Reference no: EM132378239

1. For people to fully understand some of the things that go beyond their understanding, certain strategies require an engagement to assist in the achievement of swift and efficient synthesis of findings (Grace et al., 2015). The Efficient Frontier Analysis is quite applicable for strategic risk management as it takes into account the assets to include and not to include in organizational Portfolios. The good thing with Efficient Frontier Analysis as a strategy of explaining results is that it is flexible in a way that it is most transferrable to leaders of business in their journey to establishing resiliency to become the owners of risk based on a given area of influence. As a project lead, I would apply the capabilities of Efficient Frontier Analysis to make the nontechnical decision-makers to learn the language of risk. When this visualizes in their minds during a presentation, it becomes much easier for them to understand the details being explained to them. This is attributed to the flexibility of Efficient Frontier Analysis in creating conspicuous demarcations.

Comparison and contrast of results have been in use since time immemorial. As a project lead, I would ensure that contrasting features are included during presentations as this helps print an unforgettable picture of what was ideally on the ground when data was gathered (Grace et al.,2015). The use of comparison for the portfolio issue in the case study should employ sophisticated approaches to let the decision-makers with nontechnical skills to grasp everything on the explanation boards. When I use a comparison of the portfolio financial returns, I would be capable of arranging the many noted risks against the kickbacks. Consequently, this would be beneficial to convince the nontechnical decision-makers to support the findings of a given task and accommodate them in policy formulation as well as implementation. In essence, Efficient Frontier Analysis is effective because it makes one use visualization techniques in the analysis.Primarily, this is why I would apply it to make the nontechnical decision-makers to develop a vision of the findings and predict future implications.

2. The efficient Frontier analysis is used when we want the highest return of the projects with accurate results and keeping in mind about the minimal risks. The use of this is very important because it maintains the standard deviation with known risk. The optimal solutions of the compromise in the EFA mostly have a high degree of diversification. There is an efficient frontier where the managers can edit the number and characteristics of the security and the profits for the specific task to be performed.

As a lead, I would explain the non-technical team pretty much with business logical implementation. I would keep the technical words very minimal, but I wouldn't completely eliminate them from all the technical explanation as the non-technical team might not know the keywords, but they do understand what the tools do. I will explain to them that if we aren't using the latest technologies for the applications that are in use, we might end up having some issues. The issues might include the risk of delivering the projects on time, the performance of the jobs, the funding calculator for the organization allocated to the team, and the utilization would be explained thoroughly. I would explain the portfolio of the deliverables and the time allocation.

Along with the above explanation, I would show them the graphical representation of the concepts that will help them to understand the flow of the application and the efficiency of it. From explaining all the concepts as stated above, it makes the non-technical team understand about the portfolios, what team is recommending to use and why. 

3. Enterprise risk management (ERM) has emerged as a new paradigm for managing the portfolio of risks that face organizations, and policy makers continue to focus on mechanisms to improve corporate governance and risk management (Beasley, Clune, Hermanson, 2005). There are several ways to analyze risks in an organization through various frameworks, tools, and techniques, Efficient Frontier Analysis is one such process that is used to evaluate risks. Being a lead of the Efficient Frontier Analysis team which is trying to address the major insurance risks in the company I would consider several aspects and develop analysis. It is also important for me to properly educate the business group on the analysis and its outcome. Following is a brief overview of how I would deliver the details to my business team. Our company has identified three insurance risks, they are earthquake exposure to buildings, workers' compensation insurance, and general liability insurance. To properly address the risks associated with the corporation and the current strategy we have come up with a mathematical analysis called "Efficient Frontier Analysis". This analysis helps us derive the highest returns for the lowest risks as well as the lowest risk for the expected return. We gathered a list of options with our requirements and these can be used to later tally with the options insurance company provides and choose the closest one. With the current insurance values and the company's limit, we developed a graphical overview between the tail value of losses and mean losses for each insurance risk by considering all the options that we gathered. These individual analyses are then used to calculate a combined frontier analysis where the efficient frontier is determined. This gives us a graphical view and can be used to determine an option by comparing the minimum return expected by the company or minimum risks or losses. Once the option is determined by the business executives it will help the company choose insurance provided by the insurance companies which is close to the option. Insurance risks can be reduced, and decisions can be determined efficiently using Efficient Frontier Analysis.