Luckily, starting with iOS 6, I believe, there is an easy way to prevent this Suggested Contacts list from syncing from Outlook/Exchange to your iPhone or iPad.
On your iPhone, follow these steps...
- Open the Contacts app (or go to Phone app and then switch to Contacts area).
- Click the "Groups" button in the upper left corner of the screen.
- You'll see a list of different contact groups so you want to un-check the "Suggested Contacts" group.
- Click "Done"!
Now it may take a few minutes for everything to sync again but this will remove all of the Suggested Contacts from the iPhone, leaving you with just your actual list of contacts from Outlook.