MT6104Cross Cultural Management

Continual Assessment On Comparative Strategy

MBD- Consulting Group

1
2
3

Melvin Wang AnCun

G1502007F
Bryan Joseph Fernandez G1501987E
Dani Gjulem
G1501997C

Cross Cultural Differences

Analysis of shipyards:

Keppel Shipyard (Asia)

Ulstein Shipyard (Europe)

Aker Philadelphia Shipyard (United States)

Cultural aspects through

Company setup, vision, mission, and values

CSR, employees, and finance

Cultural dimensions

Strategic Location of Shipyards

Global leader in offshore rig design, construction and repair, ship repair
and conversion, and specialised shipbuilding.

From its humble beginnings as a local ship repair yard, the Keppel Group has become one of the largest
conglomerates in Singapore.

Headquartered in Singapore, Keppel O&M integrates and harnesses the

experience and expertise of 20 yards worldwide to optimise deployment of
resources and effectively execute Near Market, Near Customer strategy.

Vision
Our vision is to be the provider of choice and partner for solutions in the global offshore and marine industry.

Mission
Keppel Offshore & Marine is a global leader in offshore rig design, construction and repair, ship repair and
conversion, and specialised shipbuilding. We harness the synergy of 20 yards worldwide to be near our customers
and their markets.

Operating Principles

1. Best value propositions to customers

2. Tapping and developing best talents from our global workforce
3. Cultivating a spirit of innovation and enterprise
4. Executing our projects well
5. Being financially disciplined to earn best risk-adjusted returns
6. Clarity of focus and operating within our core competence
7. Being prepared for the future

CORE VALUES

Employees are guided by the core

values and the Employee Code of
Conduct, which addresses standards
of acceptable and unacceptable
behaviour, personal decorum and
ethical business behaviour.

In 1968,Temasek Holdings founded Keppel Shipyard

Keppel embarked on regionalisation and diversification efforts, venture took place in

1975 when Keppel Philippines Shipyard was set up in partnership with Filipino
investors.

In 1978, Keppel then ventured into the finance industry by providing financial services
to marine contractors which propelled the growth and expansion of the financial
services provided by Keppel.

Keppel ventured into property development in 1983

In 2002, Keppel privatised its offshore and marine business which resulted in the
integration of Keppel Shipyard together with Keppel FELS and Keppel Singmarine to form
the Keppel Offshore & Marine group.

A strategic exercise to streamline its diverse portfolio and focus on three key
businesses.

Continued to be centres of excellence, leading in the

design and provision of high performance solutions for
customers worldwide.

With good project management, quality service and a

strong commitment to HSE, we deliver projects promptly
and safely.

Deliver on our promises on time, within budget and safely.

Backed by over a century of experience, Keppel Shipyard is

the global industry's trusted partner for the repair,
conversion and upgrading of a diverse range of vessels.

Delivered more than 100 jack up rigs

Constructed SOME 400 ships of diverse types and

sophisticated levels for operations around the world

Completed more than 110 FPSO/FSO/ FSRU conversion and

upgrade projects

Keppel Offshore & Marine achieved a

strong set of results

FOCUS FOR 2015/2016

Sharpen execution to extract value from

backlog of orders.

Harness synergy of global yards to provide

new build, repair and upgrading solutions to
customers.

Maintain emphasis on technology

development to sharpen competitiveness.

Seize opportunities in new markets and

adjacent businesses for long-term growth.

Safety is a Keppel core value and impacts

decisions at every level across the Group.

HOLISTIC APPROACH Recognising that fatigue and poor health often

contribute to accidents, we implement comprehensive and holistic measures
to improve the well-being of our workforce.

SUBCONTRACTOR ENGAGEMENT To ensure that our safety messages are

understood by our multinational and multicultural workforce.

SAFETY PERFORMANCE In recognition of Keppels commitment to improve

workplace safety, Singapores WSH Council and the Ministry of Manpower
awarded the Group 39 WSH Awards in 2014.

INCIDENT REDUCTION

RECORD OF EXCELLENCE

Raise overall industry standards, work closely with Singapores Ministry of

Manpower (MOM) and WSH Council to roll out safety initiatives and to
encourage our subcontractors to equip themselves with relevant safety
certifications from WSH Council.

HSE personnel in Singapore are assigned to overseas yards to guide, support

and align safety standards. Risk assessment workshops for key operating units
in Singapore, US, China, the Philippines, Azerbaijan and Indonesia.

ENVIRONMENTAL PERFORMANCE
Keppel O&M strives to be an active partner in environment protection and preservation
programmes in the community.
Keppel O&M became a member of the World Ocean Council (WOC) in January 2014, joining a
growing international business leadership alliance on ocean sustainability, science and
stewardship.

IMPROVING ENERGY EFFICIENCY

MANAGING WATER USE

AIR EMISSIONS FROM OPERATIONS

ENHANCING CAPABILITIES

WASTE MANAGEMENT

SUSTAINING THE GREEN INITIATIVE

INTEGRATING A MULTINATIONAL
WORKFORCE
Emphasis on maintaining a harmonious relationship.
No reported incidences of discrimination. Close to 42% of its global workforce are
bargainable employees covered by Collective Agreements
Safety messages are understood by our multinational and multicultural
workforce, especially subcontractors, Keppel Shipyard has trained experienced
foreign workers as mentors to discuss Workplace Safety and Health (WSH) issues
with fellow workers in their native language
Aim to localise and develop our talents from different parts of the world,
offering them training and development oppotutinty
Committed to looking after the well-being of our foreign workers in Singapore,
improving the facilities in our dormitories to better meet their needs.

Our people are our greatest asset; their pride, passion

and commitment are essential to the Groups success.

$16.3m invested on the learning and development of our global workforce

Keppel upholds and respects the fundamental principles set out in the United Nations
Universal Declaration of Human Rights and the International Labour Organisations Declaration

EMPLOYEE ENGAGEMENT We engage our employees through channels that enhance

communication and exposure to senior management and peers in other business units through
initiatives such as annual symposiums, case studies and strategic reviews.

DEVELOPING A SKILLED WORKFORCE

FAIR EMPLOYMENT PRACTICES

TALENT MANAGEMENT & SUCCESSION PLANNING

Keppel values its people and promotes employee engagement and wellness through various
initiatives. To promote friendly competition, ignite team spirit and encourage healthy
lifestyles, Keppelite Recreation Club organises the annual Keppel Games, a series of sports
competitions open to all employees.

Human capital strategy

with four key elements - to attract, engage, recognise and develop our
employees, with the intention to cultivate a positive emotional attachment and
commitment to the Company.

invest significantly in the training and development of our employees

tap the potential of each and every employee and support them to perform to the
best of their abilities.

inculcate a strong safety culture and all our employees recognise that safety is
everyones business.

Driven by innovation and a capable people with the Can Do! spirit, we strive to
become a builder of distinction in every aspect of our business.

Develop and draw on the collective strength of global yards and offices to
reinforce Near Market, Near Customer strategy and deliver value to customers.

COMPARATIVE STRATEGY

ENHANCING BUSINESS ROBUSTNESS

Seek opportunities to strategically acquire or co-invest with partners in new capabilities and
facilities, and enter into new markets.

ACTIVE COMMUNICATION

While each of Keppels global yards operate independently, the Keppel O&M HSE department
ensures that safety messages, programmes and practices are readily shared.

STRONG PARTNERSHIP

Keppel O&M shares a close working relationship with all our stakeholders, including our
subcontractors. Subcontract workers undergo the same safety training as direct employees to
ensure that those who work in our premises adopt similar high standards of safety.

PROVIDING MERITOCRATIC OPPORTUNITIES

This meritocratic approach by Keppel O&M in our human capital strategy of attracting, engaging,
recognising and developing people has been key to the companys success in developing our people.

Global Organization

With 40,000 employees in 30 countries around the world, the Keppel Group
leverages its international network, resources and talents to grow its key
businesses.

A critical success factor is aligning our global operations to produce the same
high quality and standards of timely, within budget and incident-free deliveries,
associated with the Keppel brand. To achieve consistent excellence, we have to
communicate and motivate our people to embrace a common set of core values
to form the foundation on which we perform work and conduct ourselves.

The Company's ability to survive and thrive with many notable achievements
through the decades is because of its people. The perseverance and passion of
the men and women, fondly referred to as Keppelites, are what makes Keppel.
Our core of dedicated leaders, talented managers, as well as competent and
committed workforce, are equipped and ready to grow Keppel into the future.

Global presence in 30 countries

Our Near Market, Near Customer strategy

CARING FOR THE COMMUNITY

KEPPEL CARE FOUNDATION

KEPPEL VOLUNTEERS

CARING FOR THE COMMUNITY, BREAKING THE CYCLE OF POVERTY

The Group gives back to the communities where we operate through outreach activities and
community contributions.

IMPROVING HEALTHCARE KCF pledged $2.5 million to the Keppel-NUS Vietnam Programme in
Medicine.

HOLISTIC CARE FOR THE ELDERLY KCF and Keppel Volunteers teamed up to support Nature Cares, a
sustainable and nature-based programme for volunteers to bring the healing properties of nature
to elderly homes.

NURTURING COMMUNITIES Keppel is committed to nurturing communities wherever it operates by

improving the quality of life and the environment with sustainable solutions.

Keppel Care Foundation and Keppel Volunteers teamed up to support the launch of Nature Cares
which was officiated by Dr Tony Tan Keng Yam

ULSTEIN Shipyard

Family run business

ULSTEIN VERFT established in 1917

Group was listed on the Oslo Stock Exchange in 1997

Fore-runner in building state-of-the-art vessels

Strong focus on innovative technological solutions and methods

A one stop solution for innovative design and shipbuilding (Value chain
system)

Specialize in offshore vessels

Support shipyards world-wide in collaborating excess ship building capacity to

meet order book

Vision & Mission

Vision
To create tomorrows solution for sustainable marine operations
Mission
To support and develop the business units across the business structure
Values

Customer Promise

Provide highly reliable and quality vessels that justify a long-term investment

Timely delivery since 1917

100% turn-key delivery

Commitment to the General Public

Zero discrimination in recruitment, wages and working conditions, career and

development opportunities and protection against harassment

Employees consist of >20 different countries

Member of UN Global Compact (GC), compiling and reporting the

Communication of Progress work annually.

GC Active level, meeting minimum requirements

Supports the 10 principles of GC with respect to human rights, labour, environment

and anti-corruption

Commitment to the General Public

Dividend policy (~30% of profit after tax, subject to capital

investment)

2013, NOK 69.7 million (NOK 1.105 per share)

2014, NOK 60 million (NOK 0.951 per share)

2012, NOK59.7 million (NOK 0.947 per share)

59.7

69.7

60

1.3
1.2

1.11

1.1
1

0.95
0.95

0.9

Dividen per share (NOK)

Dividen distribution
(NOK million)

Corporate Social Responsibility

Education approach: motivate younger generations to take up scientific

studies and studies related to maritime jobs to SUSTAIN the industry

Support athletics club with NOL 3 million over 3 years starting from 2012
to build new multi-purpose indoor sports arena for athletics and team
sports in Ulstenivik (group HQ location)

Since 2010, sponsor of SOS childrens village, world largest charities for
orphans and neglected children with NOK 1 million per year and organize
1-week science course for children during summer

Safety Goal: A strong culture in emphasizing ZERO accidents and no harm

to people, the environment or material assets

Environmental inculcation
Strong

advocate on reducing products (designing)

or activities (building) which pollute the
environment. Seeking product, processes and
operations sustainability

Good

routine for waste management

Integrating a multinational workforce

Ulstein group has employees from over 20 different

countries from it value chain system ranging from services
from ship design to ship building and systems solutions

Employees diversity of skills, personalities, experience

and background forms the global team to meet its vision
and values which combines innovation, quality and
expertise

Cultural strategic to boost attendance

at work

European do not have medical leave but sickness absence

Ways to mitigate sickness absence by closely following up sickness absentees,

using active sick leave and taking steps towards getting long term sickness
absentees back to work. WE CARE FOR YOUR WELLBEING strategy

Major contribution came from shipbuilding being having the highest injury
rate.

Priority given to shipbuilding section of the group to reduce work place

accident

Fair competition and career progression

Lead by female CEO

Equal number of gender in the Board of Director (2 women, 2 men)

Wage based on positions and level of responsibility.

Meeting employment act requirements for wages and remunerations to

employees

Aim to have higher % of women in management and technical

Fair competition and career progression

(Employees statistic)
1000
21.1
800

No. of Employees

21.2
21
20.8
600
20.6
20.6
20.4
400
20.3
20.2
200
20
0
19.8
816832850
172172172

2012,

Out of 816 employees worldwide, 172 are women (~21.1%)

Out of 832 employees worldwide, 172 are women (~20.6%)
2014, Out of 850 employees worldwide, 172 are women (~20.3%)
2013,

Total Employee
Empolyee (Women)
Percent of women (%)

Year
Although the total employee fluctuated slightly, the number of women
in the group maintained at 172 throughout the years indicating a
successfully culture adopted

Fair competition and career progression

(Observers and Senior Management Team)
Group Observers
2014
Year

2013
Femal
e

2012
0

Number

Senior Management Team

Number

5
4
3
2
1
0

Female
Male
2012

2013
Year

2014

Finances

Dividend to their shareholders

2014 (NOK 60 mill, 51.8% of years profit after tax)

2013 (NOK 69.7 mill, 22.3% of years profit after tax)

2012 (NOK 59.7 mill, 43.2% of years profit after tax)

Group Net Profits for the year

2014 (NOK 128.7 mill)

2013 (NOK 314.5 mill)

2012 (NOK 138.4 mill)

Aker Philadelphia Shipyard:

A cross-cultural shipyard in the Jones-act market

Aker Philadelphia Shipyard

Leading

Commercial Shipyard in the US.

Jones

Act

State

of The Art Shipbuilding Facility

Preferred

Provider

Have

delivered over 50% of all large ocean-going

commercial vessels in the Jones act market since 2000.

19
4

vessels since 2003

containerships, 14 product tankers, and 1 aframax tanker.

Aker Philadelphia
Shipyard
Listed

on Oslo Axess in December 2007

Overcame
Company

major challenges in relation to financial crisis

had to downsize, and almost went bankrupt

New

CEO turned the company around, leading to increased business

after 2010

Building

familiar and simple vessel types, easy to construct.

Significant

replacement needs remain for aging Jones Act

fleet
Leads

to a steady and secured work and environment

Opportunities

to secure long term contracts with suppliers

Jones Act

Vision and CORE

values

Cross Cultural turnaround

Kristian

Rkke appointed as CEO in 2011,

reinvented the company structure, creating
different company dynamics.
Flatter
Up

company structure; Low degree of power distance

933% on the stock market in 2013

More

contracts with new and existing customers

From

surviving to thriving

Result of new culture

through new CEO

Customers
Highly

committed to customer satisfaction, always

keeping their word and delivering on schedule.
A

part of their vision, which they proved when their orderbook was
empty, but still delivered the last vessel on time.

Majority

ownership in Philly Tankers, also building their

fleet.
Joint

Venture with Crowley, with building and investment

sharing scheme throughout the lifetime of the 4 vessels
in the contract.

Order

backlog to Dec 2018, exceeding USD 1bn.

Corporate Social
Responsibility

Extremely high focus on workers safety; Invest

another minute:
Worked

one million man-hours without a lost time incident

in 2014
Continuous

improvement for environmentally

friendly production

AKPS

comply with, or exceeds, all federal, state

and local requirements

Employees
1146

employees, 576 of which are subcontractors

Highly

skilled labour with lots of experience and training.

Attractive

employer with open and fair human relations

policy.
40%

of work force is minority background, and 4% women

Strict

Harassment Free Environment Policy

Workers
Union

rights are protected by law.

workers have also bargained for extra vacation, and personal

time, such as shutting down the yard at various holidays.

Management and
Directors
2014:
Management: 8 men; 6 from USA and 2 from Norway.
Directors: 2 males and 2 females; 2 from USA and 2 from Norway.
2013:

Management: 9 men; 5 from USA, 3 from Norway and 1 from India.

Directors: 3 males and 2 females; 4 from USA and 1 from Norway
2012:

Management: 8 men; 5 from USA, 2 from Norway and 1 from India

Directors: 3 males and 3 females; 4 from USA and 2 from Norway

Shareholders and
Finance

AKPS

aims to create maximum value for its shareholders

Focus

also on maximizing shareholder returns over time.

Paying

dividend to their shareholders (USD 43 mill in

2014).
Operating
Net

revenues of USD 240 and 276 mill (2014/2013).

income of USD 13.6 and 15.6 mill (2014/2013).

Financial

and market exposure due to Jones Act, currency,

exchange rates, and volatile demand.

Comparison Summary of the Financial

Returns for shareholders
60
50

Keppel Shipyard
(Corp)

40
31.6

30 Pay out (%)

Dividend
20
10
0

ULSTEIN Shipyard
Aker Philadelphia
Shipyard (x10 times)

0
7.62012
43.2

9.43
22.3 0
2013

10.05
51.8
2014

Year
It has been observed that Keppel has consistently increased the returns to her investors making it a good investment.
As for Ulstein, the group has promised to return at least 30% of the profit after tax to investors and have been consistently meeting this target and at times
exceed the expectation. However in 2013, the slight drop in % did not really affect investors confident as the absolute amount has been consistent over the
period investigated.
With regards to Aker Philadelphia shipyard, It has been observed that although she had promised her investors with a return on X% of dividend annual, she
have failed to fulfil it due to the crisis she faced in 2011 that affected the payout in subsequent years. However, she repaid all investor with a huge payout
316% of her 2014 profit after tax to repay her investors trust, faith and loyalty over the bad times.
This analyst although convey little information but has proven that the selected shipyards have cultivated good culture practices in ensuring investor are
returned with attractive investment, with Aker Philadelphia exceptional and generous gesture in 2014.

Cultural Dimensions Summary

Keppel
Shipyard

ULSTEIN
Shipyard

Aker
Philadelphia
Shipyard

Power Distance

Low

Low

Low

Uncertainty Avoidance

High

Low

Medium

Masculine/Feminine

Masculine

Feminine

Feminine

Individualism/Collectivi
sm

Collectivism

Collectivism

Individualism

Universalistic/Particular
istic

Universalistic

Universalistic Universalistic

Long-term/Short-term

Long-term

Long-term

Long-term

Similarity in the 3 Shipyards are long term, universalistic and low

power distance
Manages and develops a global work force with these Similarity;

Job training/professional development

Retention

Knowledge management

Sales force productivity issues

Control, trust, and commitment issues

Implanting organizational culture

Relationship marketing

Acculturation/adaptation issues

Supervision/mentoring (motivation and ethical perceptions)

Building global/local management teams

Managing diversity/multiculturalism

Cultural Comparison Summary

Keppel Shipyard

ULSTEIN Shipyard

Aker Philadelphia
Shipyard

Safety Culture

High

High

High

Shareholder return
(Annually)

Consistent

Consistent

Inconsistent

Environmental Awareness

High

High

High

Employee Welfare

High

High

High

Labour Union presence

Low

High

Medium

Training development
towards skill level

Medium

High

High

Market Share

High

High

High

Corporate Social Responsibility

High

High

Medium

Stringiness/procedural for work

in progress

Medium

High

High

Multinational

High

Medium

Low

End of Presentation

Thank You.