When you try to one of the following:
Creating a new role group or a new management role assignment.
Creating a new role assignment policy or modifying a built-in role assignment policy.
Creating a new Outlook Web App mailbox policy or modifying a built-in Outlook Web App mailbox policy.
Creating a new sharing policy or modifying a built-in sharing policy.
Creating a new retention policy or modifying a built-in retention policy.
You obtain a status message like this:
Updating Organization Settings
Please wait a moment while we update your organization settings...
And...
Error
Sorry! We couldn't update your organization settings. Please try again.
If you try to do with powershell:
It's due to the Tenant compression state: This is called dehydrated or tiny tenant mode. Think about the multitude of customers in Office 365 that have a basic tenant and do not need to make any customisations or configure a hybrid deployment. Those customers can run quite happily in the default dehydrated mode and parts of their configuration are compressed to save on space and resources. The dehydrated state is the default for a tenant.
This can be seen with the following command:
Get-OrganizationConfig | fl Identity, IsDehydrated
So, to resolve issue run the following:
Enable-OrganizationCustomization
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