The bankruptcy watch is on at Blockbuster, the movie rental company that reported first quarter losses of $65.4 million.  So how did the once dominant company lose its power?  And how is it that upstart Netflix was able to cut into Blockbuster's business so successfully?  It wasn't all about a shift from DVD's and storefronts to digital delivery of films.  Fast Company's Austin Carr wrote recently about the management style of Blockbuster CEO Jim Keyes, and shared some sharp criticism from shareholders and business scholars:

"Between the time Keyes took on the reins as CEO of Blockbuster and today, the price of Netflix stock is up 500% and the price of Blockbuster stock is down about 90%," says Greg Meyer, one of the company's largest shareholders, who is currently battling to gain a seat on the board of directors. Meyer, the former owner of kiosk company DVDXpress, drew a line in the sand Tuesday, threatening that if he's not voluntarily named to the board, he will launch an election campaign for a seat. "Investors in Blockbuster have been the victims of a massive destructive of shareholder value while Netflix shareholders have been beneficiaries of a very smart, focused, and visionary management team," Meyer tells FastCompany.com. "I think it would be more productive for Keyes to try to learn from the success of Netflix rather than criticizing this company which has executed consistently and managed to gain millions of highly loyal subscribers."

Meyer isn't the only one voicing concern about the CEO.

"Given that Netflix is dramatically outperforming Blockbuster, our belief is that [his] public criticisms are oriented to driving attention away from Blockbuster's poor performance relative to Netflix's accomplishments," wrote professors Duane Ireland, Michael Hitt, and Robert Hoskisson to me in an email, co-authors of Strategic Management: Competitiveness and Globalization. "These criticisms are quite unlikely to benefit Mr. Keyes or Blockbuster. If anything, we think these criticisms will prove to be counterproductive."

"I think Blockbuster is teetering on the brink," added professor Hitt, who guesses Keyes's vocalness derives from internal power politics. "This company could soon possibly be another Polaroid."

Read Is a Brash Management Style Behind Blockbuster's $65.4M Quarterly Loss? here.