Because no employee wants to be associated with bad news in the eyes of a superior, information about serious problems at lower levels is progressively softened and distorted as it goes up each step in the management hierarchy. the chief executive is therefore, less well informed about problems at lower levels than are his or her subordinates at those levels.
The conclusion drawn above is based on the assumption that
a) problems should be solved at levels in the management hierarchy at which they occur
b) employees should be rewarded for accurately reporting problems to their superiors
c) problems-solving ability is more important at higher levels than it is at lower levels of the management hierarchy
d) chief executives obtain information about problems at lower levels from the no source other than their subordinates
e) some employees are more are concerned about truth than about the way they are perceived by their superiors
How to approach above question by e-gmat
How to make logical structure and then pre-think?
The first step in the process is understanding the passage or drawing a logical structure. The argument structure is of the form A->B->C. Let's draw it:
No employee wants to be associated with bad news in the eyes of a superior ------------>>>> information about serious problems at lower levels is progressively softened and distorted as it goes up each step in the management hierarchy ----------------->>>>>>> the chief executive is less well informed about problems at lower levels than are his or her subordinates at those levels.
Does the argument make sense? It says that employees don't want to be associated with bad news; so, they distort the bad news when they report to higher levels. Now, this means that chief executive would be less well informed about problems than his juniors (this is because the distortion in information increase as the information travels up the heirarchy).
Now, in these kind of causal arguments A->B: we need to consider all the statements which could break this relationship and negation of such statements would be assumption (since our conclusion is that the relation A->B holds, so anything which prevents such relationship, we assume it not to be true)
Now, if you can pre-think an assumption in this case, do it; if not, just move on to the options. However, for understanding purpose, let's see how prethinking can be done here:
Is there a way chief executive knows as well as his juniors even though information is distorted as it travels up?
The answer could be that if he has some other source of information than his immediate juniors. In this case, he'll probably know as well or better than his juniors.
Therefore the assumption for the conclusion to hold, would be that Chief executive has no other source of information than his juniors.
This is what is expressed by option D, which is the correct choice.
Hope this helps