My users are not able to create any groups in outlook, the tab is grayed out.
Solved
Office for Mac Group tab is grayed out
Best answer by mm2270
Are you talking about creating a contact list in Outlook? If so, have your or your users switched to the "new Outlook experience" UI? If yes, then guess what? Microsoft didn't seem to see fit to include creating Contact lists in the new Outlook experience. The reason stems from the fact that the new experience doesn't support the On my Mac folders that the older UI did, and contact lists in the Mac version of Outlook are stored in the local folders.
If they're still on the old experience, check to see if you've deployed a profile to them that force disables the On My Computer folders. If so, that's the likely culprit.
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