A Structural Distance Theory (SDT) Toy Case Study of Enron: Operationalization and Drift Simulation Methodology

This note provides a self-contained, operational case-study template for applying Structural Distance Theory (SDT) to institutional failure. Using Enron as a motivating example, we (i) specify an SDT network with weighted directed relations encoding visibility, feedback fidelity, and consequence coupling; (ii) define downstream end-states representing grounded reality; and (iii) introduce a minimal drift simulation demonstrating how gradual insulation of an upstream decision node can increase structural distance over abstract steps. The purpose is methodological: to show how SDT can be instantiated and run as a diagnostic procedure. The simulation is intended to demonstrate qualitative dynamics and feasibility (including directionality constraints) rather than reconstruct historical timing or provide predictive claims.