Explanation
Internal factors are, for example, your culture, staff, knowledge, machinery and financial room. External factors include legislation, the market, technology, climate and competition. The aim is to understand what your management system needs to take into account to reach its objectives.
You record the context in an analysis, often with tools such as SWOT or PESTEL, and review it regularly, for example at the management review or after major changes. The result feeds the scope, the risks and opportunities and the objectives of your management system.
The context is the foundation of the system: why does it exist and what should it focus on? It differs from interested parties. They are part of the context, with their own requirements and expectations that you map separately and some of which become binding for you.
Example from practice
A transport company notes stricter client requirements and rising fuel costs as external factors, and an ageing driver workforce as an internal factor. These points feed into the objectives and the risk register.
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