This is especially true for companies that operate internationally. For example, a truculent rise to power could topple a regime. This could lead to rioting, looting, and general unrest in the environment. These disrupt business operations. Sri Lanka was in a homogeneous state during a civil war. Egypt and Syria also faced difficulties. HAZARD MITIGATION Purchasing political risk compensation is one way to manage political hazard. Companies that operate internationally use such compensation to reduce their risk exposure. There are some indices that give an idea of ​​the risk exposure in some countries. The Economic Liberation Index is a good example. Ranks countries based on how politics affects business decisions. THE IMPORTANCE OF OBSERVING THE POLITICAL ENVIRONMENT Companies should monitor their political environment. Transforming political factors can influence business strategy for the following reasons: • The stability of a political system can influence the attractiveness of a particular local market. • Governments see business organizations as a key vehicle for conviviality