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RISK ANALYSIS AND CRISIS MANAGEMENT: A PROACTIVE APPROACH

TO OVERCOMING BUSINESS UNCERTAINTY

Edie Riesnandar Wahyu

STIMA IMMI Jakarta, Indonesia

eriswabear984[email protected]

ABSTRACT

A crisis is a rumor, event and information that has an impact on the good name, image and

trustworthiness of a company. In fact, the crisis that occurred did not only impact large companies, but

small businesses were one of the groups most affected by the Covid-19 pandemic crisis. Therefore, all

parties, both individuals and companies, must be prepared to face a crisis. Crisis management is defined

as a set of factors created as a tool to eradicate a crisis and reduce the potential damage resulting from

the crisis. This research aims to find out how a business is able to survive, what strategies are prepared

to overcome uncertainty in business. This research uses a qualitative descriptive method using a case

study method which seeks to understand the whole and in depth of a case, data collection methods using

literature studies sourced from journals or other online media. The results of this research are that

UMKM business actors survive by using several strategies such as utilizing digital technology,

improving product and service quality, pricing and customer relationship marketing. Large business

players use strategy by forming a management team, identifying, analyzing, developing planning,

communication and evaluation methods.

Keywords: Risk analysis; Crisis Management; Business

INTRODUCTION

Risk is something that will not be separated from one's life. Risk is defined as an incident

or case that is troublesome or misappropriation of the fruits obtained from the ideal (Arifudin et

al., 1967). This indicates that the risk of one thing that is true will be faced by all people or

business groups or not everyone will meet with uncertainty that can have a positive or negative

effect on a goal that has been set (Hariwibowo, 2022). Every activity must have risks as well as

business activities, therefore risks are indicated by hazards that have a direct or future impact

(Huda Latifa, 2018). Risk is a large deviation between the predicted level of return and the actual

return. The greater the misappropriation, the higher the risk level (Mardhiyah, 2017). Risk can

also be interpreted as a form of uncertainty about the future (Ilyas, 2019).

The crisis according to Purwaningwulan in his journal Safitri and Muhsin (2018) is a rumor,

event and information that has an impact on the good name, image and trustworthiness of the

company. Crises only affect large companies that are the assumption of most companies, even

though crises can attack anyone, it does not rule out the possibility that crises will also have an

impact on individuals, organizations or companies. Therefore, all parties, both individuals and

companies, must be prepared to face the crisis (Safitri & Muhsin, 2018). Crisis management is

defined as a set of factors that are made as a tool to eradicate crises and reduce the potential

damage resulting from the crisis. In this case, there are four factors involved, namely prevention,

response, preparation, and revision (Pada, 2023). For an organization, the term crisis is still a scary

one. Therefore, crises have a wide enough domain to reach the community, the effect of which

results in being able to disrupt and burden the future of an organization or company, especially

the good name that has long been painstakingly formed can be damaged instantly when a crisis

strikes (L. D. Putri, 2014).

The philosophical thinking that developed in the modern management era is based on the

basis of previous management theories. The approach of an organizational system into a unity is

inseparable from modern management theory. Increased understanding is one of the keys for an

organization or company in the new management period. Companies that run business as usual

are ensured that their needs will not be known in a fast time if without updates. Therefore,

adjustment is mandatory if an organization or company wants to survive. The contingency

approach is one of the approaches presented by Pindur, the contingency approach is all factors

Risk Analysis and Crisis Management: A Proactive Approach to Overcoming Business Uncertainty 
 
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that are considered in different situations before deciding something to solve organizational or 
company problems. This understanding requires an emphasis on a comprehensive evaluation of 
the environment of the company being analyzed, in its analysis must  be equated to different 
situations and conditions. Through modification of organizational form, prepared strategy, and 
leadership behavior, able to avoid uncertain situations in line with the risks (Rahadi & Wardiman, 
2022).  
Changes in the technological environment are very fast in a business adrift in it also about 
the mindset of its management. A company, if it wants to survive and be sustainable, must apply 
open methods or methods that are related to the environment and able to adapt to the surrounding 
environment. Because the environment itself is able to form opportunities for business prospects 
or businesses apart from the opportunities formed, the environment is also able to change to form 
threats to the development of a business or business. All countries, including Indonesia with its 
environmental conditions affected by the Covid-19 virus outbreak have a considerable impact on 
all  business  industries,  both  the  social  industry,  health,  and  the  economic  sector  that  are 
substantially affected. The occurrence of this outbreak is very different from other outbreaks, 
uncertainty  is  experienced  by  the  entire  industry  when  the  Covid-19  outbreak  begins  to  be 
comprehensive.  Micro,  small  and  medium  enterprises  (MSMEs)  are  no  exception,  which 
experience serious impacts when compared to large companies. The minimal capital owned by 
MSMEs is included in the most vulnerable group, so that when the Covid-19 virus outbreak is 
comprehensive, it results in a decrease in sales and business continuity (Rahadi & Wardiman, 2022). 
The number of micro, small and medium enterprises in Indonesia is very large, around 98% 
large in the micro business group, and small enterprises amounting to around 783 thousand or 
1.28%, and medium enterprises are only 60 thousand or around 0.09%. Micro business is an active 
business owned by an individual or an individual-owned business entity that has several criteria, 
namely with a maximum total amount of assets is around fifty million rupiah and a maximum 
turnover of three hundred million rupiah. In its business continuity, micro businesses are still 
uncertain due to limited internal resources. One of the crises faced by MSMEs is the covid 19 
pandemic, after the pandemic hit small businesses owned by business actors stated that conditions 
worsened much differently when compared to before the covid 19 pandemic.  
The food and beverage business is one of the business sectors that has high demand during 
the pandemic so that PBD in the industry was able to grow by around 3.49%, but the impact of 
the Covid-19 pandemic remains inevitable which raises a problem that becomes a challenge for 
the operationalization of the business model. Moreover, in handling the consequences caused by 
Covid-19 on the food and beverage business, it has not been widely experienced (Pada, 2023). 
Through the explanation above, this study aims to find out, how a business that is run is 
able to survive in the face of uncertainty in doing business, how crisis management they face and 
what strategies are used to minimize a risk faced in the uncertainty of doing business. 
 
RESEARCH METHOD 
This research uses qualitative descriptive research methods that aim to provide an overview 
of  situations  and  conditions  or  conditions  in  a  designed  and  appropriate  manner  (Bangun  & 
Hariyono, 2019). By using the case study method that seeks to understand the whole and depth of 
a case (Subadi, 2006). Research in the form of regional plans, management science and education. 
Case study research also allows researchers to protect the nature or characteristics as well as the 
meaning or meaning of unique real events (M. S. Putri, 2021). The data collection method is carried 
out  through  literature  studies  and  documentation  sourced  from  documents,  books,  journals, 
articles / other online media (Sidiq, Umar & Choiri, 2019).  
 
RESULT AND DISCUSSION 
Crisis Management 
Crisis is defined by experts as  a positive and negative mindset. Basically, a crisis is an 
unexpected situation, meaning that the company or organization did not expect that a crisis would 
arise that could threaten its existence. The crisis must be resolved as soon as possible so that the 

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company can run well again. According to Holsti in his journal Putri (2021) the crisis is seen as

a carrier of shock and threat to the important value of the company and there is not much time

for the company or organization to make a decision to deal with it. The crisis is also seen as a

"turning point of historical life", namely a turning point in life whose effect has a significant

impact, either in a negative or positive direction, it all depends on how individual business people

or corporate groups respond to the crisis they face (M. S. Putri, 2021).

Crisis management is an important design method of crises or negative turning points, a

method of risk and uncertainty that is transformed from negative periods and strives for a

company or organization in its activities to be able to handle itself. The effectiveness of crisis

management is not only to reduce or stop a crisis, but before the crisis occurs, it can give the

company a more positive reputation. There are several ways to manage a crisis including:

1. Identify the crisis by deploying a company team that intends to search for and collect all

the necessary data and on the same day the team must draw conclusions from the data it

processes about the crisis at hand..

2. Crisis analysis, This analysis work is behind the desk by using the ability to read the crisis

problems that will be faced..

3. Isolate the crisis, If the crisis is already considered a disease to protect the spread of the

crisis widely, isolation efforts must be made before action is taken later..

4. The choice of strategy, the generic strategy is determined first before starting the

communication steps as crisis control, there are three types of generic strategies, namely:

First, the defensive strategy of steps that can be taken, which includes things such as buying

time, not taking any action, only protecting themselves by being tough. Second, the

adaptive strategy steps that can be taken include things such as changing policies, modified

operations, agreements, straightening the image. Third, the dynamic strategy of using this

strategy has a large or comprehensive nature capable of changing the company's behavior,

which can be through acquisition mergers, new investments, selling shares, making new

products, cooperating with power, throwing new issues as a distraction..

5. Control program, this program is a measure of use that is done to lead to a generic strategy

that was created long before the crisis arose as a shield. This control program is different

from the generic strategy, this program is usually compiled when the crisis arises. The

application of this control program to the company includes branches, industries of the

same business union, communities, company divisions (M. S. Putri, 2021).

The field of risk management has become an important discipline to maintain the resilience and

success of an organization or company, with the rapidly changing world, entanglements and uncertainties

that are generated. (Lubis et al., 2023). Crisis management needs to be done is to (1) the effects of

the crisis are faced by preparing a good defense, (2) in order to be able to respond appropriately

to the crisis that befalls, (3) to design a gradual step as a recovery process after the crisis takes

place. (Suryani & Sagiyanto, 2018). Apart from that, the implementation of crisis management is

also necessary to minimize the losses caused and strengthen the fortress in the face of the crisis.

(Suwandi et al., 2023).

Small Business People

In the business world, both in large companies and micro, small and medium enterprises

(MSMEs), marketing is one of the spears for the success of a business. For example, in late 2019,

the whole world experienced a crisis caused by COVID-19, a disease that can be transmitted from

human to human. The existence of the pandemic has caused a problem for all countries, including

Indonesia. Emergency and aggressive measures are taken by all countries in the world as an effort

to prevent and overcome the spread of the COVID-19 virus, these actions are ordered by the

World Health Organization. The covid-19 virus is increasing day by day in Indonesia, therefore

the implementation of Large-Scale Social Restrictions or called (PSBB) is carried out by the

Indonesian government in an effort to prevent the covid-19 virus (Yanuar et al., 2022). This resulted

in a significant decline in the Indonesian economy, considering that micro, small and medium

enterprises are one of the largest economic bases in Indonesia (Akmal & Arifa, 2023). Therefore,

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an anticipation is needed by micro, small and medium enterprises as a preventive effort to

minimize the risks caused by risk management (As Sajjad et al., 2020).

Micro, small and medium enterprises are one of the business groups most affected by the

Covid-19 pandemic which has resulted in declining sales during this Covid-19 pandemic, so

business people need a good and efficient marketing strategy so that their business can survive.

In the results of their journal, Rahadi & Wardiman (2022), there are several marketing strategies

that can be used by micro, small and medium enterprises, namely as follows:

MSME marketing strategy during the Covid-19 pandemic, in this Covid-19 pandemic

situation, it is important for business actors to make business products that are able to provide

satisfaction equivalent to the quality of the products provided at the price paid by buyers. In an

effort to fulfill the wishes and needs of customers in a pandemic situation, MSME players need

to take strategic steps quickly and precisely, these steps are taken so that the business being run

is able to survive to face the Covid-19 pandemic crisis this time. Adaptation is needed by someone

during a pandemic through the means that are owned and controlled as much as possible, they

are competing to get the maximum profit possible (Purwono, 2020).

Here are some strategies that can be used in crisis management efforts for micro, small and

medium enterprises, namely:

1. Digital Technology Utilization Strategy

Digital technology needs to be used by MSME players to fight the impact or influence

of the pandemic, for example, the use of smartphones in collaboration with the internet to

increase competitiveness, productivity and performance. As a business sustainability,

MSME actors must have an appropriate plan, defined for the identification and management

of risks that result in disrupting and disrupting services, initiating the impact of risks, and

proving service improvements. Therefore, MSMEs can use technology to achieve these

goals or expectations. Digital utilization in MSME issues can take the following forms

(Rahadi & Wardiman, 2022):

a. E-Commerce is one of the marketing update system tools to be able to reach and expand

the market. One example is the Shopee, Lazada, Bukalapak applications and many more

applications are forms of e-commerce that can be used by micro, small and medium

enterprises. Through the use of e-commerce media, it is expected to be able to increase

sales and profits generated by MSMEs, apart from that, MSME players can also

establish relationships with other networks to make a new, more creative design.

b. Digital Marketing, or digital marketing is a motion tool by utilizing social networks by

using digital media as a market search tool. In an effort to use social media, MSME

business actors are able to create visual content of their products either in the form of

videos or images combined with copywriting that is able to attract customers and is

continuously published on their social media pages. The use of copywriting is also one

of the important components to persuade customers through education on the quality of

the products we sell by composing creative words, so that it can influence customers

when they want to make decisions to buy their products. Customer complaints can also

be quickly answered with the use of digital marketing. There are other benefits

possessed in the use of digital media, namely free promotional costs, a little wealth,

reducing product display budgets, not requiring excess tools, easy interaction with

customers can be by using email, chatting, with freedom of time and place.

Through the use of technological media, the management team remains obliged to

perform its influence function and form communication that brings change. Fast decision

making is useful so that workers get certainty and do not lose control (Rahadi & Wardiman,

2022).

2. Product Quality Improvement Strategy

The quality of MSME products must be improved, this aims to increase customer

trust. Online media has now become a new tool for marketing business products. In

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conditions like this, customers make buying and selling transactions by not making direct

contact with the seller and the products they buy, therefore customer trust in products that

have good quality in accordance with the needs and desires of expectations in comments that

must be maintained and maintained (Rahadi & Wardiman, 2022).

Basically, the theory that needs to be considered by MSME business actors is to

observe product aspects and improved product quality that customers need and look forward

to. According to Garvin (1998) in his journal Rahadi &; Wardiman (2022), aspects of product

quality are composed of:;

a. Product performance to the extent to which a quality product can be measured, adds

to the usefulness of the product through the characteristics present in the product.

b. The ability of product quality in the force of business change faced within a certain

period of time.

c. Product conformity through standardization.

d. Product durability is seen from a technical point of view and its saving value, if the

goods are damaged, it is not difficult to repair.

e. Product aesthetics by observing the causes that affect customer impressions on

product quality, for example such as brand good names and others. In order for

product strength to be maintained, MSME actors must pay attention to and carry out

quality control on strength and packaging so that their products are maintained and

able to improve the quality of their products with the implementation of online media.

3. Service Quality Improvement Strategy

Maintaining quality and adding services is also important for micro, small and

medium enterprises, adding services can be done by implementing messaging services

between these services can be done by the business actors themselves or others. Indications

of good service are on time, maintained quality of products carried, and good speech, which

can later form trust and satisfaction that increases and loyalty for customers. Through the

provision of services that have no direct physical contact by utilizing technology to ensure

consumers regarding the safety of the services provided, it will improve customer trust in

business actors (Rahadi & Wardiman, 2022).

By maintaining product quality, especially during a pandemic, customers will feel safe

and comfortable to buy products sold by MSME business actors so that with the

implementation of this strategy, MSMEs do not lose and are able to suppress customers even

in the conditions of a pandemic-pandemic environment.

4. Pricing Strategy

The success of product marketing can be determined by pricing. Business actors must

make prices that are proportional to customer purchasing power in order to survive and meet

or attract customers with customers' purchasing ability declining due to the difficult period

of the COVID-19 pandemic (Rahadi & Wardiman, 2022).

5. Customer Relationship Marketing Strategy (CRM)

The quality of products and services that are improved is not enough during the Covid-

19 pandemic, requiring a strategy or way to maintain long-term relationships with customers

based on long-term trust and strength. Customer relationship marketing is a way of

marketing that has the aim of forming long-term relationships by forming consumer loyalty

by maintaining mutually beneficial relationships. In this case, many studies have proven that

the good relationship created between those who have interests and customers has an impact

on the better the marketing performance.

The above strategies are the results of business model evaluations that increase the

competitiveness of complex decision formation by taking a proactive and integrated

approach made by company officials during the COVID-19 pandemic which was used by

management to adapt during the last COVID-19 crisis (Rahadi & Wardiman, 2022).

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Big Business People (PT. Kereta Api Indonesia) 
Transportation  services  are  one  of  the  major  companies  affected  by  the  COVID-19 
pandemic. PT. Kereta Api Indonesia (Persero) in Operational Area (DAOP) 1 Jakarta as one of 
the  land  transportation  modes  affected  by  the  COVID-19  pandemic. At  the  beginning  of  the 
Covid-19 pandemic, there was a decrease in trains, but tickets had been booked by the public, so 
with the decline in train transportation modes, the company canceled many tickets. Resulting in 
complaints for train passengers, not only ticket cancellations, many obstacles also occurred due 
to this crisis such as customers who complained because trips were disrupted due to damaged 
signals due to lightning strikes, problems with access applications, damaged service facilities to 
passenger goods left behind. It is during situations like this that Public Relations Workers of PT. 
KAI Persero DAOP 1 must move quickly and responsively to manage the crisis that is happening 
(M. S. Putri, 2021). 
1.  Crisis Management at PT. Kereta Api Indonesia Persero DAOP 1 Jakarta . 
The results of research in her journal Putri (2021) that crisis management at PT. Kereta 
Api Indonesia Operation Area 1 Jakarta, namely fixing customer complaints in the era of the 
Covid-19 pandemic carried out by PT KAI persero Public Relations workers, can be handled 
quickly  and  proactively  based  on  Standard  Operating  Procedures  or  (SOP),  the  crisis  is 
overcome  through  coordination  together  with  other  parts  that  are  carried  out  strongly. 
Submission  by  giving  explanation,  understanding  and  becoming  a  public  impression  is 
assigned  to  the  public  relations  of  PT.  KAI  in  its  delivery  of  the  situation  that  is  being 
experienced so that the company's good name is maintained (M. S. Putri, 2021). 
 Public relations practice is a  level of activity that is structured as  useful as public 
control so that the problems faced by the company can be well accepted (Toruan et al., 2023). 
Public relations or public relations  is very important when an organization or company is 
affected by a crisis, public relations must carry out activities such as design, management 
until  the  final  stage of  completion  (L. D. Putri, 2015). The  existence of public  relations 
facilitates the activities of companies or organizations with outside stakeholders, therefore 
public  relations  become  one  of  the  vital  things  in  a  company  (Indrayani,  2017).  The 
widening  of  a  crisis  to  stakeholders  will  affect  the  performance  and  good  name  of  the 
company  if  it  is  not  quickly  anticipated  properly  (Parlindungan  &  Rengkuan,  2022). 
Therefore, crises require proper design to maintain the survival of  a business  (Pratiwi & 
Haninda, 2022).  
Communication strategy carried out by PT. KAI is a good strategy because strategic 
communication is an important thing, according to Coombs (2007) in his journal Hasanah 
(2022) stated that communication strategies have goals related to defense of good name, 
namely to guide crises, divert company assumptions about crises, and minimize the negative 
impact of a crisis (Hasanah, 2022). Public relations is also useful as management that forms 
and protects good interactions and has benefits between customers or the community with 
organizations  or  companies,  so  that  when  a  problem  arises  such  as  a  crisis  that  comes 
unexpectedly, public relations become a facilitator of it (Sekarbuana et al., 2017). 
The analysis is carried out by collecting customer complaint data from all parts as an 
effort to identify consumers directly affected by the crisis directly from PT. KAI Persero 
through  its  customer  service  by  sending  short  messages  via  SMS  to  prospective  train 
passengers  and  conducting direct communication if needed.  PT.  KAI  Persero  broadcasts 
releases to  inform affected customers indirectly. Media announcements from  announcers  
are carried out for prospective train users who are already inside the station, and virtual press 
conferences, published releas and making advertorials are carried out for prospective train 
users who are outside the station or for the public at large (M. S. Putri, 2021). 
Then, PT. KAI through the Public Relations division applies action strategies swiftly 
and proactively as an effort to overcome the crisis. Other divisions prepare action method 
plans which are then outlined at meetings which are then agreed and approved after which 
they apply their plans. Social distancing and distancing are one of the methods or strategies 
implemented by PT KAI during the COVID-19 pandemic crisis. Therefore, PT KAI's Public 

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Relations did not hold the conference directly, but it was carried out virtually by making its

own statement, either in the form of a broadcast release or with a statement in the form of a

video. High leadership of PT. KAI has directly become part of the crisis management team

that occurs through their respective proportions (M. S. Putri, 2021). Participating in the high

leadership of PT. KAI is one of the right things because what company leaders need in times

of crisis like that time is not only to formulate a plan but a mindset is also very important in

order to overcome a crisis that occurs and help them to be able to look forward (Friesatma,

2022).

After almost the entire series of strategies are carried out, the next step taken by PT.

KAI is carrying out a multilevel evaluation based on the results of the data obtained. Through

zoom meetings, evaluations and coordination meetings were conducted. Through other

divisions and customer service, customer complaint data is found with media monitoring

(M. S. Putri, 2021).

Through the implementation of crisis management carried out by the company is able

to overcome situations and conditions that are damaged or impossible and classified as a

crisis while still observing the most important side of brand awareness because the company

can be known by customers through the name of a brand, which will later have a good or

positive effect in increasing sales of a company (Yuliana, 2022).

CONCLUSION

Based on the results of the research above, it can be concluded that the field of risk

management has formed an important discipline to maintain the resilience and success of an

organization or company, with rapid world changes, attachments and uncertainties that are

caused. The emergence of the COVID-19 pandemic at the end of 2019 has had an impact on

micro, small and medium enterprises and even large companies. Here are the strategic efforts

made by small business people. First, the use of technology media by creating stores through e-

commerce such as lazada or bukalapak and digital marketing as promotional media. Second,

Product quality improvement strategies to increase customer trust. Third, the pricing strategy in

times of crisis, of course, people need goods at economical prices. Fourth, the strategy of

improving service quality by providing delivery services is expected to make customers happier

because transaction activities are no longer carried out by leaving the house and meeting with

many people. Fifth, Customer relationship marketing.

Large companies such as PT. KAI Persero is also affected by the COVID-19 pandemic

crisis, PT. KAI Persero then made a fast and proactive strategy and in accordance with Standard

Operating Procedures and strategies applied in dealing with the COVID-19 pandemic crisis,

namely by creating a crisis management team, identifying crises, analyzing, compiling planning

methods, communication strategies and the last is by conducting evaluations. The public relations

department also plays an important role in efforts to resolve the crisis that occurs by providing

explanations, understanding and becoming a public impression of the situation being experienced

so that the company's good name is maintained.

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