CONTEXT OF THE ORGANIZATION: EXTERNAL & INTERNAL ISSUES

According to ISO/TS 9002:2016, information about external and internal issues can be found from
many sources, such as through internal documented information and meetings, in the national and
international press, websites, publications from national statistics offices and other government
departments, professional and technical publications, conferences and meetings with relevant
agencies, meetings with customers and relevant interested parties, and professional associations

Examples of External Issues

According to ISO 9001:2015, 4.1, Note 2, external issues arise from legal, technological,
competitive, market, cultural, social, and economic environments (local, regional, national, or
international). Examples of external issues are:
 Supply chain disruption
 Loss of a key supplier
 Technology shifts
 Competitive pressures
 Money exchange rates
 Oil price changes
 Increased regulations
 Patent expirations
 Trade union regulations
 Ventures into new markets
 Changes in financial markets
 Tightening of lending from banks
 Funding for non-profits
 Scarcity of raw materials
 Natural disasters
 Major road construction in service area
 International trade agreements
 Political stability

PESTEL Model
The PESTEL model is used as a framework for reviewing the business operating environment of an
organization, including legal compliance obligations. It can also be used to identify categories for
determining external issues.
Political factors are basically how the government intervenes in the economy. They include political
stability, public investments, local infrastructure, and international trade agreements.
Economic factors include economic growth, interest rates, exchange rates, and the inflation rate,
credit availability. These factors greatly affect how businesses operate and make decisions.
 Social factors include local unemployment rates, cultural aspects, health consciousness /safety
perception, education levels, population growth rate, age distribution, career attitudes, emphasis on
safety, public holidays & working days. 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, the rate of technological change, new sector technology, materials and
equipment, patent expirations, professional code of ethics. 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. Also, statutory and regulatory factors which affect the work environment such as trade
union regulations and regulations related to an industry.

Market factors such as competition, including the organization’s market share, similar products or
services, market leader trends, customer growth trends, market stability, supply chain relationships;

These above examples of external issues are covered in a team activity within our 1.5 day
onsite ISO 9001:2015 Requirements course.

Examples of Internal Issues

According to ISO 9001:2015, 4.1, Note 3, internal issues are related to values, culture, knowledge,
and performance. Examples are:
 Structure of organization
 Expected retirement of key personnel
 Availability of reliable, qualified workforce
 Capacity for product production; service delivery
 Addition of a second shift for increased sales
 Aging machinery or obsolete equipment
 Aging workforce and new hires
 Formation of a labor union
 Relocation of the company
 Business performance
 Poor customer satisfaction; complaints
 Improvement to processes
 Inefficient, ineffective processes
 Resilience of infrastructure
 Extent of outsourcing
 Contractual arrangements with customers
 Relationship with investors
 Service level agreements with customers
 Expiration of government funding
 Work stoppage
 Computer hacking
 Social media coverage
 Organizational culture and behavior
 Corporate governance
 Rules for decision making
 Lack of organization knowledge
 Cost of quality

1) overall performance of the organization;

2) resource factors, such as infrastructure (see ISO 9001:2015, 7.1.3), environment for the operation
of the processes (see ISO 9001:2015, 7.1.4), organizational knowledge (see ISO 9001:2015, 7.1.6);
3) human aspects such as competence of persons, organizational behavior and culture,
relationships with unions;
4) operational factors such as process or production and service provision capabilities, performance
of the quality management system, monitoring customer satisfaction;
5) factors in the governance of the organization, such as rules and procedures for decision making
or organizational structure.
At the strategic level, tools such as Strengths, Weaknesses, Opportunities and Threats analysis
(SWOT) and Political, Economic, Social, Technological, Legal, Environmental analysis (PESTLE)
can be used. A simple approach can be useful for organizations dependent on the size and
complexity of their operations, such as, brainstorming and asking “what if” questions.

McKinsey 7S Model
The McKinsey 7S Model is based on the theory that, for an organization to perform well, there are
seven elements that need to be aligned and mutually reinforcing.
The model can be used to understand how the organizational elements are interrelated and ensure
that the wider impact of changes made in one area is taken into consideration. It can also be used to
identify categories for determining internal business issues.
1. Strategy – Purpose of the business and the way the organization seeks to enhance its
competitive advantage.
2. Structure – Division of activities; integration and coordination mechanisms.
3. Systems – Formal procedures for measurement, reward, and resource allocation.
4. Shared Values – Beliefs and principles which guide decisions and behavior of management and
employees.
5. Skills – Organization’s core competencies and distinctive capabilities.
6. Staff – Organization’s human resources, demographic, educational, and attitudinal
characteristics.
7. Style – Typical behavior patterns of key groups, such as managers and other professionals.

The above examples of internal issues are covered in a team activity within our 1.5 day onsite ISO
9001:2015 Requirements course.

For external issues, you can use tools such as PESTLE (PEST) analysis.
External issues are the ones that are outside your organization that you cannot control, but
affects your organization. Hence you can only anticipate that change and act accordingly.
E.g. Change in technology- such as electric vehicles. If you are a battery manufacturer, it can
be a positive issue and can result in an opportunity for your organization.

PEST Analysis

P is for POLITICAL. The P in PEST encourages the organisation to consider the political issues that
can have a positive or negative affect on how the organisation works, so what could that include?
Well, the recent decision of the UK to exit the EU is a massive and (at the time of writing) a major
political event that could have significant effects on how an organisation operates. It will probably
affect trade relationships (for better or worse we don’t yet know!), it may well also affect the
organisations ability to recruit and employ non-UK citizens. Additionally, if the organisation receives
a lot of its income via projects funded by, say, the European Social Fund (ESF), then the Brexit
implications could well be severe. Other examples could include trade sanctions status. If the
organisation has significant trade interests with, say, Iran or Russia, it would certainly need to keep
in view the current nature of sanctions relevant to their operations which, at various points in time,
may even become illegal. There are also ongoing domestic political issues that affect organisations.
Public Sector bodies are always affected by current Government Policy, which sets both Public
Sector policy and provides (or doesn’t) funding.

E is for ECONOMIC. Economic factors affect virtually every organisation, but they aren’t the same
for everyone and the scale is different for everyone, so what are the common examples? Well, the
price of commodities is often a big issue. Oil prices on the world market have been depressed for
some time. For some companies (for example those directly involved in the extraction of oil from the
ground, and providing support for companies that do), the effects lately have been adverse and
significant. Rates of pay have been cut, operations have been scaled back and people have lost
their jobs. All these trends may of course be reversed as and when the oil price returns to a certain
value, but clearly the oil companies need to monitor this very carefully, as the entire viability of their
operation is reliant on that issue. However the fall in oil prices have not been bad for everyone.
Organisations that produce chemicals that are derived from oil have seen the fall in price work in
their favour – their costs have reduced. Transportation costs have also reduced as a consequence
of falling fuel prices. However it’s not all about the price of commodities. Other economic factors that
can affect the viability of the operation are trading conditions (often as a result of political issues), the
availability of alternative options for customers and the price of alternatives (cheap imports, for
example), or simply the liquidity of an organisation at a point in time and how much cash on hand it
has.

SOCIAL. Some organisations are affected significantly by social factors. Some products are
massively affected by social trends. What may be the pinnacle of fashion one week, may be the
least desirable thing to possess one month later (selfie sticks, shell suits, Gary Glitter CDs …). In
understanding social trends, it is clearly important that the organisation understands the things that
influence trends. For example, the ingredients used by TV chefs in their recipes significantly affect
demand for that ingredient almost overnight, while a food scare (processed meat, saturated fat in
fast foods) might affect consumer behaviour, for a time, in a very negative way. Obviously many
large fast food, beverage and cosmetics companies actively seek to affect, manipulate or even
dictate trends, and invest very heavily in doing it, so important a factor that it is. The demand for
other products and services can be very seasonable or weather dependent (ice cream, lawn
mowers, outdoor equipment …). This will obviously have an impact on production levels and also
recruitment, which itself may be very seasonal. Bear in mind that what may be out of fashion in one
market, may be the height of fashion in another (apparently in some countries they still LOVE Old
Spice!). Companies that provide products and support of a medical nature will be affected also by
world events such as outbreaks of diseases such as SARS or Ebola, so naturally they would need
contingency plans to be able to move quickly whenever the World Health Organisation puts up a red
flag.

TECHNOLOGICAL. Some companies are heavily impacted by technology, and will need to work
hard to stay up to date with developments. Technology has a habit of (very quickly) creating new
markets, drastically changing others and, at the same time, wiping others out in the blink of an eye.
On a less dramatic level organisations may simply keep an eye on technological advances to see if
better ways of working are being made possible (new machinery or ways of communicating, for
instance) or even offering more user friendly options for maintaining a management system! This
can include the use to a greater or lesser degree of cloud based storage systems, software and
dashboard applications to replace documented procedures, using tablets with integrated templates
to write up your audits and so on.
Anyway, I hope this post has given you some food and direction for your thought processes as you
face your transitions. Done correctly, it is a review process that can add significant value to the
efficiency of the organisation’s strategic processes.

Here are the most important Internal & External Issues for any Organization:

 Terminating employees without signed records is a legal issue.

 Child Labor- employing people less than 18 is a legal issue.
 Discrimination- employing with regards to gender, ethnicity or age is a legal issue.
 Sexual Harassment-tend to attract lots of media attention & will damage company’s
image and therefore must be strictly monitored with complaint boxes installed that are
accessible to the Human Resources/TOP management.
 Illegal Labor- allowing illegal labors/immigrants with falsified documents is a threat.
 Copyright & Patent-copying is the legal issue and can imply huge fines to the
competitor.
 Dissatisfied Customers-losing customers is a threat to the business.
 Environmental-not adhering to regulations is a legal issue and the govt. can sue the
company.
 GDP & Inflation rates-not revising the product costs and wages accordingly is a threat.
 Income tax-non payment of taxes is a big threat and it’s a legal issue.
 Internal Communication-not communicating the company’s missions and its
performance to all the workers is a threat.
 Employee Motivation-not recognizing employees achievements is a threat of losing
employees.
 Subcontractors-having less control over the end product is a threat.
 Economic Crisis-not diversifying the offerings maximizes the impact during product
crisis.
 External Communications-interaction with customers/public impacts the company's
image and therefore it demands review of the content well in prior before it is
communicated.
 Technology-not upgrading technology to the latest is a threat (maximize errors).
 Media-failing in advertising about the company in online portals, exhibitions is a threat.
 Research-failing in researching about competitors, their products and pricing is a threat.
 Demand-not monitoring the market demand of the product offered is a threat.
 Cultural Differences-peoples with different cultures doing business/working together is
a threat.
 Examples of relevant internal issues

• Organizational performance including financial, e.g. __new products__

• Resource factors, e.g. __IT capabilities, facility, location, ___________

• Human aspects, e.g. __competencies, culture, age, experience______

• Management-related, e.g. _organizational structure, corporate issues_

Examples of relevant external issues

• Economic issues, e.g. __exchange rates, inflation, credit availability___

• Social factors, e.g. __unemployment rate, public perception_________

• Political/legal, e.g. __regulatory, government stability, trade agreements

• Technological, e.g. __new materials, equipment; patent expirations___

• Competition, e.g. __market share, competitive advantage/disadvantage

Internal Issues, such as:

1. governance, organizational structure, roles and accountabilities;

2. policies, objectives and the strategies that are in place to achieve them;
3. the capabilities, understood in terms of resources, knowledge and competence (for
example capital, time, human resources, processes, systems and technologies);
4. information systems, information flows and decision-making processes (both formal and
informal);
5. introduction of new products, services, new tools, new software, new premises
and equipment;
6. relationships with, and perceptions and values of workers;
7. the culture in the organization (see A.5.1);
8. standards, guidelines and models adopted by the organization;
9. the form and extent of contractual relationships, including for example
outsourced activities;
10. working time arrangements;
11. changes in relation to any of the above.
Internal Issues – Thought-starters

·      Organizational performance, e.g. new product sales, financial performance overall

·      Resource factors – environment, infrastructure such as IT capabilities or lack

thereof, facility layout and space constraints, location with respect to customers and
suppliers, multi-site vs single

·      Human aspects e.g competence, culture, union relationships, age/experience,

languages

·      Management-related, e.g. authority related to corporate / parent company;

organizational structure; decision-making processes
 

External Issues – Thought-starters

·      Economic issues, e.g. exchange rates, inflation, credit availability

·      Social factors, e.g. local unemployment rate, educational levels, holidays, working
days, union actions, public perception

·      Political/legal, e.g. regulatory, legislation, government stability, international trade

agreements

·      Technological, e.g. new sector technology, materials, equipment; patent expirations;
market disruption

·      Competition, e.g. _market share, competitive advantage/disadvantage, market

growth rate
 ISO 45001:2018 Internal Auditor Course
This on-site 3.0-day “ISO 45001:2018 Internal Auditor” course explains the requirements of the ISO
45001:2018 occupational health and safety management system standard and conveys the
principles and practices of effective auditing.
The 2.0-day Requirements module covers every ISO 45001:2018 requirement. Class workouts and
team activities are provided at the end of each major clause to reinforce the application of the
requirements. The answer keys for these exercises are included in the student book.
The 1.0-day Auditing module covers the concepts, methods, and techniques in the ISO 19011:2018
Auditing Guidelines standard. Class workouts are included to better understand auditing planning,
opening meetings, and closing meetings. Exercises on audit checklists, interviewing, and writing
nonconformities are provided to help prepare students to conduct internal audits. The answer keys
for these exercises are included in the student book.

Learning Objectives
Upon completion of this course, students should be able to:
 Explain basic OH&S system concepts
 Understand the process approach
 Interpret ISO 45001:2018 requirements
 Understand the changes from OHSAS 18001:2007
 Identify the required documentation
 Understand internal auditor responsibilities
 Apply ISO 19011:2018 auditing guidelines
 Recognize audit principles and practices
 Conduct all the phases of an internal audit
 Prepare effective audit reports

What are the intended results of your quality management system”? Think: Quality, Cost, Speed
(Note: measurable objectives could come from some of these)

Reduce waste, less Faster on-boarding Faster service / OTD Improved profits
rework/scrap
Better product designs Work force flexibility Meet Regulations Easier to sell
Consistent customer Job stability, growth, Smooth new product First to market, bigger
experience satisfaction/morale intro, time to market market share
Improved incoming Clear roles, Customer loyalty (not Less unplanned O/T
parts, supplier quality communication shopping)
Capacity utilization Employee safety Fewer failed products Lower warranty costs

SAMPLE OF SWOT ANALYSIS

Sophia is a girl