After retiring as a player, he managed Leyton Orient for nine years (followed by a two-year spell as the club's managing director) and then returned to Nottingham Forest as manager between 1993 and 1996. He then managed Manchester City for just over a year.
After his playing career he was Assistant Manager of Sunderland from 1979 to 1982 and then became manager of Leyton Orient, later becoming Managing Director of the Brisbane Road club. In 1993 he was appointed as Nottingham Forest manager, as a replacement for the retiring Brian Clough. Some sources have said that Clough selected Clark for the job in 1993, however Clark's name was submitted far earlier, and by the time of Clough's retirement in 1993 his preference was Ron Fenton.
Forest had just been relegated to Division One when Clark took over, but he took them back to the Premiership after achieving automatic promotion in second place. The club made an impressive top flight comeback by finishing third in the league and qualifying for the UEFA Cup.
He was also Premier League Manager of the Month for September 1994, as Forest's fine start to the season saw them in the heat of a title challenge and hopes were high that Clark could take them to the rare distinction of top division title glory a season after promotion - just as his predecessor had done 17 years earlier. Forest reached the UEFA Cup quarter finals in 1996 under Clark.
In December 1996, with Forest struggling in the league, Clark expressed his concern with the boardroom crisis at the club, with rival parties attempting to buy the club. His earlier success with the club had led to him being linked to the England job. Clark left the club in December.