Context of the Organization: External issues

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Next up, on the subject of business context as the foundation that a management system is built upon, is the need to determine your external issues. Clause 4 “Context of the Organization” specifies this requirement and pertains to the things outside of the organization that can affect or have an impact on our goals and objectives.

In this post, I will be suggesting what things should be considered when determining your external issues and giving you some ideas on how to go about it.

What should be considered?

External issues are about things outside of the company. I.e. things that you do not have direct control over. They can be anything that is relevant to the intended outcome or purpose of your management system. Here is a list of considerations to get you started, as suggested in ISO 9002:2016:

  • Economic factors, such as money exchange rates, inflation forecasts, and credit availability
  • Social factors, such as local unemployment rates, safety perception, and education levels
  • Political factors, such as political stability, local infrastructure, and international trade agreements
  • Technological factors, such as new sector technology, materials and equipment, and professional code of ethics
  • Market factors, such as competition, the company’s market share, similar products or services, trends, and supply chain relationships
  • Statutory and regulatory factors which affect the work environment, such as trade union and industry regulations

Techniques to identify external issues

SWOT analysis (Strength, Weakness, Opportunities, Threats) is a technique commonly used by companies at a strategic level and can be used here as a means to identify and document the organization’s external threats and opportunities. As was mentioned in a previous post, strengths and weaknesses address the internal issues.

PEST (Political, Economic, Social, and Technological) or PESTLE (PEST + Legal and Environmental) is another common analysis technique that considers the organization’s external issues.

Brainstorming is another simple technique that can be used as a means to capture and document external issues. So take everyone out for a plush lunch and make it interesting!

The key to getting good results in this process is to ensure that the right people are involved in the discussions. For example, top/senior management, department heads, and staff that have experience in key business activities, should be consulted.

Most management system standards do require this information to be recorded. It is certainly a good idea that this information is documented and maintained as you will need to review and update this information on an ongoing basis and it will play a key role as an input into other processes, and therefore will need to be referenced.

External issues: examples

Some examples of external issues could include:

  1. Our business operates in an area with a high crime rate
  2. Regulations in our industry change fast and its hard to keep up
  3. Our industry is highly competitive and it is hard to attract and retain skilled staff
  4. A neighboring country is on the verge of civil war
  5. Fast moving technological advancements in our industry require us to be continually upgrading our systems in order to stay competitive
  6. If there is an economic downturn, our industry is typically one of the first to be affected
  7. There is only one internet service provider in our area

Summary

Identifying external issues is a requirement in management systems that ensures that the organization is aware of current challenges that are external to the organization, and therefore has no, or limited direct control over.

It is important that these factors are identified and known as they provide input necessary for other processes, such as determining the appropriate scope of the management system, developing policies and objectives, and provides valuable information in the risk assessment process, among other things.

In my next post, I’ll be discussing the subject of ‘interested parties’.

Got questions or examples to share? Feel free to post them below.

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