Inbreeding is when people or animals that are close relatives have children. It often results in birth defects or genetic disorders.
Organizational inbreeding can be when a company only hires graduates from a particular university or who only hire people who are very similar to the existing workforce. It can include only promoting from within, or rarely hiring external candidates for managerial positions. These are not good employment practices, and can lead to nepotism, discrimination, a stagnant workforce, and a lack of corporate innovation.