In this paper, we examine how conflicting ideologies affect organizati
onal practice. We theorize that the basic relationship between ideolog
y and organization is moderated by social pressures and economic incen
tives that result from differences between the organization and its en
vironment on issues of ideology. Using data from Israeli kibbutzim for
1951-1965, we examine how the ideology of a set of socialist organiza
tions affects the practices they employ and how the influence of socia
list ideology is moderated by an environment that is governed by capit
alism. We assess the change in the extent to which kibbutzim employed
hired labor, a practice that is incompatible with kibbutzim socialist-
Zionist ideology. We find that ideological organizing principles are a
ffected by resource dependence pressures, particularly from banks, and
economic incentives for organizations to change their form. These ext
ernal influences combined with internal influences, such as kibbutz si
ze, age, and industrialization, to account for kibbutzim's transition
to hired labor. The results indicate how interaction with the environm
ent can lead to the forfeiture of ideological organizing principles.