Absolutely! When possible the company should use the talent, within the company, that have contributed to the growth and success of the company first. That is not only good for overall morale and camaraderie, it is practical. Obviously, it can't be done all the time. If the company needs a certain specialist or was ot infuse new blood (a new system of doing things) that need to recruit elsewhere.
An organization should follow a promote-from-within policy. This policy can provide benefits in recruiting, retention, cost saving and flexibility. This may help one to build a procedure that will make promoting from within victorious.