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The aim of this paper is to assess highly toxic leaders and dysfunctional organizations as presented via management consulting and executive coaching assignments.

The paper employs an action research approach via two participant observer case studies incorporating the DSM IV‐TR: Diagnostic and Statistical Manual of Mental Disorders.

The paper finds that the nexus of dysfunctional organizational systems may be located in “pre‐existing” leadership pathologies.

First, additional research will be needed to confirm and extend the findings of individual pathologies in leaders to dysfunctional organizational systems; second, a closer look is necessary at the applicability of the DSM IV‐TR to pathologies at the organizational level; third, due to the action research, case study approach utilized, there is somewhat limited generalizability; fourth, there are limitations re: the applicability of DSM IV‐TR as an assessment tool for management researchers due to the necessity of training in clinical psychology.

The importance of distinguishing personality disorders in leaders from toxic behaviors falling within a range of “normal pathology,” and the ability to assess individual leadership pathology within organizational systems via the clinically trained usage of the DSM IV‐TR; providing clinical assessment tools for reducing the number of misdiagnoses of leadership pathology in the workplace; encouraging collaboration between management and psychology researchers and practitioners.

This paper fills a gap in the toxic organizations research by identifying personality disorders in leaders and providing an action research agenda for incorporating the DSM IV‐TR as a means of extending the repertoire of assessment tools;