Case 4.2 Fisons: The fall from grace
This case was prepared from published sources by Helen Peck, Cranfield School
of Management, as a basis for class discussion rather than to illustrate effective
or ineffective handling of an administrative situation.
© Copyright Cranfield School of Management, June 1994. All rights reserved.
On 14 January 1992, the board of Fisons Plc announced that it had ‘with
considerable regret, accepted the resignation of Mr John Kerridge as chair-
man and chief executive, as a consequence of his retirement on the grounds
of ill-health’.^1 The announcement was made by non-executive director,
Patrick Egan, who would oversee the pharmaceutical, horticulture and sci-
entific equipment group until a new chief executive could be found. Egan
stressed that ‘The board wishes it to be clearly understood that there has
been no pressure on Mr Kerridge, either from his fellow board members or
from our principal institutional shareholders, for him to take this course of
action.’ Egan did, however, concede that his former colleague’s health had
not been improved by recent well-publicized difficulties between the
company and US drugs industry regulators, the Food and Drug
Administration (FDA).
Kerridge’s resignation came at the end of a traumatic four months for
Fisons. Supply problems with two of its drugs had meant that, for the first
time in many years, financial performance had failed to live up to expecta-
tions. With Kerridge’s departure, the remaining management were confi-
dent that they could now draw a line under the unfortunate episode, and
look forward to a speedy revival of Fisons’ reputation as one of Britain’s
best managed companies. The group’s shares gained 10p on the news of
Kerridge’s resignation. It was an inglorious end to what had been a
remarkable career.
From ailing dinosaur to rising star
Kerridge joined Fisons as a marketing controller in 1967, after spells in con-
sumer marketing at Cadbury Fry, AEI-Hotpoint, Lyons and Rothmans. At
Fisons he had risen steadily through the ranks of the company’s core
Fertilizer Division, eventually emerging as chief executive following a
boardroom fracas in June 1980. The mini-conglomerate he inherited looked
anything but promising. The company’s origins lay with its 130-year-old
fertilizer business, which by 1980 appeared to be in terminal decline. For 20
years it had fought a losing battle to maintain its grip on the UK fertilizer
market in the face of stiffening price competition from multinational
giants, Shell and ICI. There were early indications that Fisons’ profitable
agrochemicals business would suffer a similar fate. Together the Fertilizer
268 Relationship Marketing