Sociopathy Wherever You May Find It
Here are some ways that sociopathy and psychopathy can manifest themselves in the workplace.
The Sociopathic/Psychopathic Corporation
Some have likened the corporation to a sociopath or psychopath - because a corporation has no conscience beyond that of the people in it, even though it has a legal status and rights on its own -- it has some of the status of a "person" in the eyes of the law, but no conscience of its own.
The Sociopathic/Psychopathic Manager
It seems that sociopaths and psychopaths are perfectly suited to advance through the ranks of a dysfunctional organization - because, according to theory, they possess all the right attributes: superficial charm, a willingness to advance at the expense of others, lack of appropriate guilt or remorse, manipulative tendencies, self-centered world view, etc.
These tendencies, in a healthy, balanced organization, should be quickly detected and weeded out.
The Sociopathic/Psychopathic Co-Worker
What about the co-worker who exhibits these personality traits, but for some reason hasn't risen through the ranks? Perhaps he or she is perfectly content to stay at low levels within the organization, perhaps due to reduced scrutiny in a role that is perceived as less crucial to an organization's smooth functioning and overall health.
A dysfunctional co-worker can still do a great deal of damage. Just because someone is not a leader or manager doesn't mean that their bad behavior won't cause deep and lasting damage -- and it doesn't reduce the organization's responsibility to detect and correct this kind of behavior.
Re: The Sociopathic/Psychopathic manager
You might be missing the most dangerous aspect.
Sociopaths, psychopaths and narcissists tend to be unusually driven. That means that they often have a mixed - and extreme - record of both outstanding competence and foolish brashness along with the superficial charm, gift of the gab, gift of getting in with the right people, manipulative character and intimidating behavior that they also exhibit. The criteria you would apply to ordinary people don't apply to them - the range of possible interpretation is too broad; an unforgiving assessment would damn them to eternity, a favorable assessment would highlight the genuine outstanding capability that they have quite possibly also demonstrated through their over-dimensioned motivation and drive, that in itself being a plus point in the balance - even making them appear to be the only candidate for a difficult position. (The Peters principle may also apply, and probably will, but that's another story.) I can't quote sources - this is a personal impression.
As an aside, a showcase example of what can happen when the worst comes to the worst and failure rages at every level is the Chernobyl disaster - in this context, the roles played by the staff - especially Dyatlov (possibly a narcissist? Seemed to admit emotional instability and compensation for lack of self-control in disciplinary matters, at least by implication, otherwise intimidated the operating staff into taking extremely stupid risks against their better judgment), Bryukhanov and Fomin (the three names to kick-start a Google search if interested) in the context of the Soviet system as portrayed by Grigori Medvedev (The Truth about Chernobyl, 1991) - not saying that his accounts were absolutely accurate (he made some factual errors, and Medvedev may himself have had an ax to grind), but the general scenario is very compelling, telling, and chilling - as similar could happen in any similarly internally corrupted and systematically dysfunctional organization that's grown beyond repair or reform, an extreme case of which was the Soviet Union.
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