Risk and Crisis Management. An Overview

Abstract

The article is intended to provide an overview on risk and crisis management both in theory and in practice. Risk is everywhere and derives directly from unpredictability. However, until few decades ago, risk probability was lower and there were no schemes and well-established theories. Since the 1990s an increased interest for this topic raised, together with the need for studies, articles and relevant literature. Thus, risk management theories provide a framework for organizations to deal with and to react to uncertainty that might affect a company’s objectives and missions, in order to enhance the operations’ efficiency within the organization. Similarly, crisis can be a threat for companies, brands and their business reputation, but through crisis management organizations can learn the best way to handle it and minimize negative effect. Concretely, theory was applied by Ferrero while facing the palm oil scandal, affecting its flagship Nutella cream. By implementing the correct strategies and communicating effectively, the company was able to minimize losses and even increase consumers’ loyalty.