Luz Diaz, CEO of MaxPlan, realizes that she needs to formally communicate to her division vice presidents that the board of directors has increased the firm's profit expectations by 10 percent, and that any vice president whose division underperforms this target will be replaced. What do you think is the best way for Luz to officially communicate this information to her vice presidents?
A)In a downward fashion, via formal memo, to convey expectations and outcomes.
B)In an upward fashion, via formal memo, to maintain positive morale.
C)In a horizontal fashion, via formal memo, to maintain equity among the vice presidents.
D)By the grapevine (informal means)to maintain esprit de corps.
E)By informal conversation, so as to not commit expectations in writing.

Question

Quizplus · Accepted Answer

The best way to communicate this important information is in a downward fashion, via formal memo. This will ensure that all vice presidents are aware of the new expectations and the consequences for underperformance. A formal memo also provides a written record of the information, which can be referred to in the future if needed. This approach shows that the CEO is serious about the firm's goals and establishes accountability among the vice presidents.

Luz Diaz, CEO of MaxPlan, Realizes That She Needs to Formally