Decision-making is a complex cognitive activity filled with bias. Leader decision-making is unique because it occurs in a social context. We examine how biases resulting from social network dynamics complicate leaders' decision-making. In particular, we focus on a specific case of leader cognition: nepotism in the succession decisions in the context of family businesses. Succession often leads to a decline in performance because leaders frequently choose family members as their successor, a form of nepotism. We show that even when a leader can overcome individual decision biases, a bias in sampling resulting from families' strong ties can still allow a leader to wrongly conclude that family members are better qualified than external candidates when the opposite is true. We demonstrate this phenomenon using simulation modeling and explore solutions to family business succession planning. One of the most important activities of a leader is decision-making. Leader decisionmaking is unique from decision making more generally because it occurs in a social context.Due to the nature of their roles, leaders have to deal with multiple complex social problems that have great importance on the success and survival of organizations (March & Weil, 2009;Mumford, Friedrich, Caughron, & Byrne, 2007). The ability of leaders to solve these social problems is a crucial aspect of leader performance (Eubanks & Mumford, 2010;Mumford, Zaccaro, Harding, Jacobs, & Fleishman, 2000).The primary goal of this paper is to examine how decision biases resulting from social network dynamics complicate leaders' decision-making. In particular, we focus on a specific case of leader cognition -nepotism in the succession decisions in the context of family businesses.Succession is one of the most important decisions a leader will make to ensure sustainable business performance (Giambatista, Rowe, & Riaz, 2005). These decisions are particularly challenging for family businesses as evidenced by the more than seventy per cent of them that fail after the first generation (Family Buisness Institute, 2007) primarily due to poor succession decisions (Cucculelli & Micucci, 2008;Royer, Simons, Boyd, & Rafferty, 2008;Wasserman, 2003). One common characteristic of leaders' succession decisions in family businesses is that they tend to assign offspring as their heir, a form of nepotism. Many empirical studies have shown that nepotism in family business succession tends to lead to decline or even bankruptcy (Bennedsen, Nielsen, Pérez-González, & Wolfenzon, 2007;Cucculelli & Micucci, 2008;Gomez-Mejia, Cruz, Berrone, & De Castro, 2011;Padgett & Morris, 2005;Riggio & Riggio, 2013;Smith & Amoako-Adu, 1999). This calls for a closer investigation of the decision processes of leaders (Antes & Mumford, 2012; Eubanks & WEAKNESS OF STRONG TIES 3 Mumford, 2010;Mumford et al., 2007;Mumford et al., 2000) and why their succession decisions often appear to be biased, and can ultimately destroy their businesses.While many decision biases have been reported in the ...