William Hewlett (William) and David Packard (David), two electrical engineers from Stanford University, founded HP in 1938, in a garage behind David's home in Palo Alto, California. HP initially sold electronic instruments. The company's first product was a resistance-capacity audio oscillator, an electronic instrument used to test sound equipment. One of the big customers for the product was the Walt Disney Company,⁷ which used the product in the making of the movie Fantasia. In 1940, William and David set up their own factory in Palo Alto, under the name Hewlett Packard. HP continued to grow as an electronic equipment company throughout the 1940s. The company was incorporated in 1947, after which David became the president and William the vice president.

The company went public in 1957. In 1958, HP made its first acquisition when it bought F.L. Moseley Company, a company that produced high-quality graphic recorders. HP began entering overseas markets towards the end of the 1950s. In 1959, it opened a marketing office in Switzerland and a manufacturing plant in Germany. It was also during the 1950s that William and David formulated the HP corporate objectives. These objectives laid out HP's values relating to profit, customers, fields of interest, growth, people, management and citizenship.⁸ These corporate objectives also formed the basis for the 'The HP Way', which referred to the management style at the company (Refer to Exhibit III for The HP Way).