For an organization to successfully steer their future success, there must be a clear understanding of where they are and where they want to go. That is why defining the context of the organization is so important in ISO 9001.
Context of The Organization
Understand Your External and Internal Issues
To fully understand your organization and its purpose and defining the context of the organization, it is necessary to determine your external and internal issues which may affect your organization’s ability to meet its intended strategic objectives. This is the flagstone of your organization’s quality management system as it underpins why your organization is here. External issues that may affect your organization and you therefore need to consider, are your economic, political, legislative, regulatory, environmental, technological and social factors.
For example, the economy can affect the success of your business and the ability of your customers to pay for your product or service which then directly impacts on your bottom line. Whether the economy is specific to your industry or a global trend, it can still have an optimistic or detrimental impact on meeting your strategic objectives. Your organization may need to offer sales promotions, diversify your product line or recruit new staff to cater for the increase in demand.
Internal issues are also likely to fall into the same basic areas as external issues. For example, the economic issues may relate to employee benefits or bonus related pay, whereas social issues may relate to an ageing workforce and issues relating to succession planning. When looking at understanding your organization and its context in relation to your quality management system, make sure you consider issues can positively or negatively affect your organization.
Recognize the Requirements of Your Relevant Interested Parties
Ultimately, quality is determined by a product or service that satisfies all stakeholder requirements. Your organization will therefore be required to identify all relevant interested parties (the new terminology for stakeholders) and their relevant requirements. Interested parties who can affect or be affected by the activities and decisions of an organization are likely to be linked to the external and internal issues previously identified.
Determine and Documentation of Scope Under Context of The Organization
ISO 9001 requirements stipulate that your organization needs to determine and document its scope to outline your quality management system boundaries. As well as considering the external and internal issues and the requirements of interested parties, your organization must outline the products and services contained in your quality management system, the applicability of specific requirements and justification for any clause where a requirement cannot be applied (exclusion). The processes that form the quality management system must address the applicable requirements and expectations of interested parties, which are considered by your organization as integral to meeting its purpose and required outcomes.
These processes must include monitoring and measuring processes to ensure all interested party requirements are identified and understood and all activities undertaken by your organization are meeting these requirements.
What Are Internal and External Issues
This requirement of clause 4 can seem too general, and there is a risk of going too wide when defining the internal and external issues. In fulfilling this clause, you should focus only on issues that can affect the customer satisfaction and delivery of quality product and/or service.
An organization’s internal context is the environment in which it aims to achieve its objectives. Internal context can include its approach to governance, its contractual relationships with customers, and its interested parties. Things that need to be considered are related to the culture, beliefs, values, or principles inside the organization, as well as complexity of processes and organizational structure. To determine external context, you should consider issues arising from its social, technological, environmental, ethical, political, legal, and economic environment. Examples of external context may include:
- Government regulations and changes in the law
- Economic shifts in the organization’s market
- The organization’s competition
- Events that may affect corporate image
- Changes in technology
Basically, all this information is in the head of the CEO and other members of management, but it was never put on paper; the best way to gather it is by organizing some brainstorming. However, it should be stated it is not a requirement of ISO 9001 that this is documented.
How It Will Affect You
Since the original ISO 9001 quality management standard was released back in 1987, there has been a plethora of management system standards that address topics from the environment to business continuity. With the increasing trend towards integrated management systems that address multiple standards, it makes a lot of sense for them to adopt a common structure (in terms of major clause numbering and titles), and terminology. Examples of the high-level clause numbering and titles are:
- Normative references
- Terms and definitions
- Context of the organization
- Performance evaluation
While this change would not have much effect on an organization seeking single certification, it would have some benefit for an organization seeking several, and a standardised approach would presumably also be welcomed by consultants and auditors.
If you are looking for support with implementing you ISO 9001 quality management system or any other ISO standards, please feel free to contact us for a free consultation on how we can support.