With Oracle Human Resources, you can define multilevel organization hierarchies, with a business group at the top of each hierarchy. When you define new organizations, they are automatically assigned to the business group associated with your current session. Each organization is part of a business group. The business group is usually the top box on an enterprise organization chart, as shown in below figure.
Below this level, you represent the groupings in which employees work, such as branches, departments, or sections, by means of internal organizations. To enable the assignment of employees to an internal organization, you classify the internal organization as an HR organization.
You can define external organizations in the same way as internal organizations, so that you can represent organizations that are not part of your enterprise (such as training vendors or tax offices). The major difference between internal and external organizations is that you cannot assign people to an external organization.