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theory was fi rst proposed by Simon (1976) as a limited or constrained rationality to
explain human decision-making behavior. When confronted with a highly complex
world, the mind constructs a simple mental model of reality and tries to work within
that model. The model may have weaknesses, but the individual will try to behave
rationally within the constraints or boundaries of that model.
Individuals can be bound in a decisional process by a number of factors,
such as:
• Limits in knowledge, skills, habits, and responsiveness
• Availability of personal information and knowledge
• Values and norms held by the individual that may differ from those of the
organization
This theory has long been accepted in organizational and management sciences.
Bounded rationality is characterized by individuals ’ use of limited information analy-
sis, evaluation, and processing, shortcuts and rules of thumb (sometimes called heu-
ristics), and “ satisfi cing ” (i.e., a combination of satisfying and suffi cing) behavior,
which means it may not be fully optimized, but it is good enough. The 80/20 rule
(e.g., Clemson 1984 ) is a good example of the application of satisfi cing behavior — for
example, in a brainstorming session, when the group may not have fully exhausted
all the possibilities but did manage to capture roughly 80 percent of them. Continuing
on would result in the law of diminishing returns — so much more effort would be
required to incorporate the remaining 20 percent — that generally participants would
agree that what they have so far is good enough to proceed with.
One of the strengths of the Choo KM model is the holistic treatment of key KM
cycle processes extending to organizational decision making, which is often lacking
in other theoretical KM approaches. This makes the Choo model one of the more
realistic or feasible models of KM as the model represents organizational actions
with high fi delity . The Choo KM model is particularly well suited to simulations and
hypothesis or scenario-testing applications.

The Wiig Model for Building and Using Knowledge
Wiig (1993) approached his KM model with the following principle: in order for
knowledge to be useful and valuable, it must be organized. Knowledge should be
organized differently depending on what the knowledge will be used for. For example,
in our own mental models, we tend to store our knowledge and know-how in the
form of semantic networks. We can then choose the appropriate perspective based on
the cognitive task at hand.