Founded THINX’s revolutionary product provides a healthy and

Founded in 2011, THINX is the world’s first
manufacturer of the period panty, committed to the social mission of women’s
empowerment. In 2017, the organization made international headlines on account
of its toxic leadership and workplace culture (THINX, 2018; Tokumitsu, 2017). The
purpose of this essay is to assess the effectiveness of this socially-focused
organization through an analysis of its leadership and culture.  The paper is organized as follows: First, the
social organization shall be introduced and a commitment to its social mission,
explained. Second the organization’s corporate culture and leadership issues
shall be described. Third, the relevant organizational behavior theories shall
be explained. Following this, THINX’s corporate culture and leadership will be
assessed in accordance with the presented theories. The paper shall conclude
with a list of recommendations for THINX to improve its organizational
leadership and culture.  THINX revolutionized the feminine
hygiene industry with the creation of the period panty. The company
manufactures antibacterial, highly permeable, washable, organic period
underwear (THINX, 2018;
Tokumitsu, 2017). Since its launch, the brand has received international
media attention for its commitment to social change for women (THINX, 2018).  THINX seeks to further its social mission in
three main ways. First, THINX’s revolutionary product provides a healthy and
environmental friendly alternative for women (THINX, 2018; Johnson, 2015).
Second, through its marketing and advertisement strategy, the company seeks to
break the taboo about publicly speaking about menstruation (Coughlin, 2015).
Third, to further its espoused values of accessibility for all, the
organization donates a portion of its profits to AFRIPads, a social enterprise
that provides low-cost reusable pads to low-income women in Kampala, Uganda (THINX,
2018).  THINX recently made headlines for toxic
organizational leadership and corporate culture, contradicting these values
(George-Parkin, 2017; Tokumitsu, 2017). The next section will explain relevant
organizational behavioral theories. THINX’s corporate culture and leadership
will be assessed in accordance with these theories. LEADERSHIP – THEORY The organization’s leadership
style shall be analyzed based on transformational and transactional leadership
lenses. The foundational elements of the transformational-transactional
leadership theory were first coined by Burns (1978, as cited in Judge and
Piccolo, 2004). He stated that transactional
leaders incentivize followers to complete certain responsibilities or tasks, in
exchange for a specific, object or reward. Transactional leaders are task-based
and seek to work within the organization’s existing structure and culture. Transformational
leaders seek to psychologically empower their followers, beyond the specific
responsibility or task at hand. Bass (1985, cited in Bass and Avolio, 1993)
stated that a transformational leadership style motivates employees to look
beyond short-term goals, towards the higher purpose of the organization. Avolio,
Waldman and Yammarino (1991) proposed four main characteristics of
transformational leadership:  1)    Idealized influence refers to
incumbents being moved and inspired by the qualities and characteristics of the
leader. This results in followers often looking up to the leader, and seeing
them as a role model. 2)    Inspirational motivation refers to
the ability of the leader to create a mission and vision inspiring its
followers towards achieving that mission and vision. 3)    Intellectual stimulation refers to
the ability of the leader to challenge the status quo and the traditional way
of doing things. In this respect, the leader is able to inspire and motivate
the team to think of innovative and novel approaches to address problems and
devise solutions. 4)    Individualized consideration
refers to the ability of the leader to cultivate, nurture and grow the skillset
of each individual follower.  LEADERSHIP – ANALYSIS Chief Executive Officer, Miki Agrawal failed to
display the four critical characteristics of a transformational leader. She was
unsuccessful in empowering her employees through idealized influence (Avolio,
Waldman and Yammarino, 1991). Her employees did not see her as a role model,
and did not have respect for her. Reviews by former employees on the Glassdoor
website stated that Miki Agrawal was a “bully”, “a time bomb and a liability”,
a “loose cannon” (cited in George-Parkin, 2017; Malone, 2017).  In terms of inspirational motivation, it must
be acknowledged that Miki Agrawal was able to build a company with a strong
socially-focused mission and vision that inspired both customers and employees
alike. Even former employees that spoke out against Agrawal, said that they
were still inspired and committed to furthering the mission and vision of the
company (Avolio, Waldman and Yammarino, 1991; Malone, 2017).  Miki created a corporate culture where intellectual
stimulation was frowned upon. Employees felt uncomfortable introducing new
ideas, and viewpoints that differed from that of the leaders (Avolio, Waldman
and Yammarino, 1991). There were instances where the team proposed different
branding visions for the company, and Miki threatened to have them fired if the
employees did not follow her plan. When the team suggested a new line of
products for plus size women, Miki mocked the idea with fat-shaming comments (Malone,
2017).   Employees were not given individualized consideration
by Miki. The CEO failed to establish a relationship and connection with each individual
employee and failed to empower them on a personal level (Avolio, Waldman and
Yammarino, 1991). Instead, Miki appointed two Culture Queens who were available
for employees to speak about grievances. The appointment of Culture Queens
prevented Miki from establishing a personalized relationship with each employee
in the start-up (Malone, 2017).  Miki Agrawal displayed many elements of
transactional leadership. According to Bass (1985, as cited in Yildirim and
Bircini, 2014) transactional leaders use methods to gain control over followers
and require them to perform tasks, to attain short-term objectives. In this
respect, Miki Agrawal displayed elements of transactional leadership as she
frequently threatened employees over their jobs and a reduction in salary, to
achieve her personal objectives for the organization. This only resulted in
short-term successes (Malone, 2017). Through a predominantly transactional
leadership strategy, Miki Agrawal created a toxic workplace environment for her
– THEORY  Schein (2010) describes organizational culture
as a group of people that come together and realize a collective set of ideas,
beliefs and values over the course of time spent together. These ideas, beliefs
and values are then relayed to new recruits.  Schein (2010) states that there are three layers
to Culture:  1)   
are elements of a culture that can be recognized as
belonging to a specified group. These elements are visibly seen, heard or felt.
Some examples include, common language used, symbols, the organization’s logo,
office behavior. 2)   
values and beliefs are first proposed by one individual in the group,
often when groups first form. This idea is usually proposed by someone
influential in the group such as leader or executive. Once the group decides
that that the idea is worth accepting, then the idea gains status as an belief
of the group. After continuous implementation, it is possible for this new
belief to become a basic underlying assumption of the organization. 3)   
underlying assumptions refers to those notions and beliefs held that are
commonly ingrained within a group that the group perceives these to be a common
understanding. Any deviation from these basic assumptions are inconceivable to
– ANALYSIS When analyzing THINX in accordance with Schein’s
(1992) three layers of organizational culture, it becomes evident that there is
a disconnect between artifacts, espoused values and beliefs, and basic
underlying assumptions. The organization’s artifacts, such as the logo, taboo-breaking
advertisements and the design of its website, display a message of women’s
empowerment (THINX, 2018). Internally, however, THINX struggles with clearly
identifying its espoused values and beliefs. Miki tried to introduce her own
ideas of women’s empowerment, and progressive culture into the organization.
For example, during work meetings, it became commonplace for Miki to speak
about her sexual experiences publicly. She would also change her clothes in
front of her employees (Malone, 2017). This was a display of Miki’s personal
views of women’s empowerment, and she tried to introduce these ideas into the
group. The group, however, rejected these ideas. The leader had a different
vision of what she wanted to implement as the organization’s core espoused
values and beliefs, and what the group was comfortable with. This disconnect
between the leader’s vision, and that of its team members, resulted in a misalignment
in the organization’s display of artifacts, espoused values and beliefs, and
underlying assumptions (Malone, 2017; Schein, 1992). PSYCHOLOGICAL CONTRACT-
 Rousseau (1989) defines a psychological contract
as an implied obligation of reciprocal exchange between two parties. A
psychological contract is formed when at least one of the two individuals supposes
that there is an obligation to return the favor when given an object, whether
tangible or intangible. Blau (1964, as cited in Thompson and Bunderson,
2003) identified that psychological contracts are composed of two forms of
currencies; economic and socioemotional. Thompson and Bunderson (2003) proposed
ideology as a third form of currency. Economic currency refers to a transactional
relationship in which the employee is compensated through monetary means by the
employer. Terms of obligations are often specific, quantifiable and based on equal
and reciprocal exchange. Socioemotional currency is an element of psychological
contracts based on relationships. In exchange for the completion of specific
tasks, employees expect to be accepted into an identifiable organizational
community.  Employees that find
themselves in this type of psychological contract are often expecting social
acceptance (Blau as cited in Thompson and Bunderson, 2003). Ideological currency
is founded on a commitment to a cause. Employees in this type of contract are
often driven by intrinsic motivation and internal satisfaction from assisting
the organization in achieving a specified cause. (Thompson and Bunderson,
– ANALYSIS The form of currency that governed and
dominated most employee psychological contracts at THINX was ideological
currency (Thompson and Bunderson, 2003). Despite the firm being a highly
profitable start-up, employees were significantly underpaid in comparison to
industry standards. Employees within the organization also stated that Miki
Aggarwal created a hostile work environment, and would commonly “pit people
against each other”. Despite this toxic work environment, employees still chose
to stay because of their commitment to the vision and mission of women’s
empowerment. When an employee was asked why she didn’t leave earlier,
she responded “I struggled a lot with the weight of what I was doing. I loved
the mission of the company…” (Malone, 2017). Miki Agrawal created imbalanced
psychological contracts by exploiting ideological currency of her employees (Malone, 2017; Thompson and
Bunderson, 2003). RECCOMENDATIONS                

Figure 1. Proposed recommendation for THINXTHINX is
experiencing a breakdown in its organizational culture. Bass and Aviolo (1993)
state that a strong organizational culture provides clarity, confidence,
certainty and a sense of purpose for employees. Currently, employees are
receiving mixed signals about the organization’s culture due to its leadership,
weak beliefs and values, and the existing psychological contracts. As shown in
Figure 1.0, the main goal of the three recommendations provided is to establish
a strong organizational culture.  RECCOMENDATION ONE: RECRUIT
TRANSFORMATIONAL LEADERSHIP Bass and Aviolo (1993) state transformational
leaders have the capacity to shape transformative organizational cultures, by
empowering followers and creating a collective vision. In line with this
revelation, the first step that THINX needs to take, is to recruit a
transformational leader to drive its organization. Selecting a transformational
leader will ensure a cohesive and healthy organizational culture is established
for its employees.  RECCOMENDATION TWO:
BUILD ESPOUSED BELIEFS, VALUES AND SHARED ASSUMPTIONS Transformational leadership is an important
element that will help THINX in building espoused beliefs and values, and
assumptions that are in alignment with the organization’s artifacts. In
addition to this, transformational leadership will ensure that employees are
included in building espoused beliefs and values, that will then, through
social acceptance turn into shared basic assumptions the organization holds
(Schein, 1992; Burns cited in Judge and Piccolo, 2004). It is recommended that
the newly recruited transformational leader holds a summit with all employees,
to build a collective understanding of the organization’s beliefs and values.  RECCOMENDATION
CONTRACTS WITH EMPLOYEES After establishing transformational leadership,
and three layers of organizational culture that are now in alignment, THINX
will now be in an exceptional position to develop effective, fair and balanced
psychological contracts with its employees. Under previous leadership, THINX
created a toxic work environment for its employees by heavily exploiting
ideological currency (Thompson and Bunderson, 2003). Given that the
organization now has a transformational leader, an aligned three layers of
culture, the next logical step is to create psychological contracts that
balance economic, socioemotional and ideological currency.  

There are a number of concrete steps that THINX
can take in establishing balanced psychological contracts. First, THINX can
begin with paying employee’s competitive wages, resulting in a strong economic
currency. THINX can also hold team building activities resulting in a strong
socioemotional currency (Blau cited in Thompson and Bunderson, 2003). Third,
THINX can allocate time periodically, where employees take on passion projects,
allowing employees to contribute to the organization in more than one way,
resulting in a healthy use of ideological currency. By creating psychological
contracts with balanced currencies, THINX will finally be able to contribute to
establishing a strong organizational culture (Thompson and Bunderson, 2003).