How Inclusive Work Climates Can Foster Organizational Innovation

Topic(s): culture
Publication: Journal of Applied Psychology
Article: From Inclusive Climate to Organizational Innovation: Examining Internal and External Enablers for Knowledge Management Capacity
Authors: Y. Li, Y. Shao, M. Wang, Y. Fang, Y. Gong, C. Li
Reviewed by: Shayla Bianchi

Due to increasing workforce diversity, the concept of an organization’s climate for inclusion has gained growing attention. Prior research has shown that there are positive attitude and behavior outcomes for employees who feel included at work. However, less is known about how this inclusion may affect the organization as a whole.

One benefit of fostering an inclusive climate in the workplace is the potential to access a wider range of knowledge and perspectives. With this broader talent base may also come increased innovation. New research (Li et al., 2022) explores this idea.


Researchers administered surveys to frontline employees, HR managers, and executive managers from 102 Chinese organizations over a span of six months. Information was collected about the organizations’ climate for inclusion, demographic diversity (age, gender, and regional origin), and innovation. The researchers considered two areas of innovation: improvements made to existing products and services (called incremental innovation) and the fundamental changing of existing products and services to create something new (called radical innovation).

The results of this study showed that a more inclusive climate ultimately promoted both incremental and radical innovation by increasing the capacity for knowledge to be acquired, shared, and applied within the company. This was especially true when workplaces were more diverse in terms of the age and regional origin of their employees.


Based on these findings, the authors provide several implications for organizations that wish to maintain a competitive advantage through innovation. First, they suggest developing an inclusive work environment that acknowledges and values all employees. The researchers also encourage managers to increase representation of people of various ages. Moreover, even in cultural contexts where ethnic diversity is low, within-ethnicity differences such as regional origin are an important form of diversity to consider. Organizations can actively recruit a more diverse candidate pool and ensure that selection decisions are unbiased by discrimination such as ageism or preferential treatment based on regional differences. Finally, organizations should recognize the value of an inclusive environment for organizations with varying levels of demographic diversity.


Li, Y., Shao, Y., Wang, M., Fang, Y., Gong, Y., & Li, C. (2022). From inclusive climate to organizational innovation: Examining internal and external enablers for knowledge management capacity. Journal of Applied Psychology, 107(12), 2285–2305.

Image credit: istockphoto/nensuria