A paradox of alliance management: resource contamination in the recorded music industry

This paper deals with the problem of resource contamination in alliances, where incompatible resources may be transferred into or accessed by partner firms, thereby devaluing their own resources. Theory explains how collaborations between organizations can allow mutually beneficial resource combinations through the transfer of, or access to, the assets and/or capabilities of each partner. Research has focused on how to facilitate intended resource transfer while limiting unplanned appropriation of other resources. Here, we address how organizations can protect themselves from contamination by their partners. Resource inimicality arises from idiosyncratic path-dependent processes that create organizations with very different skills, assets and institutions. Thus, a paradox emerges where resources that are complementary may nonetheless be hostile if brought together in one firm: the exposure of one partner to another may erode the distinctive properties that make the partnership valuable. This paper explores this resource contamination perspective using interview data from managers of one Major music company and several smaller Independent partners. In this industry it is common for collaborations to occur between organizations whose resources are focused on the identification and creation of new artistic products, and partners whose resources exploit such products. These resources are complementary but also potentially hostile. We discuss the role of institutional structures and boundary spanners, individuals who mediate resource transfer across the organizations' boundaries, in resolving this paradox and inhibiting contamination.