Context of the Organization (QMS)

Context of the Organization


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4.1 Understanding the organization and its context The organization shall determine external and internal issues that are relevant to its purpose and its strategic direction direction and that affect its ability to achieve the intended result(s) of its QMS. QMS .

The organization shall monitor and review information about these external and internal issues.


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Requirements here is to; — Understanding the organization, and — Understanding its context (business environment)


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Understanding the Organization


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What is an organization? person or group of people that has its own functions with responsibilities, authorities and relationships to achieve its objectives.


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Understanding the organization — Mission (organization’s (organization’s purpose for existing as expressed by top management) — Vision — Vision (aspiration of what an organization would like to become as expressed by top management) — Strategy (plan Strategy (plan to achieve a long-term or overall objective)


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Understanding the organization — Policy Policy (intentions and direction of an organization as formally expressed by its top management) — Objective (result Objective (result to be achieved) — Core values, culture, beliefs, guiding principles


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Understanding its Context


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context of the organization combination of internal and external issues issues that can have an effect on an organization’s organization’s approach to developing and achieving its objectives. objectives. “context” here here refers to; — business environment — organizational environment — ecosystem of an organization


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Issues Issues are important topics for topics for the organization, problems for debate and discussion, discussion, or changing circumstances that affect the organization’s ability to achieve the intended outcomes it outcomes it sets for its QMS. Issues can include; — positive and negative factors negative factors or conditions for consideration (Ref: NOTE 1)


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external context external environment in which the organization seeks to achieve its objectives Ref: NOTE 2

External context includes; cultural, social, political, legal, regulatory, financial, technological,

economic,

natural

and

competitive

environment,

whether

international, national, regional or local (PESTLE)


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internal context internal environment in which the organization seeks to achieve its objectives objectives

Ref: NOTE 3

Understanding the internal context can be facilitated by considering issues related to values, culture, knowledge and performance of the organization (capabilities & constraints).


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intended outcome what an organization intends to achieve achieve by implementing its QMS. minimal, core outcomes; outcomes; 

―consistent‖ products ―consistent‖ products & services;



―enhancing‖ customer satisfaction; satisfaction;



achieving achieving results of QMS (objectives / KPI). Context of the Organization

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Understanding the Organization & its context (4.1) External Issues Political, Economical, Social, Technological, Legal & Environmental

Determine

factors whether international, national,

(on-going review & monitoring)

regional or local; local; (PESTLE)

Intended outcome of QMS Issues / Factors / points for considerations

• consistent products & services • enhancement

of

customer

satisfaction • results of QMS (objectives / KPI)

Internal Issues values, culture, knowledge and

positive or negative, in line with; —

performance of the organization capabilities and constraints

Purpose of the Organization’s Organization’s existence (Mission)

— —

Aim / Goals of of the Organization (Vision) Strategic direction


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Understanding the needs & expectations of Interested Parties


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interested party (preferred term) stakeholder (admitted term) person or organization that can affect, affect, be affected by, by, or perceive itself to be affected by a by a decision or activity Eg., Customers,

communities,

suppliers,

regulators,

non ‐governmental

organizations, investors and employees.

Note : to ―perceive ―perceive itself to be affected‖ means affected‖ means the perception has been made known to the organization.


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4.2

Understanding the needs

and

expectations

of

interested parties Due to their effect or potential effect on the organization’s organization’s ability to consistently provide products and services services that meet customer and applicable statutory and regulatory requirements, requirements , the organization shall determine: a) the interested parties that are relevant to QMS; QMS; b) the requirements of these interested parties parties that are relevant to QMS. QMS. The organization shall monitor and review information information about these interested parties and their relevant requirements. Context of the Organization

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Understanding the needs & expectations of interested parties (4.2) Determine (on-going review & monitoring)

that can affect, be affected by, or perceive itself to be affected by

Statutory & Regulatory relevant External & Internal Issues (4.1)

requirements

Interested Parties (Stakeholders) Risks & opportunities relevant Requirements

(6.1.1)

(needs & expectations)


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Overview — interested parties are also part of organization’s organization’s context (internal or external) and should be considered when reviewing its context. — interested parties can change over time (as a result of changes in external & internal issues) and can depend on the sector or industry or the geographic location in which organization operates, so are their needs & expectations.


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Overview — developing a relationship with interested parties enables communication which can lead to potential for building mutual understanding, trust and respect


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Understanding the needs & expectations of interested parties (4.2) Relationship

Examples of relevant interested parties

By responsibility

Investors

Examples of relevant needs and expectations

Expect the organization to manage its risks and

By influence

opportunities that can affect an investment Non-governmental Non-governmental organizations organizations

Need the organization’s organization’s cooperation to achieve a

(NGOs)

safer living place Expect socially acceptable performance, honesty

By proximity

Neighbours, the community

By dependency

Employees

Expect to work in a safe and healthy environment environment

By representation

Industry membership organization

Need collaboration on OH & S issues

By authority

Regulatory or statutory agencies

Expect demonstration of legal compliance

and integrity


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Reviewing its Context


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How to review its context? —establish —establish a process (practical approach, that adds value to the organization and provides a high-level, not detailed conceptual understanding of the important issues that can affect,

either

positively

or

negatively,

the

way

the

organization manages its QMS)


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How to review its context? —involving —involving a cross-functional team team (from different functions) —consideration —consideration of its authority & ability to control and influence


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The review can include the following key areas; — identification of relevant external & internal issues, which relate to the organization’s organization’s activities, products and services that can impact the organization’s QMS organization’s QMS performance. — consideration of how these issues can affect the organization’s purpose and ability to achieve the intended outcomes of its QMS.


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To

understand

which

issues

are

important,

the

organization can consider those that; — are key drivers and trends, trends, affecting the objectives of the organization; — can present problems for the organization; organization;

— can be leveraged for beneficial effect; effect; — offer competitive advantage, advantage, value for customers, or improvement of the organization’s reputation organization’s reputation and image.


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Understanding of its context should result in knowledge that can be used to assist the organization in; — setting the scope (boundaries & applicability) of its QMS (4.3)

— determining strategic risks & opportunities @ organizational context (6.1.1)

— developing Quality policy (5.2) — establishing its Quality objectives (6.2)


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Understanding of its context should result in knowledge that can be used to assist the organization in; — determining the effectiveness of its approach to fulfil its Statutory and Regulatory requirements — identification of opportunities to improve its QMS performance (10.1 & 10.3)


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Determining the scope of its QMS


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Scope of QMS (4.3) provide justification for nonapplicability, if any

Consider; a)

Ext External rnal / Int Inte ernal rnal Issu Issue es (4. (4.1) 1)

b)

Nee Needs & Exp Expe ectat ctatio ions ns of IP IPs (4. (4.2)

c)

its its pr products an and se services;

Determining the QMS Scope (4.3) (boundaries & applicability)

made available to relevant Documented information


interested parties

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Overview – Scope of QMS; — specific to the organization — intended to clarify the physical, functional and organizational boundaries boundaries (it may include the entire organization or specific operating units of one or more locations) — understand the extent of control or influence that it can exert (authority & ability) over activities, products and services


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Overview – Scope of QMS; — critical to the success of QMS QMS and to organization’s credibility and reputation (to reputation (to ensure that the scope is not defined in a way

that excludes activities, products, services or facilities that facilities that have or can have significant impact on delivery of its products & services or

in a way that evades its Legal obligations, or misleads interested parties) parties)

— factual and representative statement statement of the organization’s operations, or business processes included within its boundaries Context of the Organization

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Overview – Scope of QMS; — Scope should be reconsidered reconsidered (when the organization changes its sphere of control or influence, expands its operations, acquires / divests business lines or property)


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QMS & its Processes


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QMS & its processes (4.4) Integrate / Embed

QMS Scope

Management / Governing Processes

(boundaries & applicability) (4.3) Supplier

CORE

CORE

CORE

Customer

Knowledge gained from 4.1 & 4.2 Support / Enabling Processes


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Process Approach (PDCA); PDCA is an on-going, iterative process process to enhance customer satisfaction with a commitment to provide consistent products & services and continual improvement of QMS.


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Benefits - Integrating QMS into business processes; — operate more effectively and efficiently, through sharing of processes and resources — deliver increased value by being more closely associated with those processes that the organization depends upon to operate


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Risk Management Framework


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What is Risk? The effect of uncertainty in achieving the objectives objectives

Note: An effect is a deviation from the expected


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Risk Management Framework @ Organizational Context What matters? Establish Organizational Context (External & Internal Issues, needs & expectations of interested parties / stakeholders)

What can go right / wrong? Determine Risks and Opportunities


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Risk Management Framework @ Organizational Context What is the risk? So what? Analyse & Evaluate Risk What do we do now? Let’s do it! Planning & Implementation of Actions (Risk Treatment / Operational controls) Is it working? Can we make it better? Monitor, measure, analyse, evaluate Review, Review, update / revisit ---- Improvement initiatives Context of the Organization

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Top-down approach (Strategic Risk)

4.1

Change Management (6.3)

Statutory & Regulatory requirements

4.2

Risk @ Organization Context BUSINESS RISKS

Conformity of Products & Services

Customer Satisfaction

Bottom approach (Operational / Process Risk)


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Actions to address risks and opportunities (6.1) Consider; —

External / Internal Issues (4.1)

—

Needs & Expectations of IPs (4.2)

—

Change Management (6.3)

—

Operational / Process Risk(s)

RISK MANAGEMENT FRAMEWORK (ISO 31000:2018)

Determine the Risks (6.1.1) Business Continuity?

(Organizational Context, i.e., Business Risks)

(ISO 22301:2012) Assess the Risk Planning actions to address Risk

Verify the effectiveness effectiveness of the actions taken (9.1.1 / 9.1.2) Resilience Management

Risk Treatment (6.1.2) Integrate

Analysis and evaluation evaluation (9.1.3 e)

(BS 65000:2014)

with QMS Processes (4.4)

Implementing actions

Review (9.2.3 e)

(8.5.1) Update / Revisit (10.2.1 e)


Improvement (10.1 & 10.3)

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Planning of Action Risk Management Framework


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actions

to

address

these

risks

and

opportunities

(proportionate to the potential impact) – impact) – Risk Risk Assessment


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Options to address risks (Risk Treatment) Treatment) can include; — avoiding risk, — taking risk in order to pursue an opportunity, — eliminating the risk source, — changing the likelihood or consequences, — sharing / transferring the risk, or — retaining risk by informed decision.


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Opportunities can lead to; — the adoption of new practices, — launching launching new products, — opening new markets, — addressing new customers, — building partnerships, — using new technology and — other desirable and viable possibilities to address the organization’s needs. Context of the Organization

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how to: — integrate and implement the actions into its QMS processes, or other business processes (4.4); — evaluate the effectiveness of these actions.


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Context of the Organization (QMS)

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