What should you do when you report to a bad manager?
CareerJournal has some options here and they carry some risks.
My take: In most cases, the organization knows the manager has problems and is ignoring it until a crisis is produced. This is a bad practice that organizations need to address. It's unfair to the employees, harmful to the organization and even a drawback for the boss who may be correctable.
This is tied to the entire area of performance evaluation, which is often handled terribly.