What is the purpose of an Organizational Unit (OU) in AWS?

An Organizational Unit (OU) in AWS serves the primary purpose of grouping accounts for easier management within an AWS Organization. This structure allows organizations to implement governance and simplify the administration of multiple AWS accounts. By organizing accounts into OUs, you can apply service control policies (SCPs) to govern access and compliance requirements efficiently. This hierarchical design also supports management of multiple accounts at scale, enabling centralized billing, security, and policy management while maintaining flexibility and autonomy for individual accounts.

Using OUs streamlines organizational processes and enhances the capability to manage permissions and policies across various accounts based on different business needs, teams, or projects. This organization of accounts into groups reflects real-world business structures, making it easier to manage and apply controls appropriate to each group.