen Shipyards has many partnerships. Damen Shipyards actively partners with shipyards in order to gain access to well-equipped production capacity with competitive capabilities. Next, shipyards can provide access to local markets because local governments often regard shipbuilding as having strategic importance to local and regional economies, especially in developing countries.

An important region for Damen Shipyards is South East Asia. Due to political reforms in South East Asia, the business landscape has changed considerably since the 1980s. Damen Shipyards was early to venture into China. In 1994, Damen Shipyards established a joint venture with Changde Shipyards, which was followed by the acquisition by Damen Shipyards in 2002. In Vietnam, political changes allowed for new business activity. From 1986 on, the Vietnamese government initiated the Doi Moi policies. These policies changed the country from a traditional communist, centrally led state economy to a ‘socialist-oriented market economy’. This was followed by reforms in legal frameworks in the private sector. In 1990, the Law on Private Enterprises, which provided a legal basis to private frms, was enacted, while the Companies Law acknowledged joint-stock companies and private limited liability companies. The constitution established in 1992 offcially recognized the role of the private sector. By 1994, the Netherlands had established an Embassy in Vietnam, and this embassy has played an important role in stimulating trade between the Netherlands and Vietnam. One of the frst companies to become active in Vietnam was Damen Shipyards. Along with an attractive domestic and regional market, the highly motivated and well-trained Vietnamese labour force provided the strategic foundation for Damen Shipyards to start venturing in Vietnam.

Before venturing into Asia, Damen Shipyards was selling ships that were most often being built in the Netherlands. This proved to be a diffcult commercial concept. Ships were too expensive, and Asian customers disliked the fact that their ships were being constructed on the other side of the world. In 2002, Damen Shipyards won a Vietnamese tender for six search and rescue (SAR) vessels. The Vietnamese requested that these ships be built in Vietnam in order to support the local economy. Damen Shipyards was willing to do this and decided that fve of the six vessels would be built in Vietnam. To select the appropriate shipyard in Vietnam, a tender was released for the construction of these fve vessels. Numerous yards were visited by Damen Shipyards staff. The general impression was that most yards did not meet the high standards that Damen Shipyards required. However, next.

Questions 1 Explain how cross-cultural diferences between Dutch-based Damen Shipyard and Vietnamese-based Song Cam Shipyards without careful cross-cultural management may have led to adversities between the partners.
2 Explain how cross-cultural diferences may have afected the decision to opt for a joint venture and what post-formation initiatives may have been developed to steer the joint venture towards success.