This is the process of organogenesis/development. Plants continue to form organs throughout their life. When the seeds have the right environmental conditions, genetic material is “switched on” and plants begin to form different tissues of xylem, phloem and leaves. This is strongly controlled by plant hormones mainly auxin and cytokinins. In the plumule tissues plants will produce more cytokinin than auxin favours shoot production.
This knowledge of how plant hormones change development has allowed plant biologist to do “Tissue culture”. Here you take a piece of plant tissue it can be leaf root or stem, and depending on the balance of hormones you can produce a whole new plant.