The hierarchical address book (HAB) is a feature that enables end users to browse for recipients in their Exchange organization using an organizational hierarchy. Until now, HAB was only available in Microsoft Exchange Server 2013 and not Office 365. HAB can be customized to map to an organization’s specific business structure. Effectively, you can use HAB to provide users with the ability to find internal recipients more efficiently.
More information on HAB, including how to configure it, can be found here.