A company wants to group several subscriptions for Finance, HR, and Engineering so that the same governance settings can be applied above the subscription level. What should the administrator create?

A resource group

A resource group is a container for Azure resources such as virtual machines, storage accounts, and databases within a single subscription. It helps organize and manage resources that share a lifecycle, but it cannot group multiple subscriptions or provide governance inheritance across subscriptions.

A tag

Tags are metadata key-value pairs used to categorize resources, such as by department or cost center. They are useful for reporting and filtering, but they do not create a hierarchy and cannot apply governance settings above the subscription level.

A resource lock

A resource lock prevents accidental deletion or modification of a specific resource or resource group, depending on where it is applied. It is a protection mechanism, not an organizational structure, and it does not group subscriptions or enable inherited governance across them.

What does this AZ-104 question test?

Read the scenario before looking for a memorised answer.

What is the correct answer to this question?

The correct answer is: A management group — A management group is the right choice because it sits above subscriptions in Azure's governance hierarchy. By placing Finance, HR, and Engineering subscriptions under a management group, the administrator can apply policy, role assignments, and other governance controls once and have those settings inherit to all child subscriptions. This is the standard Azure feature for organizing multiple subscriptions for centralized governance. Why others are wrong: Resource groups are limited to resources within a single subscription and do not organize subscriptions. Tags add classification metadata but do not provide hierarchy or inheritance. Resource locks protect resources from changes, but they do not organize subscriptions or serve as a governance boundary.

What should I do if I get this AZ-104 question wrong?

Then try more questions from the same exam bank and focus on understanding why the wrong options are tempting.