There is the concept of promoting to failure. Basically you promote the best person in the subordinate job they may or may not be suited to the new job. People move up the corporate ladder until they hit the point they can no longer excel in their job. You end up people hitting their point of incompetence remaining in jobs when they would have input more to the business remaining at the lower level.
There are advantage and disadvantages to both:
If you hire from the outside the person has to be trained up on the new company’s way of doing things. The person also has outside perspective to look at something the new company does and say “that’s stupid, we should do it differently”.
Hiring from the inside allows someone to be slotted in faster, but often that person has been gunnel visioned into that company’s way of doing things, so you don’t know if there are better (or different) ways of doing thing.
Many of these answers I agree with. But the one I’ve heard in the past from upper management is that it’s easier to replace a mediocre manager then an excellent technician/worker. Meaning for example if you are a bulldozer operator and know your machine and it’s operation in and out you are worth more to the company there then in a management position where you may not excel. Then the person they replace to operate that bulldozer is barely competent the company has taken a loss. So they would rather keep the good operator and hire a mediocre manager from outside.
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