Globalization and direction toward a knowledge economy, along with an economic downturn, is creating a competitive environment that calls for corporations to become more innovative. As the business environment becomes more competitive and dynamic, corporations are looking for new ways of achieving innovation. Open innovation is one approach that recognizes the limitations of closed or strictly in-house innovations and suggests methods for innovation by involving outside organizations and knowledge. In order to identify the outside organizations and knowledge that will lead to increased innovations, firms need environmental scanning capabilities. Such capabilities allow firms to connect with outside entities across the value chain and choose highly promising opportunities. Using inductive research logic and mini-case studies across 13 firms and 36 interviews, this study explores the relationship between a firm's open innovation activities and environmental scanning capabilities. The research has revealed a strong link between the two variables as well as other components, such as absorptive capacity, boundary spanning, and value chain, identified throughout the study. The findings provide a framework showing the process flow between the components and a trend summary of three different innovation approaches, which can be used as a practical management tool. The process model reflects how organizations' environmental scanning activities impact their open innovation activities. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]