A consortium is an association of two or more individuals, companies, organizations or governments (or any combination of these entities) with the objective of participating in a common activity or pooling their resources for achieving a common goal.
Consortium is a Latin word, meaning "partnership", "association" or "society" and derives from consors 'partner', itself from con- 'together' and sors 'fate', meaning owner of means or comrade.
Examples
Educational
The Big Ten Academic Alliance and Five Colleges, Inc., along with the Claremont Consortium are among the oldest and most successful higher education consortia in the United States. The Big Ten Academic Alliance, formerly known as the Committee on Institutional Cooperation, includes the members of the Big Ten athletic conference. The participants in Five Colleges, Inc. are: Amherst College, Hampshire College, Mount Holyoke College, Smith College, and the University of Massachusetts Amherst. Another example of a successful consortium is the Five Colleges of Ohio of Ohio: Oberlin College, Ohio Wesleyan University, Kenyon College, College of Wooster and Denison University. The aforementioned Claremont Consortium (known as the Claremont Colleges) consists of Pomona College, Claremont Graduate University, Scripps College, Claremont McKenna College, Harvey Mudd College, Pitzer College, and Keck Graduate Institute. These consortia have pooled the resources of their member colleges and the universities to share human and material assets as well as to link academic and administrative resources.
An example of a non-profit consortium is the Appalachian College Association located in Richmond, Kentucky. The association consists of 35 private liberal arts colleges and universities spread across the central Appalachian mountains in Kentucky, North Carolina, Tennessee, Virginia, and West Virginia. Collectively these higher education institutions serve approximately 42,500 students. Six research universities in the region (University of Kentucky, University of North Carolina, University of Tennessee, West Virginia University, University of Virginia, and Virginia Tech) are affiliated with the ACA. These institutions assist the ACA in reviewing grant and fellowship applications, conducting workshops, and providing technical assistance. The ACA works to serve higher education in the rural regions of these five states.
Commercial
An example of a for-profit consortium is a group of banks that collaborate to make a loanâ€"also known as a syndicate. This type of loan is more commonly known as a syndicated loan. In England it is common for a consortium to buy out financially struggling football clubs in order to keep them out of liquidation.
Hulu, the American video streaming service, is owned by a consortium of large media conglomerates including Time Warner, 21st Century Fox, Comcast, and the Walt Disney Company.
Alyeska Pipeline Service Company, the company that built the Trans-Alaska Pipeline System in the 1970s, initially was a consortium of BP, ARCO, ConocoPhillips, Exxon, Mobil, Unocal, and Koch Alaska Pipeline Company.
Aerospace
Airbus example
Airbus Industries was formed in 1970 as a consortium of aerospace manufacturers. The retention of production and engineering assets by the partner companies in effect made Airbus Industries a sales and marketing company. This arrangement led to inefficiencies due to the inherent conflicts of interest that the four partner companies faced; they were both shareholders of, and subcontractors to, the consortium. The companies collaborated on development of the Airbus range, but guarded the financial details of their own production activities and sought to maximize the transfer prices of their sub-assemblies.
In 2001, EADS (created by the merger of French, German and Spanish Airbus partner companies) and BAE Systems (the British partner company) transferred their Airbus production assets to a new company, Airbus SAS. In return, they got 80% and 20% shares respectively. BAE would later sell its share to EADS.
The Tornado was developed and built by Panavia Aircraft GmbH, a tri-national consortium consisting of British Aerospace (previously British Aircraft Corporation), MBB of West Germany, and Aeritalia of Italy. It first flew on 14 August 1974 and was introduced into service in 1979â€"1980. Due to its multirole design, it was able to replace several different fleets of aircraft in the adopting air forces. The Royal Saudi Air Force (RSAF) became the only export operator of the Tornado in addition to the three original partner nations. Including all variants, 992 aircraft were built.
Coopetition
Coopetition is a word coined from cooperation and competition. It is used when companies otherwise competitors collaborate in a consortium to cooperate on areas non-strategic for their core businesses. They prefer to reduce their costs on these non-strategic areas and compete on other areas where they can differentiate better.
For example, the GENIVI Alliance is a not-for-profit consortium between different car makers in order to ease building an in-vehicle infotainment system.
Another example is the World Wide Web Consortium (W3C), which is a consortium that standardizes web technologies like HTML, XML and CSS.
Government, academia & industry
The Institute for Food Safety and Health is a consortium consisting of the Illinois Institute of Technology, the Food and Drug Administration's Center for Food Safety and Applied Nutrition, and members of the food industry. Some of the work done at the institute includes, "assessment and validation of new and novel food safety and preservation technologies, processing and packaging systems, microbiological and chemical methods, health promoting food components, and risk management strategies."
See also
- Joint venture
References
- Â This article incorporates text from a publication now in the public domain:Â Herbermann, Charles, ed. (1913). "passim". Catholic Encyclopedia. New York: Robert Appleton.Â
