Organizational inclusion and sustainable development: An empirical evidence from the context of Eastern culture

Abstract This study offers new insights into organizational inclusion and corporate sustainable development in the Japanese context. Specifically, we aim to explore organizational inclusion in the antecedents of Lesbian, Gay, Bisexual, and Transgender (LGBT) inclusion and its effects on corporate outcomes, such as corporate market performance (CMP) and corporate environmental performance (CEP). Drawing upon legitimacy theory, we propose a conceptual model to uncover how operational diversity encourages organizational inclusion, such as supportive policies and practices. Moreover, grounded in stakeholder theory, we explore how organizational inclusion affects corporate outcomes, including CMP and CEP. Using a large sample of 1456 Japan‐listed firms with detailed organizational inclusive practices and corporate outcomes. Results indicate that operational diversity has positive effects on organizational inclusion. Moreover, the results indicate that organizational inclusion strengthens CMP and CEP. The empirical results are consistent after performing robustness checks based on subsampling. Our study contributes to the global discussion on business ethics, corporate market responses, and sustainable development.