Use the Select and Link button to define the hierarchical relationship between two objects by linking them as child and parent.

You link from the currently selected object (child) to any other object (parent).

You can link an object to a closed group. When you do, the object becomes a child of the group parent rather than any member of the group. The entire group flashes to show that you've linked to the group.

A child inherits the transformations (move, rotate, scale) applied to the parent, but the child's transformations have no effect on the parent. If you want the child not to inherit the transforms, use the Link Inheritance (Selected) Utility or use the controls found in Link Info in the Hierarchy panel.

You can also create hierarchical linkages using Schematic View. Use the Connect button on the Schematic View toolbar to create hierarchical linkages between nodes.