What are Azure management groups?

If your organization has many Azure subscriptions, you might need a way to efficiently manage access, policies, and compliance for those subscriptions. Management groups provide a governance scope above subscriptions. When you organize subscriptions into management groups, the governance conditions that you apply cascade by inheritance to all associated subscriptions.

Management groups give you enterprise-grade management at scale, no matter what type of subscriptions you might have. However, all subscriptions within a single management group must trust the same Microsoft Entra tenant.

For example, you can apply a policy to a management group that limits the regions available for virtual machine (VM) creation. This policy would be applied to all nested management groups, subscriptions, and resources to allow VM creation only in authorized regions.

Hierarchy of management groups and subscriptions

You can build a flexible structure of management groups and subscriptions to organize your resources into a hierarchy for unified policy and access management. The following diagram shows an example of creating a hierarchy for governance by using management groups.

You can create a hierarchy that applies a policy, for example, that limits VM locations to the West US region in the management group called Corp. This policy will inherit all the Enterprise Agreement (EA) subscriptions that are descendants of that management group and will apply to all VMs under those subscriptions. The resource or subscription owner can't alter this security policy, to allow for improved governance.

Another scenario where you would use management groups is to provide user access to multiple subscriptions. By moving multiple subscriptions under a management group, you can create one Azure role assignment on the management group. The role will inherit that access to all the subscriptions. One assignment on the management group can enable users to have access to everything they need, instead of scripting Azure role-based access control (RBAC) over different subscriptions.

Important facts about management groups

• A single directory can support 10,000 management groups.

• A management group tree can support up to six levels of depth.

  This limit doesn't include the root level or the subscription level.

• Each management group and subscription can support only one parent.

• Each management group can have many children.

• All subscriptions and management groups are within a single hierarchy in each directory. For more information, see Important facts about the root management group later in this article.

Root management group for each directory

Each directory has a single top-level management group called the root management group. The root management group is built into the hierarchy to have all management groups and subscriptions fold up to it.

The root management group allows for the application of global policies and Azure role assignments at the directory level. Initially, the Elevate access to manage all Azure subscriptions and management groups to the User Access Administrator role of this root group. After elevating access, the administrator can assign any Azure role to other directory users or groups to manage the hierarchy. As an administrator, you can assign your account as the owner of the root management group.

Important facts about the root management group

• By default, the root management group's display name is Tenant root group, and it operates itself as a management group. The ID is the same value as the Microsoft Entra tenant ID.
• To change the display name, your account must have the Owner or Contributor role on the root management group. For more information, see Change the name of a management group.
• The root management group can't be moved or deleted, unlike other management groups.
• All subscriptions and management groups fold up into one root management group within the directory.
  • All resources in the directory fold up to the root management group for global management.
  • New subscriptions automatically default to the root management group when they're created.
• All Azure customers can see the root management group, but not all customers have access to manage that root management group.
  • Everyone who has access to a subscription can see the context of where that subscription is in the hierarchy.
  • No one has default access to the root management group. Microsoft Entra Global Administrators are the only users who can elevate themselves to gain access. After they have access to the root management group, they can assign any Azure role to other users to manage the group.

Initial setup of management groups

When any user starts using management groups, an initial setup process happens. The first step is creation of the root management group in the directory. All existing subscriptions that exist in the directory then become children of the root management group.

The reason for this process is to make sure there's only one management group hierarchy within a directory. The single hierarchy within the directory allows administrative customers to apply global access and policies that other customers within the directory can't bypass.

Anything assigned on the root applies to the entire hierarchy. That is, it applies to all management groups, subscriptions, resource groups, and resources within that Microsoft Entra tenant.

Management group access

Azure management groups support Azure RBAC for all resource access and role definitions. Child resources that exist in the hierarchy inherit these permissions. Any Azure role can be assigned to a management group that will inherit down the hierarchy to the resources.

For example, you can assign the Azure role VM Contributor to a management group. This role has no action on the management group but will inherit to all VMs under that management group.

The following chart shows the list of roles and the supported actions on management groups.

*: These roles allow users to perform the specified actions only on the management group scope.

**: Role assignments on the root management group aren't required to move a subscription or a management group to and from it.

For details on moving items within the hierarchy, see Manage your resources with management groups.

Azure custom role definition and assignment

You can define a management group as an assignable scope in an Azure custom role definition. The Azure custom role will then be available for assignment on that management group and any management group, subscription, resource group, or resource under it. The custom role will inherit down the hierarchy like any built-in role.

For information about the limitations with custom roles and management groups, see Limitations later in this article.

Example definition

Defining and creating a custom role doesn't change with the inclusion of management groups. Use the full path to define the management group: /providers/Microsoft.Management/managementgroups/{_groupId_}.

Use the management group's ID and not the management group's display name. This common error happens because both are custom-defined fields in creating a management group.

...
{
  "Name": "MG Test Custom Role",
  "Id": "id",
  "IsCustom": true,
  "Description": "This role provides members understand custom roles.",
  "Actions": [
    "Microsoft.Management/managementGroups/delete",
    "Microsoft.Management/managementGroups/read",
    "Microsoft.Management/managementGroups/write",
    "Microsoft.Management/managementGroups/subscriptions/delete",
    "Microsoft.Management/managementGroups/subscriptions/write",
    "Microsoft.resources/subscriptions/read",
    "Microsoft.Authorization/policyAssignments/*",
    "Microsoft.Authorization/policyDefinitions/*",
    "Microsoft.Authorization/policySetDefinitions/*",
    "Microsoft.PolicyInsights/*",
    "Microsoft.Authorization/roleAssignments/*",
    "Microsoft.Authorization/roledefinitions/*"
  ],
  "NotActions": [],
  "DataActions": [],
  "NotDataActions": [],
  "AssignableScopes": [
        "/providers/microsoft.management/managementGroups/ContosoCorporate"
  ]
}
...

Issues with breaking the role definition and assignment hierarchy path

Role definitions are assignable scopes anywhere within the management group hierarchy. A role definition can be on a parent management group, whereas the actual role assignment exists on the child subscription. Because there's a relationship between the two items, you'll receive an error if you try to separate the assignment from its definition.

For example, consider the following example of a small section of a hierarchy.

Assume that a custom role is defined on the sandbox management group. That custom role is then assigned on the two sandbox subscriptions.

If you try to move one of those subscriptions to be a child of the Corp management group, you'll break the path from subscription role assignment to the role definition for the sandbox management group. In this scenario, you'll receive an error that says the move isn't allowed because it will break this relationship.

To fix this scenario, you have these options:

• Remove the role assignment from the subscription before moving the subscription to a new parent management group.
• Add the subscription to the role definition's assignable scope.
• Change the assignable scope within the role definition. In this example, you can update the assignable scopes from the sandbox management group to the root management group so that both branches of the hierarchy can reach the definition.
• Create another custom role that's defined in the other branch. This new role also requires you to change the role on the subscription.

Limitations

There are limitations to using custom roles on management groups:

• You can define only one management group in the assignable scopes of a new role. This limitation is in place to reduce the number of situations where role definitions and role assignments are disconnected. This kind of situation happens when a subscription or management group with a role assignment moves to a different parent that doesn't have the role definition.
• Custom roles with DataActions can't be assigned at the management group scope. For more information, see Custom role limits.
• Azure Resource Manager doesn't validate the management group's existence in the role definition's assignable scope. If there's a typo or an incorrect management group ID, the role definition is still created.

Moving management groups and subscriptions

To move a management group or subscription to be a child of another management group, you need:

• Management group write permissions and role assignment write permissions on the child subscription or management group.
  • Built-in role example: Owner
• Management group write access on the target parent management group.
  • Built-in role example: Owner, Contributor, Management Group Contributor
• Management group write access on the existing parent management group.
  • Built-in role example: Owner, Contributor, Management Group Contributor

There's an exception: if the target or the existing parent management group is the root management group, the permission requirements don't apply. Because the root management group is the default landing spot for all new management groups and subscriptions, you don't need permissions on it to move an item.

If the Owner role on the subscription is inherited from the current management group, your move targets are limited. You can move the subscription only to another management group where you have the Owner role. You can't move the subscription to a management group where you're only a Contributor because you would lose ownership of the subscription. If you're directly assigned to the Owner role for the subscription, you can move it to any management group where you have the Contributor role.

Auditing management groups by using activity logs

Management groups are supported in Azure Monitor activity logs. You can query all events that happen to a management group in the same central location as other Azure resources. For example, you can see all role assignments or policy assignment changes made to a particular management group.

When you want to query on management groups outside the Azure portal, the target scope for management groups looks like "/providers/Microsoft.Management/managementGroups/{management-group-id}".

Related content

To learn more about management groups, see:

• Create management groups to organize Azure resources
• Change, delete, or manage your management groups
• Protect your resource hierarchy