Approval organizations are used when generating an aviation part certificate. A part certification form which is issued by an approval organization certifies that the production or maintenance has been performed under this airworthiness authority regulation. Note that each authority can issue several approvals to a given organization for different purposes.
The approval organization type can be either maintenance or production. If it is used for maintenance certificates, you need to connect it to a maintenance organization. For production, there can be only one approval organization per site. For maintenance, there can be more than one approval organization per site.