It is wrong in that it assumes that humans are perfect, that they will be objective, that university degrees actually represent a proper landmark with regards to the training of the mind.
Unfortunately it is not the case. Flattery works for certain bosses. Everyone has their key. And thus the system fails.
The same can be applied for many things in life, don't you think? Be it something as simple as affection, or something as complicated (logic wise) as communism.