Organizations or individuals who operate independently but who have common links, such as a shared clientele, a shared funding source, or common ownership, form "loosely organized systems." Organizational theory has concentrated on the nature of tightly organized systems, which generally need help reducing the rigidity of role definition and of communications flow. Loosely organized systems, on the other hand, need a type of intervention that increases awareness of roles and creates formal communications channels. Diagnosis is a form of intervention that can help loosely organized systems function by increasing each involved organization's awareness of the operation of the system as a whole and its part in the system. A case study of an intervention in a loosely organized system of mental health agencies, linked by a common public funding source, revealed that (1) the nature of the system affects the intervention, (2) entry into the system is affected by the system's looseness, (3) entry into loosely organized systems may require creation of a group capable of representing the system, (4) feedback patterns must accommodate the relationships between the agencies in the system, and (5) intervention in loosely organized systems requires interpersonal, reticular, and political competence. (Author/PGD)