Purchasing Organization refers to the organizational structure in SAP that is responsible for procurement of materials. The Purchasing Organization is the top-most organizational element in MM, and this can take any one of three forms such as

(1) Cross-plant purchasing organizations (catering to more than one plant but within the same Company Code),
(2) Plant-specific purchasing organizations (with a 1:1 relationship with the plant), and
(3) Cross-company code purchasing organizations (catering to more than one Company Code).
Entrusted with the activity of negotiating the price, delivery conditions, etc., of materials from vendors, the Purchasing Organization can further be subdivided into purchasing groups.

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