Consortium

This article is about the type of voluntary association. For other uses, see Consortium (disambiguation).

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 Committee on Institutional Cooperation and Five Colleges, Inc., along with the Claremont Consortium are among of the oldest and most successful higher education consortia in the United States. The Committee on Institutional Cooperation includes the members of the Big Ten athletic conference plus the University of Chicago. The participants in Five Colleges, Inc. are: Amherst College, Hampshire College, Mount Holyoke College, Smith College, and the University of Massachusetts at 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, Scripps College, Claremont Graduate University, Claremont McKenna College, Harvey Mudd College, Pitzer College, and the Keck Graduate Institute. These consortia have pooled the resources of their member colleges and the university 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 Berea, Kentucky. The association consists of 36 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 loan—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.

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.

Airbus example

Main article: Airbus

Airbus Industrie 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 Industrie a sales and marketing company.^[1] 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 maximise the transfer prices of their sub-assemblies.^[2]

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.

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.

References

 This article incorporates text from a publication now in the public domain: Herbermann, Charles, ed (1913). "passim". Catholic Encyclopedia. Robert Appleton Company. 

1. ^ Done, Kevin (2 February 2001). "Survey - Europe Reinvented: Airbus has come of age". Financial Times. 
2. ^ Sparaco, Pierre (19 March 2001). "Climate Conducive For Airbus Consolidation". Aviation Week & Space Technology.