Exploration and Exploitation in Relationship Portfolios of Young Enterprises: A Computer Simulation

Abstract

The notion that networks and relationships support young ventures in their further development is well established in organization science and entrepreneurship research. However, so far we still lack deeper insights how relationship portfolios are established by young ventures and how they are further developed to better fit to changes in their external and internal environment. This study elaborates a system of concrete mechanisms influencing the development of young ventures’ relationship portfolios by balancing the exploration of (potential) new partners vs. the exploitation of ongoing partnerships. In a further step all mechanisms identified are formalized and integrated into a computational model. A systematic examination of the simulation behavior allows new insights in the interplay of structural, relational and individual factors on the antecedents and consequences of exploration and exploitation in entrepreneurial ventures’ relationship portfolios.

Keywords: Startups, Relationship Management, Relationship Portfolios, Network Development, Network Evolution, Exploration, Exploitation, Social Simulation, Computational Social Science, Agent-Based Modeling, Graphical Data Analysis, Data Visualization