Hiring from within potentially occurs a little more than it should. I feel the company needs to hire more from outside the company and outside the Butte County area. They need to ensure that they are bringing in fresh perspectives and industry experience.
There is a tendency for management to act based on perceptions instead of facts. This is not uncommon in business. Just be aware of it and ensure that the perceptions match the facts as much as possible. Remember that other's perceptions are their reality.