Privatization as the Source of Organizational Change in the Israeli Labor Federation (the Histadrut): an Israeli Case Study

Abstract

The original Histadrut was founded as a welfare agency, as a socialist entity the Histadrut was politically and economically linked to the Labor Party which helped fund it while in government. The purpose of this research is to analyze how the process of privatization affected the goals of the Histadrut, as it evolved from being a super- organization dominating most of Israeli society to a mere confederation of labor unions. This research was conducted by case study analysis: using two methods of data collection - analyzing documents and interviews. The finding show, that Histadrut was highly politicized, and this led to the organization's incurring heavy debts. In 1994, a new leader, Haim Ramon, was elected and coped with its organizational decline. He transformed the Histadrut into a confederation of autonomous labor unions, selling off Histadrut enterprises and assets to private investors, and severing all political ties. The Histadrut underwent organizational change, downsizing and focusing on trade union goals.The main conclusion from this research is: The privatization process in the Israeli labor unions created a new organization focusing on its trade union's goals, losing its uniqueness as a society-wide entity.