The Influence of Transformational Leadership on Employee Engagement in B2B Service Industries

Leadership continues to occupy a central place in organizational studies because of its capacity to shape not only strategic direction but also the daily lived experience of employees. In the twenty-first century knowledge economy, the connection between leadership and employee engagement has become a decisive factor in determining organizational competitiveness. This research examines the relationship between transformational leadership and employee engagement in Business-to-Business (B2B) service industries, where human capital and client relationships form the foundation of long-term success.Drawing on transformational leadership theory as articulated by Burns, Bass and Avolio and employee engagement frameworks developed by Kahn and Schaufeli, the study explores how the four dimensions of transformational leadership idealized influence, inspirational motivation, intellectual stimulation and individualized consideration contribute to the three dimensions of engagement: Vigor, dedication and absorption. The study adopts a mixed-methods design, employing survey data collected through the Multifactor Leadership Questionnaire (MLQ) and the Utrecht Work Engagement Scale (UWES), alongside qualitative interviews to provide depth and contextual richness. For methodological illustration, a simulated dataset of 300 respondents from logistics, IT services, consulting and outsourcing firms was analysed using descriptive statistics, reliability testing, correlation, regression and structural equation modelling. The results suggest that while transformational leadership overall has a positive association with engagement, two dimensions idealized influence and intellectual stimulation are particularly influential in B2B contexts, while inspirational motivation and individualized consideration appear weaker predictors. Qualitative interviews reinforced these findings as employees highlighted the importance of trust, integrity and intellectual challenge in their work environments. The study contributes theoretically by extending the leadership–engagement linkage into B2B service industries, where the dynamics differ from healthcare, education or manufacturing contexts often studied previously. Practically, it offers guidance to HR managers and organizational leaders in designing leadership development programs that emphasize ethical role-modelling and innovation, while also addressing systemic factors such as workload and recognition to close the engagement gap. Ultimately, the study underscores that while leadership is a powerful antecedent of engagement, it must be integrated within broader organizational systems to achieve sustainable results