Context of the Organization

• How is the context of the organization defined by ISO 9001:2015?
• How do companies identify the context of their organizations?
• What are some common auditing questions about the context of the organization that companies should be prepared to answer?

What is The Context of the Organization?

The Context of the Organization, named in Clause 4.1 is a new requirement of the updated ISO 9001:2015 standard. The new standard states that “The organization shall determine external and internal issues that are relevant to its purpose and its strategic direction and that affect its ability to achieve the intended result(s) of its quality management system.” This description of the context of the organization is a bit nebulous and requires a change in application of clause 4 from the previous standard. 

So what exactly does this mean? Identifying the context of the organization is a big job, and it’s an important one. Identifying this context asks companies to define the wide variety of different influences on an organization and how they impact the quality management system. These are the “internal and external issues” that are named in this clause. Internal factors might include influences such as an organization’s mission, strategic goals, resources, culture, and relationships with suppliers (or other contractual partnerships). External factors include the legal, political, regulatory, financial, and economic issues surrounding the organization as well as perceptions of external stakeholders or interested parties. 

The context of the organization is mentioned in Clause 4.1, but also referred to in Clause 0.1, The Purpose of the Standard, that discusses “addressing risks and opportunities associated with its context and objectives” and nestled again in Clause 5.1, Leadership and Commitment, a requirement for top management, expecting leaders to ensure “that the quality policy and quality objectives are established for the quality management system and are compatible with the context and strategic direction of the organization.” 

The standard does not lay out a specific required process for identifying the context of the organization, but there are some logical steps and benchmarks organizations can aim for to meet the expectations of this requirement.

How Do We Identify the Context of the Organization? 

Many quality professionals recommend a simple, pragmatic approach to tackling this task. If you are undergoing a recertification, it’s logical to first assess which new requirements are already addressed in your existing documentation. Some of the requirements required of Quality Manuals in the ISO 9001:2008 standard overlap with the new ISO 9001:2015 clause, so examining this overlap is a good first step. Below are some additional recommended steps to identifying the context of the organization: 

1. First define the scope of the QMS (if this hasn’t already been done in a previous ISO 9001:2008 certification) and the order of processes and interactions.
2. Identify internal and external issues that impact QMS planning. CEOs and other quality managers have been aware of these factors, but they have never needed to document them. Be wary of casting too wide a net here. Focus only on issues that may impact customer satisfaction and the delivery of quality products and/or services. Internal context refers to the environment in which an organization aims to achieve its directives. External context refers to the social, technological, political, environmental, ethical, legal, and economic factors influencing an organization’s direction. You might consider conducting “PEST” (political, economic, social, technological) and SWOT (strengths, weaknesses, opportunities, threats) analyses to pinpoint these factors. See here for more information about internal and external issues, along with examples.
3. Identify internal and external parties and their needs. This means your organization must decide whose opinions matter most. Make a list of customers, suppliers, regulatory bodies, shareholders, community partners, employees, etc. Feedback from internal and external parties helps improve your quality management system; therefore, it’s advantageous to identify and meet their needs. See here for more information about identifying internal and external parties.
4. Document all of this information either in a separate document or in an existing quality manual. If you already have an existing quality manual, it may be simpler to add the new information about internal and external factors and interested parties, since many auditors are already familiar with this structure. If this is a first-time certification for you, make sure this information is clearly outlined in a new document.
5. Review, monitor, and continually improve internal and external issues within the context of your organization. Identifying and reviewing the context of the organization is an important part of the continual improvement process. This isn’t something that should be created and forgotten.

Common Auditing Questions

One common auditing concern related to the context of the organization relates to the vagueness of the requirement. How can an auditor accurately audit the context of any organization? What set of requirements are auditors using to audit against? With a potentially infinite list of relevant issues that could be documented within the context of the organization, how does an auditor determine when a nonconformity occurs? 

The key to understanding how the context of the organization will be assessed is keeping in mind the essential quality process of continual improvement. Your quality policy and processes are never perfect, and you will constantly refine them. What’s important to remember is that there should be a process in place for reviewing and improving and that it is documented for auditors. The new standard states “The organization shall monitor and review information about these external and internal issues.” Standards experts understand that defining the context of an organization is a continually changing practice. 

You should be prepared to answer some basic questions about your organization’s strategic direction that will demonstrate an understanding of the context of your organization. Below are a few examples:

1) Tell me about your company’s strategic direction.

2) Who are the members of the leadership team who lead and oversee strategic direction?

3) What activities are ongoing and how is progress monitored and reviewed?

4) Where are your management review records? Is the QMS aligned with your Strategic Direction?

An organization that understands and can exhibit what exactly it does and how different internal and external issues affect how well its QMS meets requirements will perform better in audits and ultimately set themselves up for success.