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- Keshav Ram Singhal
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Wednesday, August 10, 2016

Understanding the organization and its context

Understanding the organization and its context

- Keshav Ram Singhal

ISO 9001:2015 QMS standard in its clause 4.1 makes emphasis on clear understanding of the organization's context. The standard requires organization to:
(i) determine external and internal issues (positive and negative factors or conditions) that are relevant to its purpose and its strategic direction and that affect organization's ability to achieve the intended result(s),
(ii) monitor and review information about the determined external and internal issues (positive and negative factors or conditions).

The intent of above requirements is to understand important issues that can affect, either positively or negatively, the way the organization manages its quality management system to achieve the desired result(s). Requirements mentioned in clause 4.1 is too general and one may think many issues that may not be relevant. Consider only those issues that are relevant to the quality management system.

Why an organization need to determine external and internal issues? one may answer, it is a requirement. But why is this a requirement? Because (i) the organization needs to take better decisions based on evidence, (ii) the potential benefits of implementing ISO 9001:2015 QMS standard to an organization is addressing risks and opportunities associated with its context and objectives. This leads to improvement in the quality management system.

Addressing risks and opportunities lead to proactively managing uncertainties that lead to better decisions based on evidence. This reminds 'evidence-based decision making' principle among the seven quality management principle on which ISO 9001:2015 QMS standard is based. Clause 0.1 also has a reference of the potential benefits of implementing ISO 9001:2015 QMS.

Internal context of an organization is the environment in which organization targets to achieve its objectives. Issues that need to be considered are related to culture, beliefs, values, or principles inside the organization, as well as the complexity of processes and organizational structure. Typical examples of internal context related issues may be - Products/services offerings, Governance, Organizational structure, Roles, Responsibilities and authorities, Organizational assets (facilities, building, machinery, equipment, technology), Information system and decision making process, Relationship of staff, Perception of internal stakeholders (owners, suppliers, partners), Organization culture, Guidelines etc.

External context of an organization relates to the issues that may arise from legal, cultural, social, technological, competitive, economic environment that can be global, national, regional or local. Typical examples of external context related issues may be - Government regulations, changes in law, market competition, events (such as trade fairs), etc. These factors should be considered, while managing risks, uncertainty and opportunities and also at the time when you make decisions that may affect quality of the product/service your organization provides.

ISO 9001:2015 QMS standard does not speak on the method to determine such issues. It is for the organization to apply its own suitable method. One such method to determine the internal and external issues may consists following steps - (i) The top management of the organization should constitute a team of identified persons, who are well-versed with organization and its processes, (ii) The team members should think individually as well as collectively and identify positive/negative factors and conditions that are relevant and that can affect achievement of organization's goals/objectives, (iii) All such identified issues should summed-up, (iv) the team should also monitor and review identified issues from time to time.

While auditing the standard's requirements, auditor would look into the objective evidence how you determined the issues related to the context of the organization.

Please CLICK HERE to refer to the earlier post 'ISO 9001:2015 QMS - Understanding the organization and its context'.

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