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OLE, which stands for Object Linking and Embedding, is a technology developed by Microsoft that allows you to insert information from one application into another, creating a single "compound document". It lets you either embed an object, which copies the data into the new document, or link to it, which creates a reference to the original file. Linking ensures that if the original file is updated, all linked documents will also reflect the changes.

How OLE works

Embedding: When you embed an object, like a spreadsheet chart, into a Word document, the actual data from the spreadsheet is copied and becomes part of the Word file. If you edit the embedded object, the original spreadsheet file is not affected.

Linking: If you link to the spreadsheet, the Word document only contains a pointer to the original file. When you edit the original spreadsheet, the Word document will show the updated information the next time it is opened.

In-place activation: This allows you to edit an embedded object without leaving the container document. For example, a mini-version of Excel will appear within the Word window so you can edit the spreadsheet data.