Microsoft Azure Administrator Associate AZ-104 Practice Question

By creating a hierarchy of management groups that mirrors the organizational structure, you can assign each department's subscriptions to their respective management groups. Applying policies at a higher-level management group ensures that all child management groups and their subscriptions inherit these policies, providing consistent governance across the organization. This approach allows each department to manage its own resources within its subscriptions while adhering to the organization's policies.

Configuring resource groups and applying policies at that level affects resources within a single subscription and doesn't scale across multiple subscriptions. Assigning policies directly to each subscription is inefficient and hard to maintain, especially as the number of subscriptions grows. Merging all subscriptions into a single subscription doesn't meet the requirement of allowing departments to manage their own resources independently.