Context of the Organisation Explained

What is Clause 4 – Context of the Organisation?

Modern ISO Standards follow the Annex SL Structure, which ensures consistency across the Management System standards.

The new structure consists of 10 clauses, of which Context of the Organisation is clause number 4. This states that an organisation must actively consider any internal and external concerns that might affect the Management System. Although this has always been a requirement of ISO 9001, it is now a specific element of the Standard that requires a formal approach.

Context of the Organisation is not always the most straightforward clause to understand, as it can be interpreted in many ways. Also, context can evolve as the organisation grows and internal and external factors change.

Clause 4 Requirements

When understanding Context of the Organisation it is easier to consider it in perspective to the rest of the Management System. Each clause of an ISO Standard is concerned with a specific business procedure. For instance, Clause eight focuses on the operations of the business, meanwhile Clauses nine and ten focus on performance evaluation and improvement, respectively. However, it’s also important to remember that all business processes are inter-related.

Context of the Organisation is all about understanding all of the components of your business. So, the clause addresses questions such as:

• What are you looking to sell and who to?
• How do you operate as a business?
• What does the competition look like?
• Are there any legislative and regulatory requirements that you need to be aware of and conform to?

The clause is really asking you to identify the fundamental aspects of your business by asking the type of questions you would ask at the very start of your business journey.

Detailed Overview

Context of the Organisation is split into four sections:

4.1 Understanding the organisation and its context

4.2 Understanding the needs and expectations of interested parties

4.3 Determining the scope of the quality management system

4.4 Quality Management Systems and its processes

4.1 Understanding the organisation and its context

This section of the clause requires that organisations determine all the internal and external factors that may affect their objectives being achieved. Although there is no mandatory requirement for the information within this section to be documented, it should be obvious to an auditor that top management has effectively considered their organisation’s context. This will be apparent in the processes and everyday activities of the organisation.

Internal factors are factors that occur within the organisation and amongst other issues, relate to knowledge of the organisation’s governance and structure:

• roles and responsibilities
• knowledge of product
• services and activities
• strategy
• policies
• culture
• … and much more.

External factors are those that occur outside of the organisation’s operations, and may arise from social, political, economic, technological, competitive, cultural (both local and regional) and legal environments.

4.2 Understanding the needs and expectations of interested parties

This section requires organisations to determine their stakeholders, both internal and external, including (but not limited to):

• Neighbours
• Customers
• Regulatory bodies
• Competitors
• Staff
• Contractors etc.

Organisations are required to carefully consider their stakeholders’ needs and expectations as well as how their activity will impact them. This should, in turn, provide a stronger understanding of how the company can move forward and grow, incorporating these considerations into its activities.

As previously, there is no mandatory requirement for organisations to keep formal documentation of this information, however, it is expected that they at least have some account and are able to demonstrate this.

4.3 Determining the scope of the Management System

This section requires that organisations consider the requirements and objectives of the Management System, particularly in relation to the factors identified in the previous two sections. Organisations must also define factors such as their products and services, and their size, culture and complexity. The scope should be obvious to an external auditor when observing the activities of the organisation, however it must also be documented. The extent of the processes and controls which the organisation has in place will be reflected in the scope.

4.4 Quality Management System and its processes

The final section focuses on the processes of the management system which must be established, implemented, maintained and continually improved. This means determining the processes that are needed for the Management System and how they will be applied.To be determined:

• Required Inputs and expected outputs
• The sequence of processes and how they interact
• Performance indicators
• The resources that will be required, and their availability
• Roles and responsibilities
• Risks and opportunities
• Overall evaluation of processes and any changes required
• How the processes and system will be improved

For effective implementation of the Management System, a structured approach can really help. This can include keeping documents such as process diagrams, overlays showing process linkage, resource diagrams, identification of outsourced processes, and any other relevant documentation.

An expert solution

Don’t go alone when it comes to interpreting Context of the Organisation and other clauses within ISO Standards. QMS’ consultants are experts at implementing, managing and maintaining ISO management systems. Their knowledge will take the guesswork out of the process, guiding you at every step of your journey.