Abstract
This study provides a unique perspective on the forces at play in decision-making at the top level of organisations. This study extends research in the area of organisational decision-making by examining managerial goal conflict when confronted with status anxiety. We also examine the multi-level effects of status anxiety by examining the attitudes and reactions of investors in such situations. Using market options volatility of Arthur Anderson clients throughout its quick collapse, we analyse the severing of partnerships and the investor anxiety and company performance that accompanied these decisions. Our findings suggest senior executive compensation is a driver for decision-making in situations of high-status anxiety. In addition, investors are not influenced by these status concerns either before or after the decision to discontinue an exchange partner relationship. This finding highlights the importance of continued research in the area of customer and investor behaviour as it relates to corporate social responsibility.