**Core Concept**
The underlying principle being tested is the management of **sacrococcygeal teratomas** (SCTs), which are congenital tumors that arise from the coccyx. These tumors can be benign or malignant and require prompt treatment to prevent complications.

**Why the Correct Answer is Right**
The recommended treatment for sacrococcygeal teratomas, especially in newborns, is **surgical excision**. This approach aims to remove the tumor completely, including the coccyx, to prevent recurrence and malignant transformation.

**Why Each Wrong Option is Incorrect**
**Option A:** Incorrect because simply observing the tumor can lead to increased risk of malignancy and other complications.
**Option B:** Incorrect as chemotherapy is not the primary treatment for benign SCTs.
**Option C:** Incorrect because radiation therapy is not typically used for benign SCTs in newborns.

**Clinical Pearl / High-Yield Fact**
It's crucial to remember that sacrococcygeal teratomas can cause significant morbidity if not treated promptly, including **malignant transformation** and **obstructed labor** in female infants.

**Correct Answer:** D. Surgical excision.