How to create groups from Organisations:

Add your group types to “Organisation Type Customisation” which can be found via Set Up & More > System Configuration

Then make sure that your Organisation records are updated and the Organisation types are populated.

Go to Reporting and create a Business Report for each of your Organisation types: select “Business Type” equals “Org Type name” e.g. Business Type equals Suppliers.
Make sure that the spelling of each Business Type in the report is exactly the same as is listed in your Organisation Type Customisation page. Run the report.
Once the report has run go back into Reporting > Business Reports and you can create the report into a group. The linked Contacts from the report will then be put into the group (you can add to either new or existing group).

You can then view these groups via Contacts > Groups