Governance Structures for Managing Fully Integrated Operations and The Financial Risks and Returns of Backward Integration: Dangote Cement Plc.
Abstract
This seminar paper examines governance structures for managing fully integrated operations and analyzes the financial risks and returns associated with backward integration, using Dangote Cement Plc as a reference case study. Backward integration, where firms internalize upstream activities such as raw material extraction, power generation, and logistics has become a strategic response to supply uncertainty, cost volatility, and competitive pressure in capital-intensive industries. While backward integration can enhance operational control, cost efficiency, and long-term value creation, it also introduces governance complexity, financial exposure, and operational risks. The study adopts a structured methodological approach combining conceptual, theoretical, and empirical reviews with quantitative and qualitative analysis to evaluate how governance mechanisms influence risk management and financial outcomes. Findings indicate that strong corporate governance structures board oversight, risk management committees, internal controls, and performance monitoring systems significantly moderate the risks of backward integration while enhancing returns through cost leadership, margin stability, and strategic resilience. The study concludes with policy-relevant recommendations and areas for future research.
Citations
IRE Journals:
Onawo, Davies Ijuo "Governance Structures for Managing Fully Integrated Operations and The Financial Risks and Returns of Backward Integration: Dangote Cement Plc." Iconic Research And Engineering Journals Volume 9 Issue 7 2026 Page 2298-2311
IEEE:
Onawo, Davies Ijuo
"Governance Structures for Managing Fully Integrated Operations and The Financial Risks and Returns of Backward Integration: Dangote Cement Plc." Iconic Research And Engineering Journals, 9(7)
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