The answer is to configure the Azure AD Group settings under the Group creation settings option. This is correct because the Azure AD Groups blade contains a dedicated setting that allows administrators to restrict Microsoft 365 group creation to specific users by designating a security group whose members are the only ones permitted to create groups. To meet the requirement of limiting creation to the IT department, the administrator would first ensure those users are placed into a security group (filtered by the department attribute) and then select that group in the creation settings. On the MS-102 exam, this scenario tests your knowledge of Azure AD governance and delegated administration, often appearing as a distractor against PowerShell or licensing-based solutions. A common trap is assuming this requires Azure AD Premium P2 or a conditional access policy, but the setting is available in the basic Azure AD free tier. Memory tip: think “Groups control Groups” — the Group settings blade is where you lock down group creation to a specific security group.
MS-102 Deploy and manage a Microsoft 365 tenant Practice Question
This MS-102 practice question tests your understanding of deploy and manage a microsoft 365 tenant. This is a configuration task: choose the command set that satisfies every stated requirement. Small differences — like 'secret' vs 'password' or 'transport input ssh' vs 'all' — change whether the answer is correct. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
An administrator wants to restrict which users in the organization can create Microsoft 365 groups. The requirement is that only members of the IT department (identified by the department attribute in Azure AD) should be able to create groups. Which configuration should the administrator use?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Azure AD > Groups > Group settings > Group creation settings.
Option A is correct because the Azure AD 'Group settings' blade includes a 'Group creation settings' option that allows administrators to restrict group creation to specific security groups. By configuring this setting, the administrator can limit group creation to only members of the IT department, identified by the department attribute in Azure AD, by placing those users into a designated security group.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✓
Azure AD > Groups > Group settings > Group creation settings.
Why this is correct
This setting allows you to restrict group creation to specific security groups.
Related concept
Read the scenario before looking for a memorised answer.
✗
Azure AD Identity Governance > Access reviews.
Why it's wrong here
Access reviews are for reviewing existing group memberships, not for controlling who can create groups.
✗
Azure AD > Groups > Naming policy.
Why it's wrong here
Naming policy defines the naming convention for groups, not who can create them.
✗
Microsoft 365 admin center > Groups > Add group.
Why it's wrong here
This is a manual creation action, not a configuration to restrict creation.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse the 'Naming policy' (which controls group names) with the 'Group creation settings' (which controls who can create groups), or they mistakenly think that Access Reviews can enforce creation restrictions when it only reviews existing access.
Detailed technical explanation
How to think about this question
Under the hood, the 'Group creation settings' option in Azure AD uses a policy stored in the directory's GroupSettings object, specifically the 'GroupCreationAllowedGroupId' setting. When configured, only members of the specified security group can create Microsoft 365 groups, and the setting applies to all group creation methods including Outlook, Teams, and SharePoint. This is enforced at the Azure AD level, so even PowerShell or Graph API calls from non-members will fail with an authorization error.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A company's IT admin needs to give a contractor read-only access to production logs without sharing account credentials. Using role-based access control (RBAC) and temporary scoped permissions — not a permanent shared password — is the correct pattern. Questions like this test whether you can apply least-privilege access across cloud identity services.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this MS-102 question in full detail.
Deploy and manage a Microsoft 365 tenant — This question tests Deploy and manage a Microsoft 365 tenant — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Azure AD > Groups > Group settings > Group creation settings. — Option A is correct because the Azure AD 'Group settings' blade includes a 'Group creation settings' option that allows administrators to restrict group creation to specific security groups. By configuring this setting, the administrator can limit group creation to only members of the IT department, identified by the department attribute in Azure AD, by placing those users into a designated security group.
What should I do if I get this MS-102 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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