At its most basic, the context of an organisation is an in-depth review of a business entity which entails its structure, strengths and weaknesses, interested parties, and performance expectations. Establishing context is central to creating policies and procedures that return results and drive continual improvement. Understanding context provides a solid foundation for Health and Safety and Quality Management Systems, and is a requirement in all International Standards following the Annex SL.
Breaking Down the Basics of Context
Annex SL is a standard intended to give high-level structure systems a common language and direction. It evens the playing field and ensures each system delivers the information today’s organisations need. This includes information on organisation structure and how different elements impact – and are impacted by – policies and procedures. Establishing context is essential to structuring systems and a requirement of:
- ISO 9001 compliance
- ISO 45001 compliance
- ISO 14001 compliance
- ISO 27001 compliance
It helps create a bigger picture of an entity, so decision makers see problems “in context” and don’t get lost in the details. This encourages solutions on the macro level that work for the organisation as a whole. ISO 27001 systems can use context to determine the most effective security measures the company has available. ISO 45001 systems can use context to create policies that keep employees safe without slowing production. ISO 9001 systems use context to ensure all the pieces involved in Quality Management Systems promote benefits without creating new roadblocks.
Determining Internal and External Influences
Organisations can almost always improve performance and increase productivity. The opposite is true as well. Solutions to problems can become problematic when decision makers don’t see beyond themselves. All entities deal with external influences — elements beyond their control. The success of a business depends largely on identifying the needs of its clients and the resources available. This takes an understanding of the market as a whole. What social factors are at play? How have economic factors changed things? What role will politics and regulations play in how a company processes orders? These external factors change on regular basis. It’s important for management to encourage periodic reviews to keep tabs on an organisation’s opportunities — and risks.
Other external factors include:
- local infrastructure
- public perception
- credit availability
- market stability
- industry developments
- union relations
Internal influences can be just as volatile. Losing key employees, gaining new partnerships, and changes to corporate culture represent just a few ways an entity’s key strengths and weaknesses can change.
Other internal factors include:
- monitoring systems
- rules and procedures
- improved training programs
- overall performance
These influences determine which policies will work best for a business and which practices are viable for meeting regulation and certification requirements. When combined with the expectations of interested parties, they pave the road to a comprehensive management system for any organisation striving to gain a competitive advantage.
Identifying Interested Parties and Their Expectations
Annex SL calls for identifying “interested parties that are relevant to the management system” of an organisation, but who is relevant? Are shareholders relevant? Employees? What about the competition? Relevant interested parties include any group or individual with requirements for continued interaction with an organisation. Clients need to have their contract terms met, or they will hire a different company. Employees need to be paid. Local emergency responders need a plan in order to respond to fires and other hazards. Insurance companies need an entity to maintain certain standards to provide coverage. Organisations should define each interested party in a way that indicates what the party expects from your organisation.
Using SWOT to Evaluate the Context of an Organisation
Running a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis of an organisation helps create a comprehensive understanding of context. SWOT is often used as a starting point for expanding business, but it’s equally helpful in pinpointing other issues, such as those involved in compliance. Business leaders sometimes conduct SWOT analysis on themselves or top employees to identify what skills they bring to the table and which areas require further training. However, it is a tool used on organisations of all sizes. Alternatives include Political, Economic, Social, Technological, Legal, Environmental (PESTLE); Strengths, Opportunities, Aspirations and Result (SOAR); and Situation, Core competencies, Obstacles, Prospects and Expectations (SCOPE). Each analysis method offers its own unique benefits. For instance, SOAR is often used by organisations seeking to increase employee engagement or encourage creative solutions.
The important thing for any organisation to remember when using any method for organisational context is to look for specifics. Reports should include figures, not generalities. If a business is offering a product at a great value, there should be comparisons to other companies and their price points. With those details, it’s easier to tell whether it’s worth spending the resources needed to consider raising prices. Strengths, weaknesses, opportunities and threats should be listed in order of importance. This makes it easy to determine right away which changes can make the biggest impact. It might be necessary to use SWOT to analyse multiple processes and departments before assessing the organisation as a whole. The end result is a collection of information capable of pointing decision makers quickly in the right directions. They know which policies are working, what needs work and acts as a friendly reminder of their regulatory obligations. In this way, putting in extra time to determine a thorough understanding of an organisation’s context creates a sturdy foundation for meeting relevant standards and gaining a competitive advantage.