Abstract: According to the operation characteristics of virtual enterprises,the idea of distributed decision-making(DDM) is applied to manage the risks of virtual enterprises in the situation of permission of exceeding expenditures,and a distributed risk management model is established for those virtual enterprises with the relations of team or enforced-team.This paper describes how to reserve the best risk-controlling funds from the beginning in accordance with the risk's actual condition at different operation stages,how to take best measures to control the risk and the investment at each stage,and how to make punishment for the exceeding expenditures.And the corresponding algorithm is developed to solve the model.The simulation results show that the presented model and algorithm are feasible for risk management of virtual enterprises.