NFC: no longer functioning correctly?

NFC plc, as it is currently known, provides a unique case study because it embraces privatisation via a management and employee buy‐out (MEBO) as well as, until recently, majority employee share ownership. The initial sections of this article set out the circumstances surrounding the decision to privatise and the reasons why this was executed via a MEBO. It moves on to examine the reasons for the decision to float the company on the stock exchange in the mid‐1980s. This was a period when the initial structure of the company came increasingly into question, and the paper analyses the structural imbalances that arose as the company grew very rapidly and the tensions this created between the core values that underpinned the company’s initial success and the need to take a more “hard‐nosed’ approach if that growth was not to falter. Not only was the question of the most appropriate managerial “style” brought into question, but also whether institutional investors should be allowed to displace employee ownership. Another critical issue was whether the “internationalisation” strategy was an appropriate way for the company to trade its way out of trouble. The paper concludes that environmental factors have forced the company to evolve into something far more conventional than was either intended or desired at the time of the buy‐out.