Step 1: Interpret the sentence meaning
- The phrase "categorically squelch insights from low-tiered employees" means completely suppress or stifle ideas from lower-level employees.
- Because of this, these managers risk negatively affecting creativity (i.e., smothering or diminishing it).
- Conversely, these managers tend to have a different attitude toward ideas from the top brass: they are likely to either accept unquestioningly or approve conditionally, or arbitrarily denounce them.

Step 2: Analyze the choices for Blank (i)
- A. fomenting - to promote or stimulate (contradicts "squelch")
- B. smothering - to suppress or suffocate (fits well with "squelch")
- C. sparking - to ignite or stimulate (contradicts "squelch")

Best fit for (i) is:
B. smothering

Step 3: Analyze the choices for Blank (ii)
- D. unquestioningly embrace - accept without doubt or question (makes sense as the opposite behavior to smothering low-tier ideas)
- E. arbitrarily denounce - randomly or without reason reject (contradicts the implied favor for top brass ideas)
- F. conditionally approve - accept but with conditions (less strong than "unquestioningly embrace")

Since the sentence says "these very same managers are more likely to...", it implies they are inclined to accept ideas flowing from the top management rather than rejecting them. Therefore:

Best fit for (ii) is:
D. unquestioningly embrace

Complete sentence:
"Managers who categorically squelch insights from low-tiered employees run the obvious hazard of smothering creativity; conversely, these very same managers are more likely to unquestioningly embrace any ideas that flow down from the top brass."