Consortium
A consortium is an association of two or more individuals, companies, organizations, or governments with the objective of participating in a common activity or pooling their resources for achieving a common goal. Consortia are generally nonprofit with a goal to help its members improve their competitiveness in the specific field.
Consortium is a Latin word meaning "partnership", "association", or "society", and derives from consors, itself from con- and sors.
Examples
Educational
Consortiums among universities are established to share research laboratories and equipment facilities, exchange faculty and students, provide programs abroad, and form specialized research centers and admissions offices. Generally, it includes a corporate identity, voluntary membership of institutions, its own staff and budgetary autonomy. This type of consortium aims to facilitate the educational process and research by more effectively allocating and conserving limited resources of money, staff, and facilities, identifying specialized areas of teaching and research in which cooperative deals would be alluring.Two types of high education consortia are generally realized, the "association" and the "center." The "association" refers to colleges and universities of similar nature and purpose; the "center" type brings together dissimilar institutions: smaller colleges around a large university.
The Big Ten Academic Alliance in the Midwest and Mid-Atlantic U.S., Claremont Colleges consortium in Southern California, Five College Consortium in Massachusetts, and Consórcio Nacional Honda are among the oldest and most successful higher education consortia in the world. 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 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 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.
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 and BAE Systems 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, deriving from a portmanteau of cooperation and competition, is the word 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, now called COVESA, 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, which is a consortium that standardizes web technologies like HTML, XML and CSS.
Government, academia and 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."Consortium for installment-based purchases
Commonly known in the United States as a rotating savings and credit association and also called Savings Clubs, Christmas clubs, sousou or even money circles, they are typically informal associations of people saving money together with a commonly shared goal: buying something with the same value. In this association its members contribute by paying equal amount installments towards a common fund. On every installment the common fund reaches the goal value and someone is awarded this sum and from this point forward this person own the association the remaining amount, just as in a loan. This process repeats until every member is awarded the entire sum.These informal associations are specially popular among immigrants since they are a cheaper alternative to traditional financing and usually require no formal papers, credit history or even a bank account.
Outside the United States, these savings clubs can be formal and have proper legislation. In some countries, like Brazil, consórcios are an integral part of the traditional banking system, where there are clubs for purchasing real estate and cars, and even for plastic surgery costs. Over seven million people have engaged in these formal savings associations over the past years, adding to over U$10 billion in credit. Since these clubs have up to thousands of members, products purchased are awarded through lottery and bidding processes and the common fund administrators charge a fixed fee in order to take responsibility and guarantee the integrity of the process.