Organizations between Community and Market: The Case of the Kibbutz

Following the economic crisis, changes in the structure of kibbutz economic organizations through separation between the community and its economic units, have been suggested and partially implemented. These proposals will be analysed using an enlarged version of Williamson's 'transaction cost' typology. A comparison between two different strategies of relationship between the kibbutz community and the market are presented: (1) Separation between the market and the community, in which the economic units are conceived as an integral part of the community. The structures and internal relations of kibbutz economic organizations are therefore based on the general principles and norms of the kibbutz, and the internal impact of the relationship with the market is minimized. (2) Separation between kibbutz economy and the community in which the role of the community is limited to the exercise of ownership rights and supply of manpower. Market and hierarchical principles should be introduced in economic organizations and the relationship between the member and the community should be partially based on market rules. The degree of implementation of the suggested changes and their possible impact on economic efficiency and on kibbutz identity and values are analysed.