In June 1974, Ferguson was appointed manager of East Stirlingshire, at the comparatively young age of 32. It was a part-time job that paid £40 per week, and the club did not have a single goalkeeper at the time.[23] He gained a reputation as a disciplinarian, with club forward Bobby McCulley later saying he had "never been afraid of anyone before but Ferguson was a frightening bastard from the start."[24]
The following October, Ferguson was invited to manage St. Mirren. While they were below East Stirlingshire in the league, they were a bigger club and although Ferguson felt a degree of loyalty towards East Stirlingshire, he decided to join St. Mirren after taking advice from Jock Stein
Ferguson was manager of St. Mirren from 1974 until 1978, producing a remarkable transformation of a team in the lower half of the old Second Division watched by crowds of just over 1,000, to First Division champions in 1977, discovering talent like Billy Stark, Tony Fitzpatrick, Lex Richardson, Frank McGarvey, Bobby Reid andPeter Weir while playing superb attacking football.[26] The average age of the league winning team was 19 and the captain, Fitzpatrick, was 20.[27]
St. Mirren have the distinction of being the only club ever to sack Ferguson. He claimed wrongful dismissal against the club at an industrial tribunal but lost and was given no leave to appeal. According to a Billy Adams Sunday Herald article on 30 May 1999, the official version is that Ferguson was sacked for various breaches of contract including unauthorised payments to players.[26] He was counter-accused of intimidating behaviour towards his office secretary because he wanted players to get some expenses tax free. He didn't speak to her for six weeks, confiscated her keys and communicated only through a 17-year-old assistant. The tribunal concluded that Ferguson was "particularly petty" and "immature".[28] It was claimed during the tribunal by St. Mirren chairman, Willie Todd, that Ferguson had "no managerial ability".
On 31 May 2008, The Guardian published an interview with Todd (then aged 87), who had sacked Ferguson many years earlier. Todd explained that the fundamental reason for the dismissal was a breach of contract relating to Ferguson having agreed to join Aberdeen. Ferguson told journalist Jim Rodger of the Daily Mirror that he had asked at least one member of the squad to go to Aberdeen with him. He told the St. Mirren staff he was leaving. Todd expressed regret over what happened but blamed Aberdeen for not approaching his club to discuss compensation.[29]
In 1977, Ferguson turned down the manager's job at Aberdeen. The role went to Billy McNeill, who returned back to Celtic after only a year, leaving the role available for Ferguson once again.
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