Intuitively, these conclusions do not seem correct.
Given experience in a bureaucracy where selective promotion of the more incompetent is often speculated, one sees degradation of performance of those undertaking the work due to the "mis"direction of those promoted. My guess is that the paper assumes that the performance of a subgroup and its members is not reflected in the capabilities of the head of that subgroup.
It would have been interesting to know the assumptions used in the original study and a link to that would have facilitated further reflection.
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