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    Question

    Junior traders at a firm notice a flaw in the

    company’s risk model but are afraid to tell the aggressive CEO because the firm is currently making record profits. They remain silent to avoid being seen as doomsayers. This reflects a barrier in _______
    A Downward Communication Correct Answer Incorrect Answer
    B Lateral Communication Correct Answer Incorrect Answer
    C Upward Communication Correct Answer Incorrect Answer
    D Semantic Precision Correct Answer Incorrect Answer
    E Written Communication Correct Answer Incorrect Answer

    Solution

    The scenario describes Upward Communication, which refers to the flow of information from subordinates (junior traders) to superiors (the CEO). In this case, the communication process is blocked by a psychological barrier of fear of consequences, preventing critical feedback about the risk model from reaching the leadership.  Upward communication is often blocked by "Filtering" or the "MUM Effect" (Keeping Silent about Bad News). Subordinates often withhold unpleasant information from superiors to protect their own careers or to avoid upsetting a powerful leader, which can lead to organizational disaster.

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