Re: P1 is reporting to P2 manager and both of p1 and p2 are in org unit O how do you do it in SAP? for ex if P1 is reporting to a P2 manager then how do you establish relationship between this two other than using relationship A002

If I am not mistaken, you can have relationship B012 ( Is managed ) set up at that org unit level.  Then, identify positions within that org using B003 ( Incorporat ) so the manger for those positions is inherited.