Throughout history, higher education institutions have played a stable role in society. This is mainly due to their unwavering mission, management and organizational infrastructures. Although funding and appropriation have declined, trends show that during economic downturns, student enrollment levels increase. (U.S. Department of Education, National Center for Education). However, many higher education institutions face a wide variety of challenges during financial crises. As individuals in the workforce and business world seek to expand their human capital, professional development, and advanced degrees, colleges and universities are forced to diversify their competitiveness. Many institutions now offer distance learning (courses taken online) and hybrid programs (a fusion of face-to-face classroom instruction and online learning). Rapid advancements in technology and innovation have led to an increase in the use of the Internet for educational purposes (Christo-Baker, 2004). To be competitive, instructors must possess a range of leadership strategies tailored to the educational institution. Additionally, they must consider differences among students in their societal, cultural, and diverse learning abilities. Beaudoin (2007) suggests that distance education instructors must develop a new set of innovative rules for teacher-student engagement. Due to the uncertain environment of distance learning, the appropriate placement of effective leadership could well mean the difference between success, failure, or retention. Beaudoin (2007). Therefore, as colleges and universities rethink infrastructure efficiency, particularly for distance education offerings, a closer look at teaching quality, selection of...... middle of article......Purvanova and Bono (2009) examined employee performance. and satisfaction in a virtual organization compared to a face-to-face organization. Results indicated greater satisfaction and overall performance from employees of transformational leaders. Additional support for the impact of transformational leaders can be found in a study, Ruggieri (2009), which examined transformational and transactional leadership in relation to follower outcomes in interactive virtual contexts. In the results, transformational leaders were described by followers as more progressive, more innovative and visionary (Ruggieri). Finally, these results can be found consistent with Hoyt and Blascovich's (2003) study on a virtual interactive context in which followers' satisfaction and motivation were greater than those of followers. those of transactional leaders. (Hoyt and Blascovich; Ruggieri).