How global is your business? A business globalization index to quantify a business’ globalization degree

Abstract

Globalization as a buzz word is present in many publications, being scientific, journalistic or even literarily. This work defines the scope of globalization with regards to its meaning for businesses and within this scope, a measure is proposed to determine a firms’ degree of globalization. Starting with a review of scientific work, a multi-layered, modular approach is proposed built on three core aspects of globalization. By using a vector-based form, this index is able to provide both: a general measure for a company’s degree of globalization and a detailed evaluation of a company’s different states with regards to economical, spatial and regulatory aspects of globalization. The index developed is validated using a sample of four multi-national-companies (MNC). Results show, that firms, which are deemed global, only reach half of the overall possible degree of globalization.