Quote Originally Posted by Vip3r
I am sure that the battle map difficulty setting affects morale. (e.g your troops will rout faster on the vh difficulty.)
Also, the enemy units are made stronger and always have an advantage with the strength of their units.

Hope this helps,

Um, no they don't. You're right about the moral, but the enemy getting stronger is bugged. Yes they get stronger, but your units get stronger as well resulting in no extra advantage except that from moral.