Organizations and applications in Nexus Lifecycle can be set up to mimic your company's "command and control" hierarchy. Each organization can be considered to correspond to a distinct business unit of the company.
The installation process will create a Root Organization for your instance of Nexus IQ Server. This is the top-most level of the organizational hierarchy. You can create policies that apply across all organizations and applications, at this level. All organizations and applications under the root level inherit these policies, by default.
To create business-unit-specific or department-specific policies that govern your applications in different development pipelines, you can create organizations at various levels of hierarchy to match your company's organizational structure. (insert link)
Refer Hierarchy and Inheritance.