Organizational Change at Carmax

Organizational Change at Carmax

Edmund Lobato

MGT 435 Organizational Change

Dr. Charles Needham

September 4, 2011

Change is an inevitable factor that all organizations must experience from time to time. In most cases, it is change that has prompted the start of many organizations in the first place. As time goes on, many companies are faced with the decisions of implementing new change in order to remain successful and meet the demands of an ever changing economic environment.

“We live in a period of rapid and dramatic change: significant alterations in customer expectations and demands, new technologies, competitors with innovative business models, shifts in workforce demographics and values, new societal demands and constraints. Organizations need to respond to external dynamics in order to create and maintain outstanding performance” (Spector, 2010).

Since its’ inception in 1993 CarMax has become the US’s largest specialty used-car retailer (Hoovers, 2011). Although there has been some turmoil in the rise to the top, their unique approach to selling used vehicles has not come easily or without pain. The way the company changed how car buying is done demonstrates a unique change model that traditional organizations have never tried. This paper will analyze the change that CarMax has implemented and the effectiveness of that change based on class texts and readings. It will also analyze changes that may prove beneficial to implement, or improve upon, in order to remain competitive within the industry. CarMax’s strategy of selling cars has created a blueprint for change within the used car retail market that has yet to be duplicated.

In 1993, parent company Circuit City decided to throw its hat into the used car arena. Although Circuit City was doing well at the time, strategic renewal (Spector, 2010) directed the company into a different product and a different market altogether. Richard Sharp and W. Austin Ligon looked at the $150...