Digital Equipment Corporation and Hp

Topics: Hewlett-Packard, Compaq, Digital Equipment Corporation Pages: 12 (3360 words) Published: April 13, 2009


Hewlett-Packard is one of the largest corporations in the world. Hewlett Packard is divided into three general segments: imaging and printing systems, computing systems, and information technology services. After acquiring Compaq Computer Company, HP is currently the world’s largest computer company. HP is a growth oriented corporation that strives to stay ahead in all of its market segments.


HP was started by two electrical engineers who graduated from Stanford University in 1934. During a two-week camping trip, following graduation, Bill Hewlett and Dave Packard became close friends. Bill continued his education, taking graduate courses at MIT while Dave worked at General Electric. In 1938 the two moved next door to one another in Palo Alto, California. They began working in a garage part-time developing electronic devices. They began with $538 and a used Sears drill press. Their first invention was a device called a resistance-capacitance oscillator. This device tested sound equipment for negative feedback. This device paved the way for the development of many other electronic devices that could be used to analyze sound equipment. In 1939 they formalized the company and earned revenue of $5369. HP’s product line expanded slowly, and their equipment was met with excellent acceptance by engineers and scientists.

The start of World War 2 created a huge demand for electronics by the government. HP was forced to move out of the garage and build their first building. During these years several characteristics of the HP corporate culture were adopted. First Dave Packard began his management style coined “management by walking around.” This style of management involved interacting with all employees, and walking around and talking and listening to the concerns and ideas of everyone. HP began its open-door policy (no doors even on top-management offices) to encourage communication. They offered medical insurance to their employees and held occasional parties and picnics. They also decided that the employees of HP should share in the success of the company so it gave all employees a Christmas bonus in 1940 and created production bonuses in that year as well. In 1947 the company became incorporated, the HP catalog featured 39 products, HP had a staff of 111 employees and earned revenue of $851,287. The next year revenue more than doubled to $2.2 million dollars.

HP was expanding so rapidly by the 1950’s that as much thought had to go into the development of the company as did the development of new electronics. In 1957, HP became a publicly traded company. All employees with at least six months of service received a stock grant and were given the opportunity to enroll in a stock option program. HP still had a unique style of management. This style of management became known to the company as the “HP way.” The “HP way” involved management by objective. Senior management would determine corporate objectives that were to serve as a day-to-day guide for management decision-making. It was the belief that if everyone understood the objectives and the direction the company needed to move in, that the employees could work together to accomplish these objectives. This same year HP began manufacturing in a new, state-of-the art facility situated on a 50 acre hilltop. The facility provided an aesthetically pleasing environment, air-conditioned work area, and leisure facilities such as horseshoe pits, volleyball and badminton courts, a large cafeteria, and open patios. This building’s amenities were created to support the HP philosophy that workers require pleasing and attractive facilities to attain maximum job satisfaction and perform to their maximum potential. Revenue for 1957 reached $28 million and the payroll was up to 1,778 employees. HP’s first acquisition occurred in 1958. HP took over a graphic-recorder company that would...
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