Final answer:
The statement is True. Firms with planning systems that align with strategic management theory usually have better long-term financial performance. Knowledge of managers becomes less important as a firm establishes its strategy and outside investors have more information available to make investment decisions. Firms tend to operate at the bottom of the long-run average cost curve to ensure cost efficiency and profitability.
Step-by-step explanation:
The assertion that firms with planning systems more closely resembling strategic-management theory generally exhibit superior long-term financial performance relative to their industry can be considered true. It is widely accepted in business literature that effective strategic management is crucial for a firm's success. Strategic management helps firms to align their resources with their long-term objectives, assess external opportunities and threats, understand their internal strengths and weaknesses, and make informed decisions.
As a firm becomes established and its strategy seems profitable, knowledge of individual managers and business plans becomes less significant. Instead, the availability of information on the company's products, revenues, costs, and profits increases, allowing external investors such as bondholders and shareholders to confidently invest without personal knowledge of the managers. The willingness of these external investors to provide financial capital drives growth and supports the firm's objectives.
Lastly, firms will typically be located at or close to the bottom of the long-run average cost curve to optimize efficiency. Operating at this point ensures that they produce goods or services at the lowest possible cost over time, which is essential for competitiveness and profitability in the market. This is because firms aim to minimize costs to maximize profits, and being at the bottom of the long-run average cost curve indicates that they have achieved economies of scale and efficient production.