This is especially true for businesses that operate internationally. For example, a truculent takeover could overthrow a regime. This could lead to riots, looting and widespread environmental disorder. These disrupt business operations. Sri Lanka was in a homogeneous state during a civil war. Egypt and Syria also faced disruption. MITIGATION OF PERIL Purchasing political risk compensation is one way to manage political peril. Companies that have international operations use this compensation to reduce their exposure to perils. There are certain indices which give an idea of ​​the exposure to perils in certain countries. The Economic Liberation Index is a good example. It ranks countries based on the impact of politics on business decisions. THE PRIORITY OF OBSERVING THE POLITICAL ENVIRONMENT Companies must monitor their political environment. The transmutation of political factors can affect business strategy for the following reasons: • The stability of a political system can affect the attractiveness of a particular local market. • Governments view business organizations as an essential means of conviviality.