Many scholars wrote about social status and respect of hierarchy as another cultural characteristic of the Chinese business, it is given a strong visibility in Chinese business meetings, the status means the role and the position of a person in the company, the Chinese will agree to work only with a person from the same hierarchical level or a higher one (Woo, Prud’homme, 1999). However, Graham and Lam (2003) emphasized the importance of rank and status by showing its repercussions, it can ruin a business meeting with the Chinese, in a way that high-level negotiations will involve directly executives of both companies, and it has nothing to do with sales representatives. A negotiation usually requires the meeting of equals, so that more cooperation is visible. Some of the reflections of hierarchy would be how Chinese people greet themselves and address each other, who speaks during business meetings and who makes decisions (J. Sebanius,C.Qian, 2008). A social status implies directly a mutual trust between a business negotiator and his counterparts.
The Chinese feel that hierarchy is something very important and thus the manager makes all decisions. Usually, a diminutive amount of authority and decision-making power is delegated down in the organisation since hierarchy is extremely important.
It is very important for the Chinese to know that the persons they are negotiating with have authority to make relevant decisions. More often than not, western negotiators have the authority to make decisions and answer the customer’s questions while the chinese negotiating counterpart perhaps has to confer with a superior before a decision can be made.
Another important thing to consider is the way people are seated around a meeting table. The highest manager sits in the centre and the rest of the group is placed in hierarchical order alongside him. The expatriate team has to position itself in the same manner in order to facilitate the understanding of who is in charge.