Hewlett-Packard Co - Early History

EARLY HISTORY

In 1938, Stanford University electrical engineering graduates William Hewlett and David Packard started their own company in the garage of a home Packard was renting in Palo Alto, California. With a mere $538 in capital, the partners began marketing a resistance capacity audio oscillator (HP 200A), which was essentially a sound-equipment testing device that Hewlett created as a graduate student. The company's first break came when Walt Disney ordered eight of the new oscillators for the production of Fantasia . In January of 1939, Hewlett and Packard named their new electronics manufacturing partnership Hewlett-Packard Co., after flipping of a coin to decide upon the order of their names in the company's moniker.

Throughout the late 1940s, Hewlett and Packard devised and implemented management policies that would later lead to their recognition as pioneers in corporate management and employee relations. For example, they created an Open Door Policy, believing that all employees should feel empowered to approach management about issues and concerns. To facilitate this policy, employees worked in open cubicles, and managers worked in offices with no doors.

HP released the HP 524A, a device that lessened the time needed to measure high-speed frequencies from about 10 minutes to one or two seconds, in 1951. Radio stations began using the HP 524A to ensure accurate broadcast frequencies, especially on the fledgling FM band. By that time, sales exceeded $5 million. HP completed its initial public offering in November of 1957. It was then that Packard created objectives for HP, believing that concrete goals would help to facilitate consistent choices by the firm's management team. The following year, HP completed its first acquisition when it purchased graphics recorder manufacturer F.L. Moseley. International expansion began in 1959 when a manufacturing plant was constructed in Germany, and an office was established in Geneva, Switzerland, to serve as a headquarters for European operations. That year, HP became one of the first firms to add profit sharing to the compensation package it offered employees.

By the end of the 1960s, sales at HP exceeded $165 million, HP Laboratories was created to serve as the main research hub for the firm, and the firm invented the first scientific desktop calculator in the world, the HP 9100. Hewlett, who had recently replaced Packard as CEO, decided to decentralize operations. Although divisions had been operating fairly independently since the late 1950s—with each department handling its own research and development, manufacturing, and marketing activities—this new structure granted the decision-making authority previously held by executive vice presidents to general managers, who oversaw divisions with similar product lines.