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What are the differences between direct cost and indirect cost of organizational distress?

Accounting Dec 18, 2020

What are the differences between direct cost and indirect cost of organizational distress?

Expert Solution

Direct costs are those things which can be directly attributed to the distress. For example, if the organization loses money because of people missing work, that is a direct cost. Indirect costs are harder to identify, but might include long-term health repercussions of stressed out employees, or even damage to the company's reputation.

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