The fact that individuals are spatially close to each other in the urban environment increases the potential number of encounters between them. Thus, theoretically speaking, the probability of interaction and social intercourse among people increases as they get closer to each other spatially. This reduction in spatial distance and propensity for larger networks can offer advantages in lower communication and transaction costs. However, there is also the possibility of entropy in a single (organizational) urban subsystem, characterized by reduced spatial distances between individuals that can lead to more toxic outcomes and the possibility of generalized deconstruction in an urban system as a whole. The current paper considers, through a theoretical model and secondary data analysis, how reductions in spatial distance between individuals in urban business organizations can lead to withdrawals of energy through toxic forms of entropic citizenship behavior, and lead to the development of toxic organizations. Such toxic organizations can ‘infect’ the urban system and lead to systematic entropic urban deconstruction. Practical, implications for management of the theoretical explanatory heuristic of toxic forms of organizational entropy and toxic organizations are briefly discussed in the paper.