Final answer:
The underlying principle of modern organizations is specialization, which is part of the larger concept of modernization. Modernization increases specialization within a society and is judged by the sophistication of its structures and technology.
Step-by-step explanation:
The underlying principle of modern organizations is specialization of the human elements in the group. When considering the principle that describes the processes that increase the amount of specialization and differentiation of structure in societies, leading to a move from an undeveloped society to a developed, technologically driven one, the term used is modernization. According to Irwin (1975), modernization leads to a society being judged by the sophistication of its structures and technology. This concept also involves understanding larger organizational structures such as bureaucracies, which, despite the advanced ongoing changes, still exhibit characteristics such as a hierarchy of authority, explicit rules, and a division of labor, but not coercion to join.
Therefore, looking at industrial shifts in a society like China, modernization includes increasing labor specialization, which can lead to changes in the social structure. The principle at work in the question provided is indeed specialization, as it is the process that allows members of an organization or society to focus on specific tasks or fields of expertise, leading to greater efficiency and productivity.