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Answer (D) is correct . In these circumstances, the problem should be discussed with the immediate superior unless (s)he is involved. In that case initial presentation should be to the next higher managerial level. If the problem is not satisfactorily resolved after initial presentation, the question should be submitted to the next higher level.

Answer (A) is incorrect because This course of action would be appropriate only for the chief executive officer or for his/her immediate subordinate when the CEO is involved in the conflict.
Answer (B) is incorrect because The proper action would be to present the matter to the next higher managerial level.
Answer (C) is incorrect because Such action is inappropriate unless legally prescribed.