In 1903, Schmalenbach obtained his habilitation at the Cologne School of Commerce and subsequently founded the Economics Archive at the University of Cologne, which still exists today. In 1906, he was finally appointed professor, thereby establishing business administration as an academic discipline. At the same time, he founded the Zeitschrift für handelswissenschaftliche Forschung, for which he initially wrote most of the articles himself. When the Faculty of Management, Economics and Social Sciences at the University of Cologne was founded in 1919, Schmalenbach was appointed director of the newly established business administration seminar.
His academic career unfolded against a backdrop of severe economic instability and political polarisation. Although professors associated with the Weimar Republic were relatively well represented among the Cologne professorial body, far-right forces were also gaining ground here, as they were within the duelling student fraternities. In April 1933, Cologne was the first university to bring itself into line with Nazi policy. Due to his marriage to a Jewish woman, he faced the threat of expulsion from the university in 1933, which he pre-empted by taking early retirement. He also prevented the deportation of his Jewish wife by hiding with her at friends’ homes from 1944 until the end of the war.
After the war, he returned to teaching in Cologne and spoke on economic issues in lectures and radio addresses. Schmalenbach’s theory of balance sheets served to assess internal operational efficiency. Some of his writings, including "Dynamische Bilanz", were translated into several languages. Many of his students became chartered accountants, and Schmalenbach always saw his teaching as serving the interests of the economy.
In recognition of his academic achievements, Eugen Schmalenbach was awarded a total of six honorary doctorates. The business research and teaching he pioneered laid the foundations for the university’s distinctive tradition in business administration. With his commitment to aligning business insights closely with practical needs, Schmalenbach is still regarded today as one of the most influential pioneers of modern business administration.