Induction:

The property of magnetism may be induced in a piece of material that does not normally have that characteristic.

If a piece of soft iron is placed in the magnetic field of a permanent magnet, the soft iron will assume the properties of a magnet and become magnetised. This action is called magnetic induction. It occurs because the lines of flux tend to flow through the path of least opposition, and air offers more opposition than soft iron.

When the lines of flux pass through the soft iron, the molecules of soft iron line up with the lines of force, their north poles pointing in the direction in which the lines of force are travelling through the iron. The end at which the lines of flux enter the soft iron becomes a south pole, the end at which they leave, a north pole.

If the magnetic field is removed, the soft iron will loose its magnetism.

It should be noted that a piece of soft iron sitting in the earth's magnetic field will concentrate the lines of flux and become magnetised.