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Clause 4.1

Understanding Context of Organization


Why “Context of Organization”?

The newly revised standard of ISO9001 and ISO14001 version 2015 have the common requirements named as “Context of organization” on the first clause of requirements which is clause 4.  

Purpose of this requirements

The main purpose of this clause is to determine:

  1. Organization profile (Adopted term from Baldrige Business Excellence 2016/2017: See below for detail)
  2. Issue or Threat face by organization
  3. The interested party of organization
  4. Scope and boundary of management system


Definition and Description

ISO9000:2015 defined:

Context of the Organization is “business environment“, “combination of internal and external factors and conditions that can have an effect on an organization's approach to its products, services and investments and interested Parties“

ISO14001:2015 (Annex A4.1) further decribed:

The intent of 4.1 is to provide a high-level, conceptual understanding of the important issues that can affect, either positively or negatively, the way the organization manages its environmental responsibilities. Issues are important topics for the organization, problems for debate and discussion or changing circumstances that affect the organization’s ability to achieve the intended outcomes it sets for its environmental management system.


ISO9001/14001:2015 Requirements

Both ISO9001 and ISO14001 have four requirements (sub-clause) which are:

4.1          Understanding the organization and its context

4.2          Understanding the needs and expectations of interested parties            

4.3          Determining the scope of the quality management system         

4.4          Quality management system and its processes 


BEF organization profile

The Organizational Profile is a snapshot of your organization, the KEY influences on HOW it operates, and your competitive environment.

Organizational Description: What are your key organizational characteristics

A. Organizational Environment

(1) Product Offerings What are your main product offerings (see the note on the next page)? What is the relative importance of each to your success? What mechanisms do you use to deliver your products?

(2) MISSION, VISION, and VALUES What are your stated MISSION, VISION, and VALUES? What are your organization’s CORE COMPETENCIES, and what is their relationship to your MISSION?


What is your WORKFORCE profile? What recent changes have you experienced in WORKFORCE composition or your WORKFORCE needs? What are your WORKFORCE or employee groups and SEGMENTS,

  • the educational requirements for different employee groups and SEGMENTS, and
  • the KEY drivers that engage them in achieving your MISSION and VISION?

What are your organized bargaining units (union representation)? What are your organization’s special health and safety requirements?

(4) Assets What are your major facilities, technologies, and equipment?

(5) Regulatory Requirements What is the regulatory environment under which you operate? What are the KEY applicable occupational health and safety regulations; accreditation, certification, or registration requirements; industry standards; and environmental, financial, and product regulations?

B. Organizational Relationships

(1) Organizational Structure What are your organizational structure and GOVERNANCE system? What are the reporting relationships among your GOVERNANCE board, SENIOR LEADERS, and parent organization, as appropriate?

(2) CUSTOMERS and STAKEHOLDERS What are your KEY market SEGMENTS, CUSTOMER groups, and STAKEHOLDER groups, as appropriate? What are their KEY requirements and expectations for your products, CUSTOMER support services, and operations? What are the differences in these requirements and expectations among market SEGMENTS, CUSTOMER groups, and STAKEHOLDER groups?


Recommended Best Practice

How to conform to the ISO9001/14001 requirements for clause 4.1


Understanding the organization and its context

The organization shall determine external and internal issues that are relevant to its purpose and that affect its ability to achieve the intended outcomes of its environmental/ quality management system. Such issues shall include environmental conditions being affected by or capable of affecting the organization.

Even there are many approach to address this requirement, one of the most common tools and technique is 4P (sometime 5P) matrix with PESTLE and/or SWOT


What is 4 P?





In marketing some organization add P – PROMOTION and PRICE



What is PESTLE?

P – Political

E – Economy

S – Social

T – Technology

L – Legislation

E – Environment



What is SWOT?

S – Strength

W – Weaknessess

O – Opportunities

T – Threat



The organization can determine the internal and external issues by developing the matrix


Internal Issues

External Issues





Product/ Service
































The Internal Issues may relate to 5P while the external issues may relate to PESTLE



R -Risk (Environmental/ Quality Concerned )

O - Opportunities

Action to address R & O











SOCIAL (Neigbourhood)















ENVIRONMENT (Surrounding)










R -Risk (Environmental Concerned )

O - Opportunities

Action to address R & O




























What is the minimum requirement accepted by EFR Certification?


The documented information shall be retained at minimum in management review minutes (Clause 9.3). At least 2 external and 1 internal issues shall be identified.


The external issues shall cover:


  • Customer of the organization product or services i.e. customer complaints
  • Legal Authority such as legal non compliance to business licencing authority


Internal issues shall cover internal complaints or rejections.




Edly Ramly


EFR Certification Director


Oct 2016


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