ISO 9001:2015 – Newsletter – Issue 11

Issue 11 – Clause 4.1:  Understanding the organization and its context

ISO 9001:2015…

Clause 4.1:  Understanding the organization and its context

What’s new in Clause 4.1?… We covered Element 10.0 (the final Element) in my last Newsletter (ISO 9001:2015 Newsletter Issue 10), and now as promised I plan to start back at the beginning and delve into each of the Clauses in more detail.  Clause 4.1 is brand new in this 2015 edition of the Standard and I discussed it at a high level back in Newsletter Issue #3.

Let me start by making an observation regarding Clause 4.1… I find it interesting that the word “context” is nowhere to be found within Clause 4.1.  This is not normal since typically the words in the title of the Clause are almost always repeated within the Clause itself.  Normally you’d expect the wording to be something like “The organization shall determine its context, etc, etc”.  Basically Clause 4.1 never really asks you to state what your “context” is but rather asks you to determine what internal and external issues impact your organization.

Here is another important fact, the phrase “documented information” does not exist within Clause 4.1, so you are free to simply verbally describe how your Strategic Planning process (or SWOT activity) functions.  Even if some companies keep a record of these activities they can state that this information is considered proprietary and confidential.  If the Auditor sees this as a gap and wishes to pursue this further, they will be faced with demonstrating that a lack of “documented information” in this area somehow makes this particular QMS process, ineffective (see Clause 4.4.2).

This is a good example of how this new Standard differs from the old one… Auditors will now need to swim upstream and downstream (and within) each process (with perhaps only verbal evidence along with their own observations), in order to assess whether the process is functioning, functioning as planned, and functioning effectively.  Many Auditors will find this to be a challenge, especially when sitting across the table from the business leaders in the company.

The new Clause numbering… 

Section 4 – Context of the organization
Section 5 – Leadership
Section 6 – Planning
Section 7 – Support
Section 8 – Operation
Section 9 – Performance evaluation
Section 10 – Improvement

Clause 4.1: Understanding the organization and its context –  So what does context mean?  Notes 2 and 3 try and help by making suggestions however I view “context” as a statement made by top management that describes the “business” that the organization is engaged in and also includes a description of the external and internal factors that affect or impact how they operate.

If your company practices Strategic Planning then a lot of what Clause 4.1 requires will be addressed within that process.  Additionally, if your organization engages in SWOT analysis (which was discussed back in Newsletter Issue #4), then the output from that exercise covers the internal issues (Strengths & Weaknesses) as well as the external issues (Opportunities & Threats) quite nicely.  If your organization then develops action plans (or Strategies) based on the SWOT analysis then that will become perfect evidence for Clause 6.1 (Actions to address risks and opportunities).

However, many companies may not be able to make reference to any formal Strategic Planning process, which makes complying with this Clause more challenging.  The first thing to do is determine if your organization has any type of meeting where they discuss what the business challenges will be for the upcoming year and where goals/targets might be set.  If this type of meeting does occur then make reference to it either in your Level 1 Quality Manual (which I suggest you retain… revise it of course but still retain it) or within a supporting Level 2 Procedure.  Be sure to explain how this meeting covers both internal and factors impacting your business for the year ahead.

If for some reason your organization simply does not conduct any type of business planning meeting at the beginning the fiscal year then you will need another option or alternative for handling “context”.  This alternative approach first assumes that you will not scrap your current Quality Manual (even though it is no longer an ISO requirement).  Secondly, you need to be prepared to re-write a portion of your Quality Manual so that it includes a “Business/Strategic Planning” section which describes how your business planning activities look at internal and external issues.  An easy approach you can use within this new section of your Quality Manual would be to create two tables, one listing Internal Issues and one listing External Issues.  You’ll need to re-visit this new Quality Manual section at least once a year (perhaps at a Management Review Meeting), so that the information regarding “context” can be updated for the next year (or re-confirmed as is).

There can obviously be many other approaches that will work, since every company is unique, with each performing various degrees of “formal strategic planning”.  So as always, how you address “context” depends very much on how your current annual business planning process works (or doesn’t).