MANY of the men who gathered in the auditorium of Kibbutz Kfar Hahoresh in the fertile Sharon Plain wore short pants, sandals, and weather-beaten faces. But if a visitor closed his eyes as the speeches began, he might have imagined attache cases and ties."Profit is not a dirty word," said one of the opening speakers. That sentence - spoken half defiantly, half apologetically - summed up the misgivings and heady aspirations of a proud but down-at-the-heels socialist movement about to strike a bargain with the capitalist world in order to survive. Three hundred kibbutz delegates gathered in June to vote on changes that would permit the collectives to enter into partnerships with private enterprise, to include outside executives on boards of directors overseeing kibbutz industries, and to reorganize the kibbutz economy so that it is guided principally by cost-effectiveness rather than social welfare considerations. It was not the collapse of communism in Eastern Europe that led to these hitherto heretical steps but problems within Israel itself. An economic crisis that struck the rural sector in the late 1980s left most kibbutzim debt-ridden and some facing bankruptcy. Although kibbutzim contain only 3 percent of the country's population, they constitute the most distinctive element in Israeli society. Three of the country's eight prime ministers were ex-kibbutzniks, and kibbutzim long provided the bulk of Air Force pilots and officers in elite military units as well as leaders in other spheres of life. For the past 70 years, kibbutzim have been repositories of much of the country's idealism and mythos. The kibbutzim constitute perhaps the purest form of voluntary communism practiced anywhere in the world, matched only by certain religious orders. A Kibbutz member who manages the collective's factory or is a highly trained engineer receives the same size apartment, clothing allowance, and pocket money as does another kibbutz member who milks cows or works on the factory production line. The weekend meeting in June was of the council of the Kibbutz Artsi Movement, the most ideologically pure of the country's three kibbutz associations. To achieve greater cost-effectiveness, the association decided it must waive some of the pure democracy represented by the Saturday night general assembly held at every Kibbutz. The assembly is a town meeting at which issues affecting the commune's life are discussed and voted on by all members who show up. Until two decades ago, kibbutzim were essentially farming communities but industry now accounts for the bulk of their income, and members are often asked to vote on business matters beyond their ken. The delegates voted to relegate economic decisions to a council made up of members with suitable backgrounds. THE kibbutz association also decided to decentralize the economy of the collectives to give branch managers clear responsibility for profit and loss. But the most far-reaching decision was to permit kibbutz factories to venture beyond the monastic-like enclave of the collective movement and seek partnerships with private entrepreneurs in order to gain access to capital, know-how, and new markets. While this opens possibilities of a kibbutz breakthrough into world markets it also holds the danger that the outside world will break into the kibbutz. "What if the outside partner wants to fire older kibbutz members and hire outside people in their place?" asked one delegate. Others expressed concern that an outside partner might introduce the notion of differential pay, with a kibbutz member serving as factory manager or engineer getting several times the amount that goes to someone on the production line. Although the manager's salary, like the workman's, would not go into his pocket but into the kibbutz coffers, it was feared that even a "book" differential might introduce an ugly aspect of status into kibbutz society. A few delegates expressed fear that they might be witnessing the beginning of the end of the kibbutz movement. "At this meeting we see people who oppose the basic principles of the movement trying to destroy it from within," said a delegate from Yad Mordecai, near the Gaza Strip. Others, however, were eager to run even faster than the kibbutz association was prepared for. The possibility that an outside partner might attempt to fire some kibbutz members from the kibbutz plant was applauded by some participants who saw this as a way of ridding the factories of inefficient or lazy workers. "It's not easy for us to fire somebody who is our neighbor," said a delegate from Bait Alpha in the Jordan Valley. A number of participants attacked the principle of rotation whereby kibbutz members serve no more than one term of three or four years in key jobs like factory manager. "We don't develop leaders in three or four years," said one delegate who urged that good managers be retained for 10 or 12 years. "We're cutting them down in the name of equality." The association decided to retain the rotation principle but to permit the possibility of a second term. Responding to a resolution calling for kibbutzim to strive for "a reasonable and stable level of profit," a delegate proposed substituting the phrase "maximum profit." Another delegate rose to demur. "This argument is the essence of our dilemma," he said. "The very idea of maximizing profit contradicts our principles." The dilemma is bound to sharpen as kibbutzim move out of their isolation and attempt to maintain their humanistic, socialist values in a world where, more than ever, the bottom line is king.