Internal and External Issues

How does ISO 9001:2015 define internal and external issues?
How do companies define internal and external issues?
What are some common auditing questions about internal and external issues?

Clause 4.1 of ISO 9001:2015 states that organizations must determine the internal issues relevant to its strategic direction and impact the ability to achieve expected goals. Internal issues could be related to an organization’s overall performance, resources (infrastructure), human factors such as competence or union relationships, operational issues (maintaining and monitoring customer satisfaction, production processes), and governance factors (including rules and procedures for making decisions). Image Source: https://qualitydone.com/index.php/2020/03/10/context-of-the-organization/

What are Internal and External Issues?

Internal and external issues are referenced in Clause 4.1 of ISO 9001:2015 as part of clearly identifying the context of the organization. These are issues that have a direct impact on an organization and its ability to continually provide quality products or services. This requirement can be satisfied generally, but specifying issues will improve a company’s overall QMS. This clause calls for companies to evaluate their workforce, their community, and the cultural and social aspects of their company to identify the relevant issues to consider. This switches an organization’s focus to go beyond its customers and owners, including positive and negative factors or conditions for input. The standard additionally specifies that the identified issues must be relevant to the organization’s strategic direction and purpose, overall affecting the ability to achieve the intended results of the company’s QMS.

Internal issues could be related to an organization’s overall performance, resources (infrastructure), human factors such as competence or union relationships, operational issues (maintaining and monitoring customer satisfaction, production processes), and governance factors (including rules and procedures for making decisions).

External issues arise from technological, legal, market, competitive, social, cultural, and economic environments. Examples of external issues include: disrupted supply chain, political stability, supplier loss, international trade agreements, changes in technology, service area road construction, competition, natural disasters, currency exchange rates, material availability, changes in oil prices, available funding, stricter regulations, bank lending rule changes, expiration of patents, trade union regulations, new market ventures, and changes in financial markets.

Identification Process of Internal and External Issues

Based on the discussion above, there are a multitude of potential factors to consider. There are also several analysis techniques that can aid a business in the identification of relevant issues. The two mentioned below seem to be the most used.

For internal analysis, applying the SWOT (strength, weakness, opportunities, threats) method will aid in understanding internal factors. For external analysis, applying the PEST (political, economic, social, technological) method will aid in understanding external factors.

All the internal and external factors make up the boundaries for analysis, which determines the scope of the system. These boundaries are the foundation of identifying the internal and external issues that are relevant to the organization’s purpose, which is why this is a specified requirement within Clause 4.1. For the identified scope to be effective in determining the appropriate internal and external issues, it needs to be tailored to the company’s specific purpose.

To provide products or services is the obvious purpose of any business, but ISO 9001:2015 calls for the “strategic direction” of the company to also be considered. This entails reviewing existing documentation, including policy statements and structured risk assessments, and discussing with management about the future of the organization. Additional information collected through interviews with management and various team members is valuable for determining and understanding the quality, safety, and environmental conditions that could become inputs to internal and external issues.

Common Auditing Questions About Internal and External Issues

What are the identified issues related to the context of the organization?

Identification of internal and external issues is required as part of defining the context of the organization. This question is about alignment of the QMS with the organization’s strategic business direction. The QMS should be integrated within the overall business plan and used to run the company.

How is the information kept up to date?

The identified internal and external factors should be ongoing factors that affect the effectiveness of the QMS. It is the organization’s responsibility to monitor and review all identified internal and external issues. Documentation should include who is responsible, what is being monitored, how it is being done, and how often it is to be completed. There should be an additional outline of how the company clearly captures and uses the information collected through monitoring the issues.

External issues arise from technological, legal, market, competitive, social, cultural, and economic environments. Examples of external issues include: disrupted supply chain, political stability, supplier loss, international trade agreements, changes in technology, service area road construction, competition, natural disasters, currency exchange rates, material availability, changes in oil prices, available funding, stricter regulations, bank lending rule changes, expiration of patents, trade union regulations, new market ventures, and changes in financial markets.