External Issues

ISO 9001:2015, clause 4, Context of the Organization, includes requirements for the organization to determine its:

  • external and internal issues (4.1)
  • relevant interested parties (4.2)
  • quality management system scope (4.3)
  • processes and their interaction (4.4)
This article is focused on clause 4.1 and determining external issues. A different article in this newsletter addresses internal issues. Both articles include the same Requirements, Notes, and References sections. The Guidance sections are unique to internal issues or external issues.

4.1 Understanding the organization and its context

Requirements

An organization must determine the external issues and internal issues that are relevant to its purpose and strategic direction, as well as, those that affect its ability to achieve the intended results of its quality management system.

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

Notes

1. Issues can include positive and negative factors or conditions for consideration.

2. An understanding of the external context can be facilitated by considering issues arising from legal, technological, competitive, market, cultural, social, and economic environments, whether international, national, regional, or local.

3. An understanding of the internal context can be facilitated by considering issues related to values, culture, knowledge, and performance of the organization.

References

According to ISO 9001:2015, clause 9.3.2.b, changes to these issues are inputs to management review. These issues are also referenced in clause 4.3 as considerations for determining the scope of the quality management system. They are mentioned again in clause 6.1.1 as considerations for determining the risks and opportunities faced by the quality management system.

Guidance

Examples of possible external issues are:

  • Supply chain disruption
  • Loss of a key supplier
  • Technology shifts
  • Competitive pressures
  • Money exchange rates
  • Economic conditions
  • Inflation forecasts
  • Credit availability
  • Oil price changes
  • Local infrastructure
  • Increased regulations
  • Patent expirations
  • Trade union regulations
  • Ventures into new markets
  • Changes in financial markets
  • Funding for non-profits
  • Scarcity of raw materials
  • Climate; natural disasters
  • Major road construction in service area
  • International trade agreements
  • Political stability
A structure for identifying the different types of external issues is the PESTEL Model. It is a framework for reviewing the business operating environment of the organization, including legal compliance obligations.

Political factors are basically how the government intervenes in the economy.

Economic factors include economic growth, interest rates, exchange rates, and the inflation rate. These factors greatly affect how businesses operate and make decisions.

Social factors include cultural aspects, health consciousness, population growth rate, age distribution, career attitudes, and emphasis on safety. High trends in social factors affect the demand for a company’s products and how that company operates.

Technological factors include technological aspects like research and development, automation, technology incentives, and the rate of technological change. These can determine barriers to entry and minimum efficient production level, as well as, influence outsourcing decisions. Technological shifts affect costs, quality, and innovation.

Environmental factors include ecological and environmental aspects such as weather, climate, and climate change, which may especially affect industries such as tourism, farming, and insurance. Furthermore, growing awareness of environmental impacts affects how companies operate and the products they offer, both creating new markets and diminishing or destroying existing ones.

Legal factors include discrimination law, consumer law, antitrust law, employment law, and health and safety law. These factors can affect how a company operates, its costs, and the demand for its products.