Israel is a traumatized and traumatizing society. Its people and its culture are virtually saturated with memories of the Holocaust and other traumatic events, which go back for centuries and have unconsciously affected the mentality and actions of Jewish as well as non-Jewish citizens. Current fears of annihilation are linked with the fears experienced by previous generations. Within the context of organizations, the consequences of such fears are manifested in patterns of incohesion. Thus, their organizations oscillate between aggregation and massification, and develop social and cultural forms of encapsulation that can be understood in terms of the fourth basic assumption in the unconscious life of social systems.