What is “Context of the Organization”?

In this article, we examine a new requirement for ISO 9001:2015 called “Context of the Organization”.

Understanding the Organization and Its Context

Implementing a successful quality management system (QMS) is a strategic decision influenced by context of the organization. This requirement specifies that an organization must consider both internal and external issues, which impact its strategic objectives and QMS planning.

What does it mean?

An organization’s business environment includes a combination of internal and external factors and conditions that influences its approach to its products, services, investments and interested parties.

Context is an important consideration, which helps ensure that your QMS is well designed and adapted for your organization.

Clause 4 of the ISO 9001:2015 standard – “Context of the organization” requires that the organization evaluate itself and its context.

This means that you need to define influences of various elements on the organization and how they reflect on the QMS, the company’s culture, objectives and goals, complexity of products, flow of processes and information, size of the organization, markets, customers, etc.

It is also a means to detect all issues, and issues can be addressed as risks and opportunities for the organization within its business context.

Determining the context – A simple & practical approach

The standard does not specifically prescribe any method for determining context of the organization. However, this can be approached by this simple 4 step pragmatic approach:

1. Identify all internal and external issues – that can affect your organization’s products, services, investments and interested parties. In a simple manner, issues which are affecting business performance, including Quality Objectives.

2. Identify all interested parties (internal and external) and what are their needs and expectations.

3. Once these needs and expectations are incorporated in QMS planning – this become the context for the organization.

4. Regular review and monitor of all internal, external issues and their mitigation plans to enhance the QMS performance.

In case you are implementing the standard for the first time, you need to determine the scope of your QMS and identify the processes and their interactions. If you have already implemented ISO 9001:2008 earlier, then some of the scope and processes may already have been defined in the form of text or flowchart.

1 – What are internal and external issues?

This clause 4 requirement can seem too general. When defining internal and external issues there is a risk of going too wide. To successfully fulfill this requirement, one should focus on issues relevant to customer satisfaction and quality delivery of product or service.

An organization’s internal context is the environment within which it works to achieve its objectives. This can include its approach to governance, its contractual relationships with customers and its interested parties. Internal issues to be considered are related to corporate culture, beliefs, values and principals inside the organization, along-with organizational processes and structure.

An organization’s external context is determined by issues relevant to its political, legal, economic, ethical, environmental, technological and social environment. Some examples of external context may be: government compliances and regulations, changes in the law, economic shifts in the organization’s market, the competition, changes in technology, etc.

2 – What are interested parties?

These may include partners, shareholders, employees, suppliers, end-users and customers. In fulfilling the requirements of the QMS, one needs to consider all interested parties (internal and external) who:

  • Are involved in the organization’s ability to consistently provide a product or service that meets customer’s demand and need
  • Ensure compliance with statutory requirements and regulations
  • Affect the continual improvement process
  • Enhance customer satisfaction through effective application of the system
  • Ensure you conform to your customers’ requirements and any statutes or regulations that apply

All interested parties add value or are impacted by the activities within the organization. It is important to identify and meet their needs and expectations in order to successfully implement an effective QMS. Getting valuable feedback from interested parties can help determine what can be improved within the organization.

3 – Determine the Context

The standard specifies that once all above information is gathered, it should be well determined as documented information.

4 – Regular review and monitoring

A regular management review or other monitoring tools like Internal Audit, Data Analysis are necessary to monitor the organization’s performance.

Conclusion

Most of the above information is in the heads of the CEO and other members of management but was never properly established before in QMS. Systematization all this information can be very valuable and demonstrate where you stand as an organization.

The context of the organization seems like one of the “documented information and forget about it” requirements, but it shouldn’t be. Information gathered through defining context can be very useful for identifying room for improvement, and it shouldn’t be taken for granted. Knowing the context of your organization and opinions of your interested parties can help you improve your organization and make it even better.

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