Definitions

Consortium

Consortium

[kuhn-sawr-shee-uhm, -tee-]
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.

Economics

Each participant retains its separate legal status and the consortium's control over each participant is generally limited to activities involving the joint endeavor, particularly the division of profits. A consortium is formed by contract, which delineates the rights and obligations of each member. Consortia are more common in the nonprofit sector. A more permanent joint activity is usually called an institute.

Examples

For example, Five Colleges, Inc. is one of the oldest and most successful consortia in the United States. 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. 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 for-profit consortium was Airbus Industrie ("Airbus"). Formed in 1970, Airbus is one of the world's premier manufacturers of civilian airliners. Airbus is now owned by EADS. EADS itself is a merger of Aérospatiale-Matra of France, Daimler-Chrysler Aerospace of Germany, and Construcciones Aeronáuticas of Spain, which were originally separate partners in the consortium, owning 37.9%, 37.9%, and 4.2%, respectively. BAE Systems owned the remaining 20% but sold this in 2006. Airbus' status as a consortium means that profits accrue to the partner companies representative to their interests. Work is allocated on the same basis as profits.

Another example of a for-profit consortium is when a group of banks collaborate to give a loan. This 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.

Famous consortia

See also

Sources and external links

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