The purpose of this article is to explore the psychodynamics of regression in organizations. First, the paper presents a brief critique of the rationalist and mechanistic approaches to organizations and their selective inattention to subliminal and unconscious aspects of organizational life, particularly regressive actions. Then, the association between psychological regression and organizational identity is explored with an emphasis on group psychology. Next, the symbiotic lure is introduced as a metaphor for understanding collective regression. Members react to their anxieties about change at work by denying their individual differences and psychologically merging with each another. This common form of regressive withdrawal among organizational participants under stress, threatens participation, consensual decision making, learning and effectiveness. Using Bion’s notion of “container” and Winnicott’s concept of a “holding environment, ” the author presents a brief example and discussion that clarifies the processes of change necessary for repairing the damaged organization and renewing its potential for democratic practices and effective service delivery. Much of organizational studies has assumed that decisions and actions are guided by rational (logical and sensible) norms and intentional processes. The assumption of human nature in much of mainstream organization theory was that of a one-dimensional worker void of inner life. Consequently, many scholars persuaded their students that logic and rationality governed human behavior and decision-making in large, complex organizations. And, despite the progress of mainstream organization theories (March & Simon, 1958; Simon, 1961; Weick, 1969; 1995), a fixation with the “conscious” levels of organization and a near void to most subliminal and hidden features predominated the field (Field, 1974).