Strategic financial management is being redefined as a result of the ongoing fiscal challenges facing the nation's public colleges and universities. The Great Recession reached its peak in 2009 and the era of "business as usual" for public higher education quickly faded. A "new normal" has emerged that is causing leaders to rethink how public institutions are managed. The core purpose of this study was to better understand how two publicly funded regional universities in North Carolina managed the recent period of fiscal distress. A case study approach was used to identify the academic, administrative, and budget challenges facing Tar Heel University and North State University during the fiscal crisis. The institutional strategies used to manage the crisis were recorded and the associated impact of the economic downturn on the campus community was documented. Ultimately, the study explored to what extent these institutions responded to the budget crisis in a technical versus adaptive way. The conclusions from this analysis will help policymakers and institutional leaders better understand the management of publicly funded regional institutions during times of fiscal distress. The study found that serious challenges and experiences emerged within each university due to the economic crisis. Low morale among university employees, deteriorating physical infrastructures, job losses, and many other difficulties evolved as a result of the limited state resources. In response, both universities implemented a number of traditional budget strategies such as tuition increases, reductions to operating budgets, or efficiency improvements. Only one university, though, implemented significant adaptive changes such as academic restructuring and academic program review. It became clear through this study that adaptive leadership during a university budget crisis requires leaders who recognize that the responsibility for resolving tough problems must be shared among stakeholders and a shift in institutional mindset must occur. University leaders must be able to encourage, embrace, and regulate disequilibrium to spur adaptive change in an organization. It was evident through this study that an economic crisis is an adaptive problem that requires adaptive leadership. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://bibliotheek.ehb.be:2222/en-US/products/dissertations/individuals.shtml.]