When companies consider business continuity, the emphasis is often on natural or man-made disasters rather than the impact of political uncertainty. However, with events such as Brexit, civil unrest in Venezuela, or even the recent shutdowns of the U.S. government, events of a political nature can have significant effects on a company’s ability to maintain normal operations.
When facing such uncertainty, organizations needs to examine the nature and scope, and whether the threat represents only a change in economic conditions, or whether it also threatens continued operations, according to an article in Harvard Business Review. Once the extent of the threat is confirmed, organization can examine the risks and approaches for continued operation, via hedging strategies, relocation of operations, or temporary shuttering or withdrawal from affected regions. These actions are all dependent on a company’s cash reserves and financial flexibility, with larger reserves allowing for better chances of riding through temporary disruptions until a new state of stability is achieved.
While not all companies are capable of such actions, it can be of advantage to organizations to at least consider how to respond to events outside the more traditional set of disruptions to business continuity, including the political.
Source:
https://hbr.org/2019/02/how-companies-can-adapt-during-times-of-political-uncertainty
