Hendrie became manager of Berwick in January 1994 and in his first season he took them to second place in the Scottish Second Division, narrowly missing out on promotion due to league reconstruction. In 1996 he moved to Alloa Athletic and he took them to the Scottish Third Division championship in 1998. In 1999, he took over as manager of St Mirren, and in 2000 guided them to the championship of the Scottish First Division. However, he was unable to keep them in the SPL and they were relegated the following year. Form was poor in the 2001-02 season, and following a heavy defeat to Inverness Caley Thistle in September 2002, Hendrie was relieved of his duties. He returned to Alloa in December 2003, but was unable to recover the form from his earlier tenure, and was ultimately sacked in January 2006. He worked as a scout for Hearts for the remainder of the 2005-06 season.