> If I am ever in a position to hire (and affect through it entirely and only my own economic well being) I wouldn't mind having people I enjoy company of and can relate to. Genuinely awesome people are a plus point, but even in that category if I am able to find people who share the same background as mine, is it really that bad a decision?

Yes, it's the opposite of a meritocracy, which i'm not sure if there's a specific word for. Very close to cronyism.