The following documentation demonstrates how to create a contact group in Outlook 2011 for Mac.
While entering contact information, a list will appear under the textfield for the contact you are entering. This list displays users for what you are typing, essentially working as a search tool.
*Note: While creating your contact group, you also have the ability to add users by clicking on the Contact Search button (located on the Home toolbar in the main Oulook window). To add a contact, search for the user, then right click and select Add to Group.